Table of Contents

Page

Executive Summary................................................................................................... iii

Profiles of the Promoters........................................................................................... iv

Introduction................................................................................................................ 1

[Link] Background and History.............................................................................. 1

[Link] sponsors................................................................................................ 1

[Link] History................................................................................................... 1

[Link] analysis and Marketing Concept..................................................................2

[Link] of the Basic Idea of the Project, Objective and Strategy..................2

[Link] and Market.......................................................................................... 3

[Link] and Characteristic of the Market.......................................................4

[Link] Present size of Demand and its Past Growth...............................4

[Link] Concept, Sales Forecast and Marketing Budget...............................6

[Link] Competition.................................................................................... 7

[Link] Input......................................................................................................... 7

[Link] Materials and Factory Supplies..................................................................7

[Link] Materials............................................................................................. 8

[Link] site and Environment................................................................................ 8

[Link] and Place of The Project Implementation (Site).......................................8

[Link] of Cost of Land................................................................................... 8

[Link] Environmental Impact Assessment...............................................9

[Link] and Engineering................................................................................... 9

[Link] and Equipment Description............................................................9

[Link] Impact of Technologies...........................................................10

[Link] Estimate of Cost of Technologies.........................................................10

i
 [Link]-Production, Auxiliary and Services................................................10

[Link] Engineering Works................................................................................... 10

[Link] Estimate of Investment Cost of Civil Engineering Works......................11

[Link] and Structure of the firm...............................................................11

[Link] Layout.................................................................................... 11

[Link] Management, Production, Sales and Administration..........................12

[Link] Resource................................................................................................... 12

[Link] resource Requirement and Planning...................................................12

[Link] Human Resource Cost....................................................................13

[Link] Scheduling................................................................................... 14

[Link] Time Schedule......................................................................14

[Link] Implementation Costs....................................................................15

[Link] Analysis and Investment........................................................................15

[Link] Investment Cost..................................................................................... 15

[Link] of Working Capital Requirements.....................................................16

[Link] Fixed Assets................................................................................... 16

[Link] Capital Structure and Proposed Financing.......................................16

[Link] Cost............................................................................................... 17

[Link] Period................................................................................................ 17

[Link]........................................................................................................... 18

[Link]............................................................................................................... 19

ii
 Executive Summary

Aksum is a growing city in different scenarios. The populations are almost

56,576 (CSA, 2007). The growing rate per annum is 3% and also the
development of the economy and other social factors changes the
urbanization rate and life style of the population. As cities growing, there
should be reliable source of consumer goods supply as numbers of
consumers grow. Among the different consumer goods bread is a necessity
not a choice. Unfortunately the city faces serious shortage of bread suppliers
as compared to the population and it constitutes. These are manifested in
the long walking distance that the residents are facing to get their daily
bread consumption. In addition to the long distance walking that are
observed everywhere there also serious quality problem in the breads
supplied to the residents.

Considering these problems as an opportunity to make business out of it and

at the same time serve the society. SABA Bakery PLC is established by five
partners after going through details project analysis and planning work and
it’s named by taking the name of the queen that was ruling the kingdom
axum. The reason is so as to get emotional feeling and quick recognition by
the community since she was most famous and respected by Ethiopians in
general and axum community in particular.

The project will be located in Axum city and the specific site of the projects
for a factory is around condominium because the cost of land around
condominium is somehow lower than others in the city. In addition to the
production center the project will have three shopping centers in the city
soas to enhance quick delivery and to expand our reach to customers.
Condominium will be both production and distribution center where as the
rest will be distribution and retail centers.

iii
The market for bread in Axum is estimated to be 2.1 billion pieces of medium
bread and this is expected to grow at 3% per annum. From this SABA
bakery is expected to have market share of 0.5% (10.6 million initially and
the market share growth rate of 10% per annum for the next five year and
reach 15.5 million in the next five year,
The financial impact of the above market analysis can be summarized as
follows:
 The project will have payback period of 3.16 years
 The BCR of the project is 1.803
 The NPV of the project will be birr 1,247,934
 The IRR of the project will be 30.41%

To sum up the finding of the project analysis shows as that the project is a
very attractive business for its promoters and will also be accepted by the
creditors.

