Investment Office Anrs Bahirdar Zurya Wereda Industry and Investment Office
Investment Office Anrs Bahirdar Zurya Wereda Industry and Investment Office
Investment Office Anrs Bahirdar Zurya Wereda Industry and Investment Office
Owner:-
JULY 2013EC
BAHIRDAR, ETHIOPIA
Table of Contents
1. Executive Summary.................................................................................................1
8 Financial Analysis......................................................................................................... 10
8.2 Investment.................................................................................................................. 11
Demand projection divulges that the domestic demand for canned processed meat is substantial and is
increasing with time. Accordingly, the planned plant is set to produce 580 tons annually.
The total investment cost of the project including working capital is estimated at Birr 100 million and
creates 103 jobs and Birr 3.48024 millions of income.
The financial result indicates that the project will generate profit beginning from the first year of
operation. Moreover, the project will break even at 15.4% of capacity utilization and it will payback fully
the initial investment less working capital in 2 years and 9 months. The result further shows that the
calculated IRR of the project is 35.7% and NPV discounted at 18%
In addition to this, the proposed project possesses wide range of economic and social benefits such as
increasing the level of investment, tax revenue, employment creation and rural income.
Generally, the project is technically feasible, financially and commercially viable as well as socially and
economically acceptable. Hence the project is worth implementing.
Reports in this connection inform that the major consumers of processed meat in our country are
members of the armed forces. The report further reveals that these supplying factories are very
old.
On the other hand, Ethiopia exports live animal and semi processed meat to abroad. The main
items exported include live animals and meat products, steers and yearlings; lowland sheep and
goats; fresh and chilled lamb and mutton carcass; fresh and chilled goat carcass; fresh and chilled
veal carcass and beef four quarter; fresh and chilled boneless veal and beef; frozen lamb, mutton
and goat carcass and veal and beef special cuts. The major meat trade partner countries with
Ethiopia include Saudi Arabia, Dubai, Egypt, Yemen, Congo Brazzaville, Cote d'Ivoire and
South Africa while major destinations for live animals from Ethiopia are Saudi Arabia, Dubai,
Yemen and Egypt. Canned (processed) meat is also imported from abroad and it is available in
supermarkets. However, the import data obtained from Customs Authority aggregates the canned
meat with other related products such as tuna and the like so that exact data on import could not
be documented. Also company has a plan to export the canned meat to such meat trade partners
of Ethiopia such as Saudi Arabia, Dubai, Egypt, Yemen, Congo Brazzaville, Cote d'Ivoire and
South Africa. Table 1, therefore, shows only the annual domestic production of meat by the meat
processing plants
Table 1: Domestic Production of Meat (in ton) in the past and current
2003/04 96
2004/2005 615
2005/06 526
2006/07 555
2007/08 1194
2008/09 849
2009/10 924
2011/12 908
2012/13 612
The above table shows that production of processed meat has shown a declining trend in recent
years under consideration. The highest level of production has been registered in 2007/08 which
then continuously decreased up to 2011/12 which then marginally rises in the following period.
The reduction in production partly is low capacity of operation as many of the plants are old and
use obsolete machineries. However, the consumption of meat in general is showing a substantial
increase in the country as a whole. For instance, research study by Abbey Avery sponsored by
International Livestock Research Institute (entitled “Red Meat and Poultry Production and
Consumption in Ethiopia and Distribution in Addis Ababa” - 2011) confirmed that about 2.1
million cattle had been slaughtered in 1993. This number has increased to about 2.8 million
cattle in the year 2003. Roughly speaking this is about 350 thousand tons of meat and represents
the presence of huge demand in the country.
