Karis Garment and Textil PLC Indestry Project-AA-2024

KARIS GARMET AND TEXTILE,
PLC INDUSTRY
BUSINESS PLAN
Project Location: Addis Ababa City Administrative
Specific Location: Addis Ababa City
Promoter: Karis Garment and Textile, Plc
CONSULTANT: YOYA DEVELOPMENT CONSULTANCY AND
TRAINING PLC
(0911384833)
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MARCH/2024
TABELS OF CONTENTS
ANNEXTURE................................................................................................................................................. IV
FIGURE ........................................................................................................................................................ IV
TABLES ........................................................................................................................................................ IV
ACRONYMS.................................................................................................................................................. VI
EEXECUTIVE SUMMARY .................................................................................................................................7
1. BACK GROUND OF PROJECT .................................................................................................................. 10
1.1 INTRODUCTION .................................................................................................................................................10
1.2 THE APPLICANT .................................................................................................................................................10
1.3 PROJECT OBJECTIVES ........................................................................................................................................11
1.4 EXPECTED OUTPUTS/RESULTS ..........................................................................................................................11
2. PRODUCT/SERVICE DESCRIPTION.............................................................................................................. 12
2.1 LOCATION OF PROJECT .....................................................................................................................................12
2.2 PROJECT LOCATION ADVANTAGE .....................................................................................................................12
2.3 ESTIMATED INVESTMENT CAPITAL/PROJECT COST (USD) ................................................................................13
2.4 PRODUCTS OF PROPOSED PROJECT..................................................................................................................13
2.5 REQUIRED LAND/SHED AREA ............................................................................................................................14
2.6 PRODUCTION PROCESSES (MANUFACTURING LINE) AND RELATED TECHNOLOGY .........................................14
2.6.1GARMENT INDUSTRY PROCESS DESCRIPTION ......................................................................................... 15
3.INPUT/OUTPUT OF PRODUCT/SERVICE ...................................................................................................... 18
3.1 PRODUCT DESCRIPTION AND APPLICATION .....................................................................................................18
3.2 RAW MATERIALS ...............................................................................................................................................18
3.3 UTILITIES............................................................................................................................................................19
3.4 AVAILABILITY OF UTILITIES AND INFRASTRUCTURE .........................................................................................20
4.MARKET STUDY......................................................................................................................................... 21
4.1 INTRODUCTION .................................................................................................................................................21
4.2 SUPPLY OF GARMENT MARKET ANALYSIS ........................................................................................................21
4.2.1 GARMENT & TEXTILE SUPPLY ANALYSIS ................................................................................................. 21
4.2.2 SUPPLY OF GARMENT THROUGH LOCAL PRODUCTION/EXPORT ........................................................... 22
4.2.3 SUPPLY OF GARMENT THROUGH IMPORT.............................................................................................. 23
4.2.4 TOTAL SUPPLY ......................................................................................................................................... 23
4.3 DEMAND ANALYSIS ...........................................................................................................................................24
4.3.1 DEMAND PROJECTION ............................................................................................................................ 24
4.3.2 MARKET PROSPECT (DEMAND – SUPPLY GAP) ....................................................................................... 25
4.4 MARKETING PLAN .............................................................................................................................................25
4.5 MARKETING STRATEGIES ..................................................................................................................................26
4.5.1 TARGET MARKETS ................................................................................................................................... 26
4.5.2 PROMOTIONAL STRATEGIES ................................................................................................................... 27
4.6 PRICING AND DISTRIBUTION.......................................................................................................................27
4.6.1 PRICING ................................................................................................................................................... 27
4.6.2 DISTRIBUTION ......................................................................................................................................... 29
5.ORGANIZATION & MANAGEMENT ............................................................................................................. 31
5.1 ORGANIZATIONALSTRUCTURE ..........................................................................................................................31
5.2 HUMAN RESOURCE REQUIREMENT..................................................................................................................32
5.3 QUALIFICATION AND EXPERIENCE OF PROPOSED MANAGEMENT ..................................................................33
5.4 MAN POWER FINANCE REQUIREMENT ............................................................................................................35
5.5 TRAINING COST .................................................................................................................................................36
5.6 BENEFITS ...........................................................................................................................................................36
5.7 PRE-OPERATING ACTIVITIES ..............................................................................................................................37
6. TECHNICAL STUDY .................................................................................................................................... 38

6.1 PLANT DESCRIPTION AND CAPACITY.................................................................................................................38
6.1.1 PLANT DESCRIPTION............................................................................................................................... 38
6.1.2 PRODUCTION CAPACITY AND EXPORT PLAN .......................................................................................... 38
6.2 PROJECT TECHNOLOGY ENGINEERING AND PROCUREMENT ..........................................................................39
6,2.1 PLANT MACHINERY REQUIREMENTS ...................................................................................................... 39
6.2.2 AUXILIARY EQUIPMENT.......................................................................................................................... 41
6.3 OFFICE FURNITURE & EQUIPMENT ...................................................................................................................42
6.4. VEHICLES REQUIREMENT .................................................................................................................................43
6.5 PROJECT BUILDING AND CIVIL WORKS .............................................................................................................43
6.5.1 LAND DEVELOPMENT AND INTALLATION COST ...................................................................................... 43
6.5.2 BUILDING CIVIL WORKS AND RELATED COST.......................................................................................... 44
7. PROJECT FINANCIAL STUDY ...................................................................................................................... 45
7.1 PROJECT ASSUMPTION .....................................................................................................................................45
7.2 CAPITAL INVESTMENTS .....................................................................................................................................46
7.3 INVESTMENT FINANCING PLAN ........................................................................................................................47
7.4 GROSS REVENUE PROJECTION ..........................................................................................................................47
7.5 OPERATION & ADMINISTRATIVE (DIRECT & INDIRECT) COST ESTIMATE .........................................................48
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7.10 FINICAL PROJECTIONS .....................................................................................................................................48
7.10.1 INCOME STATEMENT (USD) .................................................................................................................. 48
7.10.2 CASH FLOW FORECAST (LIQUIDITY) ...................................................................................................... 49
7.10.3 PROJECTED BALANCE SHEET (USD) ....................................................................................................... 49
7.11 FINANCIAL EVALUATIONS ...............................................................................................................................49
7.11.1THE NET PRESENT VALUE (NPV) ............................................................................................................ 49
7.11.2 FINANCIAL INTERNAL RATE OF RETURN ............................................................................................... 49
7.12 FINANCIAL RESULTS EVALUATION ..................................................................................................................50
7.12.1 PROFITABILITY ....................................................................................................................................... 50
7.12.2 PAYBACK PERIOD .................................................................................................................................. 50
7.12.3 INTERNAL RATE OF RETURN AND NET PRESENT VALUE ....................................................................... 50
7.13 LOAN REPAYMENT SCHEDULE ........................................................................................................................50
7.14 SENSITIVITY ANALYSIS .....................................................................................................................................51
8. ENVIRONMENTAL CONSIDERATION AND SOCIO ECONOMIC IMPACT ......................................................... 52

8.1 ECONOMIC BENEFITS ........................................................................................................................................52
8.1.1 EARNING FOREIGN CURRENCY ............................................................................................................... 52
8.1.2 JOB CREATION ......................................................................................................................................... 52
8.1.3 TAX REVENUE .......................................................................................................................................... 52
8.2 IMPACT ON ENVIRONMENT..............................................................................................................................52
9. KEY SUCCESS FACTORS & CONSTRAINTS AND RISK AND SWOT ANALYSIS................................................... 53
9.1 SUCCESS FACTORS ............................................................................................................................................53
9.2 CONSTRAINTS AND RISK ...................................................................................................................................53
9.3 OPPORTUNITY AND THREATS (SWOT AND/OR PESTEL ANALYSIS) ...................................................................54
10. ANNEXTURE ........................................................................................................................................... 57
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ANNEXTURE
Annex 1 PROJECTED INCOME STATEMENT (Birr) ..................................................................................... 57
Annex 2 PROJECTED BALNCE SHEET (Birr) ................................................................................................ 58
Annex 3. PROJECTED CASH FLOW STATEMENT (Birr) .............................................................................. 58
Annex 4 INTERNAL RATE OF RETUREN (Birr) ............................................................................................ 59
Annex 5 : Project Deprecation Cost (Eth.Birr) .......................................................................................... 60
FIGURE
Figure 1 Exported Garment industry process flow ................................................................................. 14
Figure 2 Project Operating Plan .............................................................................................................. 31
TABLES
Table 1 Raw materials requirement from being to full capacity and cost ............................................. 18
Table 2 Utilities determination at full capacity and cost ....................................................................... 20
Table 3: Garment/wearing apparel domestic production Export in Net-Mass (Kg) ................................ 22
Table 4: Import in Net-Mass (Kg) .............................................................................................................. 23
Table 5: Total garment supply Net Mass ( Kg) .......................................................................................... 23
Table 6: Demand Projection (Net mass in Kg) .......................................................................................... 24
Table 7: Demand – supply gap projection (Net mass in Kg) ..................................................................... 25
Table 8: Marketing Plan of the project ..................................................................................................... 26
Table 9: Ethiopian Top-10 Apparel Export Products (2019) ..................................................................... 28
Table 10: Assumption of the Project price ............................................................................................... 29
Table 11: Man Power requirements ........................................................................................................ 32
Table 12: Minimum Qualification and Experience of Proposed Management ........................................ 33
Table 13: Man Power Finance requirements............................................................................................ 35
Table 14: Company Training Cost ............................................................................................................. 36
Table 15: Company Pre-operating activities ............................................................................................. 37
Table 16: Project Yearly Production Plan.................................................................................................. 39
Table 17: Machinery & Equipment: Cutting, Spreading and Design ........................................................ 40
Table 18: Machinery & Equipment: Sewing ............................................................................................. 40
Table 19: Machinery & Equipment: Finishing ........................................................................................... 41
Table 20: Auxiliary Equipment .................................................................................................................. 42
Table 21: The Estimated Cost of Office Furniture and Equipment ........................................................... 42
Table 22: Company Vehicles ..................................................................................................................... 43
Table 23: Infrastructure and cost related to installation .......................................................................... 43
Table 24: Building Construction works & Related Cost ............................................................................ 44
Table 25: Financial Assumption of the Project ......................................................................................... 45
Table 26: Investment breaks down.......................................................................................................... 46
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Table 27: Financial Requirement & respective source ............................................................................ 47
Table 28: Gross Revenue Determination .................................................................................................. 48
Table 29: Projected Production Operation estimated cost (direct and indirect) ..................................... 48
Table 30: loan Repayment Schedule......................................................................................................... 51
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Acronyms
ADLI Agricultural Development-Led Industrialization
ECX Ethiopian Commodity Exchange
ETB Ethiopian Birr
FDRE Federal Democratic Republic of Ethiopia
GDP Gross Domestic Product
GTP Growth and Transformation Plan
ha Hectare
KA(s) Kebele Administration(s)
KM Kilo Meter
m.a.s.l. Meters above sea level
mm Millimeter
MoARD Ministry of Agriculture and Rural Development
MoFED Ministry of Finance and Economic Development,
oC Degree Cellicious
PIF Policy and Investment Framework (of Ethiopian Agricultural Sector)
PLC Private Limited Company (Pvt. Ltd. Co)
Qtl(s) Quintal(s)
USA United States of America
USD United States Dollars
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EEXECUTIVE SUMMARY
The present project investment proposal study to establish a modern Apparel Industry by KARIS
GARMENT AND TEXTILE PLC, (company under formation) managed by Mr. Yisfalem Agza Sibante the
Garment and Textile Plc, is established at Addis Ababa Administrative at investment land of 10,000 m2
area with a capital investment of 2.708 million USD(151.673 million Birr).
This to some extent has been able to stimulate for 396 skilled & semi-skilled laborers resulting in the
alleviation of poverty overtime in areas where garment and textile industry have been commissioned
already.
This project, which is basically a construction and operation of garment and textile industry at strategic
job opportunity of the project area, is meant to put an end to poverty reduction in Ethiopia,
particularly in Addis Ababa city Administrative, which will then naturally the project required high
human labors, in turn increase economic activities and reduce poverty levels. This is the main rationale
for project.
The capability KARIS GARMENT AND TEXTILE PLC for manufacturing of 7,500 pieces of
textile products per day will be done with owned 896 machineries and implementation efficient
management, production, maintenance, merchandise management systems. The garment and tetile
will produce woven apparel for export or import suction market. At full capacity 6 million woven shirts
will be exported to various buyer at USA, Canada, Africa countries at annual gross revenue of 27
million USd
The total capital investment cost of project is estimated to be 2.708 million USD(151.673 million Birr).
As the major investment capital such as machinery, plant, furniture, equipments, computers, and
vehicles required for the work area transfer to the proposed investment with value of 1.895 million Usd ,
bank loan is required to cover pre-operating and working capital need of project . The bank loan and
equity has 30% : 70% ratio. .
Name of the Industrial Unit GARMENT AND TEXTILE PLC, Industry

Nature of business fabrics, printed label, sticker, such as active wear, Casual ,
Dress, Islamic clothing, Jackets, Lingerie, Trousers, Pullovers,
Safety wear ,School uniforms, Shirts, Sportswear, Stockings
and tights, Tote bags, T-shirts, Work wear, suits, Medical
wear, denim (in m/year) and other especial focus Polo shirts
and Shirt for export and local market.
Company KARIS GARMENT AND TEXTILE, PLC
Project Cost/Birr $2,708,446.92 151,673,027.48 birr
Total Initial Fixed Costs $2,442,168.85 136,761,456 birr
Pre-production expenditure $87,172.34 4,881,651 birr
Working Capital $179,105.73 10,029,921 birr
Loan Ration
Debt -DBE Loan $1,895,912.84 106,171,119.23 birr(70%)
Equity $812,534.08 45,501,908.24 (30%)
Location Addis Ababa