Profiles of the Promoters

1. Name: Amanuel Mengistu

Address: Amhara Region, north wolo, filakit sub-city

Educational background: BA in Management, MA fellow

2. Name: Hailie Shitahun

Address: Amhara region,
Educational background: BA in Management, MA fellow

3. Name: Debela Assefa

Address: oromia region,

Educational background: BA in Management, MA fellow

4. Name: Abeba Takele

Address: amhara region, north wolo, weldya city
Educational background: BA in Management, MA fellow

5. Name: Tigist
Address: Addis ababa,
Educational background: BA in Management, MA fellow

iv
Introduction

1. Project Background and History

1.1. Project sponsors

Project Sponsor

Project Establishment of Bakery Factory

Project Sponsors SABA Bakery PLC
Project Manager Amanuel mengistu

1.2. Project History

SABA Bakery PLC is private limited company under establishment through a

partnership form of organization under Ethiopian law. The partnership has
five members who are interested to make their own business which is
profitable for themselves and at the same time meet the needs of the
customers in particular and at the same the time needs of the society.
Partners will contribute financially and as well as professionally both in its
establishment and its operation.
The reason why we select this project among other alternative business
organizations is based on the critical gap we observed and findings in our
preliminary assessment enable as to conclude that there is huge market
potential which can be exploited using relatively less capital requirement,
standard technology which can be operated without any special technical
skill in the human resource.
2. Market analysis and Marketing Concept
2.1. Definition of the Basic Idea of the Project, Objective and
Strategy

1
 Basic Ideas of the Project

Due to the shortage of enough bakery producers and retailers in Axum the
residents of the city are forced to walk long distance from their home and
spend a lot of time in walking through to get breads for their consumption.
Besides the breads supplied to the residents are not in an acceptable quality
and price. Therefore, SABA Bakery PLC aimed at in the production and supply
of bakery products for customers of their own choice at an acceptable
quality, price and distribution channel so that it can benefit itself and
customers.
Objectives
To fulfill the above basic ideas of the project SABA Bakery PLC designed the
following basic objectives:
 Produce and supply affordable, standard and healthy bakery products
that can be consumed by all class of the society for the residents of
Axum.
Strategy
In order to achieve the above objectives of the company, we will use
different strategies of pricing, product, promotion and distribution as shown
below:
Product Strategy:
As our target customers are all classes of residential customers of Axum our
product strategy is the supply of basic standard breads of different grams so
that we can reach the needs and wants of the residential customers in the
city.
Table 1: Product Types and Their Description

No Product Type Gram Price in birr

1 Mini 100 1.30
2 Medium 200 2.50

2
 3 Large 500 5

SABA Bakery will not be involved in price competition rather it will be

market price taker.

Distribution Strategy
The distribution strategy of SABA Bakery PLC is to have selected three
locations at the beginning in the city owned by the company. After building
the branches of the company in the city we will use indirect channel
distribution system through Franchise concept, partnership with different
supermarkets and retail shops in the city. We will also approach directly by
using our own cars.
Promotion Strategy
We will follow out door and in door promotion strategy using banners,
billboards, posters, fliers and Axum community FM radio as we believe they
are effective advertising Medias for the target customers
2.2. Demand and Market
The market of SABA Bakery for the time being is geographically bounded in
the city of Axum where the 56,576 population residents are living. But in the
coming future we believe that we will expand our market to Adiwa and shire,
even for other towns and cities Axum through shire and Axum through
adigirat. Since bread is one of the basic needs of human beings ideally the
whole residents with the exception of those parts of the society who are
allergic to wheat or medically wheat products prohibited need bread in their
daily food consumption. Furthermore we will have another product line of
bread that is prepared from barley for those people who are allergic with
wheat. In the food market since bread is the one of the less costly approach
to satisfy the need it is expected that the demand for the bread is very high
in the city.
2.3. Structure and Characteristic of the Market

3
 The market structure and characteristics of bakery industry in Axum is highly
fragmented and disorganized. There are few organized bakery producers in
the city like the recently opened YEGNA bread, Misrak bread Hanan bread
and floor but as compared to the size of the market their presence is very
limited and the majority of the buyers get bread products from small scale
bread producers and retailers in residential areas.
The problem with this small scale suppliers are they are not sufficient
enough to address the demand in their surrounding and on top of that the
bread produced and supplied by the small scale producers and suppliers are
not standardized and with a very serious quality problem.
In general the bakery market in the city faced two major problems to satisfy
customers requirement these are mainly:

