Enjera Business Plan
Enjera Business Plan
Enjera Business Plan
Content page
Project Summary…………………………………………………………….…………..……4
Background…………………………………………………………………..………...…..……6
1. Project area………………………………………………………………….……….………7
Location and size……………………………………..…..…………….………7
Climate and topography………………………….…………………….……7
Soils and pasture……………………………………………..………….….…7
Water resource………………………………………………………..…………8
Disease condition………………………………………………….…..….……8
2. The project……………………………………………………………..………………...…9
Objectives……………………………………………….……….………….……..9
Duration and ownership…………………………………….….……..……9
Outputs………………………………………………………….………...…..……9
Beneficiaries………………………………………………………...….………10
Details and strategies……………………………….……….……….……10
Input collection…………………………………………….……….….….………10
Feeding…………………………………………………………………….……………11
Milking…………………………………………………………………….….…………12
Breeding………………………………………………………………….…….………12
Fencing, Sheltering and guarding……………………….………….……12
3. Product marketing……………………………………………………………..….……15
4. Organization and management………………………..………………….……15
5. Herd projection…………………………………………………………….…….………15
6. Financial study………………………………………………………………..….………16
Investment costs………………………………………..………….…………16
Operating costs…………………………………………..……….……………16
Feeds and feed costs……………………………………….…………………..16
Indirect costs……………………………………………………..………………..16
Total financial requirement & sources of fund…………………17
Production parameters and assumptions…………………………17
Sources and revenue of the farm……………………………….……18
Profit and/or loss statement…………………….…………….……..…18
Cost benefit analysis…………………………………………………………19
Assumptions used in the study…………………………………..……19
List of tables
Tables page
Table 3. Infrastructure………………………………………………….…………………..22
Annex Page
The farm plans to precede its operation with 40 pregnant cows/heifers and two
breeding bulls of known records. The project will receive its revenue from sale of
milk, processed milk and live animals. Growing bulls will be sold around the last
period of their second year whereas heifers will be transferred to breeding stock.
The financial, economic and technical viability of the project has been assessed
using various financial statements. The project profit and/or loss statement shows
that the project will generate an average net profit of more than 500,000 birr per
year from the second year of the project. In addition, the farm will hire experienced
workers for the over all operation of the farm. The project is, there fore, financially
viable and technically sound.
The proximity of the farm to different social services and infrastructure such as
market, veterinary centers and drug pharmacies, man road, water and electricity
lines are some among many factors contributing to the promising profitability of the
project.
At final year of its first phase the herd projection of the project will be 44 cows, 17
heifers, two breeding bulls and 21 male & 22 female calves of different age. The
next phase of the project will depend on the final evaluation of the farm; i.e. the
final evaluation may lead the farm to continue by expanding its size of operation or
shifting to manufacturing farm . In order to minimize the feed cost specially
concentrate feeds the farm will establish edible oil and flour extracting mill in the
farm compound.
BACK GROUND
Ethiopia’s domestic live stock population of 140 million head ranks first in Africa and
ninth in the world. The cattle population alone is estimated over 35 million; but the
current meat and milk productivity must thus be increased and improved to meet
the increasing demand in the face of the shrinking land area per person. Production
per unit animal must then be increased.
The children of most developing countries are facing the problem of malnutrition,
especially foods of animal origin. Milk is one of those products having full fledged
and high biological value in human food of all age.
In spite of the huge number of our local cattle, their production and productivity is
still low and are unspecialized. Crossing of the local cattle with temperate
specialized dairy breeds is the fastest way of improving the milk production of
indigenous breeds. To change such conditions and to make production reliable it is
necessary to adopt modern dairying system with effective and efficient
management practices.
project wishes to establish modern dairy farm with dairy products processing in
Oromia region, Finfinne surrounding special zone, sebeta town kebele 02.
1. PROJECT AREA
Location and size
The project is located in Finfinne surrounding special zone, sebeta town kebele
02district, which is located at 30 kms South west of Finfinne /Addis Ababa/
main road connecting Addis Ababa and Jimma. The project covers an area of
340 M2 land including the site reserved for new farm construction. The area is
bounded by Irrechaa (oromo God’s thanking in the north east, very small
River and road in the west, and by open free space both in north and south
directions. The slope of the land is good for effluent disposal and drainage which
fulfils dairy farm regulation of Ethiopia.
Water Resource
In addition to the proximity of the site to the pipe lines of Sebeta town, there is
permanent natural stream nearby the project area. This ample water resource is
thus expected to minimize operating costs in various aspects.
Disease Condition
The disease data from the district Agricultural Development office indicates that
the incidence of serious diseases have not yet been reported except some
internal and exo-parasites. The availability of private and governmental
vet.clinics and vet drug stores in sebeta town are some of the opportunities to
easily alleviate the disease problems that may occur in the farm.
2. THE PROJECT
This dairy farm is a new private investment project with the aim of commercial
purpose and designed with the following objectives:
Objectives
- To generate income for the Company by participating in economic
development of the country through private initiatives;
- To supply good quality whole milk and processed milk of high biological value
for the surrounding community there by to assist the ever increasing demand
for foods of animal origin in domestic consumption
- To create employment opportunities
- To produce and supply cross bred animals for dairy, meat and draught
purpose.
