print ink

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Investment Office ANRS

Project Profile on the Establishment

of Print ink making plant

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l di

Table of Contents

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

2.Product Description and Application.................................................................3

3.Market Study, Plant Capacity and Production Program.................................4

3.1Market Study...........................................................................................................................4

3.1.1Present Demand and Supply............................................................................................4

3.1.2Projected Demand............................................................................................................53.1.3Pricing and Distribution...................................................................................................8

3.2Plant Capacity.........................................................................................................................8

3.3Production Program................................................................................................................84.Raw Materials and Utilities.................................................................................8

4.1Availability and Source of Raw Materials..............................................................................8

4.2Annual Requirement and Cost of Raw Materials and Utilities...............................................9

5.Location and Site................................................................................................12

6.Technology and Engineering ............................................................................12

6.1Production Process................................................................................................................12

6.2Machinery and Equipment....................................................................................................12

6.3Civil Engineering Cost..........................................................................................................13

7 H R d T i i R i t 14

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1. Executive Summary

This project profile deals with print ink manufacturing plant in Amhara National Regional State.

The following presents the main findings of the study

Demand projection divulges that the domestic demand for printing ink is substantial and is

increasing with time. Accordingly, the planned plant is set to produce 90 ton annually. The total

investment cost of the project including working capital is estimated at Birr 2.76 million and

creates 25 job opportunity and 267.84 Birr of income

The financial result indicates that the project will generate profit beginning from the first year ofoperation. Moreover, the project will break even at 19.5% of capacity utilization and it will

payback fully the initial investment less working capital in 2 years. The result further show that

the calculated IRR of the project is 35.7% with NPV discounted at 18% of Birr 1,643,461.25

In addition to this, the proposed project possesses wide range of economic and social benefits

such as increasing the level of investment, tax revenue, employment creation and import

substitution

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while flexographic, gravure and rotary newsprint requires liquid form of ink for printing. The

different constituents of printing ink have different functions. For example the pigments import

the basic coloring effect, vehicle provide the facility of transporting the coloring pigments to the

plate of the printing machine. Similarly to produce printing inks for specific purpose other

additives like binders, extenders and plasticizers are added.

Printing inks are used in every type of printing activity. This includes die, newspapers, books,

magazines, periodicals, advertisement materials, packaging and labeling.

3. Market Study, Plant Capacity and Production Program

3.1 Market Study

3.1.1 Present Demand and SupplyThe whole demand for printing ink is met through import. The major sources are Japan, China,

United Kingdom, Netherland and United Arab Emirates. The annual demand for the last 10 years

is presented in table 1 below.

Table 1: Import of Printing Ink (in ton)

Year Import of Printing Ink 1997/98 106.4

1998/99 86.2

1999/00 95 4

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Source: Customs Authority, (various yeas)

The above table shows that the demand for printing ink has shown a continuous increase except

for two years (1998/99 and 2005/06). The average growth in demand do not exhibit similar

pattern. For instance, if we take the whole data of table 1 the average demand growth will be

about 19%. On the other hand, demand has grown by 6.3% in 2006/07 when compared from

2005/06. Whatever consideration is employed the trend clearly indicates the presence of ample

and growing demand to the product and the promising future of establishing a small producing

plant.

3.1.2 Projected Demand

The demand for printing ink is a derived demand. That is, it is a function of the demand for

newspapers, books, magazines, advertisement materials, packaging, labeling etc. With an

increase in the number of students the demand for books also increases. In this regard, it is

estimated that there are more than 11 million students enrolled in elementary and high schools

throughout the country. With the current huge investment in the education sector and the move toincrease education coverage throughout the country, the number of students is expected to

increase in the coming years. Thus, the demand for printing ink in producing books also

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Accordingly, the projected demand for printing ink is given in table 2 below.

