Project Proposal for Integrated

Mixing Farming Enterprise

This project proposal is prepared with the objective of operating a Mixing livestock and
cropping enterprise that comprises a Poultry Farm for meat and eggs production integrated
with Animal Feed Processing and cereals growing that include: Barely, Wheat, Maize, Corn,
Sorghum, Oats, etc.) based on suitability of the local soil environment.

Owner: Naser Chirwa Bogoreh

Presented to: Somali Regional State

Irrigation Development Bureau

February 2022,
Harewe Kebele, Siti Zone

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Contents
1. Executive Summary.....................................................................................3

1.1. Farm Description and Application.............................................................4

1.2. Management..........................................................................................6

1.3. Purpose of the Project............................................................................6

2.1. The Project Area....................................................................................7

2.2. Specific Project Area Description..............................................................7

2.2.1. Location of the Project........................................................................7

2.3 Climatic conditions..................................................................................8

2.3.1. RAIN FALL.........................................................................................8

2.3.2. Temperature....................................................................................9

2.3.3. Wind conditions...............................................................................9

2.4. Topography..........................................................................................10

2.5. Geology................................................................................................10

2.5.1. Soil....................................................................................................10

2.5.2. Soil & Land Suitability Study..........................................................10

2.5.2.1. General.......................................................................................10

2.5.2.2. Description of the command soil................................................11

2.5.2.3. The soils of the study area..........................................................11

2.5.2.4. Soil Suitability Conclusion...........................................................12

2.6. Hydrology............................................................................................12

2.7. Environmental Degradation.................................................................13

2.7.1. Natural degradation.......................................................................13

2.7.2. Livestock...........................................................................................13

2.7.3. Biological environmental (flora and fauna).......................................14

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 2.7.3.1. Flora............................................................................................14

2.8. Water supply........................................................................................15

2.9. Electricity.............................................................................................15

2.10. Transport...........................................................................................15

2.11. Commercial and economic activities.................................................16

2.12. Poverty situation................................................................................17

2.13. Settlement in project site..................................................................17

2.14. Land use............................................................................................18

2.15. Present Agricultural Conditions.......................................................18

2.16. Existing Crop Calendar (rain-fed agriculture)..................................18

2.17. Livestock Production.......................................................................19

3. Marketing Plan........................................................................................20

3.1 Marketing Objectives............................................................................20

3.2. Marketing Strategies............................................................................20

4. Technical Aspects......................................................................................20

4.1. Layers chicken house..........................................................................20

4.2. Chicken house for broilers...................................................................25

4.3. Complete poultry feed production kit 1000Kg/h..................................28

4.4. Farm Capacity.........................................................................................31

4.5. Production Programme...........................................................................31

4.6. Farm Inputs.............................................................................................32

4.7. Source of Technology.............................................................................33

4.8. Manpower Requirement..........................................................................33

5.. Financial Analysis.....................................................................................34

6. ENVIRONMENTAL IMPACTS OF THE PROJECT...............................................1

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 6.1. THE ESIA STUDY.....................................................................................1

6.1.1. ENVIRONMENTAL SCREENING................................................................1

6.1.2. SCOPING OF ESIA STUDY....................................................................2

6.1.3. APPROACH AND METHODOLOGY........................................................3

6.2.1 General...................................................................................................3

6.3. Beneficial Impacts and Measures for Enhancement.................................4

6.3.1 Economic Benefit..............................................................................4

6.3.2 Contribution to National Economic Performance..............................5

6.3.3. Employment.....................................................................................8

6.3.4. Investment.......................................................................................9

6.4. Social Benefits..................................................................................10

6.4.1 Local Income Generation and Livelihood Improvement..................10

6.4.2 Gender Equity and Employment Opportunities...............................10

6.5 Negative Impacts..................................................................................11

6.5.1 Description of Environmental and Social Risks and Impacts...........11

6.6 Impacts and Mitigations Associated with Operation Phase...................12

6.6.1 Approach.........................................................................................12

6.7. CONCLUSION..........................................................................................12

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1. Executive Summary
The purpose of this project proposal is to start up the development of a
Mixed Farming Enterprise for the production of Poultry meat and eggs,
integrated with poultry feed processing plant and cereals crop farming.

At full capacity operation, the project will have a capacity of rearing

2,134,000.00 heads of poultry per annum coupled with 12,000 kg/hour
capacity feed processing plant coupled with a a Ground Water Based Surface
Irrigation Project for production of Cereals that include: Barely, Wheat, Maize,
Corn, Sorghum, Oats, etc., based on suitability of the local soil environment.
The Cereals Farm will have a capacity of producing 11,700 tonnes Fruit per
annum.

The project is owned by Mr. Naser Chirwa and is proposed to be

implemented at Harewe Kebele of Sity Zone.

Harewe Kebele is endowed with huge amount of ground water resources.

Taking advantage of the Government’s efforts in bringing out the ground
water potential of the area, by constructing boreholes, the promoter plans to
effectively utilize one farming block constructed on a 200 hectares land and
having five Boreholes.

The total investment requirement is estimated at Birr 50,034,808.06, out of

which 30% (Birr 14,975,634.36) is owner’s equity while the remaining 70%
(35,024,365.64) expected from Bank loan. The plant will create employment
opportunities for 196 persons.

The project is financially viable with an internal rate of return (IRR) of 72.98
% and a net present value (NPV) of Birr 88,950,007, discounted at 8.5 %.
Further, results of our break-even analysis indicate that the project should at
least use 30.09% of its full capacity OR make a minimum annual sale of Birr
21,009,885 to avoid loss.

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1.1. Farm Description and Application
The capacity of the envisaged Farm is proposed to be as follows by taking
into consideration the market study and minimum economics of scale.

 Component One: A Poultry Farming Practice for the production of

poultry meat and eggs integrated with a animal feed Processing
Facilities.
 Component Two: A Groundwater based surface irrigation project for
the production of Cereals that include: Barely, Wheat, Maize, Corn,
Sorghum, Oats, etc.) based on suitability of the local soil environment.

Table: Crop & Livestock Species in the Mixed Farm

Project Sub-component:
Poultry eggs and Poultry meat production
Poultry Production
Project Sub-component:
Barely, Wheat, Maize, Corn, Sorghum, Oats,
Cereals Production

Our market study suggested that there is a huge demand for the Farm’s
products both domestically and on the international market.

Table: Farm Description

Component one: Animal Production

Project Sub-Component Annual capacity in heads Land, Hectare
Poultry eggs production 1,134,000.00 5
Poultry meat Production 1,000,000.00 5
Component Two: Crops Production
Project Sub-Component Annual Yield in tons Land, Hectare
Barely 1,000.00 40
Wheat 1,200.00 50
Maize 400.00 20
Corn 1,000.00 40

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Oats 1,200.00 40
Total 200

Poultry are large domestic fowl (e.g. hens, ducks, geese, turkey) reared for
meat or egg. The consumption of poultry has increased considerably owing
to the speed at which fowl mature and to the small amount of feed required
per kg of meat produced.

The production cycle for the envisaged poultry farm starts with day old
chicken. Day old chicken is brought for rearing in the envisaged plant by
feeding well balanced feed in disease controlled and hygienic shed.
Accordingly, eggs producing chickens shall be fed for about six months while
meat producing Broilers stay for six weeks.

The major consumers of the product of the envisaged plant will be hotels,
restaurants, and supermarkets, various institutions with food catering
services, households and importers from Djibouti.

1.2. Management
Mr. Naser Chirwa is responsible for overall management of the daily
operations of the project.

1.3. Purpose of the Project

The purpose of this project is to increase the competitiveness of the Region’s
crop and livestock products in both the domestic and export markets by
investing in a large scale mixed farming enterprise.

Ethiopia is well connected to the international world markets by a major

international Airport with sufficient cargo flights out of Ethiopia Airlines. There is a
direct railway and road transport to the port of Djibouti for delivering the finished
products to the market by sea.

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The primary objective of this project is to play role on the eradication of
poverty. The project has the following specific objectives:

 To supply crop and livestock products to local and export market

 To create additional job opportunities in the administration,
 To transfer knowledge to the surrounding farmers
 To generate additional foreign currency to the country
 To contribute to the development of the region.