Land Requirement 1ha
Power Requirement 50,000KW per year
Water Requirement 600,000L per annum
Working Hours 8 hours
Working Days 7 days / week
Commissioning Schedule 24 months from the date of taking over the
Land
Project Justification:
The contribution of the envisage project to national economy are summarized as follows.
 This project creates permanent job opportunities for 4 expat and 392 local employees.
 I addition to saving hard currency by substituting import and exporting of garment products,
the project will have a role of earning of foreign currencies by exporting 80% of its products.
Accordingly, an average of 13.782 million USD sales each year during operation life of the
project and a total of 137.820 million USD export sales will be made at the end of the project
life (ten years).
 Government and city administrations will benefit from tax revenue.
 Country will have benefited by export market
Some of rational of prompter for proposing this proposals area,
 Availably of major inputs of fabric at Company textile factory and other inputs are also
available at competitive textile industry with in Ethiopia
 Availably of trainable wages and energy at lower cost compared with other competitors
aboard.
 Access to domestic, regional and international markets.
 New export opportunities created through initiatives such as AGOA (the African Growth and
Opportunity Act),
 Stable annual economic growth in double digits since 2024;
 Promoter Experience: - The promoter has a capacity to cover the partial cost of the project,
equity up to 30% of investment cost. The founder of KARIS GARMENT AND TEXTILE, PLC in
manufacturing has experience work Garment and textile industry for the past four years.
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The project is financial viable project. The project profit and/ or loss, cash flow statements, have good
results. The financial Internal Rate of Return (FIRR) shows 64 % after tax. The net present value of
project capital investment at 14 % discount rate is Usd 14.234 million after taxes. The project payback
period is forth years.
All the aforementioned facts discussed above and the feasibility study on market, technical, financial,
and social point of view proves the project is viable business plan and one of the government's
priorities, which contributes for the government strategy on development worth deserving
encouragement and support from the pertinent government investment office, financial institution
and banks.
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1. BACK GROUND OF PROJECT
1.1 INTRODUCTION
Ethiopia one of the second most populous country in Africa exercises rapid and broad based economic
development. As of Ministry of Finance and Economic Development (MOFED) report, Ethiopia’s
economic average growth for the 2016/17 fiscal year was 9.7%. The annual growth of major sectors:
agriculture, industry and service were 7.1, 18.5 and 9.9 % respectively and their shares out of the total
GDP were about 43, 12 and 45 percent respectively.
As articulated in the GTP-2 of the country the underlying objectives of the industrial development
sector is to increase the share and the benefits earned (gained) from the global economic integration
with an ultimate goal of becoming an industrialized country. Strong emphasis is also given garment
sector as it plays valuable role in the forward and backward linkages of economic development as well
as foreign currency income.
Apparels are ready to wear garment products produced through different manufacturing processes
that involve different steps, beginning with the idea or design concept and ending with a finished
product. The major products of the envisaged factory include underwear and nightwear and etc..
The promoter of this project KARIS GARMENT AND TEXTILE, PLC, decide to become one of the
beneficiaries of the new economic policy who has been initiated to invest in garment industry that
the government has given utmost consideration in the development strategy of the country by
establishing garment industry which produce all age men and women apparel from woven fabrics
1.2 THE APPLICANT

Name: KARIS GARMENT AND TEXTILE, PLC
Address: Company Office Region: Addis Ababa City Administrative: Sub City:Kolife, woreda:-
12, House No.771
Mobile: +251912 676786
Nationality: Ethiopia
Legal form of ownership of the PLC
business
The project
Name KARIS GARMENT AND TEXTILE, PLC
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Project Address Region: Addis Ababa City Administrative: Addis Ababa City
Status of the Project New
Project Sector Category Garment and Textile industry
Type of Project
Project Objective The primary objective of the project is to engage in the development
of modern Garment and Textile Plant to produce high quality
garment products such as active wear, Casual, Dress, Islamic clothing,
Jackets, Lingerie, Trousers, Pullovers, Safety wear, School uniforms,
Shirts, Sportswear, Stockings and tights, Tote bags, T-shirts, Work
wear, suits, Medical wear, denim (in m/year) and other especial focus
Polo shirts and Shirt for export and local market.
To successfully develop a garment and Textile plant technology and
deliver high quality and Textile products thus making a profitable
business venture
Project’s land holding;- Total area 10,000M2
Right of Occupancy of the project The promoter has acquired the land by lease from Addis Ababa City
Land Administrative
Lease period 70 years
Type of products Garment and Textile products
Project period 10 years (2024-2034)
1.3 Project objectives

Objective of the project is which manufacturing men and women shirts from woven fabrics produced
in next factory shade at the same park for the domestic market and export market. In line with this,
the following are specific objectives of the project:
o To establishment of Garment and Textile Industry at Addis Ababa Administrative with
newly established of KARIS GARMENT AND TEXTILE, PLC, with a capacity to produce 7,500
pcs/day
o Too generate attractive return to the investor and also contribute to the foreign exchange
substitute role to country.
1.4 Expected outputs/results

This project is expected to:
 Provide garment product of 1.5 million pieces every year to export market or import
substitutions.
 Generate foreign currency for the country
 Create job opportunities for youths
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2. PRODUCT/SERVICE DESCRIPTION
2.1 LOCATION OF PROJECT AREA
The project is located Addis Ababa City Administrative. Addis Ababa City is a governmental department
that houses the offices of the Municipality of Addis Ababa, Ethiopia. It is where near to the African
Union is headquartered and where its predecessor the Organization of African Unity (OAU) was based.
It also hosts the headquarters of the United Nations Economic Commission for Africa (ECA), as well as
various other continental and international organizations. Addis Ababa City is therefore often referred
to as "the political capital of Africa" for its historical, diplomatic and political significance for the
continent. Its geographical coordination is in between 9°02′05″N 38°45′03″E, latitude and longitude
respectively, with 726 feet (2,355 m) meter above sleeve.
2.2 Project Location Advantage

The project area of location advantages are commercial, business, infrastructure advantages being at
Addis Ababa City.
Availability of well-developed social and economic infrastructure facilities such as modern
telecommunication, electric power, higher education and financial institutions, airport and etc.
The presence of abundant, easily trainable and inexpensive labor force in the city and
surrounding urban area;
Preferential market access: serious of initiative s have been taken to produces new export
opportunities for company that enjoy the benefits of favorable global market such as COMESA
(common market for east and southern Africa), AGOA, and has the result of multilateral trade
agreements accomplished with the developed countries which are free of duty and without
quota restriction for all export product;
Abundant Human resource: as a Addis Ababa City has significantly wider in the part the youth
age group, which has plentiful supply of skilled workers in different types of fields;
Addis Ababa City has a huge potential in Hydro power sub-station, for the company a power
supply,
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2.3 Estimated investment capital/Project Cost (USD)
The total investment cost of the envisage garment is 2.708 million USd. However as you can see at
break down figure below 90.02% of the investment is fixed asset, 6.6% is the working capital and 3.2%
is the pre-production cost.
2.4 Products of proposed project

product.
The major products of the envisaged factory include trousers, coats, jackets, shirts, blouses, baby
garments, and etc. They can be used either as casual clothes or working clothes under different
operations accordingly.
Different fabric types; such as cotton fabrics, polyester fabrics, nylon fabrics, polyester-cotton blended
fabrics, denim fabrics, and others, are used to manufacture these products tailored to customers’
requirement
The major products of company is high quality garment products such as active wear, Casual, Dress,
Islamic clothing, Jackets, Lingerie, Trousers, Pullovers, Safety wear, School uniforms, Shirts,
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Sportswear, Stockings and tights, Tote bags, T-shirts, Work wear, suits, Medical wear, denim (in
m/year) and other especial focus Polo shirts and Shirt for export(80%) and local market(20%).
2.5 Required land/shed area

The proposed plant requires a total land area of 10,000 m2. The building includes production hall,
warehouses both for raw material and finished products, design and pattern making room, product
display room, canteen both for workers and staffs, toilet and shower/wash room, security room,
offices and other facilities.
The factory shade will be stablished at Addis Ababa City. The lease rental rate starts with US$2.21 per
m2 per year for the 70-year lease period, the total lease cost is, USd 1,547,812.50 of which 10% of the
total lease USd 154,781.25 will paid in the first year.
2.6 Production processes (manufacturing line) and related technology

The process flows the envisage garment & textile manufacturing unit is as shown at the figure-1 below.
The figure shows stepwise garments Manufacturing Sequence on Industrial basis is given below:
Figure 1 Exported Garment industry process flow
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2.6.1Garment industry process description
Design/ Sketch:
For the production of knit garments, or woven garments a sketch of a particular garment
including its design features is essential to produce on paper so that after manufacturing of that
garment could be verified or checked whether could be done manually or with the help of
computer.
Pattern Design:
Hard paper copy of each component of the garment of exact dimension of each component is
called pattern. The patterns also include seam ounce, trimming allowance, dirt’s, and pleats,
ease allowance, any special design etc affairs. Pattern design could also be done manually or
with the help of computer.
Sample Making
The patterns are used to cut the fabric. Then the garment components in fabric form are used
to sew/assemble the garment. Sample garment manufacturing is to be done by a very efficient
and technically sound person.
Production Pattern
The patterns of the approved sample garment are used for making production pattern. During
production pattern making, sometimes it may be necessary to modify patterns design if buyer
or appropriate authority suggests any minor modification.
Production Pattern
The patterns of the approved sample garment are used for making production pattern. During
production pattern making, sometimes it may be necessary to modify patterns design if buyer
or appropriate authority suggests any minor modification.
Grading
Normally for large scale garments production of any style needs different sizes to produce from
a set of particular size of patterns, the patterns of different sizes are produced by using grade
rule which is called grading.
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Marker Making
All the pattern pieces for all the required sizes are arranged n the paper in such a way so that
maximum number of garments could be produced with minimum fabric wastage. Markers are
made for 6, 12, 18, 24 etc. pieces. Marker is also useful to estimate fabric consumption
calculations.
Spreading
It is the process of arranging fabrics on the spreading table as per length and width of the
marker in stack form. Normally height of the lay/fabric is limited up to maximum six inches
high. But 4 inch to 5 inch height of the lay is safe.
Fabric Cutting
On the fabric lay/spread the marker paper is placed carefully and accurately, and pinned with
the fabric to avoid unwanted movement or displacement of the marker paper. Normally
straight knife cutting machine is used to cut out the garment component as per exact
dimension of each patterns in stack form, care must be taken to avoid cutting defects.
Sorting/ Bundling
After cutting the entire fabric lay, all the garments components in stack form is shorted out as
per size and color. To avoid mistake in sorting, it is better to use code number on each pattern.
Sewing or Assembling
It is the most important department/ section of a garment manufacturing industry. Sewing
machines of different types are arranged as a vertical line to assemble the garments. Sequence
of types of sewing machine arrangement depends on sequence of assembling operations.
Number of sewing machine per line in the envisaged factory 75 machineries based on our
planed products style of the garment to be produce. Average Production per line per one shift
is 125 pcs. Number of production line in the envisage factory are ten. Therefore, daily 7,500
wear, Casual, Dress, Islamic clothing, Jackets, Lingerie, Trousers, Pullovers, Safety wear,
School uniforms, Shirts, Sportswear, Stockings and tights, Tote bags, T-shirts, Work wear,
suits, Medical wear will be product will be sewed and assembled depending on design and
output quantity of garment.
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Inspection
Each and every garment after sewing passes through the inspection table/ point, where the
garments are thoroughly and carefully checked to detect/find any defect if present in the
garment. The defects may be for example variation of measurement, sewing defect, fabric
defects, spots etc. if the defect is possible to overcome, then the garment is sent to the
respective person for correction. If the defect is not correction able, then the garment is
separated as wastage.
Pressing/ Finishing
After passing through the inspection table, each garment is normally ironed/ pressed to remove
unwanted crease and to improve the smoothness, so that the garments looks nice to the
customer. Folding of the garment is also done here for poly packing of the garments as per
required dimension.
Final Inspection:
It is the last stage of inspection of the manufactured garments on behalf of the garment
manufacturing organization, to detect any defective garments before packing.
Packing:
After final inspection, the garments are poly-packed, dozen-wise, color wise, size ratio wise,
bundled and packed in the cartoon. The cartoon is marked with important information in
printed form which is seen from outside the cartoon easily.
Dispatch:
The cartoons of the manufactured garments and textile products are delivered or placed in the
dispatch department or finished product goes down, from where the garments lot is delivered for
shipment.
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3.INPUT/OUTPUT OF PRODUCT/SERVICE
3.1 Product description and application

product.
The major products of the envisaged factory include Woven fabric products of wear, Casual, Dress,
Islamic clothing, Jackets, Lingerie, Trousers, Pullovers, Safety wear, School uniforms, Shirts,
Sportswear, Stockings and tights, Tote bags, T-shirts, Work wear, suits, Medical wear are the current
plan of the envisage plant. The prompter due to previous work exposure has already started
communicating buyers abroad. Different fabric types; such as cotton fabrics, polyester fabrics, nylon
fabrics, polyester-cotton blended fabrics, denim fabrics, and others, are used to manufacture these
products tailored to customers’ requirement.
3.2 Raw Materials