1. Supply shortage both in terms of quantity and distribution

2. Serious quality problem such as poor process of baking and inputs and
distribution

2.4 Approximate Present size of Demand and its Past Growth

Assumptions

 Population growth rate of 2.1% Addis Ababa as per CSA census report 2007

 Regular bread consumers at least 200 gram per day 65%

 2002 E.C. as base year for forecasting
 Initial sales 60% of its own capacity and reach 100% at the end of the
second year

Table 2: Past Demand and Its Growth

2003 2004 2005 2006 2007 2008

Population
3,241,410 3,309,480 3,378,979 3,449,937 3,522,386 3,596,356
Regular Bread

4
consumers 2,106,917 2,151,162 2,196,336 2,242,459 2,289,551 2,337,631
Average Bread DD
per day 2,106,917 2,151,162 2,196,336 2,242,459 2,289,551 2,337,631
AverageBread DD
per month 63,207,495 64,534,852 65,890,084 67,273,776 68,686,525 70,128,942
Average Bread DD
per year 758,489,94 774,418,22 790,681,01 807,285,31 824,238,30 841,547,30
0 9 2 3 4 9

Table 3: Present Market Demand Forecast

Demand and Sales Forecast

2009 2010 2011 2012 2013
Population
3,671,879 3,748,989 3,827,718 3,908,100 3,990,170
Regular Bread consumers
2,386,722 2,436,843 2,488,017 2,540,265 2,593,610
Average Bread DDper day
2,386,722 2,436,843 2,488,017 2,540,265 2,593,610
Average Bread DD per
month 71,601,650 73,105,284.84 74,640,496 76,207,946 77,808,313
Average Bread DD per
year 859,219,802.2 877,263,418.0 895,685,95 914,495,35 933,699,75
3 8 0 5 7

2.4. Marketing Concept, Sales Forecast and Marketing Budget

The Marketing Concept

Our marketing concept is based on the principle of meeting customers need

profitably. As result of this principle marketing philosophy of SABA bakery is
that; to be competitive in the bakery market our products shall be
standardized both in size of the bread and its quality, in the inputs it use to
produce bread and the supply of bread of an acceptable quality from health
5
perspective. Besides to the standardization of the product the distribution
and retail service for customers shall be with very good customer service.
Sales Forecast
Table 4: Sales Forecast

Demand and Sales Forecast

2009 2010 2011 2012 2013
sales forecast unit
824,851 2,161,577 3,468,09 3,895,01 4,374,495
6 9
Sales forecast birr 5,512,021
2,103,370 8,843,64 9,932,29 11,154,96
5 8 2

Marketing Budget
As bakery is categorized under the fasting moving commodity consumer
goods with a very stable demand (because it is necessity) there is no need to
have an aggressive promotion expense. Rather the focus shall be on
understanding the market demand and preferences with some promotional
strategies to be included in the marketing efforts. Therefore, the marketing
budget of the company can be summarized as follows.
Table 5: Marketing Budget Summery

Marketing
No Budget in Birr
Activity
1st year 2nd Year 3rd Year 4th Year 5th Year
Market Research
1 10000 11000 12100 13310 14641
(secondary)
2 Posters 1000 1100 1210 1331 1464.1
Packaging
3 3000 3300 3630 3993 4392.3
(plastic)
4 Fliers 2000 2200 2420 2662 2928.2
Total 16000 17600 19360 21296 23425.6

6
2.5. Anticipated Competition

The supply constraint in the bakery industry indicate that there is shortage of
bread supplier in the market and SABA Bakery PLC will inter in the market to
filling the supply and quality gap which existed in the market. As a result of
this supply constraint low rivalry is expected in the market among firms in
the bakery industry.
3. Materials Input
3.1. Raw Materials and Factory Supplies
The basic raw material needed by SBA bakery is wheat and barley flour
which are widely grown in different parts of the country and in addition to
this government import abroad besides the local production. Government is
forced to import wheat as the locally produced wheat cannot satisfy the local
demand for wheat. It is mainly distributed by the government for bakery
producers. A quintal of it is sold for 1110 birr on average.
3.2. Auxiliary Materials
In addition to the main raw material the factory will use different ingredient
materials like bread yeast, spices, sugar and salts which are easily available
from the market.
4. Location, site and Environment

The location of the project implementation will be limited to Axum city at

least for the next five years then after it will be launched to the nearby cities
and towns as per its profitability.