The production of crops and livestock is largely dominated by small scale farm
holder producers covering many parts of the Central, Eastern and Western parts
of the country.

The raw materials and inputs needed for operation of our mixed farm project
are readily available, locally. Production can be stimulated easily for scaling up,
once sufficient demand and capacity is established.

The Project is expected to be established on a 10 hectare land at Dire Dawa

City. The Company will have its own fattening facility that supplies the the
Slaughterhouse Plant.

We have a comparative advantage by operating in Dire Dawa City as we can

have easy access to quality organic animals from the nearby markets.

2.1. The Project Area

Region --- Somali Regional State

Zone --- Siti
Wereda --- Shinile
Kebele --- Harewe

The project area is located in the lower flat plain of Harewe kebele of Shinile
Wereda. The plain is situated in the northern west zone of Somali National

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Regional State in Sitty Zone situated at 27km from Dire Dawa and 547km
from Addis Ababa.

2.2. Specific Project Area Description

The project is proposed to be located at Harewe kebele of Siti Zone. The
space required for establishing the processing facility is estimated to be
around 50 hectares.

2.2.1. Location of the Project

The project area for the Harewe Mixed Farming project is situated in the
Somlai Regional State, Siti Zone, Shinile Woreda of Harewe Wereda at some
40 km from the Ethiopia and Djibouti Border (near Ali Babieh) along the Rail
and road leading from Djibouti to Dire Dawa and Addis Ababa.

It is bordered on the south by Dembel, on the southwest by Shinile, on the

west by Erer, on the north by Djibouti, on the east by Somaliland and on the
south east by Jijiga Zone. The area is remote with a mobile nomadic
population and inadequate infrastructure.

The Harewe Mixed Farming project area can be accessed via the main
Asphalt road which runs from Dire Dawa to Djibouti though Shinile and
Dewele and the Ethio - Djibouti rail way line.

Further, the area is characterized by strong and consistent wind originated

from the Gulf of Aden. The project area covers a land that is flat,
uninhabited, and covered with almost no vegetation.

2.3 Climatic conditions

Climatically, it is mostly deserted with high average temperatures and low
bi-modal rainfall, According to the geotechnical investigation, the area is
usually characterized by strong wind, high temperature and low humidity.
The highest day and night average temperature recorded is 38 0C (measured
in July to august) and the lowest is 16C (measured in February) the average

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day and night temperature of the site is 27.7 0C. There is little seasonable
and regular rainfall with a mean annual rainfall of 318 mm.

2.3.1. RAIN FALL

There are no meteorological stations in the project area. Nonetheless,
various reports indicates that the project area rainfall is very low, with a
mean annual rain fall of less than 318 mm.

The rainfall of the project area shows a distinct bimodal distribution pattern.
The main wet season (Long rains) normally starts in late March and lasts
until late May. The short rains start in late July and last until beginning of
September. In addition to the low rainfall received in the project area, an
important characteristic of the rainfall received is the high variability.

Such a situation is manifested through sudden floods that result from heavy
rains in the region. Evaporation is very high and minimal water requirements
for growing crops exceed rainfall the whole year.

Figure: Wet and Dry Seasons in Somali Region

Source: Field surveys conducted by SCUK/DPPB. Food security monitoring

and early warning programme revised 2004.

2.3.2. Temperature
Shinile Wereda is one of the hot and arid areas in Ethiopia. According To a
study conducted by the Somali Regional State Environmental Protection

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Authority, the highest day and night average temperature recorded was 38 0C
(measured in July to August) and the lowest was 16 0C (measured in
February). The average day and night temperature of the site is 27.7 0C. The
hottest season in the project area is between May and August.

2.3.3. Wind conditions

Winds are channeled by the Rift Valley, coming from the Gulf of Aden and
reaches Shinile unobstructed due to the levelness of the re as topography.
The seasonal variation of the wind direction shows a very consistent wind
direction from October to May, the months with the strongest wind speeds,
and still rather consistent wind directions for the summer months, at a 1500
shift.

2.4. Topography
The proposed project area is situated at the eastern end of the Ethiopian Rift
valley, at an altitude varying between 720m and 770m above sea level.
Average elevation in the Shinile Woreda is 766m above sea level; the terrain
is completely flat and covered with almost no vegetation and a firm
sand/gravel ground. There is a dry river bed at a 60m lower elevation on the
western flank of the site that drains the occasional summer rainwater. Hilly
terrains are located north of Shinile away from the project site.

2.5. Geology

2.5.1. Soil
The bed rock in the project site is sandstone and this is covered by
sediments of sand, gravel and silt. Basalt is found on the top of hilly areas
north of Shinile.

According to researches done on the Shinile zone of the Somali Regional

State (Haile, 2008, Gezahegn, 2006), the soils in the area are eutric flub
soils, orthic solonchaks and eurtic regosolos. Land use pattern in the zone

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show that 86.35%, 3.38%, 3.77% and 3.55% are covered by unutilized land,
shrub, bush and grazing lands, respectively.

Fluvisols are young soils developed in recent alluvial deposits of river plains,
deltas, former lakes and coastal areas. Soil conditions are highly variable. In
arid regions, they are saline--which is the case for the proposed project area.
Nonetheless, fluvisols are generally good agricultural soils and often
intensively used.

2.5.2. Soil & Land Suitability Study

2.5.2.1. General
Basically soil is known to be the source of life. Every living thing depends on
soil for its existence. Crop production requires sufficient supply of water
either from rainfall or irrigation sources. And the major source of water for
the plant root zone is soil water which firstly stored in the soil during rainfall
or irrigation time. Apart from this, soil provides essential plant nutrients,
support plants by holding down their root masses against wind action. Thus,
detail physical and chemical investigation for an agricultural soil is found to
be important for sustainable crop production.

2.5.2.2. Description of the command soil

The command area has flat plain landform with gentle and slightly increasing
slope (0.1-2%) situation in all of the command areas. Some dead water ways
and small gullies with short lengths and shallow depths are also observed in
their naturally well conserved condition. The soil in the proposed command
area has sufficient depth, for most of agricultural crops to be grown by
irrigation. It is more of alluvial nature, with a deep self-mixed A horizons
dominated by reddish brown to light color and high content of sandy loam. It
has medium to high water holding capacity and fair to medium infiltration
rate especially in some pocket lands within the command area. As the
proposed command area is bare land, no crop observed in the field during

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the assessment period. No rock outcrops are observed in the command area
and most parts are covered by lowland shrubs.

2.5.2.3. The soils of the study area

Based on the basic physical characteristics of the command soil, the irrigable
land falls under Class I and Class II which is suitable for irrigation
development with certain amendments. However, as physical observation
made during the field assessment there is some soil erosion by runoff water
during the period of rainfall and requires certain conservation measures for
sustainable irrigation utilization. Contour farming, strip cropping, terracing,
stone mulching/bund, use of permanent crops on the upper slopes, and the
likes could be some of the conservation measures to be taken during
irrigated crops production.

The following measurements and soil characteristics analysis report gives

ample information on the soil of Shinile area. The analysis was made as part
of the ESIA Study conducted for the Ethio-Djibouti Trans-Boundary Water
Supply Project.

2.5.2.4. Soil Suitability Conclusion

Generally, the project soil has sufficient depth with high water holding
capacity. This is very suitable for production of most agricultural crops. The
pH values of all sampled soils are somewhat higher, which is a common
phenomenon for dry environments of the eastern part of the country. This
high pH value indicates that the soils are of alkaline nature and some soil
amendment measures such as application of gypsum (Ca2SO4) and other
basic anion containing materials and use of salt tolerant crops are very
crucial.

However, exchangeable sodium percentage (ESP) and EC values are

minimum indicating that the alkalinity nature of the soil is not limiting factor

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for crop production. Most of the chemical properties are under normal
conditions and those which are not in their normal conditions can be
amended by different soil and crop management activities, during the
cultivation seasons. Thus, generally the project soil is possible for irrigation
development with the amendment practices recommended in the physical
and chemical analyses during the course of crop production.