The raw materials required to produce garments include fabrics, buttons, sewing threads, and
accessories like zipper, shoulder pad, labels etc. Except some materials and accessories which are not
produced locally, for a short run, all the raw materials will be purchased from importers. However, in
the near future all the raw materials will be expected to be available locally as there are a number of
projects in the pipeline locally and foreign manufacturer. Table-1 below presents annual requirements
and corresponding costs of raw materials at full production capacity Usd 7,516,088.
Table 1 Raw materials requirement from being to full capacity and cost
Sr. No. Description UoM Quantity Quantity Unit Total Price in

Required/Unit Required @ Price USD
100% in
Capacity USD
Textile Production
1 100 % Cotton, Single Jersey kg 0.2 294,000 6.3 1,852,200
2 Rib kg 0.05 73,500 6.45 474,075
3 Neck band pcs 1 1,470,000 0.04 58,800
4 barcode printed label pcs 1 1,470,000 0.01 14,700
5 barcode sticker pcs 1 1,470,000 0.03 44,100
6 brand label pcs 1 1,470,000 0.01 14,700
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7 button 4 hole 16 mm pcs 3 4,410,000 0.02 88,200
8 clips 20cm pcs 2 2,940,000 0.01 29,400
9 Hang tag pcs 1 1,470,000 0.04 58,800
10 care label Pcs 1 1,470,000 0.04 58,800
11 stitching yarn (for sewing ) kg 0.01 20,580 0.78 16,052
12 soft interline meter 0.05 73,500 0.51 37,485
Sub-Total 2,747,312
Cost of Freight (3%FOB) 82,419
Foreign Cost Sub-Total 2,829,732
Birr Equivalent (1USD=56.35 Birr) 116,490,153
Other Local Costs (6.25% of FOB Price) 7,280,635
Total Polo Shirt Production Cost in Birr 123,770,788
Garment production
1 100 % Cotton, Plain weave meter 1.2 2,520,000 1.5 3,780,000
2 Neck band pcs 1 2,100,000 0.04 84,000
3 barcode printed label pcs 1 2,100,000 0.01 21,000
4 barcode sticker pcs 1 2,100,000 0.03 63,000
5 brand label pcs 1 2,100,000 0.01 21,000
6 button 4 hole 16 mm pcs 1 2,100,000 0.02 42,000
7 clips 20cm pcs 7 14,700,000 0.01 147,000
8 Hang tag pcs 2 4,200,000 0.04 168,000
9 care label pcs 1 2,100,000 0.04 84,000
10 stitching yarn (for sewing ) kg 0.02 42,000 0.78 32,760
11 soft interline meter 0.1 210,000 0.51 107,100
Sub-Total 4,549,860
Cost of Freight (3%FOB) 136,496
Foreign Cost Sub-Total 4,686,356
Birr Equivalent 192,920,866
Other Local Costs (4.25% of FOB Price) 8,199,137
Total Shirt (woven) production Cost in Birr 201,120,003
Grand Total Cost 324,890,790
The raw materials which has 90 % of raw material will be purchased from foreign textile industry.
3.3 Utilities
Electricity and water are the two major utilities required by the envisaged plant. Total annual cost of
major utility items at full operation capacity of the plant is Usd 67,077.55 Usd per year. Details are
shown in the table below:
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Table 2 Utilities determination at full capacity and cost
S/N Utilities Unit Hourly Yearly Rate Cost
Demand Demand
1 Electric power Kwt/ Hr 350.00 1,680,000.00 $0.02 $33,600.00
2 Water M3/hr 30.00 72,000.00 $0.14 $10,080.00
3 Telephone 12,000.00 $1.00 $12,000.00
Fuel and oil $11,397.55
Total Cost $67,077.55
3.4 Availability of utilities and infrastructure

Utilities like electric power, water, and communication devices like telephone, internet, and fax are
among important facilities that supposed to be fulfilled for smooth operation of every project. The
envisaged project will can easily have eclectic power from ELPA line installed at Addis Ababa City.
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4.MARKET STUDY
4.1 Introduction
Textile and garment have been with us ever since people in ancient times moved from wearing
garments made of animal skins to wearing garments made of cloth. The modern form of the textile
industries –using factories with machinery driven by artificial motives power-dates from the first
Industrial Revolution, started in Britain in the late 18th century, based on cotton.
The global textiles and garments industry forms an important component of world trade flows,
particularly for some developing and least developed countries where clothing accounts for a large
proportion of total exports. World garment products export values have increased from USD 179
million to USD 212 billion during the year 2008 to 2012.The developing countries produce half the
world’s textile exports and nearly three-quarters of the world’s clothing exports.
In Ethiopia, traditional garment making “Habesha Dress” has a long history, made from cotton seed
and for long it has been a cottage industry and has satisfied the demand of the people for centuries.
But through the evolution of human being, the fabric type, style, quantity has varied and the garment
nature has advanced and the industry has evolved from cottage to vast manufacturing industries.
The first industrialized garment factory was established in the 1960s, with the establishment of Addis
garments (Augusta) in 1958, by an Italian investor. Shortly following Akaki garment factory, were
founded by Ethiopian government in 1963. Later, Gulele garment factory and Nazereth garment
factory were founded in 1983 and 1992 respectively.
4.2 Supply of garment market analysis
4.2.1 Garment & Textile supply analysis

The garment manufacturing business in Ethiopia shows a growing trend indicated by the growing
number of firms engaged in the garment production. According to data obtained from CSA, the
number of large and medium scale garment -manufacturing establishments increased from 22 in year
2004 to 160 in year 2018.
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The Average Gross Value of Production and Value Added of the sector was Usd 730.8 million and 430.2
million in the year 2017, respectively. During the years 2008 – 2018, gross value of production and
value-added of the sub-sector has shown a substantial growth, registering an average annual growth
rate of 91% and 101 %, respectively. At present the sources of supply for garment are import and local
production. Accordingly, past trends in local production, import and total supply or apparent
consumption is analyzed hereunder.
4.2.2 Supply of garment through local production/export

Garment manufacturing is driven by the designs chosen, the inputs which come from in-house
designers and market feedback. Manufacturers consider several aspects related to the customer
(demography, lifestyle, motivation and aspiration, needs and preferences), raw material (type, quantity
and availability) and internal capability (expertise and availability of labor, production process
complexity and delivery time) for developing different designs and types of garment products, which in
turn, determine the product’s comfort, look and feel and value.
Various types of garment products, such as Casual, Dress, Islamic clothing, Jackets, Lingerie, Trousers,
Pullovers, Safety wear, School uniforms, Shirts, Sportswear, Stockings and tights, Tote bags, T-shirts,
Work wear, suits, etc. are manufactured locally. These products are mostly manufactured by small and
medium sized manufacturers though recent establishments with modern technology are exhibited in
the country. This envisaged project however, intends to manufacture good quality garment products
using the state of the art technology.
The trend in the local production of garment products (Wearing Apparels) and supply to the domestic
market by the existing local manufactures over the years 2002 - 2011 is shown in table below.
Table 3: Garment/wearing apparel domestic production Export in Net-Mass (Kg)
Year Net Mass ( Kg) Growth Rate

2002 50,483.00
2003 118,120.00 134%
2004 695,807.10 489%
2005 436,455.90 -37%
2006 502,480.26 15%
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2007 351,970.05 -30%
2008 797,423.05 127%
2009 383,980.71 -52%
2010 770,251.07 101%
2011 770,251.07 0%
Average growth rate 83%
Table above reveals that domestic production of ready-made garments and export has average growth
rate of 83 %.
4.2.3 Supply of Garment through import

A large proportion of the country's requirement for garment products has been met through import
while some amount of the product is produced locally. During 2002-2011, Ethiopia imported garment
products from different countries, mainly from China, India, Thailand, and Turkey. The import has
growth rate of 13%.
Table 4: Import in Net-Mass (Kg)
Year Net Mass ( Kg) Growth Rate
2002 9,234,109.94
2003 13,780,003.96 49%
2004 15,911,535.51 15%
2005 20,289,345.96 28%
2006 21,893,291.87 8%
2007 24,017,373.71 10%
2008 23,093,513.42 -4%
2009 25,024,744.34 8%
2010 30,435,103.93 22%
2011 24,304,144.57 -20%
Average growth rate 13%
Source: Based on Ethiopian Customs data
Generally, during the past five years the import trends for garment product to Ethiopia increased by 13
% in terms of volume.
4.2.4 Total supply

The total supply of garment, as discussed earlier is composed of domestic production plus import less
local export. Accordingly, the table below summarizes the total supply of garment products during the
period 2002 – 2011 G.C.
Table 5: Total garment supply Net Mass ( Kg)
Year Export) Import Import + Growth Rate
Export
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2002 50,483.00 9,234,109.94 9,284,592.94
2003 118,120.00 13,780,003.96 13,898,123.96 50%
2004 695,807.10 15,911,535.51 16,607,342.61 19%
2005 436,455.90 20,289,345.96 20,725,801.86 25%
2006 502,480.26 21,893,291.87 22,395,772.13 8%
2007 351,970.05 24,017,373.71 24,369,343.76 9%
2008 797,423.05 23,093,513.42 23,890,936.47 -2%
2009 383,980.71 25,024,744.34 25,408,725.05 6%
2010 770,251.07 30,435,103.93 31,205,355.00 23%
2011 770,251.07 24,304,144.57 25,074,395.64 -20%
13%
Total Supply of garment products has been characterized by a noticeable growth trend (See Figure 4),
though it exhibits fluctuations from year to year. It has average increased of 13 % in 2002- 2011 E.C.
Hover to be safe we take 10% as growth rate.
4.3 Demand Analysis
4.3.1 Demand projection

As the market of envisage factory is import substitution and export, the demand exhibited at export
and import data of Ethiopia take for demand forecast. A simple version of the quantities method of
projection is the application of the historical rate to future growth. The total garment products
consumption and the average growth rate for the years 2025 to 2034 is presented in table 5 above .
Based on the result obtained above one can assume that the demand for garment products to grow
yearly by 10%. The result of the estimation is presented in table below.
Table 6: Demand Projection (Net mass in Kg)
Year Net Mass ( Kg)
2025 65,036,524.64
2026 71,540,177.10
2027 78,694,194.81
2028 86,563,614.29
2029 95,219,975.72
2030 104,741,973.29
2031 115,216,170.62
2032 126,737,787.69
2033 139,411,566.45
2034 153,352,723.10
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4.3.2 Market prospect (demand – supply gap)
The interaction of demand supply is summarizing in table below through demand - supply gap of
processed honey products at the country level is calculated as shown below.
Table 7: Demand – supply gap projection (Net mass in Kg)
Year Supply Demand Gap
Net Mass ( Kg) Net Mass ( Kg) Net Mass ( Kg)
2025 6,149,543.55 65,036,524.64 (58,886,981.09)
2026 6,764,497.90 71,540,177.10 (64,775,679.20)
2027 7,440,947.69 78,694,194.81 (71,253,247.12)
2028 8,185,042.46 86,563,614.29 (78,378,571.83)
2029 9,003,546.71 95,219,975.72 (86,216,429.02)
2030 9,903,901.38 104,741,973.29 (94,838,071.92)
2031 10,894,291.51 115,216,170.62 (104,321,879.11)
2032 11,983,720.66 126,737,787.69 (114,754,067.02)
2033 13,182,092.73 139,411,566.45 (126,229,473.72)
2034 14,500,302.00 153,352,723.10 (138,852,421.10)
Source: Consultant Analysis Results
The Demand – Supply analysis shows that there exists a wide range of market that enables this
upcoming project to sale its produce without any problem at local and import substitution.
4.4 MARKETING PLAN

Considering the need for skill development and the time required for market penetration (export
market) the processing plant will be planned to start operation at 60% of the capacity in the first year,
and will grow to 70% 80% and 90% in the second, third and fourth years respectively. The plant will
operate at full capacity operation in the fourth year and then after. It is estimated that the product is
about 80% to the export market and 20% for domestic market.
We present an extensive range of all ages’ wear that are manufactured using different fabrics such as
cotton, silk, wool and others. Available in a wide range of gorgeous colors, designs and prints, these
apparels are designed keeping in mind the most up-to date fashion trends. The different age groups,
our variety of garment and textile is offered in different sizes and is tremendously comfortable to
costumers. Our main wearing collection offered for all ages are:
Woven fabric of synthetic filament yarn
Men’s or boys’ suits, ensembles, not knit, etc.
T-shirts, singlet’s and other vests, knitted or crocheted
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Women’s or girls’ suits, ensembles, jackets, blazers, dresses, skirts, divided skirts, trousers, bibs
and brace overalls, breeches and shorts
Synthetic filament yarn (other than sewing thread), not put up for buyer
The factory operates in one shift of 8 hours & has a production capacity of finished Products as shown
in the following table 8.
Table 8: Marketing Plan of the project
Sale Summary UoM Y1 Y2 Y3 Y4
Export Market
Sales Volume (Qty) Pcs 693,750 832,500 971,250 1,110,000
Local Market
Finished Goods sold (QTY) Pcs 173,438 208,125 242,813 277,500
Total Sales (Qty) Pcs 867,188 1,040,625 1,214,063 1,387,500
From the total company products garment constitutes 60% and textile products is about 40% of the total
products.
After start-up funding is secured, we will expand the types of clothing items available and the
customization options. Additional items to the company couture product line will include fashion
different products. The company will add a new product line of high-quality sweatshirts, sweatpants,
and athletic shorts. In the future, the company intends to expand its line of business to fashion
empowerment programmes for less-privileged in the society, interior decoration, event planning and
decoration and assorted gift store.
4.5 MARKETING STRATEGIES
4.5.1 TARGET MARKETS