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Table 2: Projected Demand for Printing Ink

Year Projected Demand2007/08 440.2

2008/09 465.6

2009/10 491

2010/11 516.4

2011/12 541.8

2012/13 567.2

2013/14 592.6

2014/15 618

2015/16 643.4

2016/17 668.8

2017/18694.22018/19 719.6

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3.1.3 Pricing and Distribution

Information obtained from Customs Authority reveal that the average CIF price for a kilogram of

printing ink varies on average between Birr 35 to 44 in 2006/07. The overall price importers

have to pay (which is equivalent to producers price) is expected to be far higher than the above

range (at least by about 20%) when customs duty, transit port handling, inland transport and

bank charge is taken in to account.

Thus, based on the market research result and the capacity of the envisaged plant, the selling

price of printing ink is set to be Birr 40 per a kg of the product. Moreover, the available

wholesale network shall be used by the envisaged plant.

3.2 Plant Capacity

Given the expected demand for print ink as presented earlier, and the planned technology, the

envisaged plant is set to produce 90 tons of print ink annually.

3.3 Production Program

The program is scheduled based on the consideration that the envisaged plant will work 275 days

in a year in 1 shift, where the remaining days will be holidays and for maintenance. During the

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4.2 Annual Requirement and Cost of Raw Materials and Utilities

The annual raw material and utility requirement and the associated cost for the envisaged plant is

listed in table 3 here under.

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Table 3 Material and Utility Requirement

Material and Input Quantity

Total Cost (Birr)

L.C. F.C.Carbon Black 10,800 kg 162,000

Victoria Blue 6000 kg 288,000

Phlocyanine Blue 1632 kg 89,760

Phenolic Resin 1680 kg 13,776Metallic Resin 1680 kg 28,560

Alkyd Resin 960 kg 16,224

Prussian Blue 624 kg 84,240

Ester Gum 18,000 kg 360,000

Bitumen 5784 kg 26,896

Calcium Carbonate 10,200 kg 17,340

Linseed Oil 7320 kg 164,700

Stand Oil 768 kg 11,520

Aromax Solvent 252 kg 5,292

Aluminum Hydrate 252 kg 630

White Spirit 24 lt 288

Chrome Pigment 528 kg 39,600

Cobalt Drier 708 kg 212,400

Other oils (Grease and machine oil) 12,000 kg 228,000

Tin Container (for 10 kg pack) 9000 pcs 36,000

Total Material Cost 280,224 1,505,002

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5. Location and Site

The appropriate locations for the envisaged project in view of the availability of infrastructure as

well as proximity to the market for the output are major towns of the region mainly Bahir Dar,

Kombolcha and Debre Birhan.

6. Technology and Engineering

6.1 Production Process

The process of printing ink manufacturing is simple. It involves first mixing of the ingredients

with additives in stainless steel planetary mixer. After completing mixing, the combination is

passed to triple role mill and 7 to 8 passes are given to achieve the required fineness. Then the

paste form of ink is tested and packed in tin containers.

The technological option available is related to the production capacity of the machineries. That

is, high capacity of operation is accompanied by automated machineries in vehicles preparation

and color dispersion activities. For the envisaged plant, however, the semi automated plant is

more appropriate and relatively cost effective.

6.2 Machinery and Equipment

Th hi i d i i d f f i i i k i d il d i bl 4 b l

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Table 4: Machinery and Equipment

The total cost of machinery and equipment including freight insurance and bank cost is estimated

to be about Birr 660,000.

The following is machineries supplier address for the envisaged project

S.S. Engineering

Machinery and Equipment QuantityBall Mill size 4'dia x4'x6' length made of M.S plate with refractoryLining and 10HP motor 1

Triple Roll Mill with hollow chilled cast iron roll of 12'x26' size withwater cooling arrangements and 12.5 HP motor 1

Varnish Kettle 250 kgs. Cap made of stainless steel 1

Planetary Mixer made of S.S. capacity 250 lts. With dual speed and 5

H.P motor 1Pot Mill having 3 Porcelain Pot of capacity 2 lts, each with 2 HP motor 1

Storage and Potting Vessel, 100 kgs capacity each 1

Weighing Scale Platform type with capacity 300 kgs 1

Weighing Scale 10 kg capacity 1

Laboratory Equipment 1 set

Colloid mils 1

Other Equipment and Tolls

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7. Human Resource and Training Requirement