4.1. Area and Place of The Project Implementation (Site)

Initially the company will select four strategic areas for retailing and
wholesaling and production of its products. Locations are selected based on
its convenience for customers and market potential. As a result of these we
have selected the following four sites in the city of Axum. One location will
also serve as production, retail and distribution center where as the rest will
be mainly for retail centers:

7
 1. Sheromada retail center
2. FerenciayLegasiyon retail center
3. Megenagna–serve as production distribution and retail center
4. Merkato retail center

4.2. Estimate of Cost of Land

The SABA Bakery factory will rent production and retail center based on the
market price from the selected areas it could be from government or private
houses based on its convenience for the business.
Table 6: Production and Distribution Center

No Location Rent per month Rent per Remark

annum
1 Sheromeda retail 15,000.00 180,000.00
center
2 FerenicayLegaciyon 13,000.00 156,000.00
retail center
3 Megenanga -serve as 30,000.00 300,000.00
production distribution
and retail center
4 Merkato retail center 15,000.00 180,000.00
Total Yearly Rental 73,000.00 816,000.00
Cost

4.3. Preliminary Environmental Impact Assessment

SBA bakery factory will use electricity from hydro power and not wood from
forests as source of energy so there will be No carbon emission as a result of
its production process. Hence, the environmental impact assessment of the
project shows us that the company will not cause any meaningful damage to
the environment by any standards.
5. Technology and Engineering
5.1. Technology and Equipment Description
SABA Bakery factory will use high capacity state of the art Bakery technology
to produce breads to meet customers’ requirement in terms of quantity and

8
quality. We will use automatic equipment to mix the wheat flour so that we
can minimize the manual operation in the process of mixing and baking the
bread.
Besides to this the technology to be deployed by the SABA bakery will be
environmental friendly as it will use electricity. Besides to this the capacity of
the baking machine will be 3, 000 loaves of bread per hour.
5.2. Environmental Impact of Technologies
As can be seen from the preliminary environmental impact assessment, the
factory will use environmental friendly or carbon free technologies. This is
mainly due to the fact that the energy source for bread baking is hydro
power generated electricity rather than forest products.
5.3. Rough Estimate of Cost of Technologies
Table 7: Technology and Equipment Budget

Investment cost Amount

Baking Machine 448,80
0
Machinery Mixer 244,80
0
Equipment Cutter 40,800
shelf display and balcony 81,600
Total 816,00
0

5.4. Equipment-Production, Auxiliary and Services

The company will use different equipment other than the baking and mixing
machine to facilitate its production and distribution operations some of the
materials are as follows:

1. Water tank
2. Shelves
3. Office chairs and tables
4. Sales desk and cash register machine
5. Bread box

9
 5.5. Civil Engineering Works
SABA bakery PLC will have civil work mainly at its production center in
condominium and in addition to this the other retail center will have some
civil work in terms of furnishing and branding of the sales centers. Civil works
required are as follows:
1. Baking facilities at condominium production and distribution center
2. Modification and branding of all shops both internally and externally
5.6. Rough Estimate of Investment Cost of Civil Engineering Works
Table 8: Cost of Civil Work Estimate

No. Civil Work Cost in birr

1 Baking facilities at condominium 30,000.00
production center
2 Building Maintenance three shops 38,000.00
Total 68,000,00

6. Organizations and Structure of the firm

6.1. Organizational Layout
General Manager -1

Assistant-1

Production, Quality Control Marketing and Finance & Admin.

& Design Head-1 Procurement head-1 Head-1

Bakery -4 Design
head-1 Store keeper-2 Sales - 9 Purchaser-1

10
 Casher-9 Guards -8 Cleaner-8 Accountant-1

6.2. General Management, Production, Sales and Administration

SABA Bakery plc will have one general manger that is responsible at the top
level for the whole function of the organization. And the company will have
51 employees in total at the four branches to carry out the business. The
human resource and professional skill required in the company is explained
in the following section.