A number of prospective customer groups will comprise Karis Garment and Textile Plc Industry’s
principal target markets. The type of marketing required to effectively connect to the various groups
will vary, and these differences will be noted.
Local Market: The Company plans to target potential clients of all age group. Customers within this
group, have diverse backgrounds. The company customer is a versatile person who can fit into any
environment and is willing to pay a reasonable price for quality clothing.
The company has several distinct target markets: individuals, schools, and businesses. Our primary
target market includes high schools and colleges their student, teams, and individuals. This market is
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technologically savvy and utilizes the Internet for most information to deal export. The secondary
target market includes area businesses, such as restaurants and corporations that want to expand their
brands through cool, retro clothing.
Export Market: The Company will use African Growth and Opportunity Act (AGOA) is a United States
Trade Act that significantly enhances U.S. Use currently market access for 39 Sub-Saharan African (SSA)
countries. The company also reaches other world country’s export destinations area. The majority of
garments (HS 61-63) are exported to the US, United Arab Emirates and United Kingdom (UK), while the
majority of cotton textile (HS52) exports go to other garment producers such as Bangladesh, China,
Viet Nam and Sri Lanka and etc….
4.5.2 PROMOTIONAL STRATEGIES
As a general statement, the principal objective behind Karis Garment and Textile Plc Industry’s
ongoing promotional activities will be to introduce and reinforce the commodity brand name to the
market. Some of the promotional activity / tactics to be employed is rather straightforward, including:
Large signage along major roadways (e.g. billboards).
Free sample giveaways in markets and other shopping places.
Radio and newspaper ads.
Participate to a “bazaar” or exhibition in the local and international level
Offer a discount on buyers for those customers who agree to commit to longer-term, minimum
volume, supply contracts.
Pay competitive commissions to local buyers, wholesalers, and brokers so that they remain
motivated to sell the company product lines.
Internet: In addition to the direct sales efforts Internet plans to establish a presence on the
internet by developing a website. Plans are underway to develop a professional an effective site
that will be interactive and from which sales will be generated worldwide.
4.6 PRICING AND DISTRIBUTION
4.6.1 PRICING
Company’s pricing objectives are twofold (cost and value-based). Prior to the company’s mission
statement, pricing must remain reasonable and, competitive. So the company will focus on maximizing
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sales through volume pricing and continue to maximize return on sales (ROS). The company will use a
cost-value based pricing strategy. The costs of raw materials are discounted when company purchase
in bulk, because vendor tend to discount wholesale/volume purchases.
According to Ethiopia Garment and Textile report, 2019, the top five products account for almost 70
percent of total apparel exports in 2019. Unit values are relatively low with a median price of the top
five products US$ 8.8 per piece (Table 11). With regard to the two key end markets, product
concentration is high in both markets with the top 10 products accounting for 92 percent in the EU-15
and for 88 percent in the US. All of the top 10 products for the EU-market in 2014 are knit items while
there are four woven items among the US top 10.
Therefore, for this envisaged project the following export price reference was taken for the calculation
of project business revenue estimation.
Table 9: Ethiopian Top-10 Apparel Export Products (2019)
HS code Product Value (US$ /pcs.) Share(%) Unit Value(US$/pcs)

610910 T-shirts (N/A, cotton) 23.733 35% 4,3
610462 Trousers (W&G, cotton) 12.563 18% 5,6
610510 Shirts (M&B, cotton) 4.413 6% 8,8
611430 Garments (N/A, MMF) 3.924 6% 14,0 (US$/kg)
611030 Jerseys (N/A, MMF) 2.703 4% 10,5
Average 47.34 69% 8,6
Median 8.8
620343 Trousers (M&B, synthetic) 2.24 3% 12,5
610469 Trousers (W&G, other textiles) 2.227 3% 7,9
610463 Trousers (W&G, synthetic) 2.127 3% 7,7
610444 Dresses (N/A, artificial) 1.729 3% 13,7
610990 T-shirts (N/A, other textiles) 1.673 2% 5,1
Average 57.33 84% 9.0
Median 7.9
Total 68.408 100%
Source: UN COMTRADE 2019; apparel represents HS92 50-60+63; exports represent partners’ imports
In foreign market price is set at the point where the ownership is transferred, which in turn
determined based on the agreement with the importer. Currently, the sales scheme is at FOB. The
price assumption is will grow 5% growth rate throughout the project life, the actual project price
lowered to 46% and 77% and of the above table 10 median value for textile and garment product
respectively.
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Table 10: Assumption of the Project price
Sr. no Description Project Years(Y1-Y10)

Unit Y1 Growth Rate 5%
1 Export market (80%)
Sealing Price
all age Trousers (cotton) USA/pcs 6.5
All age Shirts ( cotton) USA/pcs 4.5
Garments (stock and others) USA/pcs 8.8
Boy's set (4 pcs) Vest,Tie,Shirt & Trouser USA/pcs 4.5
Adult & Youth Suit Single Button Embroidery USA/pcs 4.5
Adult& Youth Mock neck L/S T-shirt USA/pcs 4.5
Adult Dresses USA/pcs 7.5
Adult and youth T-shirts (N/A, other textiles) USA/pcs 4.5
Adult and Youth Jacket USA/pcs 7.5
Others USA/pcs 5.5
Total 58.3
Average USA 5.83
2 Local Market (20%)
sealing Price
all age Trousers (cotton) Birr/Pcs 200
All age Shirts ( cotton) Birr/Pcs 150
all age Garments (stock and others) Birr/Pcs 120
Boy's set (4 pcs) Vest,Tie,Shirt & Trouser Birr/4Pcs 120
Adult & Youth Suit Single Button Embroidery Birr/Pcs 80
Adult& Youth Mock neck L/S T-shirt Birr/Pcs 180
Adult Dresses Birr/Pcs 150
Adult and youth T-shirts (N/A, other textiles) Birr/Pcs 150
Adult and Youth Jacket Birr/Pcs 200
Others Birr/Pcs 50
Total 1400
Average 140
4.6.2 DISTRIBUTION
The company intends to build a sales team that will be tasked with generating sales leads on
international and national basis. They will also be responsible for establishing connections with other
buyer outlets. A key factor in the success of company will be by its distribution. The company plans to
use the following channels of distribution channels:
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Departmental stores
Garment and textile specialty stores
Internet stores
Catalogs are another important method of shipping. Consumers have lesser time to shop, and for
some, catalog shopping offers a more convenient and pleasant alternative.
The distribution channel that has received the most attention recently is the Internet. Consumers like
the convenience of being able to shop from anywhere and at any time they wish. Manufacturers with
internet sites use them for marketing and awareness purposes. With further technological advances in
hardware, software and data pipelines, shopping for fashions continues to gain popularity.
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5.ORGANIZATION & MANAGEMENT
5.1 ORGANIZATIONALSTRUCTURE
The organizational structural will be designed in a way that makes the envisaged factory most
successful. There are different sections with their own tasks to make the envisaged factory beneficial;
the general manager who is the top of the Factory will be managing the overall operations. The owner
of the envisaged factory has acquired sufficient knowledge and experience concerning factory and
business management. The organizational structure is as shown at figure below.
Figure 2 Project Operating Plan
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5.2 Human resource requirement
. Garment industry is labor intensive where use of quality labor is the most determining success factor.
Availability of training is also crucial to improve productivity, speed and management. In Ethiopia,
though there is abundant labor, quality is a big problem. There is scarcity of designer, pattern maker
and marketing professionals with higher education.
The manpower requirement of the enterprise is estimated employment for about skilled & 0 semi-
skilled totally 396. Operators are skilled and semi-skilled employees working in different positions. Of
the total manpower, of total works 4 are foreign expatriates with special technical skills and are
expected to serve for the first four years; after the fourth year of operation, they will be replaced by
domestic employees. See table below for the detail manpower requirement: The total manpower
requirement planned for the project is given below the table 11.
Table 11: Man Power requirements
Sr. No. Department/Section No. Required

Local Foreign Expatriates Total
I General Manager Office 3 0 3
II Production and Technical Dep’t 3
Department Manager 1 0 1
Design Section 6 1 7
Cutting Section 39 1 40
Sewing Section 244 1 245
Finishing Section 42 1 43
Engineering Section 4 0 4
Quality Control Section 12 0 12
Sub-total 348 4 352
III Planning & MIS Dep't 5 0 5
IV Administration & Finance Dep’t
HRM & Admin Section 14 0 14
Finance Section 6 0 6
Sub-total 21 0 21
V Marketing & Supplies Dep’t -
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Marketing Section 6 0 6
Supply Section 8 0 8
Sub-total 15 0 15
Total 392 4 396
5.3 Qualification and Experience of Proposed Management

Deferent sectors of the economy demand different skill level of management and workforce skill. In
order to work in managerial occupations in the company, a collage education is necessary and some
positions even require an advanced degree. Many workers in administrative and managerial
occupations shall be those having degrees in business and possess a combination of technical and
business degrees
The organizational set up of Karis Garment and Textile Plc, Industry’s project shall be managed by the
first general manager of Mr. Yisfalem Agza Sibante at the top together with the second production
and technical department manager (to be assigned), and Administration, finance and marketing
department manager that are accountable to the general manager. The project should be designed to
have a functional structure which establishes effective management system and enhances upward,
downward, horizontal and lateral communications and tasks in the line of order.
Table 12: Minimum Qualification and Experience of Proposed Management
Minimum Qualification & Experience
No.
Sr. No. Management Position
Required Minimum Qualification Experience
BA degree in management, Minimum of 8 years of
1 General Manager 1
Economics & related field relevant experience
BA degree in management Minimum of 5 years of
2 Administrative & Finance Dep’t 1
or any related field relevant experience
BSC degree in textile Minimum of 8 years of
3 Production &Technical Dep’t 1
engineering relevant experience
BA degree in Economics,
Minimum of 5 years of
4 Planning & MIS Dep't 1 Management & related
relevant experience
field
Minimum of 6 years of
5 Marketing & supplies Dep’t 1 BA degree in marketing
relevant experience
General Manager
The company’s General Manager Mr. Yisfalem Agza Sibante has held four years of relevant experience
in the same line of business and these will have enabled him to fit to the position & to run the company
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under consideration. Moreover, the company has a plan to hire other qualified technical staff since
garment and textile activities need experience and qualification of the management.
Thus the company shall recruit based on the recommended experience gained from the different
positions on the same line of business of the general manager can run the project at its best performance
with the support of the project that would be recruited an agronomist farm manager & other technical &
qualified personnel
Production Department Manager
Production manager will serve as the company's Production Manager. He/she holds a B.Sc.in
production engineering, economics and has held the position of Production Manager and water
treatment specialist at the industry. Of particular significance, he/she will assume oversight
responsibilities during the initial plant setup stage, ensuring that the various section components are
assembled and tested properly. Once operational, he/she will manage all production staff training, and
will establish quality control policies and procedures.
Financial Department Manager
The Financial officer will direct the organization’s financial goals, objectives, and budgets. She/he will
oversee the investment of funds and manage associated risks, supervise cash management activities,
and execute capital-raising strategies to support a firm’s expansion.
Marketing Department Manager
B.Sc. in Business Administration from the known University and has been active in the Arts and Science
field. He/she is very familiar with the media and promotional venues
Serving as the lead marketing and promotion strategist for the firm, he will develop and implement the
appropriate advertising campaigns essential to establish and then build the Garment brand. His/her job
will also include recruitment and training of all marketing and sales personnel, as well as ensuring that
sales targets are being met.
Distribution and delivery unit is directed under marketing department, He/she will manage the firm's
trucking fleet operations, including the recruitment and training of all delivery personnel. Once
operational, his job will be to ensure that delivery routes are properly planned and executed, and that
product is distributed on time and cost-effectively.
Administration Manager
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He/she will serve as the company's Administration Manager, primarily managing the day-to-day affairs
of the firm's Luanda office, including reception, secretarial, payroll, human resources, and other
administrative tasks. He/She has got many years of experience in the administration and public
relations field.
STAFF CONSIDERATIONS
Karis Garment and Textile Industry Company will require a substantial workforce to adequately carry
out the range of activities envisioned. Some of the highlights for these staff members are highlighted
below table 13.
5.4 MAN POWER FINANCE REQUIREMENT

As Labour is a highly valued asset in garment industry, the enterprise is assumed to pay competitive
salary and benefit packages. The total salary cost of Birr 21,962,162 in the first year of operation, the
enterprise is expected to fully cover required salary and wage while an amount of Birr 20,487,358 full
production capacity and the payroll will growth at 5% growth rate. Moreover, the enterprise is
assumed to pay about 20% of the basic salary as a benefit package.
Table 13: Man Power Finance requirements
Description Year-1 Year-2 Year-3 Year-4 Year-5-y10