7.1 Human Resource

The list of required manpower for the envisaged plant is stated in table 5 below

Table 5: Human Resource Requirement

Position No. Required

Monthly

Salary

Total Annual

SalaryManager 1 4,000 48,000

Accountant/Cashier 1 1,200 14,400

Secretary 1 800 9,600

Sales Clerk 1 600 7,200

Chemist 1 1,500 18,000

Store Keeper 1 600 7,200

Technician 2 1,000 24,000Supervisor 1 1,000 12,000

Operators 6 600 43,200

Daily Laborers 3 300 10,800

Cleaners 2 300 7,200

Messengers 1 300 3,600

Driver 1 600 7,200

Guards 3 300 10,800Benefit (20%) 44,640

Total 25 267,840

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The envisaged plant therefore, creates 25 job opportunity and about Birr 267.84 thousand of

income. The professionals and support staffs for the envisaged plant shall be recruited from

Amhara region

7.2 Training Requirement

Training of key personnel shall be conducted in collaboration with the suppliers of the plant

machineries. The training should primarily focuses on the production technology and machinery

maintenance and trouble shooting. Birr 25,000 will be allocated as training expense.

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8. Financial Analysis

8.1 Underlying Assumption

The financial analysis of printing ink manufacturing plant is based on the data provided in the

preceding chapters and the following assumptions.

A. Construction and Finance

Construction period 2 year

Source of finance 40% equity and 60% loan

Tax holidays 2 years

Bank interest rate 12%

Discount for cash flow 18%

Value of land Based on lease rate of ANRS

Spare Parts, Repair & Maintenance 3% of fixed investment

B. Depreciation

Building 5%

Machinery and equipment 10%

Office furniture 10%

Vehicles 20%

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8.2 Investment

The total investment cost of the project including working capital is estimated at Birr 2.76

million as shown in table 6 below. The Owner shall contribute 40% of the finance in the form of

equity while the remaining 60% is to be financed by bank loan.

Table 6: Total initial investment

Items L.C F.C Total

Land 1,800 1,800

Building and civil works 800,000 800,000

Office equipment 35,000 35,000

Vehicles 250,000 250,000

Plant machinery & equipment 0 660,000 660,000

Total fixed investment cost 1,086,800 660,000 1,746,800

Pre production capitalexpenditure* 87,340 87,340

Total initial investment 1,174,140 660,000 1,834,140

Working capital at full capacity 267,636 656,728 924,364

Total 1,441,776 1,316,728 2,758,504

*Pre-production capital expenditure includes - all expenses for pre-investment studies, consultancy fee during

construction and expenses for companys establishment, project administration expenses, commission expenses,

preproduction marketing and interest expenses during construction.

The foreign component of the project accounts for 47.7% of the total investment cost.

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Table 7: Production Cost

Items Cost1. Raw materials 1,785,226

2. Utilities 82,250

3. Wages and Salaries 267,840

4. Spares and Maintenance 17,468

Factory costs 2,152,7845. Depreciation 176,968

6. Financial costs 198,612

Total Production Cost 2,528,364

8.4 Financial EvaluationI. Profitability

According to the projected income statement attached in the annex part (see annex 4) the project

will generate profit beginning from the first year of operation. Ratios such as the percentage of

net profit to total sales, return on equity and return on total investment are 14%, 29% and 30% in

the first year and are gradually rising. Furthermore, the income statement and other profitability

indicators show that the project is viable.

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IV. Simple Rate of Return

For the envisaged plant the simple rate of return equals to 32.7%

V. Internal Rate of Return and Net Present Value

Based on cash flow statement described in the annex part, the calculated IRR of the project is

35.7% and the net present value at 18 % discount is Birr 1,643,461.25

VI. Sensitivity Analysis

The envisaged plant is profitable even with considerable cost increment. That is the plant

maintains to be profitable starting from the first year when 10 % cost increment takes place in

the sector. This result is accompanied by more or less unchanged IRR and payback period.