Duration and owner ship of the project
The project will have duration of five years as its first phase.
Owner’s Name:- Mr. Abera feyissa and Abiot Nigussie
Out puts
The major out puts expected from this dairy farm include:
Beneficiaries
The population of Sebeta and Alem Gena town is estimated to be over 100,000
which would be directly or indirectly benefited from the outputs of this project.
More over the project can expand its sphere of product distribution to other
nehibouring towns such as Tafki Tullu bolo Waliso,Finfinne/Addis Abeba/ and
others. The other outputs like steers and culled animals could be sold to the
surrounding small towns and farmers for different purposes at fair price.
Feeding
The new born calves will be provided with colostrums for the first five days.
There after all calves will be fed whole milk on average of 2 kg a day for the first
2 months. In addition to whole milk, hay and concentrate will be offered to
accustom the rumen microbes in digesting roughages.
Dry cows and breeding bulls will be allowed to graze on pasture land and will not
be supplemented during night, except in time of sickness or bad condition.
Pregnant cows will be kept in door from the 8 th month until delivery, and each
will be fed a concentrate of 2 kg day -1 until calving. In addition they will be
offered hay. After calving the cows will be kept in door for five days until the
milk changed from colostrums to normal milk. From the 5 th day of parturition
milking will start and cows will join the herd for grazing on the pasture. Each
milking cow will be supplemented with 5 kg of concentrate per day over milking
time. The concentrate mixture will consist of Noug cake, maize flour and salt.
Water will be offered adlibtum for all classes of animals.
Milking
Cows will be hand milked twice per day (morning and evening) in side the night
barn. Well experienced milkers with ability to detect mastitis cases and proper milk
handling will perform the task. Individual towels will be prepared for each milking
cows in order to minimize the dissemination of mastitis among cows.
3.5.4.Breeding
Breeding will be practiced using both natural mating and A.I. services. The breeding
bulls will be allowed to run along with the herd during the day time and will be
fitted with bull nose ring during night time. In order to maintain the exotic blood
level of the herd between 62.5 and 75% A.I. service will be rendered from district
MOA office based on the heat condition of the females. The record history of
animals and their parents will help in the ease of the semen to be used for
insemination during the subsequent breeding seasons.
The area on which the farm constructions carried out will be fenced with barbed
wire and locally available eucalyptus poles. Moreover live fence will be developed
around the farm compound to protect entrance of wild animals.
A/ Sheltering
I/office and store: - One building of size 10x6m will be constructed and its
sections will be sub-divided for office, and store. The sections of feed store should
water proof in order to prevent vermin entry.
II/ Milk room:- A small milk room of size 4x5m is needed for storing milk and
milk utensils. The wall of the room will contain a rack with hooks and pegs. The
windows of the milk room will have wire mesh to keep out flies.
III/ Isolation pen of size 4x10m with manger and trough will be constructed as
separate shed for sick and deformed animals.
IV/ Maternity hall: - this has size of 4x5m constructed as a separate shed.
V/ Calf pen: - A well ventilated closed and separate shed of size 4x20 m will be
constructed. The pen should be 120 cm high with bucket hunger and fresh bedding
provided all the time.
VI/ Cow shed with loafing area: - This will have a total size of 200 m 2 (10x20m)
including the area for loafing. The shed will serve for an over night stay and for
milking of the cows. Feeding trough of 60cm wide and 110 cm long will be
constructed in side the shed.
VII/ Hay shed: - a separate close to cow shed hay store with open sides of size
10x10m and height of 5m will be constructed. It also serves for storing bulky feeds
such as crop residues.
VIII/ Guard house: - A guard house of size 3x4m will be constructed near the
cow shed.
3. Product Marketing
The project is to undertake the production of fresh milk, processed milk and live
animals. Milkand milk products will be marketed to formal channel (DDE and
Mamma), individual household consumers, retailers, local processors and
institutional consumers (hotels, restaurants and offices). Some contractual
agreements will be used to protect interests of both buyers and sellers, as the case
may be. Breeding animals will only be sold to the surrounding farming population
at reasonable price. Since the demand for foods of animal origin is increasing from
time to time, the farm will not face market problems.
4. Organization and Management
The project will have one manager who will be responsible for the over all operation
of the farm. In addition the farm will have other temporary workers; most of them
carry out non specific activities. The details of their salaries and wages are as
shown in table 7.
5. Herd Projection
Based on production parameters and assumptions the planed herd projection is
shown in table 1. Accordingly, the project will start with 40 breeding females and 2
breeding bulls as foundation stock. At the end of its first phase, i.e, 5 th year the
project will have a total of 179 births, 23 deaths, 34 culls, and 58 sales. The final
balance of the herd projection at the closing period of last year will then be 61
breeding females, 2 breeding bulls, 21 male & 22 female calves.