Local Labour 16,855,000 17,697,750 18,582,638 19,511,769 20,487,358
Foreign Labour 2,553,581 2,553,581 2,553,581 2,553,581 0
Total Cost 19,408,581 20,251,331 21,136,219 22,065,350 20,487,358
Additional Company’s Foreign
Labour Cost (Birr) 2,553,581 2,553,581 2,553,581 2,553,581 0
Total Cost to the Company 21,962,162 22,804,912 23,689,800 24,618,931 20,487,358
The proposed project is expected to create employment opportunity to several citizens of the region.
That is, it will provide permanent employment to 392 locals and 4 expat professional, production, and
support staffs. Consequently, the project creates income of 439,624 Usd per year and 36,635 Usd per
month for local and expat employees
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5.5 Training Cost
Training will be conducted in collaboration with the Ethiopian Textile Industry Development Institute
(ETIDI) and other sectorial associations. A training center is expected to be set in the industrial park,
equipped with the necessary materials and facilities including the required human resource. At the
initial stage, there will be intensive training programs and majority of the cost (up to 85%) will be
covered by the government. However, starting from the second year (till the tenth year), the training
cost will decrease as training is expected to be given only to new and some existing employees. For the
detail see table 14 below.
Table 14: Company Training Cost
Project Years
Description
Year-1 Year-2 Year-3 Year-4 Year-5
Training on Designing, pattern making, Cutting, Sewing, Quality Control, Machine Application etc
No. of Trainee 799 320 320 320 320
Average Training Cost/Head in Birr 5,000 5,250 5,513 5,788 6,078
Total Training Cost 3,995,000 1,677,900 1,761,795 1,849,885 1,942,379
Government Support (%age) 85% 75% 50% 25% 0%
Government Support (Birr) 3,395,750 1,258,425 880,898 462,471 0
Training Cost to the Company in Birr 599,250 419,475 880,898 1,387,414 1,942,379
5.6 BENEFITS
To cover employee’s benefits of leave, bonus, dressing, health, and pensions an additional budget of
20% of the salary included in the budget.
 LEAVE: Employees will be entitled to annual and sick leaves. The duration and condition of
leave will be worked out by the Department of Administration and finance.
 HEALTH AND LIFE INSURANCE: Employees will be entitled to health and life insurance as per
the terms and condition of the plant manual.
 BONUS: Employees will be entitled to annual bonus equivalent to their monthly salary based
on overall performance and achievement of the Plant. Criteria, type, and amount of a bonus
should be prepared separately by Administration and finance department.
 DRESSING: Technical workers will be provided with uniforms to wear at workplace in the plant
premises
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5.7 Pre-operating activities
During the implementation period, the different activities likely to be undertaken have been classified
as follows based on activities category and schedule in one-year period as shown in the activity chart
shown at Fig -3
Table 15: Company Pre-operating activities
2023-2024
Sr. No. Type of Activities Aug Sept Oct Nov Dec Jan Mar Apr May Jun Jul
Site Engineering (months 1 to 3)

Loan Processing
Phase I
Identify best plant site from several candidates
Develop full engineering specs for the plant
Infrastructure Acquisition (months 4 to 6)
Arrange for building construction / renovation
Phase II
Order all production equipment
Recruit senior production personnel
Construction & Plant Set-up (months 7 to 12
Construction / renovation of the plant
Production equipment received and assembled.
Phase
III Delivery equipment received
Marketing materials prepared and promotion
begins
Commencement of Operation
Page 37 of 63
6. TECHNICAL STUDY
6.1 Plant Description and capacity

6.1.1 Plant Description
The envisage plant has purchased machinery and plant with all accessories from pro forma invoice
price. The purchased plant by prompter has the following features,
• Product Category : Dress, Islamic clothing, Jackets, Lingerie, Trousers, Pullovers,
Safety wear, School uniforms, Shirts, Sportswear, Stockings and tights, Tote bags, T-shirts,
Work wear, suits,
• Production Area ( Factory Size) – 10,000 m2 area (owned by Addis Ababa Administrative )
 Number of machine :750 available; running only 750
 Number of Sections : 889 sawing secretion machineries
: 183 Cutting and preparation section machineries
: Finishing section 80 machineries
 Production Line : Ten
• Machineries : 75 sewers per line * 10 = 750 Sewing machines
• Workers : 75 sewers , 13 finishing = 88 workers per line
• Production : Daily 750 Pcs/day per line, 1,500 pcs/shft, 7,500 Pcs/day
• Monthly production = 115,625 pcs/ month
• Annual production = 1.387 Million pcs/ year
6.1.2 Production Capacity and Export Plan

Due to different limiting factors, like operators’ skill, industry experience and availability of raw
material and utilities, it will not be possible to achieve the installed production of the factory at early
years of operation.
It is assumed that the production capacity utilization rate in the first year will be 60% and will increase
by 10% annually and reach the maximum of 90% in the five year of operation (the capacity utilization
will be 90% for the rest of the project’s life). The initial capacity utilization rate is set to 60% based on
the current average capacity utilization of similar factories. However, at later operational years, due to
Page 38 of 63
modern training and effective management and experience in the industry, the average productivity
and hence capacity utilization of the factory is expected to increase by 10% annually.
Table 16: Project Yearly Production Plan

Product Specification Produc Production Year
Propor. Y1 Y2 Y3 Y4
Plant Installed Capacity
Plant Capacity Per day (1shifit) Pcs 7,500 7,500 7,500 7,500
Working Day per annum 250 250 250 250
Plant Annual Production Capacity Pcs 1,875,000 1,875,000 1,875,000 1,875,000
Project Installed Utilization Capacity(%) 60% 70% 80% 90%
Project Annual Production Pcs 937,500 1,125,000 1,312,500 1,500,000
Quantity Shipped
all age Trousers (cotton) 10% Pcs 93,750 112,500 131,250 150,000
All age Shirts ( cotton) 5% Pcs 46,875 56,250 65,625 75,000
all age Garments (stock and others) 20% Pcs 187,500 225,000 262,500 300,000
Boy's set (4 pcs) Vest, Tie, Shirt & Trouser 10% Set 93,750 112,500 131,250 150,000
Adult & Youth Suit Single Button Embroidery 5% Pcs 46,875 56,250 65,625 75,000
Adult& Youth Mock neck L/S T-shirt 5% Pcs 46,875 56,250 65,625 75,000
Adult Dresses 10% Pcs 93,750 112,500 131,250 150,000
Adult and youth T-shirts (N/A, other textiles) 10% Pcs 93,750 112,500 131,250 150,000
Adult and Youth Jacket 5% Pcs 46,875 56,250 65,625 75,000
Others 20% Pcs 187,500 225,000 262,500 300,000
Total 100% 937,500 1,125,000 1,312,500 1,500,000
6.2 PROJECT TECHNOLOGY ENGINEERING AND PROCUREMENT
6,2.1 Plant Machinery Requirements

The project will have different types of garment machineries required for cutting, sewing and finishing
processes. After evaluation of the submitted pro forma invoices, the following machinery and
equipment are selected by the company. The aggregate cost of machinery and equipment estimated
cost is USD 1,258,090.83 of which Usd 237,560.25 is for cutting, spreading and designing machineries,
USD 892,070.44 is for sewing machineries and USD 128,460.14 is for of finishing machineries and the
list of equipment, quantity and are given in table 17,18 &19.
Page 39 of 63
Table 17: Machinery & Equipment: Cutting, Spreading and Design
Brand/
Sr. Total Quantity Unit Price in Total Price in
No. Machine Type Required USD USD supplier
AUTOMTIC FABRIC SPREADER ''590 E-70KG-220'' FOR

KNIT, CPS CUTTING DEVICE WITHOUT CATCHER,
SIEMENS PLC TOUCH SCREEN CONTROL PANEL,
PLATEFORM FOR FOLDED FABRICS WITH MOTORIZED
1 SYSTEM 2 3000 6,000 Any brand or GROUP
AIR FLOTATION TABLS FROM ITALY, BLOWING TABLE

2 BY FK (22M*10) WORKING WIDTH:220CM, 220METER 2 21,680 43,360 FK GROUP
3 Pattern 3 plotter 3 software keys 1 122,550 122,550 GERBER
4 Straight knife 7 3,050 21,350 EAST MAN
5 Ply numbering guns 5 98 490 JUKI
6 End cutters 2 6,800 13,600 EAST MAN
7 Band Knife 2 4,800 9,600 NAGAI HING
Sub-total in USD 21 216,950
Other Costs (9.25% of FOB Price) 20,610.25
Total Cost in USD 237,560.25
Total Cost In Birr(1USD=54.45Birr) 12,935,155.61
Note: When calculating total cost, the following additional costs were included: Cost of freight (2.25%), Insurance (0.75%),
Bank charge (3%), and Local Costs (Port Handling, Loading, Unloading, Clearing and Forwarding, Local Transport etc) of
3.25 %) FOB price were considered and included in birr equivalent. The following exchange rates were used to convert the
costs to Birr: USD = 56.35.
Table 18: Machinery & Equipment: Sewing
Total
Sr. Quantity Unit Price Total Price in
No. Machine Type Required in USD USD Brand /supplier
1 needle chain stitch , blind stitch machine with skip
stitch device and universal throat plate/manual
1 thread cutter - CB-641/T003 1 2,356 2,356 JuIki
2 3th Over lock (MO-6704S-0A5-150) 15 954 14,310 Juki India plc
3 4th Over lock (MO-6714S-BE6-44H/ G 39/Q141 43 972 41,796 Juki India plc
4 5th Over lock(MO-6716S-DE4-40H/E35) 5 245.2 1,226 Juki India plc
5 Bar tack (LK-1900BSS/MC-670KSS) 3 482 1,446 JuKI
6 Button Hole Machine ( LBH-1790AS/MC-602KS) 42 7,700 323,400 JuKI
7 Button Sew Machine ( LK-1903BSS301/MC670K) 42 5438 228,396 JuKI
FUSING PRESS WITH AUTOMATIC BALANCING
6 SYSTEM 2 129.60 259 AL BORJ MACHINERY LLC
DNLS with Top Center Plait Folder/Cloth Puller/Tape

10 Reel(LH3120AQ/M315/V053B/R006/R001) 15 4,552 68,280 JuKI
11 FIT ( Flat ironing table) 114 112.20 12,791 NAOMOTO
12 FOA ( Heavy Duty) (MS-1261MF/V045S) 1 2,760 2,760 JUKI SINGAPORE PTE LTD
13 FOA ( Light Duty) (MS-1190MF/V046R) 14 2,760 38,640 JUKI SINGAPORE PTE LTD
Page 40 of 63
14 Helper Table 57 45 2,565 Local
17 SNLS Edge Trimmer ( DLM-5200ND ) 30 300 9,000 JuKI
18 SNLS-UBT ( DDL-8100BM-7-WBK) 467 124 57,908 JuKI
Top & Bottom Cover stitch Machine (Cyl Bed) ( MF-

19 7923D-U11-B56) (3 N, 5 Th) 15 82.40 1,236 JuKI
Top & Bottom Cover stitch Machine (Flatbed) ( MF-

20 7523-U11-B56) (3 N, 5 Th) 29 201.60 5,846 JuKI
21 Elastic Attaching Machine(6-Needle) 2 803.2 1,606 JuKI
22 TAJIMA COMPUTERIZED EMBROIDERY 1 854.40 854 TAJIMA
MACHINE,TAIJIMA MODEL:TFGNII-918 9 COLOR 18
HEADS WITH EMBROIDERY AREA OF ( 800 X 400)S
Sub-total in USD 898 126,958.80 814,676
Total Cost In Birr(1USD=54.45Birr) 48,573,235.40
Table 19: Machinery & Equipment: Finishing

Total
Sr. Quantity Unit Price in Total Price in
No. Machine Type Required USD USD Brand /supplier
IRONING TABLE (900MM*1300MM), WITH OUT

SWING ARM AND ANY BUCKS and MODEL HSL-620,
1 ALL STEAM IRON WITH 2.5M STEAM TEFLON 20 5,212 104,240 NAOMOTO
2 Pressing Machine MPRP 44 7 37.60 263 Rimoldi
3 TWIN HEAD, CONVEYOR TYPE NEEDLE DETECTOR 1 2,608 2,608 AL BORJ MACHINERY LLC
4 HEAT TRANSFER PRESS 2 5,102 10,204 AL BORJ MACHINERY LLC
Sub-total in USD 30 459.60 117,315.20
Total Cost In Birr(1USD= 54.45 Birr) 6,994,654.84
6.2.2 Auxiliary Equipment

The project assumption to operate 250 days per year which required additional machinery and
equipment, and other auxiliary equipment which are necessary for the smooth functioning of the
factory; they include compressor, boiler, water treatment plant, hydro power electric energy supply,
but in case there may be create power interruption, for that purpose the company electric power
source is generator (450 KVA Open Type Diesel), CCTV and fabric inspection machines. The total cost of
the auxiliary equipment is USD 66,793.91. The cost breakdown is provided in Table 20 below.
Page 41 of 63
Table 20: Auxiliary Equipment
Sr. Total Unit Price USD Total Price
No. Type Qty in USD Brand
Auxiliary Equipment
1 Screw air compressor, GA55FF 3 7,200 21,600 Atlascopco
2 Boiler for Iron 1 8,880 8,880 NAOMOTO
3 Supply of water softening Plant 1 1,200 1,200 KPL International Limited
4 Generator 450 KVA 1 4,290 4,290 Green power
5 CCTV 1 4,389 4,389
6 Knitted fabric inspection machine 2 8,880 17,760 SUNTECH INDUSTRIAL
7 Woven fabric inspection machine 2 1,440 2,880 New Bhagavati Eng
Sub-total in USD 178,156.80 60,999.00
Total Cost In Birr(1USD= 54.45 Birr) 3,636,928.13
6.3 Office furniture & Equipment
The company Office furniture and equipment such as computer, printer & Fax machines will be
acquired for the project. The cost for furniture and equipment is estimated considering the size of
manpower required for actual production and management. The furniture and equipment will be
procured locally and the estimated total cost is USD 55,019.41. See on Table 21 below for the
breakdown.
Table 21: The Estimated Cost of Office Furniture and Equipment
Sr. Description Unit Quantity Unit Price in Total Price in Birr
No. Birr
Furniture
1 EXCUTIVE TABLE PCS 12 103,479 1,241,748
2 HIGH BACK CHAIR PCS 1 8,900 8,900
3 MEDIUM BACK CHAIR PCS 25 2,261 56,525
4 STANDARD TABLE PCS 5 20,000 100,000
5 FILLING CABINET PCS 2 25,000 50,000
6 SINGLE PEDESTAL TABLE 140X80X75 WITH THREE PCS 3 2,367 7,101
FIXED DRAWER
7 REVOLVING CHAIR: IMPORTED HIGH QUALITY PCS 900 1,478 1,330,200
REVOLVING CHAIR WITHOUT ARM REST IN FABRIC
8 Bundling table PCS 2 16,493 32,986