9. Economic and Social Benefit and Justification

The envisaged project possesses wide range of benefits that help promote the socio-economic

goals and objectives stated in the strategic plan of the Amhara National Regional State. It also

plays positive role in diversifying the economic activity by enhancing the industrial sector of the

region. The other major benefits are listed as follows:

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C. Import Substitution and Foreign Exchange Saving

Based on the projected figure we learn that in the project life an estimated amount of US Dollar

3.36 will be saved as a result of the proposed project. This will create room for the saved hard

currency to be allocated on other vital and strategic sectors

D. Employment and Income Generation

The proposed project is expected to create employment opportunity to several citizens of the

region. That is, it will provide permanent employment to 25 professionals as well as support

stuffs. Consequently the project creates income of Birr 267.84 thousands per year. This would be

one of the commendable accomplishments of the project.

E. Pro Environment Project

The proposed production process is environment friendly.

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ANNEXES

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Annex 1: Total Net Working Capital Requirements (in Birr)

CONSTRUCTION PRODUCTION

Year 1 Year 2 1 2 3 4

Capacity Utilization (%) 0% 0% 65% 80% 90% 100%

1. Total Inventory 0.00 0.00 1022755.82 1258776.39 1416123.44 1573470.49

Raw Materials in Stock- Total 0.00 0.00 446743.72 549838.43 618568.23 687298.04

Raw Material-Local 0.00 0.00 19870.43 24455.91 27512.90 30569.89

Raw Material-Foreign 0.00 0.00 426873.29 525382.52 591055.33 656728.15

Factory Supplies in Stock 0.00 0.00 1652.01 2033.24 2287.39 2541.55

Spare Parts in Stock and Maintenance 0.00 0.00 3715.92 4573.44 5145.12 5716.80

Work in Progress 0.00 0.00 41300.15 50830.95 57184.82 63538.69

Finished Products 0.00 0.00 82600.30 101661.91 114369.64 127077.38

2. Accounts Receivable 0.00 0.00 255272.73 314181.82 353454.55 392727.27

3. Cash in Hand 0.00 0.00 24824.56 30553.31 34372.47 38191.64

CURRENT ASSETS 0.00 0.00 856109.39 1053673.09 1185382.23 1317091.37

4. Current Liabilities 0.00 0.00 255272.73 314181.82 353454.55 392727.27

Accounts Payable 0.00 0.00 255272.73 314181.82 353454.55 392727.27

TOTAL NET WORKING CAPITAL REQUIRMENTS 0.00 0.00 600836.66 739491.27 831927.68 924364.09

INCREASE IN NET WORKING CAPITAL 0.00 0.00 600836.66 138654.61 92436.41 92436.41

1

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Annex 1: Total Net Working Capital Requirements (in Birr) (continued)

PRODUCTION

5 6 7 8 9 10

Capacity Utilization (%) 100% 100% 100% 100% 100% 100%

1. Total Inventory 1573470.49 1573470.49 1573470.49 1573470.49 1573470.49 1573470.49

Raw Materials in Stock-Total 687298.04 687298.04 687298.04 687298.04 687298.04 687298.04

Raw Material-Local 30569.89 30569.89 30569.89 30569.89 30569.89 30569.89

Raw Material-Foreign 656728.15 656728.15 656728.15 656728.15 656728.15 656728.15

Factory Supplies in Stock 2541.55 2541.55 2541.55 2541.55 2541.55 2541.55

Spare Parts in Stock and Maintenance 5716.80 5716.80 5716.80 5716.80 5716.80 5716.80