The country has immense livestock resource. According to CSA, Annual Abstract (2006), the
number of cattle in 2003/04 was 38.1 million and increased to 40.3 million in 2005/06. From
this the share of Amhara National Regional State has been about 25%. Such huge number
suggests the presence of sustainable supply for firms engaged in meat processing. If we compare
the number of cattle slaughtered in 2003 (which is 2.8 million) with the cattle number registered
in 2003/04 (which is 38.1 million) we learn that the consumption level has been 7.35%. If we
apply the same ratio to the 2005/06 cattle size, the consumption level of cattle will be 2.96
million or roughly 370.2 thousand ton of cattle meat. This can be taken as the present demand for
cattle meat in the country where the share of Amhara is estimated to be 92.5 thousand tons.
3.1.2 Projected Demand
As presented earlier the annual demand for meat is substantial. Thus, with proper marketing,
quality as well as demand based production; it is possible to attract a portion of the consumers to
the consumption of processed meat. If we conservatively assume that only 2.5% of annual
consumption will be attracted by modern meat processing plant, the present annual demand for
such product would be about 9,255 ton processed meat. Based on this figure we can forecast the
future demand for the product. That is if we further assume that demand grows by 3% (parallel
with the population growth), the future demand for the processed meat will be as indicated in
table 2 below.
2013/14 9,533
2014/15 9,819
2015/16 10,113
2016/17 10,417
2017/18 10,729
2018/19 11,051
2020/21 11,383
2014/22 11,724
2022/23 12,076
2023/24 12,438
2024/25 12,811
2025/26 13,196
As shown in the above table there is huge untapped potential demand for the product. This
demand reaches 10 thousand ton in 2015/16 and increases by about 30% within 10 years
(2025/26). Such figure suggests the relevance of establishing meat processing plant.
3.1.3 Pricing and Distribution
Based on the market research result and the capacity of the envisaged plant, the wholesale price of a 500
gram canned processed meat is set to be Birr 17 per piece while Birr 9.60 is set for a 250 gm product.
Moreover, the firm will sell the by-products (bones, etc) and skin at Birr 150 per slaughtered cattle. In
distributing the product the envisaged plant shall make use of the available retail and wholesale network.
Utility
According to the above table the annual material and utility cost at full capacity of operation is Estimated
to be Birr 18,423,900.
An alternative processing technology that has recently expanded in some rich countries is to use
pasteurization method instead of sterilization of meat. This is because sterilization processes
compromise the retention of compounds that are heat-sensitive in the foods, and alter the
organoleptic characteristics of the raw meat. Vitamins, for example, may be destroyed by high
temperatures and/or their long duration. With the aim of remedying this problem, a process has
been developed in recent years in which prepared foods may be heat treated at a temperature at
which their organoleptic properties are less affected than in sterilization processes. This
alternative, however, is very expensive where it costs more than double of the technology
proposed in this profile.
1. Electric hoists 4
2. Stunning box 1
3. Stunning gun 1
8. Pneumatic spreader 1
22. Balance 20
30. Saccharimeter 2
33. Salinometer 2
34. Boiler 1
The total cost of machinery and equipment including freight insurance and bank cost is estimated
to be about Birr 8,519,500. The machineries suppliers’ address is alibaba of china .com , turkey
and vietnam
The envisaged plant therefore, creates 36 jobs and about Birr 3.48024 million of income. The
professionals and support staffs for the envisaged plant shall be recruited from Amhara region.
B. Depreciation
Building 5%
Machinery and equipment 10%
Office furniture 10%
Vehicles 20%
Pre-production (amortization) 20%
According to the income statement of the project, the laundry soap plant will generate profit
starting from the first year of operation. Return on investment and return on equity of the project
is 43% and 62 %, respectively.
Breakeven Analysis: - The break-even point of the project is estimated by using income
statement projection. The plant breaks evens at 15.4% of capacity utilization
Payback Period: - The project will pay back fully the initial investment in 4 year time.
Simple Rate of Return: - The simple rate of return of the project at its full capacity utilization is
37.1%.
Sensitivity Analysis: - The project will absorb shocks if prices increased by 10%
Profit Generation
The project is found to be financially viable and earns on average a profit of birr 1.6million per
year and birr 16 million within the project life. Such result induces the project promoters to
reinvest the profit which, therefore, increases the investment magnitude in the region.