2.6. Hydrology
There is no indication of presence of perennial surface water bodies in the
project area. Occurrence of ground water at shallow depth is not anticipated
due to permeable nature of the overburden (alluvial and wind deposits) and
very low rainfall intensity.

Long-term meteorological data does not exist for the Shinile Zone, but
community perceptions suggest that rainy seasons have shortened during
the last decade-- with rains starting later and ending earlier-- and that rain
frequency, distribution and predictability is decreasing. Water sources in the
area are mainly rivers, shallow wells, natural ponds, artificial reservoirs and
boreholes. The commonest, however, are shallow wells (mostly in seasonal
river beds) but their yields and quality decline in dry season.

Water quality is often a problem for all sources-- boreholes are better but are
very few. Water scarcity is an endemic problem in most areas, particularly
those with no permanent water points.

2.7. Environmental Degradation

2.7.1. Natural degradation

Gullies/erosion is the commonest type of natural degradation that is clearly
observed in the proposed project area. The area is dry and highly wind.
Consequently, soil wind erosion is highly prevalent with dust devils.
Moreover, sand sheets and dunes appear with frequent sand storms. The
project area is characterized by flat terrain and very low and erratic rainfall

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intensity. However, arid areas are also exposed to heavy torrential rain that
can result in flash flooding, resulting in heavy erosion and formation of
gullies in the project area.

2.7.2. Livestock
Main feed resources for livestock in the area are natural pastures
(herbaceous vegetation composed mainly of grasses, forbs and browses
(Shrubs, tree leaves and pods). Different grass species are highly important
in terms of palatability and enhancing milk production of cattle when they
are consumed. However those species are dangerously affected by
infestation of prosodies juliflora, an invasive species which has suppressed
most of the indigenous vegetation, prosodic julflora tends to form dense
impenetrable thicket. Hence, livestock are not able to graze underneath and
have difficulties in movement and accessing river water.

A creeping problem of environmental deterioration is linked to an emerging

trend of widespread tree felling for conversion to charcoal. In an area where
resources are very scarce, this will have a clear negative impact on the
environment.

Combined natural and human induced environmental degradations are also

common in the area. In this regard, overstocking, overgrazing and
deforestation are cited as sources of environmental changes and rangeland
degradation. These factors also have facilitated the disturbance of the
ecosystem and enhanced the effect of droughts in the region.

2.7.3. Biological environmental (flora and fauna)

2.7.3.1. Flora
The vegetation in the deserts of the Somali regional state is phyto -
geographically constituted of Somalia Massai type with Semi-desert
scruvkand. The plant types are Acacia and commpihora joined by Euphorbia
and Aloe, as well as grass species such as Dactylocatenium Egypt and

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pancium tyrgidum (Tilahun etal 1996). The range lands of Jigjiga and Shinile
Zones are mainly charaterzied by dense shurub and bush land dominated by
Acacia etbaica, A. nilotica, A. seyal, A. Senegal, A. bussei, A, brevispica,
Balanties glabra, commiphora Africana, euphorbia grandis and Grewiavillosa
spp.

The medium height grassland is dominated by Chrysopogon plumulosis and

andropogon greenwayi. Other important species in the grassland
associations are Cenchrus Ciliars, Aristida adscensionis, Cynodon dactylon,
hetropogon controtus, sprobouls marginatus, harpachne schimperi (ICRA,
1997). The rangeland which is the sole provider of food for all types of
animals is overgrazed and degraded in most parts of the vast plains.

Although scarce and increasingly being depleted, vegetation plays an

important role in the life of pastoralists and agro-pastoralists of the project
area. They provide firewood and charcoal and also they are the main
materials in construction of houses and feed for the livestock including
camel, cattle, goats and shoats. Some of the shrubs are also valued as
medicinal source.

2.8. Water supply

Out of the total population of the Woreda, only 10% get pure water from few
shallow and deep bore holes. Water from the bore holes can be salty such as
at Dewele’s boreholes so that only livestock can use it.

As far as livestock watering is concerned, this is available only during rainy

times. In dry seasons and during drought years, pastoralists are forced to
travel long distances in search of water and pasture. Moreover, concerning
animal health service there is no any animal health service for all the
kebeles.

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2.9. Electricity
The 230 KV transmission line connecting Dire Dawa and Djibouti is passing
by Shinile, supplying Djibouti with 35 MW produced power to an average
price of USD 7 cents per kw/h. Shinile is connected to the transmission line
with its own distribution network.

2.10. Transport
Lack of infrastructure is the major bottleneck for the development of the
Woreda. Except the main road concerting Dire Dawa to Djibouti and the
railway connecting Dire Dawa and Djibouti, there are no roads to connect
Kebeles to the Woreda Town. The Town is not properly planned and needs a
master plan that takes in to consideration future development interventions.

2.11. Commercial and economic activities

The livelihood of the Woreda population mainly depends on livestock rearing.
The majority of the population in the area depends on the income generated
from this economic activity while the remaining few depend on trading.
However, the absence of veterinary services, proper range management as
well as a traditional and backward method of animal husbandry has resulted
in food insecurity challenges for the local community.

The Zonal capital serves as the market center for the area. Nonetheless,
other trading centers dwellers of the Shinile Woreda frequently visit are
Gadamaiti, Beki, Dire Dawa, and Djibouti. These trading corridors are also
sources for food and other goods including rice, whet, flour, pasts, sugar,
new and second hand clothes, and all types of household items. The main
commodities sold by pastoralists in the area are livestock and to a lesser
extent livestock products (milk and ghee).

Lack of demand for hides and skins in the region means these are hardly
sold at all. Trade (particularly livestock sales) with the rest of Ethiopia is very
limited. The interface markets with the rest of Ethiopia are Negelle, Dire
Dawa, Meisso, Moyale and Babile, where livestock is sold for consumption in

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the Ethiopian highlands and as raw materials for export oriented
slaughterhouses. But the volume of trade is very small.

The reasons suggested for this poor trade with other Ethiopia areas include
poor transport links and lack of historical trading and understanding between
such distant areas (Ethiopia main meat processing plants are very far from
the region) cause such trading to be perceived as risky. Other sources of
income and trading activities include collection and sale of construction
materials, firewood, charcoal, gums and resins and engagement in unskilled
labor activities such as working in tea shops and livestock herding for the
richer households.

2.12. Poverty situation

The Shinile Woreda is among the poverty stricken areas in the region. Wealth
in this area is generally determined by livestock holdings, particularly
camels, shoats and cattle. There is relatively little employment to be found
outside the towns, other than seasonal agricultural labor, and sometimes
livestock herding. In the area, it can be generalized; the skilled labor force is
extremely limited.

Consequently, acute poverty prevails in the project area creating a situation

where individuals and households cannot afford basic food and non-food
items. The main causes of poverty in the project area include.

 Severe droughts resulting from very low and unpredictable rainy

seasons.
 Inadequate water for domestic and non-domestic use
 Under developed livestock /livestock products markets and
unwillingness to sell livestock (which is traditionally a measure of
wealth and status in the area).
 Lack of employment opportunities.
 Over-dependency on relief food.

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2.13. Settlement in project site
From site visit and information from the Woreda, currently there are no
settlements as well as no grazing or water point sites. However, it is
indicated by the Wereda officials that there are mobile pastoral communities
who claim ownership of the site area. Therefore, the consultant recommends
that The promoter should facilitate with the responsible government body, to
clear the situation by providing appropriate compensations.

2.14. Land use

The land use of the area surrounding the project site is determined by the
climatic conditions and the natural resources available in the area. The
surface is almost barren with few scattered bushs. The severe climatic
conditions make it difficult for most domestic animals to survive; however,
some livestock may occasionally occur during rainy seasons.

The major land use types in the command area include bare land abandoned
for long time, and desert bush land.

As the information obtained from the local community, physical observation

made in the field during the assessment period and according to the
information obtained from Shinile woreda, the land use type of the woreda is
indicated as follows:

2.15. Present Agricultural Conditions

There is no Agricultural activity at the project area. As the area is desert with
little natural rainfall and no available surface water resources, traditional and
subsistence type of livestock farming practice is the only agricultural activity
practiced by the community surrounding the project area.