Work in Progress 63538.69 63538.69 63538.69 63538.69 63538.69 63538.69

Finished Products 127077.38 127077.38 127077.38 127077.38 127077.38 127077.38

2. Accounts Receivable 392727.27 392727.27 392727.27 392727.27 392727.27 392727.27

3. Cash in Hand 38191.64 38191.64 38191.64 38191.64 38191.64 38191.64

CURRENT ASSETS 1317091.37 1317091.37 1317091.37 1317091.37 1317091.37 1317091.37

4. Current Liabilities 392727.27 392727.27 392727.27 392727.27 392727.27 392727.27


TOTAL NET WORKING CAPITAL REQUIRMENTS 924364.09 924364.09 924364.09 924364.09 924364.09 924364.09

INCREASE IN NET WORKING CAPITAL 0.00 0.00 0.00 0.00 0.00 0.00

2

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Annex 2: Cash Flow Statement (in Birr)


Year 1 Year 2 1 2 3 4

TOTAL CASH INFLOW917070.00 1841434.09 2595272.73 2938909.09 3279272.73 3639272.73

1. Inflow Funds 917070.00 1841434.09 255272.73 58909.09 39272.73 39272.73

Total Equity 366828.00 736573.64 0.00 0.00 0.00 0.00

Total Long Term Loan 550242.00 1104860.46 0.00 0.00 0.00 0.00

Total Short Term Finances 0.00 0.00 255272.73 58909.09 39272.73 39272.73

2. Inflow Operation 0.00 0.00 2340000.00 2880000.00 3240000.00 3600000.00

Sales Revenue 0.00 0.00 2340000.00 2880000.00 3240000.00 3600000.00

Interest on Securities 0.00 0.00 0.00 0.00 0.00 0.00

3. Other Income 0.00 0.00 0.00 0.00 0.00 0.00

TOTAL CASH OUTFLOW 917070.00 917070.00 2702055.18 2417240.22 2815078.94 3051010.45

4. Increase In Fixed Assets 917070.00 917070.00 0.00 0.00 0.00 0.00

Fixed Investments 873400.00 873400.00 0.00 0.00 0.00 0.00

Pre-production Expenditures 43670.00 43670.00 0.00 0.00 0.00 0.00

5. Increase in Current Assets 0.00 0.00 856109.39 197563.70 131709.14 131709.14

6. Operating Costs 0.00 0.00 1421421.79 1745213.82 1961075.17 2176936.52

7. Corporate Tax Paid 0.00 0.00 0.00 0.00 280933.98 334106.19

8. Interest Paid 0.00 0.00 424524.00 198612.29 165510.25 132408.20

9.Loan Repayments 0.00 0.00 0.00 275850.41 275850.41 275850.4110.Dividends Paid 0.00 0.00 0.00 0.00 0.00 0.00

Surplus(Deficit) 0.00 924364.09 -106782.45 521668.87 464193.79 588262.28

Cumulative Cash Balance 0.00 924364.09 817581.64 1339250.51 1803444.30 2391706.58

3

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Annex 2: Cash Flow Statement (in Birr): Continued

PRODUCTION

5 6 7 8 9 10

TOTAL CASH INFLOW 3600000.00 3600000.00 3600000.00 3600000.00 3600000.00 3600000.00

1. Inflow Funds 0.00 0.00 0.00 0.00 0.00 0.00

Total Equity 0.00 0.00 0.00 0.00 0.00 0.00

Total Long Term Loan 0.00 0.00 0.00 0.00 0.00 0.00

Total Short Term Finances 0.00 0.00 0.00 0.00 0.00 0.00


Sales Revenue 3600000.00 3600000.00 3600000.00 3600000.00 3600000.00 3600000.00


3. Other Income 0.00 0.00 0.00 0.00 0.00 0.00

TOTAL CASH OUTFLOW2896129.88 2893198.84 2870027.41 2571005.56 2571005.56 2571005.56

4. Increase In Fixed Assets 0.00 0.00 0.00 0.00 0.00 0.00



5. Increase in Current Assets 0.00 0.00 0.00 0.00 0.00 0.00

6. Operating Costs 2176936.52 2176936.52 2176936.52 2176936.52 2176936.52 2176936.52


8. Interest Paid 99306.15 66204.10 33102.05 0.00 0.00 0.00

9. Loan Repayments 275850.41 275850.41 275850.41 0.00 0.00 0.00

10.Dividends Paid 0.00 0.00 0.00 0.00 0.00 0.00

Surplus(Deficit) 703870.12 706801.16 729972.59 1028994.44 1028994.44 1028994.44

Cumulative Cash Balance 3095576.70 3802377.86 4532350.45 5561344.89 6590339.33 7619333.76