7. Human Resource
7.1. Human resource Requirement and Planning
Table 9: Human Resource Requirement by Profession and Skill

No. Professions and skill Quantity Remark

1 General Manager 1 Office
2 Assistant 1 Office
3 Production, Quality Control & 1 Office
Design Head
4 Marketing and Procurement head 1 Office
5 Finance & Admin Head 1 Office
6 Bakery 4 Production
7 wheat mixer 4 Production
8 Store keeper 2 Office
9 Sales 9 Four
branches
10 Purchaser 1 Office
11 Casher 9 Four
branches
12 Guards 8 Four
branches
13 Cleaner 8 Four
branches
14 Accountant 1 Office
Total 51

11
7.2. Estimated Human Resource Cost

Table 10: human Resource Budget

No. Professions and skill Quantity Unit Cost per Unit Cost per annum
Month
1 General Manager 1
8,000.00 96,000.00
2 Assistant 1
3,000.00 36,000.00
3 Production, Quality 1
Control & Design Head
5,000.00 60,000.00
4 Marketing and 1
Procurement head
4,500.00 54,000.00
5 Finance & Admin Head 1
4,500.00 54,000.00
6 Bakery 4
1,800.00 21,600.00
7 Mixer 4
1,800.00 21,600.00
8 Store keeper 2
1,500.00 18,000.00
9 Sales 9
1,600.00 19,200.00
10 Purchase 1
1,600.00 19,200.00
11 Casher 9
1,600.00 19,200.00
12 Guards 8
700.00 8,400.00
13 Cleaner 8
700.00 8,400.00
14 Accountant 1
3,500.00 42,000.00
Total 51
477,600.00

8. Implementation Scheduling
8.1. Implementation Time Schedule

12
Table 11: Implementation Schedule

Activities Duration in Start Date End Date

Days
Implementation team 10 Days MAY 01, 2016 MAY 10, 2016
formation `detailed
study
Legal requirement and 10 days MAY 11, 2016 MAY 20, 2016
readiness
Government Approval 3 days MAY 21, 2015 MAY 23, 2016
Rent for production and 20 Days MAY 10, 2016 MAY 30 , 2016
Sales Centers
Maintenance
Building maintenance 15 Days JUNE 1, 2016 JUNE 15, 2016
and furnishing
Procurement and 30 Days JUNE 15, 2016 JUNE 15, 2016
Installation of
Machineries and
Equipment
Auxiliaries 10 days JUNE 15, 2016 JUNE 25, 2016
Midi Van 20 days JUNE 25, 2016 JULY 15, 2016
Hiring Employees 30 days JULY 15, 2016 AUGUEST 15,
2016
Launch Production and September 1,
Sales
2016

8.2. Estimated Implementation Costs

Table 12: Implementation Cost

Activities Cost in birr

Implementation team formation `detailed study 20,000
Legal requirement and readiness 3, 000.00
Government Approval 1,000.00
Rent for production and Sales Centers Maintenance 456,000

13
 Building maintenance and furnishing 100,000
Procurement and Installation of Machineries and 816,000
Equipment
Auxiliaries 60,000
Midi Van 250,000
Hiring Employees 60,000
Launch Production and Sales 20,000
Total 1,783,000.00

9. Financial Analysis and Investment

8.3. Total Investment Cost

Table 13: Investment Cost

Investment cost Amount

Baking Machine 448,800
Machinery Mixer 244,800
Equipment Cutter 40,800
shelf display and balcony 81,600

Mini Van (vehicle) 250,000

Building maintenance (partition and painting) 60,000
Shop furnishing 40000
preproduction expenditure (feasibility study, licensing) 28,389

Auxiliaries 60,000
NWC 300,000
Total Investment Cost 1,554,389

8.4. Estimate of Working Capital Requirements

Table 14: working Capital Requirement

Annual Requirement
Item Minimum CTO 2008 2009 2010 2011 2012
days of
coverage
Cash 30 days 12
104,28 252,44 363,29 400,06 441,29

14
 2 0 4 4 1
Inventories 15 days 24 27,495 72,053 115,60 129,83 145,81
3 4 7
Total Current 131,77 324,49 478,89 529898 587,10
Asset 7 2 7 8
Account 0 0 0 0 0
payable
Net W.C 300,00 131777 324,49 478,89 529,89 587,10
0 2 7 8 8
Increase in Net 300,00 168,22 492,71 154,40 51,001 57,209
W.C. 0 3 5 5