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2.16. Existing Crop Calendar (rain-fed agriculture)
The agro-climatic zonation for this particular area is hot and dry tropics
(more of dry lowland having mono-modal, erratic and insufficient rainfall
distribution with scattered desert bushes). As the information obtained
from regional bureau of agriculture, woreda agriculture office, and from the
interview of local community indicated the project area

has no sufficient experience of crop production both with rainfall and

irrigation. The major limiting factor is the insufficient amount and distribution
of rainfall and little experience of irrigation activity from ground water
resources.

2.17. Livestock Production

Livestock production is a major component of the farming system in the
project area. It is also one of the economic activities for provision of dairy
products, transportation and for household income generation. According to
the information obtained from woreda livestock agency and health clinic, and
the community, animal disease is not as such common in the woreda and the
project area, however, Pasturollosis, Faciolla, Newcastle, and ecto-parasites
are the most prevalent diseases in the area.

Vaccination and treatment is the major means of preventing these diseases

and farmers use their traditional healing mechanisms practiced from
generation. In the area natural grazing is the major sources of feed for
livestock. Communal grazing land is the common means of grazing
arrangements among the farmers of the area.

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3. Marketing Plan
The Chicken Farm intends to maintain an extensive marketing campaign that
will ensure maximum visibility for the business in its targeted market. Below
is an overview of the marketing strategies and objectives of the Company.

3.1 Marketing Objectives

• Establish relationships with hotels, restaurants, supermarkets, various
institutions with food catering services and importers from Djibouti
• Implement a local campaign with the Company’s targeted market via
the use of flyers, local newspaper advertisements, and word of mouth
advertising.
• Develop an online presence by developing a website and placing the
Company’s name and contact information with online directories.

3.2. Marketing Strategies

The promoter intends on using a number of marketing strategies that will
allow the Farm to easily target buyers within the target market. These
strategies include traditional print advertisements and ads.

The Company will also develop its own online website showcasing the
facility, its inventory of chickens, preliminary pricing information, and contact
information.

4. Technical Aspects
4.1. Layers chicken house
The dimensions of the structure are 60 Meters long by 12 Meters wide and
the vertical walls goes up to 3 Meters high. The structure is designed to be

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simply installed by the client on site according to plans delivered by the
Supplier.

This product is designed for average production of 6000 eggs per day, yet
with good management of the project the production can easily overpass this
rate.

Structure
Dimensions:
Length: 60 Meters
Width: 12 Meters
Height (vertical wall): 3 Meters
Height (roof top): 4.2 Meters
Total covered area: 720 m²
Battery rows: 4
Battery height: 2 levels
Cages per row: 672
Total cages in house: 2688
Distance between pillars 3 Meters
Roof inclination 20%
Roof insulation 50mm polystyrene panel
Foundations 1 Meter deep
Foundations diameter 30cm.
Concrete required 59 m³

21 | P a g e
Long Lasting – Hot Galvanized Steel
All metal structure components are designed manufactured and punched
by computerized machinery to ensure easy and correct installation on site.

All structure components are punched welded and then hot galvanized at
the origin, the construction on site will be done only by bolts and nuts - no
welding on site! This ensures very high durability of the structure for many
years.

Electricity and water

22 | P a g e
 • Electric system will be controlled by a 16A switch board that will be
equipped with a service socket.
• The board will control 5 lightning lines supplied with 18W (EL) energy
saving bulbs.
• The board will also include a timer and an anti-shock protector switch.
• The structure includes 2 external projector lights on both front and
back of the structure
• Water to the chicken will be supplied from a gravity tank on top of a fully
hot galvanized steel water tower
• The tower is equipped with 1000L drinking water tank and 200L Vitamins
and medicine dosing tank.
• Water will be supplied to the drinking cups connected with a polyethylene
pipe equipped with 140 Mesh water filter

Layer Cage System

23 | P a g e
 • 2 Level fully galvanized Layer cage system will be supplied.
• 2688 Layer cages distributed in 4 rows.
• Each cage is designed to contain 3 Layers, for a total amount of 8,064
layers in the Henhouse
• Cage system is supported by galvanized steel legs connected to the
concrete sidewalks
• High quality PLASSON drinking cups connected with a polyethylene
pipe
• Feeding trough made out of Aluminum to avoid rusting.

Extra equipment included

24 | P a g e
In order to guarantee the full functionality of the henhouse the following
equipment will be supplied:
• 4 units of 12 Liter buckets
• 2 Hermetically sealed barrels for feed storage
• 1 wheel carriage for feed distribution
• 2 shovels for feeding.
• 2 large metal shovels for manure removal.
• Spare parts kit free of charge including:
✓ 25 Meters of spare 20mm Polyethylene water pipe
✓ 10 Extra 18W energy saving Light bulbs.

4.2. Chicken house for broilers

The dimensions of the structure are 30 Meters long by 12 Meters wide and
the vertical walls goes up to 3 Meters high.
The structure is designed to be simply installed by the client on site
according to plans delivered by the supplier.

This product is designed for average production of 4500 broiler chicken each
6 weeks or 4500 pullets each 16 weeks.

Note: For this project we shall use three such Chicken houses for
broilers and hence the project capacity reaches 12,000 broilers per
6 weeks.

Structure
Dimensions:
Length: 30 Meters
Width: 12 Meters
Height (vertical wall): 3 Meters
Height (roof top): 4.2 Meters
Total covered area: 360 m²
Roof inclination 20%
Roof isolation 50 mm polystyrene panels

25 | P a g e
Foundations 1 Meter deep
Foundations diameter 30cm
Concrete (cement) required 52 m³

Long Lasting – Hot Galvanized Steel

All metal structure components are designed manufactured and punched by

computerized machinery to ensure easy and correct installation on site.

All structure components are punched welded and then hot galvanized at the
origin, the construction on site will be done only by bolts and nuts -no
welding on site! This ensures very high durability of the structure for many
years.

Electricity and water

 Electric system will be controlled by a 16A switch board that will be
equipped with a service socket
 The board will control 3 lightning lines supplied with 18W (EL) energy

26 | P a g e
 saving bulbs.
 The board will also include a timer and an anti-shock protector
switch.
 The structure includes 2 external projector lights on both front and
back of the structure.
 Water to the chicken will be supplied from a gravity tank on top of a
fully hot galvanized steel water tower
 The tower is equipped with 1000L drinking water tank and 200L
Vitamins and medicine dosing tank.
 Water will be supplied to the bell drinkers connected with a
Polyethylene pipe equipped with 140 Mesh water filter.

Feeding and drinking

 Feeding from a manual feeder pan with capacity of 15Kg each.

 Feeders will be hanging from the ceiling including a hook to adjust the

27 | P a g e
 height of the feeder according to the age of the birds.
 Each feeder will be calculated for 50 birds
 For day old chicks – feeding will be supplied using manual feeding
equipment designed for chicks (included)
 High quality PLASSON bell drinkers connected with a Polyethylene
pipe.
 Each bell drinker will be calculated for 80 birds.

For day old chicks – drinking will be supplied using 2.5L manual drinking
equipment designed for chicks (included).

4.3. Complete poultry feed production kit 1000Kg/h

We are proud to present our proposal for a professional poultry feed
production monoblock with total capacity of 1000Kg/hour. It is a very durable
and simple machine to operate. An European made machine.
It is composed by a Monobloc Assembly constituted by:

1 Square metal hopper with 1250 x 1250 mm w/feet

1 Tubular worm with 6,50mt / 100mm diameter with cone
1 Hammer mill model 4F / 32M / 20HP

28 | P a g e
1 1000kg Vertical mixer (low model)
1 Tubular worm with 5mt / 120mm diameter
1 Square metal silo with 1,500x1,500mm w/feet
2 50kgs cursor scales
1 Electrical control and protection board

Advantages of the Rafael 1000 Super model

This model is simple and has the best quality/price ratio. It has a hammer
mill to crash the grains to a soft powder and a 1000Kg per hour mixer with a
strong 20 horse power engine to which are added the following advantages:

1. Container with base of 1250 x 1250 mm to receive feedstock. Allow to

make a mixture at the same time as feeding the mill;
2. Conveying means from the vessel to the top of the hammer mill;
3. Collection and storage of crushed and mixed matter in a silo with a
capacity of approximately 1500mm3;
4. Output of silo equipped with scale to facilitate distribution and / or
packaging of feed.