4

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Annex 3: DISCOUNTED CASH FLOW-TOTAL CAPITAL INVESTED


Year 1 Year 2 1 2 3 4



Sales Revenue 0.00 0.00 2340000.00 2880000.00 3240000.00 3600000.00


2. Other Income 0.00 0.00 0.00 0.00 0.00 0.00


3. Increase in Fixed Assets 917070.00 917070.00 0.00 0.00 0.00 0.00



4. Increase in Net Working Capital 0.00 0.00 600836.66 138654.61 92436.41 92436.41

5. Operating Costs 0.00 0.00 1421421.79 1745213.82 1961075.17 2176936.52


NET CASH FLOW -917070.00 -917070.00 317741.55 996131.57 905554.45 996520.89

CUMMULATIVE NET CASH FLOW -917070.00 -1834140.00 -1516398.45 -520266.88 385287.57 1381808.45

Net Present Value (at 18%)-917070.00 -777177.97 228197.03 606276.43 467074.91 435588.46

Cumulative Net present Value -917070.00 -1694247.97 -1466050.93 -859774.50 -392699.59 42888.87

5

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Annex 3: DISCOUNTED CASH FLOW-TOTAL CAPITAL INVESTED (Continued)

PRODUCTION

5 6 7 8 9 10



Sales Revenue 3600000.00 3600000.00 3600000.00 3600000.00 3600000.00 3600000.00


2. Other Income 0.00 0.00 0.00 0.00 0.00 0.00


3. Increase in Fixed Assets 0.00 0.00 0.00 0.00 0.00 0.00

Fixed Investments0.00 0.00 0.00 0.00 0.00 0.00


4. Increase in Net Working Capital 0.00 0.00 0.00 0.00 0.00 0.00

5. Operating Costs 2176936.52 2176936.52 2176936.52 2176936.52 2176936.52 2176936.52


NET CASH FLOW 1079026.68 1048855.67 1038925.05 1028994.44 1028994.44 1028994.44

CUMMULATIVE NET CASH FLOW 2460835.13 3509690.80 4548615.85 5577610.29 6606604.72 7635599.16

Net Present Value (at 18%) 399705.51 329262.05 276393.71 231993.04 196604.27 166613.79

Cumulative Net present Value 442594.38 771856.43 1048250.14 1280243.19 1476847.46 1643461.25

Net Present Value (at 18%) 1,643,461.25

Internal Rate of Return 35.7%

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Annex 4: NET INCOME STATEMENT ( in Birr)

PRODUCTION

1 2 3 4 5

Capacity Utilization (%) 65% 80% 90% 100% 100%

1. Total Income 2340000.00 2880000.00 3240000.00 3600000.00 3600000.00

Sales Revenue 2340000.00 2880000.00 3240000.00 3600000.00 3600000.00

Other Income 0.00 0.00 0.00 0.00 0.00

2. Less Variable Cost 1333460.39 1641182.02 1846329.77 2051477.52 2051477.52

VARIABLE MARGIN 1006539.61 1238817.98 1393670.23 1548522.48 1548522.48

(In % of Total Income) 43.01 43.01 43.01 43.01 43.01

3. Less Fixed Costs 264929.40 280999.80 291713.40 302427.00 302427.00

OPERATIONAL MARGIN 741610.21 957818.18 1101956.83 1246095.48 1246095.48


4. Less Cost of Finance 424524.00 198612.29 165510.25 132408.20 99306.15

5. GROSS PROFIT 317086.21 759205.89 936446.59 1113687.28 1146789.33

6. Income (Corporate) Tax 0.00 0.00 280933.98 334106.19 344036.80

7. NET PROFIT 317086.21 759205.89 655512.61 779581.10 802752.53

RATIOS (%)