Tax Revenue
In the project life under consideration, the region will collect about birr 3.2 million from
corporate tax payment alone (i.e. excluding income tax, sales tax and VAT). Such result create
additional fund for the regional government that will be used in expanding social and other basic
services in the region
Import Substitution and Foreign Exchange Saving and source of hard currency
The commencement of this project relieves a portion of the import burden. That is, based on the
projected figure we learn that in the project life an estimated amount of US Dollar 6.0 million
will be saved as a result of the proposed project. This will create room for the saved hard
currency to be allocated on other vital and strategic sectors.
Employment and Income Generation
The proposed project is expected to create employment opportunity to 103 professionals as well
as support stuffs. Consequently the project creates income of birr 3.48042 million per year. This
would be one of the commendable accomplishments of the project.
Pro-Environment Project
The proposed production process should be carried out carefully to protect the environment from
pollution.
1. Pa electric hoist
Model NO. PA
Running Mode Moving
Feature Antiseptic
Certification GS, CE
Standard National Standards
Name PA Electric Hoist
Remote Control Wired or Wireless Control
Wire Rope Yes
Electric Trolley Yes
220V Available
2 Phases Yes
House Used Yes
Lift 200kg - 1000kg Available
Brake Trolley Yes
Trademark HUGO
Specification CE, SGS, TUV
Origin Shanghai
HS Code
8425110000
Dimension
40cm*34cm*25cm
Gross weight per
unit product
15.000kg
Small Size Electric
Mini Hoist,
220V 500kg Hoist
2. Stunning box machine
Overview
Quick Details
Condition New
Application Cattle
Place of Origin Jiangsu, China
Model Number stunning box
Dimension(L*W*H) 2540*2100*2400 mm
Weight 3800kg
Certification ISO9001:2008
After-sales Service Provided Engineers available to service machinery overseas
Name Cattle stunning box for abattoir equipment
Frame galvanized
Feature halal slaughtering box for cattle slaughtering line
slaughtering capacity 60 cattle/hour
Packaging & Delivery
Packaging Details Complete Slaughtering Line wooden box
Port Shanghai
3. Platform machine for cattle processing
Overview
Quick Details
Applicable Industries: Manufacturing Plant, Food & Beverage Factory, Food & Beverage
Shops
Condition: New
Application: Cattle
Place of Origin: Shandong, China
Brand Name: WFA
Dimension(L*W*H): 1600x1000x600mm
Weight: N/A
Certification: ISO9001
Warranty: 1 Year
Marketing Type: New Product 2021
Warranty of core components: 1 Year
Product name: Platform for stunning
Material: Stainless Steel
Color: Silver
Suit for: Cattle Slaughterhouse Plant
Processing: Complete Slaughter Line
Advantage: High Efficiecny
Object: Slaughterhouse Machine
Capacity: Customised
Feature: Customized Slaughter Line
Function: Multi-function
4. Electric saw for cutting and splitting
Quick Details
Applicable Industries: Hotels, Food & Beverage Factory, Farms, Restaurant,
Home Use, Retail, Food Shop
After Warranty Service: Online support, Spare parts
Local Service Location: None
Showroom Location: None
Video outgoing-inspection: Provided
Machinery Test Report: Provided
Marketing Type: New Product 2020
Warranty of core components: 1 Year
Core Components: Motor
Brand Name: HORUS
Place of Origin: Zhejiang, China
Voltage: 110/220/240/380
Power: 1100W, 1100W
Dimension(L*W*H): 46*45.5*87
Weight: 36
Certification: CE
Warranty: 1 Year
After-sales Service Provided: Online support
Application fields: FOOD PROCESSING