9 Final Inspection Table(5 ' X 3 ') PCS 28 2,199 61,572
10 Trimming Table (Wire Meshed) PCS 28 550 15,400
11 Folding table 10 meter PCS 4 16,493 65,972
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SUB-TOTAL 2,970,404
Equipment
1 Dell Optiplex 7010 PCS 5 12,499 62,495
2 INTEX 1050VA UPS-IT-1050V PCS 5 2,088 10,440
3 Hp LaserJet P2055d-printer PCS 3 3,290 9,870
4 Canon 2420 digital photo Copy machine PCS 1 23,478 23,478
5 Scanner G2710 HP PCS 2 2,200 4,400
SUB-TOTAL 110,683
TOTAL COST 3,081,087
6.4. VEHICLES REQUIREMENT

The vehicle types required include, Service Bus and Trolley with an estimated total cost of Usd 290,000.
The detail is given below Table 22.
Table 22: Company Vehicles
Description Quantity UNIT PRICE IN BIRR Total PRICE in Birr

DAEWOO BUS 2 7,900,000 15,800,000
TROLLEY 8 55,000 440,000
TOTAL 16,240,000
6.5 PROJECT BUILDING AND CIVIL WORKS
6.5.1 Land Development and Intallation Cost
For the purpose Site electric installations program it is necessary to the pre-plant site work activities
should be done accordingly the Ethiopia Electric Utility Addis Ababa City Administrative electric
service requirement estimation cost and some of site work perform, such activities are site power and
Generator Supply & installation. So as the proposed project area Infrastructures and installations with
related costs USD $48,350.80 is required, which is given the following table 23.
Table 23: Infrastructure and cost related to installation
Infrastructures and costs related to installations
Rate Cost
Description
Birr Birr
Electrification
Transformer and Material cost 2,299,960
Labour Cost 136,707
overhead cost 103,810
Other charge 167,167
Total Cost 2,707,645
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6.5.2 BUILDING CIVIL WORKS AND RELATED COST
The total project land of 15,000 M2 is secured by the company and for the proposed set up of Garment
and textile plant; a built-up area of 12,100 square meters is required. This requirement is study by
Circle Consulting Architects Engineer; PLC for the plant main factory shade, canteen, office and guard
house is estimated cost to be USD 605,804. The details breakdown and others details are shown at the
supporting plan and bill of quantities. The grand summary of the project building and construction cost
is given below table 24.
Table 24: Building Construction works & Related Cost
Description unit Area Total Cost

Building Construction works
Main Factory Shade M2 9000 27,000,000.00
Canteen M2 380 950,000.00
Office and other services M2 500 1,250,000.00
Guard House M2 120 300,000.00
Sub-total M2 10,000 29,500,000.00
VAT 15% Birr 4,425,000.00
Grand Total BIRR 10,000 33,925,000.00
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7. PROJECT FINANCIAL STUDY
The financial breakdown for the subject of company under formation “Karis Garment and Textile, Plc “
owned investment plan and its future commercial operations relies on the information or data
presented in the preceding chapters and the following major assumptions. These assumptions
essentially define the financial plan and require that the project obtain the needed financing at the
proposed level
7.1 Project Assumption

The project cost estimates for the proposed Garment and Textile manufacturing industry have been formulated
on the basis of discussions with industry owners. The projections cover the cost of infrastructures, building and
civil works construction, machinery and equipment purchase, office furniture and fixtures, pre-operating
expense and working capital for startup of the project. Assumptions regarding machinery have been provided,
however, specific assumptions relating to individual cost components are given as flows: Operating Expenses for
the project and here basis are taken as follows:
Table 25: Financial Assumption of the Project
Description Basis Basis
CONSTRUCTION AND FINANCE
Project Life (years) 10
Construction period 1 years 12 months
Bank interest 10% 14%
Discounted cash flow 10% 10%
Source of finance 30% equity and 70% loan
ECONOMIC ASSUMPTIONS
Utilities price growth 5%
Material price growth rate 5%
Wage Growth Rate 5%
Tax rate 30%
EXPENSE
Salaries Expenses As per salary estimations
Staff Benefits 20% of Payroll
Insurance 1% of equipment Cost
Administrations expense 5% of Sales
Production 80% of Sales
Selling Expenses 1% of Sales
Utilities price growth
Water and electric city price growth rate % 5%
Loan period 10 years
CASH FLOW ASSUMPTIONS
Inventory (% of COGS) 8%
Minimum cash balance (% of sales) 2%
Accounts receivable (% of sales) 5%
Accounts payable (% of COGS) 3%
INITIAL WORKING CAPITAL ESTIMATIONS
Local Raw material 3 months
Auxiliary Raw Materials Local 3 months
Stock of Finished Goods 3 months
Goods in Process 3 months
Administrative and Marketing Expenses 3 months
PRODUCTION ASSUMPTIONS Production and Machine Capacity
Machine Capacity(pces/day) 7,500, Pcs per day
Operating Expenses for the project and there basis are taken as follows
Description Basis Basis
Capacity 90%
machine operation hour per day 8
available working day per year 250
Maximum annual volume at full capacity 90%
Garment and Textile products 1.5 million Pcs
Utilization efficacy start 60%
Product Mix
Garment 60%
Textile 40%
7.2 Capital investments

“KARIS GARMENT AND TEXTILE PLC” total initial investment cost including land lease, fixed asset, Pre-
Production cost and working capital is estimated at USD 2,708,446.92. The fixed investment component is
estimated at about USD 22,442,168.85(90.2%), the working capital portion is USD 179105.7321(6.6%) and Pre-
Production cost is USD 87172.33828 (3.2%). From the total investment cost is USD 1,726,734.35 (60%) is foreign
currency required and the remaining of birr is for local purchasing cost. The following table briefly summarizes
the total investment cost of the project. Broad break-up of the above cost under various heads is presented,
Table 26.
Table 26: Investment breaks down
Description USD ET BIRR

Initial Capital Cost
Land Lease paint 154,781.25 8,667,750
Infrastructures and costs related to installations 48,350.80 2,707,645
Building- OF COFFEE PROCESSPING 605,803.57 33,925,000
Machinery & Equipment: Cutting, Spreading and Design 230,984.92 12,935,156
Machinery & Equipment: Sewing 867,379.20 48,573,235
Page 46 of 63
Machinery & Equipment: Finishing 124,904.55 6,994,655
Auxiliary Equipment 64,945.15 3,636,928
-
Total Machinery & equipment Cost 2,097,149.44 72,139,974
Furniture and Fixtures 55,019.41 3,081,087
Motor & vehicles 290,000.00 16,240,000
Sub-total Fixed Asset 2,442,168.85 136,761,456
Pre-operating cost 87172.33828 4,881,651
Pre-operating Interest cost 0
Sub-total Pre-operation Cost 87172.33828 4,881,651
Total Capital Costs 141,643,106
Initial Working Capital
Direct Operation Cos 29768.14823 1,667,016.30
Indirect Operation Cost 149337.5839 8,362,904.70
Total Working Capital 179105.7321 10,029,921
CAPITAL INVESTMENT + WC 2,708,446.92 151,673,027.48
7.3 Investment financing Plan

Based on the financial analysis carried out so far the total investment cost is estimated to be 7,704,692
USD. The source of the financial need of the project is assumed to be fulfilled by owner’s equity
contribution is USD 2,311,408 and bank financing is USD 5,393,285 and scenario proportionate 30:70
share.
Table 27: Financial Requirement & respective source
Description Source of Fund
Equity Contribution Bank Loan Total
INITIAL INVESTMENT COST 732,651 1,709,518 2,442,169
PRE-OPERATING Cost 26,152 61,021 87,172
INITIAL WORKING CAPITAL COST 1,552,605 3,622,746 5,175,351
Total Cost 2,311,408 5,393,285 7,704,692
% Share 30% 70%
7.4 Gross Revenue projection

The planned Expected Revenue: Based on international market the revenue earned from roasted and
green coffee oil sales value is briefly summarizing the project gross revenue presented below Table-
28.
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Table 28: Gross Revenue Determination
Revenue Unit Y1 Y2 Y3 Y4
Summary
Export Market
Total Export Sales Birr/year 276,186,509 347,995,001 426,293,876 511,552,652
(In Birr)
Local Market
Total Local Sales (In Birr/year 22,031,250 27,759,375 34,005,234 40,806,281
Birr)
Gross sales Income Birr/Year 298,217,759 375,754,376 460,299,111 552,358,933
(Birr)
Gross Revenue in USD $ 5,325,317.12 $ 6,709,899.57 $ 8,219,626.98 $ 9,863,552.37
7.5 Operation & administrative (Direct & Indirect) Cost Estimate
The total operating cost is estimated at USD 7,037,607.99 at full production capacity ten years five and
will increase through project life. Operating costs are recorded on a year basis. It is divided into direct
and indirect costs. The direct cost component is estimated at about USD 6,790,410.642 and the
indirect cost is USD 247,197.34 at full production capacity year four respectively and. Summary of
operating costs is presented on below table 29.
Table 29: Projected Production Operation estimated cost (direct and indirect)
Description Project Year
Require Y1 Y2 Y3 Y4
Production cost -
Direct - 201,602,539 235,189,629 268,776,719 335,950,899
Indirect - 33,451,619 37,432,624 41,314,402 44,312,097
Sub-total - 235,054,158 272,622,253 310,091,121 380,262,996
Working Capital(3Month only)
Direct 3Month 1,667,016 1,941,519 2,216,022 2,765,027
Indirect 3Month 8,362,905 9,358,156 10,328,600 11,078,024
Sub-total 10,029,921 11,299,675 12,544,622 13,843,051
Total 245,084,079 283,921,928 322,635,743 394,106,047
Total Operation Cost in USD 4,376,501.41 5,070,034.43 5,761,352.56 7,037,607.99
7.10 Finical Projections
7.10.1 Income Statement (USD)

The projection shows positive net profits of USD 466,182.96 at the begging project year & grows to
USD 4,646,223.31 in the 10th projection period. Further, adequate surplus cash is available with the
Page 48 of 63
unit for promoter withdrawal. For the detailed information is given in the Annexure-1.
7.10.2 Cash Flow FORECAST (Liquidity)

The project shall add values and generate positive cash flow throughout the ten consecutive years and
it is also expected bring higher cash inflows in future periods of the business. During these periods, it
generates an average net profit of USD 2,599,635. The business is projected to register a net cash flow
of USD 926,132.40 in the second year that will grow to a cumulative net cash flow of USD
18,053,161.73 in the tenth year. This shows its ability to meet its obligations on time, effectively and
efficiently. All in all, the project is liquid throughout its life. For the detailed information is given in the
Annexure-2.
7.10.3 Projected Balance Sheet (USD)

Assets of the envisaged project are naturally the total initial investment at the beginning year. Whereas, the
liabilities constitute USD 3,202,507.39 of long term loan at end of the first year that makes up 92% of total
assets or capital invested for the project, and no balance of liabilities shall appear at the end of the ninth year.
Throughout the business life, the project creates additional values as it is financially strong and can settle its
obligations through the added value. Through the operational life it builds up its own capital which is expected
to rise to USD 6,714,393.26 at end of 4th year at full production capacity. For the detailed information is given in
the Annexure-3
7.11 FINANCIAL EVALUATIONS
7.11.1The Net Present Value (NPV)

o Net Present Value (NPV) before Tax at 14 % interest rate; USD 19,797,864.05
o Present Value (NPV) after Tax at 14 % interest rate; USD 14,234,048.90
The net present value is the difference between the sum of discounted future cash flow, year 1 to 10
and the amount of the initial investment at year zero. The NPV’s computed at the prevailing 14%
interest rate results positive large cash amount indicating that the project is viable.
7.11.2 Financial Internal Rate of Return

A commercial profitability analysis indicates that the plant will generate a reasonable rate of return.
The internal rate of return (IRR) for the project after and before tax is expected to be 72% and 64%,
respectively. The Financial Internal Rate of Return both after and before income tax is higher than the
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economic rate of return of about 11.5%. This indicates that the project is financially viable one. For the
detailed information is given in the Annexure-4
7.12 Financial results evaluation
7.12.1 Profitability
According to the projected income statement, the project will start generating profit in the first 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 life-time of the project. The income statement and the other indicators of profitability show that
the project is viable.
7.12.2 Payback period

The investment cost and income statement projection are used to project the pay-back period. The project’s
initial investment will be fully recovered within four years.
7.12.3 Internal rate of return and net present value

Based on the cash flow statement, the calculated IRR of the project is 72% before tax and 64 % after
tax and the net present value at 10 % discount rate is USD 19.797 million and 14.234 Million USD
before and after tax respectively.
7.13 Loan Repayment Schedule

The principal loan shall be repaid every year, starting on, 2025 & ending on, 2034, whereby repayment
will be made in 10 annual installments.
The loan repayment period is simply defined as the period (i.e. the number of years) required paying
the principal and interest of the original investment cost throughout the project life. The business
result obtained reveals that the investment is financially viable and has a healthy cash flow forecast.
The outcome of the financial analysis reveals that in the table of the given table 30 below.
Interest Payment: 14% p.a. on the outstanding loan balance is to be paid every 30 on December in
every production year. Pre- production interest shall be paid by the promoter on the due date.
Page 50 of 63
Table 30: loan Repayment Schedule
Year Amount of Principal Instalment Interest Total