Milk processing
In rural areas, milk may be processed fresh or sour. The choice depends on
available equipment, productdemand and on the quantities of milk available for
processing. Allowing milk to ferment before processing has a number of advantages
andprocessing sour milk will continue to be important in this sector.Where greater
volumes of milk can be assembled, processing fresh milk gives more product
options,allows greater throughput of milk and, in some instances, greater recovery
of milk solids in products.
In many rural dairy processing plants monitoring equipment may not be available
and, although yields may be maximized by adhering to the prescribed procedures,
all these products can be successfully made byapproximating temperature, time, pH
etc. It is particularly important in cheesemaking to proceed when thecurd is in a
suitable condition. In general the farm will conduct some product processing with
the objective of value adding so as to improve both the shelf life and price.
Milk separation
The fat fraction separates from the skim milk when milk is allowed to stand for at
least 30 to 40 minutes.This is known as ‘‘creaming’’. The creaming process can be
used to remove fat from milk in a moreconcentrated form. A number of methods
are employed to separate cream from milk. An understanding ofthe creaming
process is necessary to maximise the efficiency of the separation process.
6. Financial Study
6.1.Investment cost
The total investment cost of the project during the first year 2015 is Birr 1,323,830
out of which buildings, infrastructure, foundation stock, office furniture & equipment
and materials account for 138180, 36750, 125400, 2972, 20528 birr respectively.
The break down of the amount by the type of investment including the contingency
allowance of 5% is as summarized in table 9.
The estimated feed costs ( concentrate) for milking cows and calves during the year
2015 is Birr 91800, however, the total cost required including the cost for
conservation of other feeds will be 93800 in year 2008 and growing to Birr 123500
in year 2012.
6.2.2.Indirect costs
The estimated indirect costs for the year 2008 is birr 112987. The major indirect
cost items are salaries and wages, repair and maintenance, depreciation. The
indirect costs are assumed to remain constant over the project years.
6.3. Total financial requirement and sources of fund
The total financial requirement of the project during year 2008 will be 547617and
the 30& of the cost will be covered by the promoter where as the remaining 70% is
expected from Bank.
A/Cows
Death rate = 2%
Milk spoilage = 2%
B/ Calves
Weaning = 60 days
Death rate = 5%
The estimated revenue expected from the sale of milk and animals during year
2012 is Birr 634639and 54000 respectively. These figures will respectively grow to
887390 and 1948000 birr in the last year of the project. The details are presented in
annex 2.
The projected profit and/or loss statement for a period of 5 years, i.e., from year
2012 to 2016 is shown under annex 2. It is estimated that the project will earn a
net profit of Birr 117048 during the 2012 production year. Tax exemption is
assumed only for the first year.
Year 2012
Breeding Females 40 - 1 6 - 33
Breeding Bulls
2 - - - - 2
Calves
Males
- 17 1 - - 16
Females
- 17 1 - - 16
Year 2013
Breeding Females 33 - 1 5 - 27
Breeding Bulls 2 - - - - 2
Calves
Males 16 14 2 - 15 13
Females 16 14 2 - - 15**+13*
Year 2014
Breeding Females 42 - 1 7 - 34
Breeding bulls 2 - - - - 2
Calves
Males 13 17 2 - 12 16
Females 13 18 2 - 12**+17*
Year 2015
Breeding Females 46 - 1 7 - 38
Breeding bulls 2 - - - - 2
Calves
Males 16 18 2 - 15 17
Females 17 19 2 - 16**+18*
Herd projection …cont’d
Year 2016
Breeding Females 54 - 1 9 - 44
Breeding bulls 2 - - - - 2
Calves
Males 17 22 2 - 16 21
Females 18 23 2 - 17**+22*
Herd Balance
106 = 106
Sub-total 251460
1.1.Infrastructure --------- (Table 3)
Fence - LS 15000
Stapler 1 40 40
Puncher 1 30 30
2. Operating costs
Project years
1. Pregnant cows No 34 28 35 37 45
2. Milk Cows No 34 28 35 37 45
3. Calves No 34 28 35 37 45
Project Years
1. Investment cost
2. Operating cost
Water, telephone & electricity 12000 12000 12000 12000 12000 60000
charges
A. Heifers No
B. Males No 15 12 15 16 58
C. Culled cows No 6 5 7 7 9 34
D. Total Milk produced Litr 122046 100074 122028 148680 170652 663480
Milk for sale (80%) Litr 97637 80059 97622 118944 136522 530784
Total sale of whole Birr 634639 520385 634546 773136 887390 3450096
milk+processed
Less: sale tax (5%) Birr 654207 807866 879268 1065079 269362 6100041
Annex 2. Profit and/or loss statement
Pr o jec t Y ea r s
Description 2012 2013 2014 2015 2016
Revenue- (a)Milk sale (whole 634639 520385 634546 773136 887390
milk + processed)
(b)Sale of animals 54000 330000 291000 348000 1948000
Total 690651 852398 927560 1123151 2837406
Less: Operating cost 148718 326665 382927 573118 2265773
Profit before tax &
depreciation 217973 395920 452182 642373 2335028
Less: depreciation 148718 326665 382927 573118 2265773