The structure is designed to be simply installed by the client on site

according to plans supplied.

29 | P a g e
Table: Summary of Costs Chicken Houses & Feed Processing Equipment

No
Items Qty Unit cost Total Cost
.
birr Birr
Full kit Chicken House with total capacity
1 of 4,032 layers designed for 3000 eggs per 3 2,893,728.00 8,681,184.00
day
Full kit Chicken House with total capacity
2 of 8,064 layers, designed for 6000 eggs 2 5,363,923.20 10,727,846.40
per day
Full kit Chicken House for Broilers with
3 total capacity of 4,500 Broiler 3 2,857,676.80 8,573,030.40
Chicken/6weeks
Complete poultry feed production kit 2 581,497.60 1,162,995.20
4
1000Kg/h
5 Incubator for production of fertile eggs 1 1,500,000.00 1,500,000.00

30,645,056.00
Total

30 | P a g e
4.4. Farm Capacity
The proposed annual capacity of the poultry farm by considering the market
study and minimum economies of scale is rearing 1,134,000.00 heads of
poultry per annum.. The production capacity is determined based on 300
days per year operation of the farm.

Table: Farm Capacity

Component one: Animal Production

Project Sub-Component Annual capacity in heads Land, Hectare
Poultry eggs production 1,134,000.00 5
Poultry meat Production 1,000,000.00 5
Component Two: Crops Production
Project Sub-Component Annual Yield in tons Land, Hectare
Barely 1,000.00 40
Wheat 1,200.00 50
Maize 400.00 20
Corn 1,000.00 40
Oats 1,200.00 40
Total 200

4.5. Production Programme

The farm will operate at 70% and 85% of its rated capacity in the first and
second year. Full production capacity will be achieved in the third year and
then after.

Table Annual Production Programme

No. Description Year 1 Year 2 Year 3 Year 4-10

1 Capacity utilization (%) 70% 80% 90% 100%

31 | P a g e
 4.6. Farm Inputs
The principal farm inputs required are chicken for breeding, poultry feed, and
medicines.

Chickens and poultry feed required by the plant can be acquired locally. The
annual requirement for farm inputs and the corresponding cost at 100%
capacity utilization is given in the following Table.

Table Annual Requirement and Cost Estimates of Farm Inputs

price/ cost/full prod
No. Description Unit Qty unit period cost/year

Egg Production
36,288.00 35.3 1,280,966.40 1,024,773.12
1 Day old chick number
Feed for layer PHASE ONE
8
4.00 145,152.00 116,121.60
2 UPTU PULLET 1D-5M kg/layer
Feed for layer PHASE TWO
UPTU PULLET 5M TO 1YEAR 8
40.00 1,451,520.00 1,161,216.00
3 AND 5 M kg/layer
36,288.00 2 72,576.00 58,060.80
4 Medicine number
2,950,214.40 2,360,171.52
Subtotal

Meat Production
price/ cost/full prod
No. Description Unit Qty unit period cost/year
27,000.00 15 405,000.00 3,240,000.00
One day old broiler number
5 10 1,350,000.00 10,800,000.00
Feed for broilers up to 6weeks kg/broiler
27000 3 81,000.00 648,000.00
Slouthering cost number
27000 3 81,000.00 648,000.00
Packing cost number
27,000.00 2 54,000.00 432,000.00
Medicine number
1,971,000.00 15,768,000.00
Subtotal
18,128,171.52
TOTAL Cost of raw materials

32 | P a g e
4.7. Source of Technology
Machinery and equipment for poultry rearing and processing plant are sourced from
an Israeli Company: Herman Zemel Ltd. The Company has proven expertise in
carrying out agricultural, industrial and civil projects worldwide; from the drawing
table to the completed product.
Agent in Ethiopia
Research & Consult International (RCI-Ethiopia)
Tel: +251-09-12-17-76-20
Email: [email protected]
Web: http://rciethiopia.wixsite.com/global
Kezira, Dashen Bank Building, First Floor, Room No. 106
P.O.BOX: 1946, Dire Dawa City, Ethiopia

4.8. Manpower Requirement

The total manpower required is 27 persons. Details of manpower and annual
estimated labour cost including the fringe benefits are given in the Table
below.

Table: Personnel Plan

No. Description No. of Salary, Birr
Persons Monthly Annual
1 Manager 1 15,000 180,000
2 Secretary 1 4000 48,000
3 Production supervisor 6 12,000 144,000
6 Veterinary doctor(diploma level) 1 12,000 144,000
7 Laborer 56 2,500 450,000
8 Electrician 4 6000 72,000
11 Accountant 2 6,000 72,000
12 Sales/Purchase man 2 6000 72,000
15 Store keeper 2 5,000 120,000
16 Cleaner 4 2500 30,000
17 Cashier 1 4000 48,000
18 Driver 2 3000 72,000
19 Guard 4 2,500 120,000
Sub-Total 102 1,572,000
Employees' benefit (25% of 550,200

33 | P a g e
 basic salary)
Total 2,122,200

5.. Financial Analysis

Table: Vehicles
No. Vehicles Cost (Birr)
1 Cold vehicle 1,200,000.00
2 Management vehicle 1,200,000.00
3 Employees Service vehicle 700,000.00
Total 3,100,000.00
Table: Other Fixed Assets
No Other Fixed Assets Cost (Birr)
.
1 Office Building & Equipment 1,000,000.00
2 Cold storage 300,000.00
3 Generator 700,000.00
Total 2,000,000.00
Table: Fixed Assets
No. items value (Birr)
Chicken Houses & Feed 31,645,056.00
1 Processing Equipment
2,000,000.00
2 Other Fixed Assets
3,100,000.00
3 Vehicles
36,745,056.00
Total
Table: Depreciation
Depreciatio Original value
Description n rate (Birr) Annual Dep. (Birr)
Chicken Houses & Feed Processing 31,645,056.00 1,532,252.80
Equipment 0.05
2,000,000.00 100,000.00
Other Fixed Assets 0.05
3,100,000.00 310,000.00
Vehicles 0.10
36,745,056.00 1,942,252.80
Total Fixed Asset

Table: Repair and maintenance costs based on the standard rate

Description Percentage Total Repair &
investment maintenance costs
Chicken Houses & Feed Processing 0.03
Equipment 31,645,056.00 919,351.68

34 | P a g e
Other Fixed Assets 0.01 2,000,000.00 20,000.00
Vehicles 0.02 3,100,000.00 62,000.00
Total Fixed Asset 36,745,056.00 1,001,351.68

Table: Summary of Cost of sales

Description Value (Birr)
2,360,171.52
Egg Production
15,768,000.00
Meat Production
18,128,171.52
Total Costs of products sold

Table: Costs of sales forecast

Year 1 Year 2 Year 3 Year 4 Year 5
Capacity utilization 0.70 0.80 0.90 100.00
Total costs of sales 4,229,906.69 4,834,179.07 5,438,451.46 6,042,723.84 6,344,860.03

Table: Operating Expenses

Items Value (Birr)
Utilities
120,000.00
Administration Costs
108,000.00
Depreciation
1,942,252.80
Maintenance and Repair
1,001,351.68
Salary Expense
2,122,200.00
Total Operating Costs
5,293,804.48

Table: Revenue Forecast

No. Unit Prod Prod/year Price/pc/kg revenue/year
1 Eggs Pieces/day 9,000.00 2,700,000.00 3.5 9,450,000.00
2 Meat kg/6weeks 9,000.00 72,000.00 225 16,200,000.00
Total 25,650,000.00

Table: Sales forecast

Sales Year 1 Year 2 Year 3 Year 4 Year 5
Capacity utilization 0.7 0.8 0.9 100
Total Revenue 17,955,000.00 20,520,000.00 23,085,000.00 25,650,000.00 28,215,000.00