8.5. Estimated Fixed Assets

Table 15: Fixed Assets

Investment cost Amount

Baking Machine 448,800
Machinery Mixer 244,800
Equipment Cutter 40,800
shelf display and balcony 81,600

Mini Van (vehicle) 250,000

Building maintenance (partitions and painting) 60,000
Shop furnishing 40000
preproduction expenditure (feasibility study, licensing) 28,389

Auxiliaries 60,000
Total Investment Cost 1,254,389

8.6. Proposed Capital Structure and Proposed Financing

SABA Bakery PLC will use equity financing to cover the financial cost required
to implement the project. The source of equity will be contribution from
partners. As the partnership is formed by five members each will contribute
40,000 birr and the total contribution will be 2,000,000 birr.

8.7. Production Cost

Table 16: Production Cost

Production cost
cost Investmen 2008 2009 2010 2011 2012

15
 per t Phase
unit
Production
in units 824,851 2,161,57 3,468,09 3,895,01 4,374,49
7 6 9 5
Production
cost
Raw 0.8
material 659,880.8 1,729,26 2,774,47 3,116,01 3,499,59
1 2 7 5 6
Labor 0.13
103,200 270,442 433,906 487,319 547,308
Production 0.1
Overhead 82,485.10 216,158 346,810 389,502 437,450
Total 1
production 845,566 2,215,86 3,555,19 3,992,83 4,484,35
cost 2 2 6 4

8.8. Payback Period

PBP =t- comu. Net cash flow year end -initial investment/net cash flow for year end

payback period
Year Cash flow Investment to be
recovered
0 1,554,389
1 (15,232) 1,569,621
2 241204 1,328,417
3 1107396 221,021
4 1380518.712 -
0.16
Payback period=3.16 years

 The IRR of the project will be 30.41%

 NPV of the project = PV of CF- [Link].
=2,802,323_1,554,389
=1247934
 Benefit Cost Ratio (BCR):-PV benefit\PV cost or investment
= 2,802,323/1,554,389
= 1.803

16
  This means 1 birr investment become 1.803 birr including the
investment and the profit.
 Break Even Point (BEP)

Breakeven Point
Fixed Cost 1,254,389
Contribution Margin 0.96
FC/Contribution margin per unit 1,306,655.208
Break even birr 3,135,972.5

10. Conclusion

8.9. Major Advantages of the Project

The major advantages of this project are as follows:

1. There is huge unmet demand which is evidenced by walking long
distance and inferior quality demonstrated in different parts of the city
to get bread,
2. Relatively low cost and easy operational management requirement,
3. The project will have very high social contribution as it is going to
produce and supply basic needs of all class citizens of the city
8.10. Chances of Implementing the Project

Due to the attractive result of the financial and market feasibility study of
the project the partners are very motivated and eager to realize the
implementation of the project.

11. Annexes

Income Statement of the Project

SABA Bakery PLC

Income Statement
For Five Years

17
 Investment 2009 2010 2011 2012 2013
phase

Sales in Birr
- 2,103,37 5,512,02 9,932,29 11,154,962
0 1 8,843,64 8
5
Cost of goods
Sold - 845,566 2,215,86 3,555,19 3,992,83 4,484,354
2 2 6
Gross profit
- 1,257,80 3,269,15 5,288,45 5,939,46 6,670,608
4 9 3 2
Marketing and
administration - 423,200 855,488 864,886 874,612 884,688
Depreciation
Expense - 116,939 116,939 116,939 116,939 116,939
Earning 4,306,62
before tax - 717,665 2,296,73 8 4,947,91 5,668,981
2 1
Tax (0.30) 689,020
- 215,299 1,291,98 1,484,37 1,700,694
8 3
Earning after
tax - 415,756 1,399,64 2,650,49 3,054,56 3,508,965
7 0 0
Retained
Earnings 70% - 291,029 979,753 1,855,34 2,138,19 2,456,276
3 2
Dividend 30%
- 124,727 419,894 795,147 916,368 1,052,690

Cash Flow of the Project

SABA Bakery PLC

Statement of Cash Flow
For Five Years
Investment 2008 2009 2010 2011 2012
phase
Source