Machinery Function: MEAT AND BONE CUTTING
Raw material: MEAT AND BONE
Material: stainless steel
Cutting Thickness: 4-180mm
Wheel Diameter: 210mm
Food Temperature: -20℃~2℃
Blade Size: 1681650*0.5mm
Nominal Voltage: 110-220V
Frequency: 50/60Hz
Saw Speed: 15m/s
Model: HR-210A
5. Pneumatic knife
Quick Details
Applicable Industries: Food & Beverage Factory, Food & Beverage Shops,
Meat processing factory, Snack food processing plants, Fish Food Factory, Sauce processing
plant
After Warranty Service: Video technical support, Online support, Spare parts,
Field maintenance and repair service
Local Service Location: None
Showroom Location: None
Video outgoing-inspection: Provided
Machinery Test Report: Provided
Marketing Type: Ordinary Product
Warranty of core components: 1 Year
Core Components: PLC, Bearing, Pressure vessel, Pump
Condition: New
Place of Origin: Shandong, China
Brand Name: Zhongnuo
Voltage: 380 V/410 V/220 V/Customized
Power: 12 KW
Weight: 1200kg
Dimension(L*W*H): 4700*2100*2000mm
Certification: ISO
Warranty: 1 Year
After-sales Service Provided: Field installation, commissioning and training
Key Selling Points: Famous brand PLC
Product name: Steam sterilization machine sterilizer price
Application: Meat, fish, canned/pouch food
Control system: PLC+ Touch Screen
Function: Prolong Shelf Time
Advantage: High Efficiency Low Cost
Material: Stainless Steel SUS304
Heating way: Steam Boiler Heating
Keywords: Steam sterilization machine
Design Temperature: 121-145 Degree
Max pressure: 0.35 Mpa
7. Processing and inspection tables
Overview
Quick Details
Local Service Location: Viet Nam
Showroom Location: Viet Nam
Condition: New
Application: Cattle, work table for slaughterhouse
Place of Origin: China
Brand Name: butchery meat processing equipment cutting table
Voltage: n/w
Dimension(L*W*H): 1800 * 900 * 800 mm
Weight: n/m
Certification:ISO After-sales Service Provided:Online support,
Overseas third-party support available
Warranty: 1 Year
Key Selling Points: High Productivity
Marketing Type: Hot Product 2019
Machinery Test Report: Not Available
Video outgoing-inspection: Provided
Warranty of core components: 1 Year
Core Components: Motor
Name: butchery meat processing equipment cutting table
Material: stainless steel
Quick Details
Applicable Industries: Manufacturing Plant, Farms, Other, livestock
industry
Local Service Location: Turkey
Showroom Location: Turkey
Condition: New
Application: Cattle
Place of Origin: Izmir, Turkey
Brand Name: ASMERT
Dimension(L*W*H): 40x60 box section 2,5 mm
Weight: 12
Certification: ISO CE HELAL
After-sales Service Provided: Video technical support, Online support
Warranty: 1 Year
Key Selling Points: Long Service Life
Marketing Type: New Product 2021
Machinery Test Report: Not Available
Video outgoing-inspection: Provided
Warranty of core components: 1 Yea
9. Machine for Washing and cleaning of stomach
Quick Details
Applicable Industries: Manufacturing Plant, Food & Beverage Factory,
Restaurant, Food Shop, Food & Beverage Shops
Condition: New
Application: Cattle
Place of Origin: Henan, China
Brand Name: UD
Voltage: 380v
Dimension(L*W*H): 1000*650*950mm
Weight: 200kg
Certification: SGS
After-sales Service Provided: Free spare parts, Video technical support,
Online support
Warranty: 1 Year
Name: Tripe washing machine
Function: Cleaning
Capacity: 500kg/h
MOQ: 1 Set
Advantage: High Efficiency
Feature: Electrical System
Material: Stainless Steel
Operation: Easily
Package: Wooden Case
Basic parameters of stomach cleaning machine
Model UD800
Power 2.2kw 380v
Capacity 500kg/h
Dimension 1000*650*950mm
Weight 200kg