35 | P a g e
Table: Working Capital Determination
Items Days of coverage Required working capital
Raw material for egg production
210 1,652,120.06
Raw material for meat production
180 11,352,960.00
Wage and Salaries
120 707,400.00
Total working capital required
13,712,480.06

Table: Planned Investment for the whole project

Description Costs (Birr)
Chicken Houses & Feed
Processing Equipment
31,029,728
Other Fixed Assets
2,000,000
Vehicles
3,100,000
Subtotal (Fixed Assets)
36,129,728
Total working capital required
13,905,080.06
Total Investment Costs
50,034,808.06

Table: Sources of Finance

No. Description Total Costs Owners' equity Bank loan

Amount % Amount %
Chicken Houses & Feed
30.00 70.00
31,029,728 6,308,918.40 14,720,809.60
1 Processing Equipment
2,000,000 600,000.00 30.00 1,400,000.00 70.00
2 Other Fixed Assets
3,100,000 930,000.00 30.00 2,170,000.00 70.00
3 Vehicles
36,129,728 7,838,918.40 30.00 18,290,809.60 70.00
Total Basic Costs
13,905,080.06 4,171,524.02 30.00 9,733,556.04 70.00
4 Working Capital
50,034,808.06 14,010,442.42 30.00 28,024,365.64 70.00
Grand Total

Table: Loan Repayment Schedule

Year Loan Interest (8.5%) Outstanding
Repayment Balance
0 28,024,366

36 | P a g e
 1 2,802,437 2,382,071 25,221,929
2 2,802,437 2,143,864 22,419,493
3 2,802,437 1,905,657 19,617,056
4 2,802,437 1,667,450 16,814,619
5 2,802,437 1,429,243 14,012,183
6 2,802,437 1,191,036 11,209,746
7 2,802,437 952,828 8,407,310
8 2,802,437 714,621 5,604,873
9 2,802,437 476,414 2,802,437
10 2,802,437 238,207 0

37 | P a g e
 Project Proposal for Integrated Mixing
Farming Enterprise
Table: Profit and Loss Statement
Description 1 2 3 4 5 6 7 8 9 10
Sales 35,910,000 41,040,000 46,170,000 51,300,000 56,430,000 62,073,000 68,280,300 75,108,330 82,619,163 90,881,079
Direct cost of
sales 23,727,320 27,116,937 30,506,554 33,896,172 35,590,980 37,370,529 39,239,056 41,201,008 43,261,059 45,424,112

Gross Profit 12,182,680 13,923,063 15,663,446 17,403,828 20,839,020 24,702,471 29,041,244 33,907,322 39,358,104 45,456,968
Operational
expense 2,812,562 3,214,357 3,616,151 3,724,636 3,836,375 4,028,194 4,229,604 4,441,084 4,663,138 4,896,295

Profit before
tax and 9,370,118 10,708,706 12,047,294 13,679,192 17,002,645 20,674,277 24,811,641 29,466,238 34,694,966 40,560,673
interest
Depreciation
1,144,841 1,144,841 1,144,841 1,144,841 1,144,841 1,144,841 1,144,841 1,144,841 1,144,841 1,144,841
EBITDA
(Earning
before tax, 10,514,959 11,853,547 13,192,135 14,824,034 18,147,486 21,819,118 25,956,482 30,611,079 35,839,808 41,705,514
interest and
depreciation)
Interest
expense 2,680,765 2,412,688 2,144,612 1,876,535 1,608,459
1,340,382 1,072,306 804,229 536,153 268,076
Profit tax
(30%) 0 0 2,970,805 3,540,797 4,618,256 5,800,168 7,121,801 8,598,603 10,247,644 12,087,779

Net profit 6,689,353 8,296,018 6,931,878 8,261,860 10,775,930 13,533,726 16,617,535 20,063,406 23,911,169 28,204,817

25 | P a g e
 Table: Cash Flow Statement
Production Year

Cash in flow 0 1 2 3 4 5 6 7 8 9
Owners' equity 13,516,460
Existing Bank
Loan

Additional Bank
Loan 31,538,406
Net Profit 0 6,689,353 8,296,018 6,931,878 8,261,860 10,775,930 13,533,726 16,617,535 20,063,406 23,911,169
Depreciation 1,144,841 1,144,841 1,144,841 1,144,841 1,144,841 1,144,841 1,144,841 1,144,841 1,144,841
Total Cash in
flow 45,054,866 7,834,194 9,440,859 8,076,719 9,406,701 11,920,772 14,678,568 17,762,376 21,208,247 25,056,011
Cash out flow

Replacement 0 0 0 0 0 0 0 0 0
loan repayment 3,153,841 3,153,841 3,153,841 3,153,841 3,153,841 3,153,841 3,153,841 3,153,841 3,153,841
Capital
Expenditure 19,796,826 - - - - - - -
- -
Working capital 25,258,040 - - - - - - - - -
Existing Working
capital

Pre-operating
expenses and 0
interest

Total Cash out

flow 45,054,866 3,153,841 3,153,841 3,153,841 3,153,841 3,153,841 3,153,841 3,153,841 3,153,841 3,153,841
Net Cash Flow
0 4,680,354 6,287,019 4,922,878 6,252,861 8,766,931 11,524,727 14,608,535 18,054,407 21,902,170
Cash balance
29,938,394 36,225,413 41,148,291 47,401,152 56,168,083 67,692,810 82,301,345 100,355,752 122,257,922

26 | P a g e
 Table: Balance Sheet Statement
Description Investment

ASSETS 0 1 2 3 4 5 6 7 8 9

Current Assets

Cash 25,258,040 29,938,394 36,225,413 41,148,291 47,401,152 56,168,083 67,692,810 82,301,345 100,355,752 122,257,922
Other Current
Assets 0 0 0 0 0 0 0 0 0
Total Current
Assets 25,258,040 29,938,394 36,225,413 41,148,291 47,401,152 56,168,083 67,692,810 82,301,345 100,355,752 122,257,922
Fixed Asset

Chicken Houses
& Feed
14,696,825.6
Processing 13,961,984 13,227,143 12,492,302 11,757,460 11,022,619 10,287,778 9,552,937 8,818,095 8,083,254
0
Equipment

Other Fixed
Assets 2,000,000.00 1,900,000 1,800,000 1,700,000 1,600,000 1,500,000 1,400,000 1,300,000 1,200,000 1,100,000
Vehicles 3,100,000.00 2,790,000 2,480,000 2,170,000 1,860,000 1,550,000 1,240,000 930,000 620,000 310,000.00
Total Fixed
Asset 19,796,826 18,651,984 17,507,143 16,362,302 15,217,460 14,072,619 12,927,778 11,782,937 10,638,095 9,493,254
Pre-operating
Costs 0 0 0 0 0 0 0 0 0 0
Total Asset 45,054,866 48,590,378 53,732,556 57,510,593 62,618,612 70,240,702 80,620,588 94,084,282 110,993,847 131,751,176
LIABILITIES

Short term
liability - - - - - - - - - -
Long term
liability (Bank 13,516,460 10,362,619 7,208,779 4,054,938 901,097 -2,252,743 -5,406,584 -8,560,424 -11,714,265 -14,868,106
Loan)

27 | P a g e
Sub Total 13,516,460 10,362,619 7,208,779 4,054,938 901,097 -2,252,743 -5,406,584 -8,560,424 -11,714,265 -14,868,106
CAPITAL

Owner's Equity 31,538,406 31,538,406 31,538,406 31,538,406 31,538,406 31,538,406 31,538,406 31,538,406 31,538,406 31,538,406
Retained
Earnings 0 6,689,353 14,985,371 21,917,249 30,179,109 40,955,039 54,488,766 71,106,300 91,169,706 115,080,876
Earnings 6,689,353 8,296,018 6,931,878 8,261,860 10,775,930 13,533,726 16,617,535 20,063,406 23,911,169
Sub Total 31,538,406 38,227,759 46,523,777 53,455,655 61,717,515 72,493,445 86,027,172 102,644,706 122,708,112 146,619,282
Total Liability &
Capital 45,054,866 48,590,378 53,732,556 57,510,593 62,618,612 70,240,702 80,620,588 94,084,282 110,993,847 131,751,176
Net Worth 31,538,406 38,227,759 46,523,777 53,455,655 61,717,515 72,493,445 86,027,172 102,644,706 122,708,112 146,619,282