18
Earning Before
Tax (no interest _ 717,665 2,296,732 4,306,628 4,947,911 5,668,981
expense)
Depreciation
116,939 116,939 116,939 116,939 116,939
Owners
contribution 3,000,000 _ _ _ _ _
Total Source 3,000,000 834,604 2,116,435 3,903,353 4,480,596 5,129,746
Use
Fixed Investment 1,554,389 _ _ _ _ _
Cash paid for
operating 423,200 855,488 864,886 874,612 884,688
expense
Tax 178,181 599,849 1,135,924 1,309,097 1,503,842
Dividend 124,727 419,894 795,147 916,368 1,052,690
Total use
1,554,389 726,108 1,875,231 2,795,957 3,100,078 3,441,220
Net Cash Flow
1,445,611 (15,231.67) 241,204 1,107,396 1,380,519 1,688,526
Beginning Cash
Balance - 1,445,611.0 1,430,379 1,671,583 2,778,979 4,159,498
0
Ending Cash
Balance 1,445,611 1,430,379.3 1,671,583.3 2,778,979.2 4,159,497.9 5,848,024.3
3 8 3 4 4
Discount factor 1
(12%) 0.8928 0.7972 0.7118 0.6355 0.5674
Discounted Cash
flow 1,445,611 (13,599) 192,288 788,244 877,320 958,070
NPV 1,247,934
IRR 30.41%

Total Cost
Investment 2008 2009 2010 2011 2012
period
Fixed Cost 1,254,389
1,269,60 1,710,97 1,729,77 1,749,22 1,769,376
0 6 2 5
Variable cost

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 1,691,13 4,431,72 7,110,38 7,985,67 8,968,709
2 4 4 2
total cost 1,254,389 2,960,73 6,142,70 8,840,15 9,734,89 10,738,08
2 0 6 7 5

other costs
Investme 2008 2009 2010 2011 2012
nt period
Rent 456000 456000 456000 456000 456000
Marketing 16000 17600 19360 21296 23425.6
expense
Administrativ
e expense 374,400.0 381,888.0 389,525.7 397,316.2 405,262.6
0 0 6 8 0
marketing 423200 855488 864885.7 874612.27 884688.20
and admin 6 5 1

Depreciation Schedule
2008 2009 2010 2011 2012
Fixed Asset Cost Residual Amount Amount Amount Amount Amount
Value
Baking Machine 448,80 30,000 41,880 41,880 41,880 41,880 41,880
0
Machinery Mixer 244,80 15,000 22,980 22,980 22,980 22,980 22,980
0
Equipment Cutter 40,800 6,000 3,480 3,480 3,480 3,480 3,480
shelf display and balcony 81,600 7,000 7,460 7,460 7,460 7,460 7,460
0 0 0 0 0
Mini Van (vehicle) 250000 25000 22,500 22,500 22,500 22,500 22,500
Building maintenance 60000 0 6,000 6,000 6,000 6,000 6,000
(partition and painting)
Shop furnishing 40000 0 4,000 4,000 4,000 4,000 4,000
preproduction expenditure 28389 0 2,839 2,839 2,839 2,839 2,839
(feasibility study, licensing)
Auxiliaries 60,000 2,000 5,800 5,800 5,800 5,800 5,800
NWC
Total Investment Cost 116,939 116,939 116,939 116,939 116,939
Depreciation method Applied straight line

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According to Central Statistical Agency of Ethiopia (CSA), as of July 2012 (est.) the town of
Axum's population was 56,576. The census indicated that 30,293 of the population were females
and 26,283 were males.[16] The 2007 national census showed that the town population was
44,647, of whom 20,741 were males and 23,906 females). The majority of the inhabitants said
they practiced Ethiopian Orthodox Christianity, with 88.03% reporting that as their religion,
while 10.89% of the population were Muslim.[17]

The 1994 national census reported a total population for this city of 27,148, of whom 12,536
were men and 14,612 were women. The largest ethnic group reported was the Tigrayan (98.54%)
and Tigrinya was spoken as a first language by 98.68%. The majority of the population practiced
Ethiopian Orthodox Christianity with 85.08% reported as embracing that religion, while 14.81%
were Muslim.[18]

The Axum University was established in Axum in May 2006 on a greenfield site, four kilometers
(2.45 miles) from the town center; the inauguration ceremony was held on 16 February 2007.
The current area of the campus is 107 hectares, with ample room for expansion.[citation needed] The
establishment of a university in Axum is expected to contribute much to the ongoing
development of the country in general and of the region in particular.

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