Gross Profit/Sales 14% 26% 29% 31% 32%

Net Profit After Tax/Sales 14% 26% 20% 22% 22%

Return on Investment 30% 37% 31% 33% 33%

Return on Equity 29% 69% 59% 71% 73%

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Annex 4: NET INCOME STATEMENT (in Birr):Continued

PRODUCTION

6 7 8 9 10

Capacity Utilization (%) 100% 100% 100% 100% 100%

1. Total Income 3600000.00 3600000.00 3600000.00 3600000.00 3600000.00

Sales Revenue 3600000.00 3600000.00 3600000.00 3600000.00 3600000.00

Other Income 0.00 0.00 0.00 0.00 0.00

2. Less Variable Cost 2051477.52 2051477.52 2051477.52 2051477.52 2051477.52

VARIABLE MARGIN 1548522.48 1548522.48 1548522.48 1548522.48 1548522.48


3. Less Fixed Costs 234959.00 234959.00 234959.00 234959.00 234959.00

OPERATIONAL MARGIN 1313563.48 1313563.48 1313563.48 1313563.48 1313563.48


4. Less Cost of Finance 66204.10 33102.05 0.00 0.00 0.00

5. GROSS PROFIT 1247359.38 1280461.43 1313563.48 1313563.48 1313563.48

6. Income (Corporate) Tax 374207.81 384138.43 394069.04 394069.04 394069.04

7. NET PROFIT 873151.57 896323.00 919494.44 919494.44 919494.44

RATIOS (%)

Gross Profit/Sales 35% 36% 36% 36% 36%

Net Profit After Tax/Sales 24% 25% 26% 26% 26%

Return on Investment 34% 34% 33% 33% 33%

Return on Equity 79% 81% 83% 83% 83%

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Annex 5: Projected Balance Sheet (in Birr)


Year 1 Year 2 1 2 3 4

TOTAL ASSETS 917070.00 2758504.09 3330863.03 3873127.60 4292062.53 4835065.95

1. Total Current Assets 0.00 924364.09 1673691.03 2392923.60 2988826.53 3708797.95

Inventory on Materials and Supplies 0.00 0.00 452111.65 556445.11 626000.75 695556.38

Work in Progress 0.00 0.00 41300.15 50830.95 57184.82 63538.69

Finished Products in Stock 0.00 0.00 82600.30 101661.91 114369.64 127077.38

Accounts Receivable 0.00 0.00 255272.73 314181.82 353454.55 392727.27

Cash in Hand 0.00 0.00 24824.56 30553.31 34372.47 38191.64

Cash Surplus, Finance Available 0.00 924364.09 817581.64 1339250.51 1803444.30 2391706.58

Securities 0.00 0.00 0.00 0.00 0.00 0.00

2. Total Fixed Assets, Net of Depreciation 917070.00 1834140.00 1657172.00 1480204.00 1303236.00 1126268.00

Fixed Investment 0.00 873400.00 1746800.00 1746800.00 1746800.00 1746800.00

Construction in Progress 873400.00 873400.00 0.00 0.00 0.00 0.00

Pre-Production Expenditure 43670.00 87340.00 87340.00 87340.00 87340.00 87340.00

Less Accumulated Depreciation 0.00 0.00 176968.00 353936.00 530904.00 707872.00

3. Accumulated Losses Brought Forward 0.00 0.00 0.00 0.00 0.00 0.00

4. Loss in Current Year 0.00 0.00 0.00 0.00 0.00 0.00

TOTAL LIABILITIES 917070.00 2758504.09 3330863.03 3873127.60 4292062.53 4835065.95

5. Total Current Liabilities 0.00 0.00 255272.73 314181.82 353454.55 392727.27


Bank Overdraft 0.00 0.00 0.00 0.00 0.00 0.00

6. Total Long-term Debt 550242.00 1655102.46 1655102.46 1379252.05 1103401.64 827551.23

Loan A 550242.00 1655102.46 1655102.46 1379252.05 1103401.64 827551.23Loan B 0.00 0.00 0.00 0.00 0.00 0.00