28 | P a g e
 Project Proposal for Integrated
Mixing Farming Enterprise
Table: Internal Rate of Return
Year Net Cash Flow Discount Factor NPV IRR
0 -23,989,409 1.00 -23,989,409 0.3165
1 9,503,628 0.92 8,714,827
2 11,168,660 0.84 9,404,012
3 8,934,602 0.77 6,897,513
4 10,310,991 0.71 7,300,182
5 11,896,536 0.65 7,732,748
6 13,593,485 0.60 8,101,717
7 15,469,940 0.55 8,462,057
8 17,544,753 0.50 8,807,466
9 19,838,702 0.46 9,125,803
10 0 0.42 0
0 50,556,915

Table: Payback period

Item 0 1 2 3 4 5 6
Investment cost 23,989,409
Net profit 9,666,902 11,331,934 9,097,876 10,474,265 12,059,810 13,756,759
Interest 1,169,599 1,052,639 935,679 818,719 701,759 584,800
Depreciation 1,212,725 1,212,725 1,212,725 1,212,725 1,212,725 1,212,725
Profit 12,049,226 13,597,298 11,246,28 12,505,709 13,974,294 15,554,283
0

Note: The investment cost and income statement projection are used to
project the pay-back period, the project will fully recover the initial
investment and working capital within two years.

Table: Break-even point

Items
Values at full
Value (Birr) capacity operation
Fixed Cost 21,154,502
variable costs 9,868,045

0|Page
Sales 25,650,000
Ratio of variable cost to sales 0.384719109
contribution ratio 0.615280891
Break-even level of sales 13,015,961.09
BE Point of production capacity 50.74%
Note: A Birr 13,015,961.09 of Break-even level of sales and a 50.74% of
Break-even point of production capacity indicate that the project should at
least use 50.74% of its full capacity OR make a minimum annual sale of Birr
13,015,961 to ensure that the project does not ‘lose money’.

6. ENVIRONMENTAL IMPACTS OF THE PROJECT

6.1. THE ESIA STUDY
Any change in the present activity is expected to cause impacts on the
surrounding environment. The impacts may be adverse and/or beneficial. In
order to assess the impacts, an ESIA study should be conducted within the
project area.

In order to understand the possible environmental impact of the Mixed

Farming Complex project, an Environmental Impact Assessment Study was
conducted by the consultant. The Study is intended to analyze potential
positive and negative impacts of the proposed project and propose suitable
mitigation and management measures to overcome any adverse impacts so
as to enhance the positive ones.

6.1.1. ENVIRONMENTAL SCREENING

Environmental Screening has been undertaken to determine the appropriate
extent and type of ESIA to be carried out for the proposed project.
Depending on the type, location and sensitivity of the project as well as the
nature and magnitude of its potential environmental impacts, the proposed
project has been classified.

Depending on the type, location and sensitivity of the project as well as the
nature and magnitude of its potential environmental impacts, the proposed

1|Page
project has been classified as “Schedule 1” project based on the MEFCC’s
ESIA guideline. Thus, as per the Schedule 1 of the guideline, the proposed
project requires a full ESIA.

In this context, a full environmental and social impact study was conducted
by the consultant. The study examines the project's potential negative and
positive environmental impacts and recommends any measures needed to
prevent, minimize, mitigate, or compensate for adverse impacts and improve
environmental performance.

6.1.2. SCOPING OF ESIA STUDY

In line with the environmental procedures of the Government of Ethiopia, a
Scoping Study was undertaken for the proposed project. The purpose of the
Scoping Study was to ensure that the ESIA focuses on pertinent issues. This
exercise helps to decide upon the boundaries and sensitivity of the study
area for the project and draw the list of activities and impacts to be
considered within the full ESIA study.

The scoping process was conducted based on available primary and

secondary data sources. In this respect, the consulting team employed
different tools and techniques relevant to the proposed project.

Field visits of existing Mixed Farming Complex facilities in the project area,
consultants expertise in the specific field of specialization and consultation
with different stakeholders (including experts, project affected people and
local administrators) were the major sources of information in carrying out
the scoping exercise.

As a result of the Scoping study it was concluded that the main issues to be
addressed in this ESIA study would be:

o Land and Groundwater Quality

o Ecology

2|Page
 o Landscape Impact
o Socio-Economic Effects
Whilst emphasis was placed upon these issues, the assessment considered
the full range of potential environmental and social impacts.

6.1.3. APPROACH AND METHODOLOGY

This ESIA Report is based on the observations made by the consulting team
during visits to the study area and collection of primary and secondary
environmental data. Literature has also been reviewed and relevant
information has been collected for environmental and social baseline.

6.2 .ENVIRONMENTAL IMPACTS AND MITIGATION MEASURES

6.2.1 General
An Environmental and Social Impact Assessment (ESIA) Study has been
carried out to assess both the adverse and beneficial impacts of the
proposed activity in the project’s area of influence. Potential impacts and
risks are assessed for the following key stage of the project cycle (i.e.
construction and operations.) as per the Ethiopian and Regional EIA
guidelines.

The impacts have been assessed for short‐term, long‐term, and cumulative
context in the following steps:

 Identification of interactions between activities and environmental

receptors

 Identification of potentially significant environmental impacts

 Evaluation of all significant environmental impacts

6.3. Beneficial Impacts and Measures for Enhancement

Establishment of the Harewe Mixed Farming Project will have a number of
positive impacts both at the regional and local community levels. Some of
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the major positive impacts include technological capacity building, economic
development and creation of employment opportunities. These potential
positive impacts, their origin and characteristics are presented below.

6.3.1 Economic Benefit

The basic purpose of the Environmental and Social Impact Assessment (ESIA)
study is to identify, predict and analyze the magnitude of environmental and
social impacts and propose enhancement and/or mitigation measures for
significant environmental and social effects that are likely to arise from the
various activities of the project during construction and operation phases.

It is also to ensure that the proposed project is environmentally sound and

socially acceptable, and hence contributes to the development of
environmental and social functions of local communities. It is also expected
to provide a means whereby the overall environmental performance and
social benefits of the project can be enhanced through defining positive
social and economic benefits local communities can derive from the
proposed project implementation and designing subsequent operation, and
preparation of plans and recommendations regarding measures that will
minimize adverse impacts and enhance beneficial impacts.

The methodology adopted for conducting the environmental impact

assessment study of the project follows the conventional methods that meet
the requirements of the Federal and Regional Environmental Protection
Organs’ Environmental Impact Assessment Guidelines.

The Government is constantly looking out to identify constraints to the

development of the Agriculture sector and advise on the best course of
action to facilitate investment in the sector. The private sector involvement
in investment activities has contributed to the above objectives in the
following ways:

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  Generation and saving of foreign exchange

 Creating employment

 Provision of new opportunities for professionals and experts to develop

technical skills and careers in modern industry,
 Contribution to the government's objective of widening the tax base

 Contribution to social stability through provision of jobs, incomes,

public services and amenities to villages surrounding modern
industries

 Contribution to the development of other commercial activities in areas

adjacent to the industries (construction, building blocks, restaurant,
etc.).

 Development of local expertise through on-the-job training of

personnel,

 Contribution to absorbing rural-urban migration.

 The investment will have multiplier effect.

6.3.2 Contribution to National Economic Performance

The implementation of the project has a range of economic benefits. It
provides consumer goods for domestic markets, generates employment
directly and indirectly, promotes skill development and disseminates new
technologies.

One of the main aims of the project is to provide additional volume of

consumer good for the community and the export market. Hence, the socio-
economic impact of the proposed project is mainly positive. The local
supplies of the project outputs have been limited. The project will solve the
problem of shortage of the supply of vegetable oil, animal feed and the other
project outputs on Ethiopian markets.