Outstanding due Payable at 14% Amount
1 106,171,119 10,617,112 14,863,957 25,481,069
2 95,554,007 10,617,112 13,377,561 23,994,673
3 84,936,895 10,617,112 11,891,165 22,508,277
4 74,319,783 10,617,112 10,404,770 21,021,882
5 63,702,672 10,617,112 8,918,374 19,535,486
6 53,085,560 10,617,112 7,431,978 18,049,090
7 42,468,448 10,617,112 5,945,583 16,562,695
8 31,851,336 10,617,112 4,459,187 15,076,299
9 21,234,224 10,617,112 2,972,791 13,589,903
10 10,617,112 10,617,112 1,486,396 12,103,508
- -
Total 106,171,119 81,751,762 187,922,881.0
7.14 Sensitivity analysis
The project's sensitivity to adverse circumstance is viewed & analyzed from two different scenarios:
by decreasing its sales revenue by 10 % and increasing its operating cost by 10%.
A) Sensitivity test Scenario I: – Increase in operating cost by 10 %
When operating cost increases by 10%, the result indicates that FIRR after tax decreases from 64% to
50%. It can be concluded that, the project can cover its costs, make profit for stakeholders & will
remain viable even if unforeseen costs would occur that should be incurred more than estimated.
B) Sensitivity test Scenario II: – Decrease in Revenue by 10 %
When revenue decreases by 10%, the result indicates that FIRR after tax decreases from 64% to 43 %.
It can be concluded that, the project will remain viable even if an adverse marketing problem would
occur that forces to reduce the selling price & hence reduce the revenue. It also shows that the
project is more sensitive in both case and affected by decline in sales revenue when compared with
the increase in operating costs and indicates caution to be taken in selling the products.
Page 51 of 63
8. Environmental consideration and socio economic impact
8.1 ECONOMIC BENEFITS
8.1.1 Earning foreign currency

In addition to saving hard currency by substituting import of dairy products and cattle feed, the project will have
a role of earning of foreign currencies by exporting 99% of its products. Accordingly, an average of 3.850 million
USD sales each year during operation life of the project and a total of 11.651 million USD export sales will be
made at full production capacity year fourth.
8.1.2 Job creation

This project creates permanent job opportunities for skilled, & semi-skilled 392 and 4 expat totally 396 persons
and during construction period 500 casual labour in Addis Ababa city and other cities of the country.
8.1.3 Tax Revenue

In the project life under consideration, the city will collect about Usd 4.047 million from corporate income tax.
Such result create additional fund for the government that will be used in expanding social and other basic
services in the region.
8.2 Impact on Environment

The envisaged in the project is planned to import purely environment friendly. However, garment and textile
manufacturing, while offering valuable products like the oil itself and potential for biodiesel production from
waste grounds does generate various waste streams that need proper management to minimize environmental
impact. Here's a breakdown of the main waste categories and potential discharge systems:
Wastewater:
o Origin: Primarily generated during washing of garment and textile soil and equipment cleaning. .
Dry Waste:
o Origin: garment and textile raw material garbage, typically containing can also include filter materials and
packaging waste.
Page 52 of 63
9. Key success factors & constraints and RISK and SWOT ANALYSIS
9.1 Success Factors

There is a lot of potential in the commercial Garment and textile business because the availability of
unemployed young how needs the job and profitability on the company the business. Production
process in the company, there are no complications in the manufacturing process. Machines operation
can be eco-friendly operated and fully computerized.
Skilled and Semi-skilled labour can be get from university graduate that can be easily skilled with in
short period of time to handle the machines. However the senior high skilled experts are needed to
share their experience of merchandize knowledge, so as the envisaged project work with foreign
experts as to train the local labour.
However, the company foreign market has been identified and approached in order success and to
keep the manufacturing industry stainable, the following points should also be considered:
 Assurance of high consistent quality;
 Surety of products on time delivery;
 Competitive rates;
 Cost efficiency through better management.
9.2 Constraints and risk

The following risks and uncertain incidents that might affect the project could occur during operating
period of the project. If the global economic crisis and inflation is prolonged and intensified, it will
affect the project cost benefits analysis. Besides, it may also affect the production cost and both inland
and offshore markets. Due to the price fluctuation the owner discourage results the supply of raw
material of garment and textile purchasing will be problems of efficiency of company manufacturing
apparels.
The main risks associated with this project are:
The risk that the new method of garment and textile will not be as efficient as expected.
The risk that the market demand for company products will not grow as expected.
The risk that the price of company products will increase.
Page 53 of 63
These risks can be mitigated by:
Conducting market research to assess the potential demand for company products.
Establishing a strong hedging strategy to manage the risk of price fluctuations.
9.3 Opportunity and threats (SWOT and/or PESTEL Analysis)
The following outlines the most significant strengths and weaknesses of envisaged garment industry,
and the opportunities and threats that exist in the “Karis Garment and Textile Plc. ‘’ garment and
Textile Industry production and market environment. The objective is to leverage the strengths to
take advantage of the opportunities of market presents, develop those areas that are weaknesses, and
devise contingency plans to address threats if those should become a reality.
STRENGTH
 “Karis Garment and Textile Plc. ‘’ has made agreement and purchased all investment which was
used by Garment and Textile Plc, which has capability
 The “Karis Garment and Textile Plc. ‘’ so far has sufficient asset to cover required equity for the
bank loan
 Production skill and management of the envisage investment by the promoter general manager
Mr. Yisfalem Agza Sibante has owned a company which supplies garment product on subs
contract bases . As a result, has gained a lot of experience of the product manufacturing skill
o Cheap electricity- up to 8 times less than other manufacturing nations
o Cost of goods therefore far lower than any other producing nation
o Strong financial support government
 Tax holidays up to 2-10 years depending on area
 Income tax holidays up to 2 years for expatriate technicians/ trainers and other persons
with desired expertise that are willing to transfer knowledge
o Import duty free equipment, machinery and on spare parts and / or any goods needed to
realize
Production
o Speed to market by using airfreight at competitive costs: transport prices by air even cheaper
than transport by vessel in other producing nations- saves over 3-4 weeks transit to market
Page 54 of 63
WEAKNESS
 Limited availability raw materials- only cotton
 No manmade fibers – only through imports
 Quality is low staple- 26mm
 Bureaucracy
 Lack of merchandisers
 Inefficient production 45% maximum
 Lack of IT and CAD/ CAM in production
 lack of adequate business infrastructures
 Lack of testing agencies- all to be send to SGS Egypt or Turkey
 Non availability of spare parts for maintenance of machine park
 The inability to compete on the international market due to price pressure caused many tex-
tile-and garment manufacturers to renew their interest for the domestic and local market
OPPORTUNITIES
Due to the increase in number of commercial garment at international market and competition, there
are
Chances that the market rates may reduce. The current political situation and sanction in African
Growth and Opportunity Act (AGOA) market is also another problem. However, this can be tackled by
providing
Different value added services to customers. Another major treat is bank credit facilities
 The availability of credit to the project with low interest rate & without external collateral
 Fast growing economy
 Conducive investment environment;
 Low energy cost;
 Bank loan for textile industry, skilled manpower’s, machineries and working capitals will make
the farm profitable
 Abundant and relatively cheaper supply of labor and land;
 Conducive agro-ecology to produce;
 The strong support and incentives from the government;
 International interest for investment
Page 55 of 63
 Good flow of FDI
 Next global economic zone after the Asian zone
 A strategic positioning in the sub-Saharan Africa.
 Potential Comesa- AGOA markets
THREATS
 Competition from similar products which are already in the market
 Inputs & spare parts price escalation

 Un alarmingly, continuous rise of input price.
 The presence damaging insects and diseases;
 Delayed and bureaucratic process
 Human right contraventions
Page 56 of 63
10. ANNEXTURE
Annex 1 PROJECTED INCOME STATEMENT (Birr)
Sr. Project Years
Description
No 1 2 3 4 5 6 7 8 9 10
1 Gross Revenue 298,217,759 375,754,376 460,299,111 552,358,933 652,473,990 685,097,689 719,352,574 755,320,202 793,086,212 832,740,523
2 Less: Production costs (Dir+Indir)Costs 235,054,158 272,622,253 310,091,121 380,262,996 380,543,406 380,428,943 382,350,965 384,369,088 386,488,117 388,713,097
3 Gross profit 63,163,601 103,132,123 150,207,990 172,095,937 271,930,584 304,668,746 337,001,609 370,951,115 406,598,095 444,027,425
Less administrative Cost(Dir + Indr) 10,029,921 11,299,675 12,544,622 13,843,051 13,913,154 13,884,538 14,096,147 14,318,336 14,551,635 14,796,599
Less: Deprication Expense 13,260,408 13,260,408 13,260,408 13,260,408 13,260,408 13,260,408 13,260,408 13,260,408 13,260,408 13,260,408
4 Operation Profit 39,873,272 78,572,040 124,402,960 144,992,478 244,757,022 277,523,800 309,645,054 343,372,370 378,786,053 415,970,419
5 Profit Before Interest & Tax 39,873,272 78,572,040 124,402,960 144,992,478 244,757,022 277,523,800 309,645,054 343,372,370 378,786,053 415,970,419
Less: Prodn Interest Exp 11,802,040 14,014,517 13,377,561 11,891,165 10,404,770 8,918,374 7,431,978 5,945,583 4,459,187 2,972,791
6 Profit before tax (PBT) 28,071,232 64,557,523 111,025,399 133,101,313 234,352,253 268,605,426 302,213,076 337,426,788 374,326,866 412,997,627
Othe Charge(2% ) 561,424.64 1,291,150.46 2,220,507.98 2,662,026.25 4,687,045.05 5,372,108.53 6,044,261.51 6,748,535.75 7,486,537.31 8,259,952.55
Community Development(5% ) 1,403,561.61 3,227,876.14 5,551,269.94 6,655,065.63 11,717,612.63 13,430,271.32 15,110,653.79 16,871,339.39 18,716,343.28 20,649,881.37
7 Less: Profit Tax (30% of PBT) 0 0 33,307,619.64 39,930,393.75 70,305,675.79 80,581,627.93 90,663,922.72 101,228,036.31 112,298,059.65 123,899,288
8 Net Profit / Loss 26,106,246 60,038,496 69,946,001 83,853,827 147,641,919 169,221,419 190,394,238 212,578,876 235,825,925 260,188,505
Net Profit in USD 466,182.96 1,072,116.00 1,249,035.74 1,497,389.77 2,636,462.84 3,021,811.05 3,399,897.10 3,796,051.36 4,211,177.24 4,646,223.31
Annex 2 PROJECTED BALNCE SHEET (Birr)
Description Yo Y-1 Y-2 Y-3 Y-4 Y-5 Y-6 Y-7 Y-8 Y-9 Y-10
Assets
Cyrrent Asset
Cumul Cash balance 10,029,921 17,242,494 51,863,415 89,414,878 131,763,622 231,741,870 350,375,906 486,893,911 642,010,063 816,455,598 1,010,977,057
Inventory - 18,804,333 21,809,780 24,807,290 30,421,040 30,443,472 30,434,315 30,588,077 30,749,527 30,919,049 31,097,048
Accounts receivable - 14,910,888 18,787,719 23,014,956 27,617,947 32,623,699 34,254,884 35,967,629 37,766,010 39,654,311 41,637,026
Total Current Assets 10,029,921 50,957,715 92,460,914 137,237,124 189,802,609 294,809,042 415,065,106 553,449,617 710,525,600 887,028,958 1,083,711,131
Gross property, plant & equipment 141,643,106 141,643,106 141,643,106 141,643,106 141,643,106 141,643,106 141,643,106 141,643,106 141,643,106 141,643,106 141,643,106
Less: Accumulated depreciation expense - -13,260,408 -13,260,408 -13,260,408 -13,260,408 -13,260,408 -13,260,408 -13,260,408 -13,260,408 -13,260,408 -13,260,408
Net property/equipment 141,643,106 128,382,699 128,382,699 128,382,699 128,382,699 128,382,699 128,382,699 128,382,699 128,382,699 128,382,699 128,382,699
Total assets 151,673,027 179,340,414 220,843,612 265,619,822 318,185,307 423,191,740 543,447,804 681,832,316 838,908,298 1,015,411,656 1,212,093,829
Liabilities Initial balance Year 1 Year 2 Year 3 Year 4 Year 5 Year 5 Year 5 Year 5 Year 5 Year 5
Accounts payable - 7,051,625 8,178,668 9,302,734 11,407,890 11,416,302 11,412,868 11,470,529 11,531,073 11,594,644 11,661,393
Notes payable/short-term debt - 0 0 0 0 0 0 0 0 0 0
Total current liabilities - 7,051,625 8,178,668 9,302,734 11,407,890 11,416,302 11,412,868 11,470,529 11,531,073 11,594,644 11,661,393
Long-term debt from 106,171,119 100,680,635 94,421,482 87,286,049 79,151,654 69,878,445 59,306,986 47,255,523 33,516,855 17,854,773 -
Shareholders equity 45,501,908 71,608,154 131,646,650 201,592,652 285,446,479 433,088,398 602,309,816 792,704,054 1,005,282,930 1,241,108,856 1,501,297,361
Total long-term debt and shareholders equity 151,673,027 172,288,789 226,068,133 288,878,700 364,598,133 502,966,842 661,616,802 839,959,577 1,038,799,785 1,258,963,629 1,501,297,361
Total liabilities 151,673,027 179,340,414 234,246,800 298,181,434 376,006,023 514,383,145 673,029,670 851,430,106 1,050,330,858 1,270,558,272 1,512,958,754
In USD 2,708,446.92 3,202,507.39 4,182,978.58 5,324,668.46 6,714,393.26 9,185,413.30 12,018,386.97 15,204,109.03 18,755,908.17 22,688,540.57 27,017,120.60
Annex 3. PROJECTED CASH FLOW STATEMENT (Birr)