7. Total Equity Capital 366828.00 1103401.64 1103401.64 1103401.64 1103401.64 1103401.64

Ordinary Capital 366828.00 1103401.64 1103401.64 1103401.64 1103401.64 1103401.64

Preference Capital 0.00 0.00 0.00 0.00 0.00 0.00

Subsidies 0.00 0.00 0.00 0.00 0.00 0.00

8. Reserves, Retained Profits Brought Forward 0.00 0.00 0.00 317086.21 1076292.10 1731804.71

9.Net Profit After Tax 0.00 0.00 317086.21 759205.89 655512.61 779581.10

Dividends Payable 0.00 0.00 0.00 0.00 0.00 0.00

Retained Profits 0.00 0.00 317086.21 759205.89 655512.61 779581.10

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Annex 5: Projected Balance Sheet (in Birr): Continued

PRODUCTION

5 6 7 8 9 10TOTAL ASSETS 5361968.07 5959269.23 6579741.82 7499236.26 8418730.69 9338225.13

1. Total Current Assets 4412668.07 5119469.23 5849441.82 6878436.26 7907430.69 8936425.13

Inventory on Materials and Supplies 695556.38 695556.38 695556.38 695556.38 695556.38 695556.38

Work in Progress 63538.69 63538.69 63538.69 63538.69 63538.69 63538.69

Finished Products in Stock 127077.38 127077.38 127077.38 127077.38 127077.38 127077.38

Accounts Receivable 392727.27 392727.27 392727.27 392727.27 392727.27 392727.27

Cash in Hand 38191.64 38191.64 38191.64 38191.64 38191.64 38191.64

Cash Surplus, Finance Available 3095576.70 3802377.86 4532350.45 5561344.89 6590339.33 7619333.76

Securities 0.00 0.00 0.00 0.00 0.00 0.00

2. Total Fixed Assets, Net of Depreciation 949300.00 839800.00 730300.00 620800.00 511300.00 401800.00

Fixed Investment 1746800.00 1746800.00 1746800.00 1746800.00 1746800.00 1746800.00

Construction in Progress 0.00 0.00 0.00 0.00 0.00 0.00Pre-Production Expenditure 87340.00 87340.00 87340.00 87340.00 87340.00 87340.00

Less Accumulated Depreciation 884840.00 994340.00 1103840.00 1213340.00 1322840.00 1432340.00

3. Accumulated Losses Brought Forward 0.00 0.00 0.00 0.00 0.00 0.00

4. Loss in Current Year 0.00 0.00 0.00 0.00 0.00 0.00

TOTAL LIABILITIES 5361968.07 5959269.23 6579741.82 7499236.26 8418730.69 9338225.13

5. Total Current Liabilities 392727.27 392727.27 392727.27 392727.27 392727.27 392727.27


Bank Overdraft 0.00 0.00 0.00 0.00 0.00 0.00

6. Total Long-term Debt 551700.82 275850.41 0.00 0.00 0.00 0.00

Loan A 551700.82 275850.41 0.00 0.00 0.00 0.00

Loan B 0.00 0.00 0.00 0.00 0.00 0.00

7. Total Equity Capital 1103401.64 1103401.64 1103401.64 1103401.64 1103401.64 1103401.64

Ordinary Capital 1103401.64 1103401.64 1103401.64 1103401.64 1103401.64 1103401.64

Preference Capital 0.00 0.00 0.00 0.00 0.00 0.00

Subsidies 0.00 0.00 0.00 0.00 0.00 0.00

8. Reserves, Retained Profits Brought Forward 2511385.81 3314138.34 4187289.91 5083612.91 6003107.35 6922601.78

9. Net Profit After Tax 802752.53 873151.57 896323.00 919494.44 919494.44 919494.44

Dividends Payable 0.00 0.00 0.00 0.00 0.00 0.00

Retained Profits 802752.53 873151.57 896323.00 919494.44 919494.44 919494.44

10

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