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The project introduces advanced technology for the Agri-Processing. Hence,
the supply of the products to the local market increases and reduces import
from other Countries. Moreover, as a result of the project, more market
actors will involve in the process of supplying the product. The project will
also serve as import substitution from abroad. In this regard, the project can
serve as a mechanism of saving the counties meager foreign currency, which
otherwise be used for importing these commodity.

In addition, as a result of extended volume of production the project will

generate enormous profit in the future as clearly indicated and the project
document and hence the Shinile Wereda and the Federal Government shall
benefit through various forms of tax revenue. The government not only
benefits from tax revenue collected from the project, but also volume of tax
revenue also increases as a result of more number of workers employed.
Moreover, there is ultimate potential of mobilizing saving from increased
number of employees.

Beside the financial and economic development contributions, the new

project will be an opportunity for the introduction of new technologies to the
Country. Since the project uses a more technology intensive mode of
production, it is an opportunity for local experts to benefit from transfer of
new technological knowledge and skill. Further, the enhanced waste water
treating techniques can be used as a lesson by other similar industries that
release waste water from their factories. Generally, impacts on the socio-
economic conditions are mainly positive, including a rise in employment
opportunities to the host communities and indirect stimulation of local
development

Benefit enhancement measures:

The project has multifaceted benefits to the nation in general and Shinile
Wereda in particular. These may include increased efficiency and volume of

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supply which ultimately end up in increased supply of the consumer good.
Moreover introduction of new technology will reduce the burden on the
environment by reducing waste water released. Hence benefits are
enhanced as a result.

The proposed project will introduce a new type of technology and hence
results in increased supply of the product. This will be a healthy development
replacing the inefficient technique of currently being used production used.
Moreover, increased production volume means substitution import from
other location and hence will reduce cost of transportation, which ultimately
reduces cost of supplying the product to the final consumer. Therefore, the
project will have a positive impact on the socio-economy both at local and
national levels.

Many local experts are also involving in the project implementation. This, on
one hand increases exposure to new technologies and better job
opportunities on the other. When seen from regional perspective, it can be
considered as capacity building of professionals whose experience can be
used for related project schemes. Participating local professionals at different
stages of the project will enhance capacity building in the sector. Similarly,
these technically capacitated experts are expected to reduce the operational
cost of the factory as they can potentially involve in maintenance and further
possible expansion in the future. This is also an opportunity to minimize
operating costs and professionals can be readily available locally for
maintenance and expansion activities.

6.3.3. Employment
The direct and indirect employment opportunities to be created for citizens
are other economic benefits of the project beyond those economic outputs
discussed above. The project will be an opportunity for reducing
unemployment in the Wereda to a large extent.

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An indirect employment is also expected as the project start to operate with
its full capacity. As the volume of production increases the number of local
dealers and service-providers increases and this is also an indispensable
indirect employment opportunity.

Benefit enhancement measures:

Special consideration is given to enhancement of the positive effects of the
project by maximizing the distribution of this employment related project
benefits. Hiring professionals and service providers will be based on merits
and yet on competitive basis in order to get quality technical workers. It will
enhance the benefits of the project to give special consideration for the
people residing near by the project site to provide them with job as priority
for those positions not requiring especial skill. During construction phase of
the project, as there will be high demand for daily laborers, it will be twofold
advantages to hire laborers from local people.

At first place, the project promoter will reduce time of searching for laborers
and save money that is needed for transporting of these laborers to project
site and in second place, fairly distributing the benefits of the project will
enhance the project’s social acceptability in general.

In addition to the above proposed measures that can enhance the direct
employment benefits, procuring supplier and services from local sources to
the maximum extent possible at each stage of the project enhances the
indirect employment opportunity of the project.

6.3.4. Investment
The establishment of Mixed Farming practices like the proposed project
requires high level of investment, particularly for purchasing of farm

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machineries, erection of the project production units and installing of utility
systems.

This will have a significant inducing power for establishment of other similar
projects as backward and forward linkages. It will also play great roll in
strengthening the investment capacity, most importantly at Shinile Wereda
level.

Benefit enhancement measures:

Complying with public and private requirements and producing goods at low
costs maximizes benefits from the investment. Through exerting high level
effort by external institutions and governmental bodies, facilitating the
investment process enhances the benefit.

6.4. Social Benefits

6.4.1 Local Income Generation and Livelihood Improvement
The employment opportunity to be created by the project will have social
benefit beside the expected economic benefit. The employment income from
the project will have a substantial role for social livelihood improvement in
the project area. This local income generation related social benefit will have
short term as well as long term cumulative benefits.

Benefit enhancement measures:

Utilization of the available labor force in the area enhances the benefits at
local level. Out sourcing commercial activities like transportation and other
services for local competitive service providers maximizes the social benefits
of the project.

6.4.2 Gender Equity and Employment Opportunities

Women efficiency in carrying out some of the production processes (e.g.
product packaging, process control and sorting of product defects) make

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them preferable for the Harewe Mixed Farming Project. This gender specific
opportunity will address the historical disproportionate burden of
unemployment on woman.

Benefit enhancement measures:

Consideration to be given for keeping the above beneficial opportunities of
the project provides to women and actions to avoid work area problems
women can face. The actions to be taken include:
 Providing equal work opportunity
 Strict rule on work area sexual harassments.

 Job security

 Appropriate payment (equal payment standard with men engaged on

equivalent work load).

 Medical and reproductive health follow-up for women’

6.5 Negative Impacts

The negative impacts associated with the proposed project are dealt here by
classifying them in the following two phases:
 Construction phase

 Operational phase

Generally, the impacts during construction are temporary and confined for
smaller area around the project site. On the other hand, operational impacts
are continuous up to the life time of the project.

6.5.1 Description of Environmental and Social Risks and

Impacts
The following two Tables highlight the key impacts associated with the
proposed establishment of the Harewe Mixed Farming project. The type,
nature (positive, negative, direct, indirect), magnitude, timing (during
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design, operation), duration (short term/temporary, long term/permanent)
and significance of impacts is assessed. The evaluation approach
implemented in this study is a Receptor-Specific Analysis approach
addressing the various sources of impacts from the project’s Construction
phase.

Table: Summarized qualitative impacts of the proposed project during

construction and operation phases

Particulars Impact Rating

Nature Duration Likelihood Severity Potential
Construction phase
Socio-economic impacts Beneficial Short term Medium Localized High
Air Quality Adverse Short term Medium Localized Medium
Ecology/Flora & Fauna Adverse Short term Medium Localized Medium
Land Use & Visual Adverse Short term Medium Localized High
Noise & Vibration Adverse Short term Medium Localized Medium
Soil & Water Resources Adverse Short term Medium Localized Medium
Quality
Solid Waste Adverse Short term Medium Localized Medium

6.6 Impacts and Mitigations Associated with Operation Phase

6.6.1 Approach
As the operational phase is the main environmental issue of the proposed
project, the Consultant preferred to follow an approach that provides realistic
background information on the environmental assessment process. The
approach considers the environmental aspects, the environmental impacts
and the viable (both environmentally, technically and economically)
mitigation measures.

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The Consultant methodology for this is as follows:
 Identification of the Environmental Aspects of the project

 Impact assessment and identifying sustainable impact mitigation

measures

6.7. CONCLUSION

The implementation of the proposed Mixed Farming Complex Project will

have a pack of economic and social benefits. It plays a role on the country’s
economic development activity through creation of an employment
opportunity for citizens, generation of income for the local community, and it
also paves the way for rural development in the area.

On the other hand, the proposed project has some associated environmental
aspects that might cause adverse impacts. However most of these
environmental effects can be reduced to acceptable levels with
implementation of pollution prevention and control techniques, and
integration of restoration and other mitigation measures proposed in this EIA
report.

Therefore, it can be concluded that there will be no severe or irreversible

adverse impacts that will prevent the implementation of the proposed
industrial development project.

To have minimal and acceptable residual environmental impacts, it is

recommended that the proposed mitigation measures should be properly
implemented. A close follow up of the effectiveness of the implemented

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measures is recommended since a well-planned monitoring program is
critically important.

In general, the Consultant perceived that there are no insurmountable

environmental difficulties for the implementation of the proposed Mixed
Farming Complex Project.

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