Description Y0 Y-1 Y-2 Y-3 Y-4 Y-5 Y-6 Y-7 Y-8 Y-9 Y-10
Net income 26,106,246 60,038,496 69,946,001 83,853,827 147,641,919 169,221,419 190,394,238 212,578,876 235,825,925 260,188,505
Plus depreciation 13,260,408 13,260,408 13,260,408 13,260,408 13,260,408 13,260,408 13,260,408 13,260,408 13,260,408 13,260,408
Less increase in inventory - (18,804,333) (21,809,780) (24,807,290) (30,421,040) (30,443,472) (30,434,315) (30,588,077) (30,749,527) (30,919,049) (31,097,048)
Less increase in accounts receivable - (14,910,888) (18,787,719) (23,014,956) (27,617,947) (32,623,699) (34,254,884) (35,967,629) (37,766,010) (39,654,311) (41,637,026)
Plus increase in accounts payable - 7,051,625 8,178,668 9,302,734 11,407,890 11,416,302 11,412,868 11,470,529 11,531,073 11,594,644 11,661,393
Cash flow from operations(Inflow Cash) - 12,703,058 40,880,073 44,686,897 50,483,138 109,251,457 129,205,495 148,569,469 168,854,820 190,107,617 212,376,232
Less investment (141,643,106) - - - - - - - - - -

Cash flow from operations and invests (141,643,106) 12,703,058 40,880,073 44,686,897 50,483,138 109,251,457 129,205,495 148,569,469 168,854,820 190,107,617 212,376,232
Plus net new equity capital raised 45,501,908 - - - - - - - - - -
Less dividends paid - - - - - - - - - - -
Plus net new long-term debt 106,171,119 (5,490,485) (6,259,152) (7,135,434) (8,134,394) (9,273,210) (10,571,459) (12,051,463) (13,738,668) (15,662,082) (17,854,773)
Plus net new bank borrowings - - - - - - - - - - -
Cash flow from ops, invests, and fin(Outflow) 10,029,921 7,212,573 34,620,920 37,551,464 42,348,744 99,978,248 118,634,036 136,518,005 155,116,152 174,445,535 194,521,459
Beginning cash balance - 10,029,921 17,242,494 51,863,415 89,414,878 131,763,622 231,741,870 350,375,906 486,893,911 642,010,063 816,455,598
Ending cash balance 10,029,921 17,242,494 51,863,415 89,414,878 131,763,622 231,741,870 350,375,906 486,893,911 642,010,063 816,455,598 1,010,977,057
In USD 307,901.69 926,132.40 1,596,694.26 2,352,921.82 4,138,247.67 6,256,712.60 8,694,534.13 11,464,465.40 14,579,564.24 18,053,161.73
Page 58 of 63
Annex 4 INTERNAL RATE OF RETUREN (Birr)
Discription y0 y1 y2 y3 y4 y5 y6 y7 y8 y9 y10
Benefits
Gross Revenue 1 0 298,217,759 375,754,376 460,299,111 552,358,933 652,473,990 685,097,689 719,352,574 755,320,202 793,086,212 832,740,523
W/Cap Recovery 2 6,979,542
Fixed asset recovery 3 464418.8625
Total Benefits 1+2+3 - 298,217,759 375,754,376 460,299,111 552,358,933 652,473,990 685,097,689 719,352,574 755,320,202 793,086,212 840,184,484
Costs
Initial Investment Cost 5 151,673,027.48
Operating Expense(working
- 10,029,921.00 11,299,675.01 12,544,622.18 13,843,051.39 13,913,153.82 13,884,538.08 14,096,146.99 14,318,336.35 14,551,635.17 14,796,598.93
Captal
Replacement Cost 6 0 0
Operat/Prodn costs 7 0 235,054,158 272,622,253 310,091,121 380,262,996 380,543,406 380,428,943 382,350,965 384,369,088 386,488,117 388,713,097
Total costs 5+6+7 151,673,027 245,084,079 283,921,928 322,635,743 394,106,047 394,456,559 394,313,481 396,447,112 398,687,424 401,039,752 403,509,696
Income tax 30% of PBT 9 0 0 0 33,307,620 39,930,394 70,305,676 80,581,628 90,663,923 101,228,036 112,298,060 123,899,288
Net Benefit Before Tax (4-8) (151,673,027) 53,133,680 91,832,448 137,663,368 158,252,886 258,017,430 290,784,208 322,905,462 356,632,778 392,046,460 436,674,788
NPV beforeTax (Birr) 1,108,680,387
IRR Before Tax = 72%
Pay Back Period 3 year 5months
Net Benefit After Tax (4-8-9) (151,673,027) 53,133,680 91,832,448 104,355,748 118,322,492 187,711,754 210,202,580 232,241,539 255,404,742 279,748,401 312,775,500
NPV AfterTax (Birr) 797,106,738
IRR After Tax = 64%
Pay Back Period 4 year 6months
Page 59 of 63
Annex 5 : Project Deprecation Cost (Eth.Birr)
Project Years
Description
Y0 Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Y9 Y10
original cost 2,707,645 2,707,645 2,707,645 2,707,645 2,707,645 2,707,645 2,707,645 2,707,645 2,707,645 2,707,645 2,707,645
Deperciation Rate 5% 5% 5% 5% 5% 5% 5% 5% 5% 5% 5%
Infrastructures costs Deperciation amt 135,382 135,382 135,382 135,382 135,382 135,382 135,382 135,382 135,382 135,382 135,382
Acc Dep 135,382 270,764 406,147 541,529 676,911 812,293 947,676 1,083,058 1,218,440 1,353,822 1,489,205
Book Valu 2,572,262 2,436,880 2,301,498 2,166,116 2,030,733 1,895,351 1,759,969 1,624,587 1,489,205 1,353,822 1,218,440
original cost 33,925,000 33,925,000 33,925,000 33,925,000 33,925,000 33,925,000 33,925,000 33,925,000 33,925,000 33,925,000 33,925,000
Civil works & Buildings Deperciation amt 1,696,250 1,696,250 1,696,250 1,696,250 1,696,250 1,696,250 1,696,250 1,696,250 1,696,250 1,696,250 1,696,250
Acc Dep 1,696,250 3,392,500 5,088,750 6,785,000 8,481,250 10,177,500 11,873,750 13,570,000 15,266,250 16,962,500 18,658,750
Book Valu 32,228,750 30,532,500 28,836,250 27,140,000 25,443,750 23,747,500 22,051,250 20,355,000 18,658,750 16,962,500 15,266,250
original cost 72,139,974 72,139,974 72,139,974 72,139,974 72,139,974 72,139,974 72,139,974 72,139,974 72,139,974 72,139,974 72,139,974
Machinery & equipment. Deperciation amt 7,213,997 7,213,997 7,213,997 7,213,997 7,213,997 7,213,997 7,213,997 7,213,997 7,213,997 7,213,997 7,213,997
Acc Dep 7,213,997 14,427,995 21,641,992 28,855,990 36,069,987 43,283,984 50,497,982 57,711,979 64,925,977 72,139,974 79,353,971
Book Valu 64,925,977 57,711,979 50,497,982 43,283,984 36,069,987 28,855,990 21,641,992 14,427,995 7,213,997 - (7,213,997)
original cost 16,240,000 16,240,000 16,240,000 16,240,000 16,240,000 16,240,000 16,240,000 16,240,000 16,240,000 16,240,000 16,240,000
Vechicle and Motor Deperciation amt 1,624,000 1,624,000 1,624,000 1,624,000 1,624,000 1,624,000 1,624,000 1,624,000 1,624,000 1,624,000 1,624,000
Acc Dep 1,624,000 3,248,000 4,872,000 6,496,000 8,120,000 9,744,000 11,368,000 12,992,000 14,616,000 16,240,000 17,864,000
Book Valu 14,616,000 12,992,000 11,368,000 9,744,000 8,120,000 6,496,000 4,872,000 3,248,000 1,624,000 - (1,624,000)
original cost 3,081,087 3,081,087 3,081,087 3,081,087 3,081,087 3,081,087 3,081,087 3,081,087 3,081,087 3,081,087 3,081,087
Furniture & Fixture Deperciation amt 616,217 616,217 616,217 616,217 616,217 616,217 616,217 616,217 616,217 616,217 616,217
Acc Dep 616,217 1,232,435 1,848,652 2,464,870 3,081,087 3,697,304 4,313,522 4,929,739 5,545,957 6,162,174 6,778,391
Book Valu 2,464,870 1,848,652 1,232,435 616,217 - (616,217) (1,232,435) (1,848,652) (2,464,870) (3,081,087) (3,697,304)
original cost 4,881,651 4,881,651 4,881,651 4,881,651 4,881,651 4,881,651 4,881,651 4,881,651 4,881,651 4,881,651 4,881,651
Pre-production costs Deperciation amt 488,165 488,165 488,165 488,165 488,165 488,165 488,165 488,165 488,165 488,165 488,165
Acc Dep 488,165 976,330 1,464,495 1,952,660 2,440,825 2,928,991 3,417,156 3,905,321 4,393,486 4,881,651 5,369,816
Book Valu 4,393,486 3,905,321 3,417,156 2,928,991 2,440,825 1,952,660 1,464,495 976,330 488,165 - (488,165)
original cost 14,863,957 14,863,957 14,863,957 14,863,957 14,863,957 14,863,957 14,863,957 14,863,957 14,863,957 14,863,957 14,863,957
Deperciation amt 1,486,395.67 1,486,395.67 1,486,395.67 1,486,395.67 1,486,395.67 1,486,395.67 1,486,395.67 1,486,395.67 1,486,395.67 1,486,395.67 1,486,395.67
Pre-production Interst costs
Acc Dep 1,486,396 2,972,791 4,459,187 5,945,583 7,431,978 8,918,374 10,404,770 11,891,165 13,377,561 14,863,957 16,350,352
Book Valu 13,377,561 11,891,165 10,404,770 8,918,374 7,431,978 5,945,583 4,459,187 2,972,791 1,486,396 - (1,486,396)
Annual Deperci. & Amortization 13,260,407.79 13,260,407.79 13,260,407.79 13,260,407.79 13,260,407.79 13,260,407.79 13,260,407.79 13,260,407.79 13,260,407.79 13,260,407.79 13,260,407.79
Page 61 of 63
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KARIS GARMET AND TEXTILE,

Project Location: Addis Ababa City Administrative

Specific Location: Addis Ababa City

Promoter: Karis Garment and Textile, Plc

CONSULTANT: YOYA DEVELOPMENT CONSULTANCY AND

6. TECHNICAL STUDY .................................................................................................................................... 38

8. ENVIRONMENTAL CONSIDERATION AND SOCIO ECONOMIC IMPACT ......................................................... 52

10. ANNEXTURE ........................................................................................................................................... 57

Name of the Industrial Unit GARMENT AND TEXTILE PLC, Industry

Location Addis Ababa

1.2 THE APPLICANT

1.3 Project objectives

1.4 Expected outputs/results

2.2 Project Location Advantage

2.4 Products of proposed project

2.5 Required land/shed area

2.6 Production processes (manufacturing line) and related technology

Figure 1 Exported Garment industry process flow

3.1 Product description and application

3.2 Raw Materials

Sr. No. Description UoM Quantity Quantity Unit Total Price in

3.4 Availability of utilities and infrastructure

4.2 Supply of garment market analysis

4.2.1 Garment & Textile supply analysis

4.2.2 Supply of garment through local production/export

Year Net Mass ( Kg) Growth Rate

4.2.3 Supply of Garment through import

4.2.4 Total supply

4.3 Demand Analysis

4.3.1 Demand projection

4.4 MARKETING PLAN

4.5 MARKETING STRATEGIES

4.5.1 TARGET MARKETS

4.5.2 PROMOTIONAL STRATEGIES

HS code Product Value (US$ /pcs.) Share(%) Unit Value(US$/pcs)

Sr. no Description Project Years(Y1-Y10)

Figure 2 Project Operating Plan

Sr. No. Department/Section No. Required

5.3 Qualification and Experience of Proposed Management

5.4 MAN POWER FINANCE REQUIREMENT

Description Year-1 Year-2 Year-3 Year-4 Year-5-y10

Site Engineering (months 1 to 3)

6.1 Plant Description and capacity

6.1.2 Production Capacity and Export Plan

Table 16: Project Yearly Production Plan

6.2 PROJECT TECHNOLOGY ENGINEERING AND PROCUREMENT

6,2.1 Plant Machinery Requirements

AUTOMTIC FABRIC SPREADER ''590 E-70KG-220'' FOR

AIR FLOTATION TABLS FROM ITALY, BLOWING TABLE

DNLS with Top Center Plait Folder/Cloth Puller/Tape

Top & Bottom Cover stitch Machine (Cyl Bed) ( MF-

Top & Bottom Cover stitch Machine (Flatbed) ( MF-

Table 19: Machinery & Equipment: Finishing

IRONING TABLE (900MM*1300MM), WITH OUT

6.2.2 Auxiliary Equipment

6.3 Office furniture & Equipment

8 Bundling table PCS 2 16,493 32,986

6.4. VEHICLES REQUIREMENT