JENFOK TRADING PLC GARMENT FACTORY
2020
PROJECT PROPOSAL FOR GARMENT
FACTORY
PROMOTER: JENFOK TRADING PLC
Contact person: Kindye Teka
Mobile: 0913049214
SUBMITTED TO: BAHIR DAR CITY TRADE,INDUSTRYAND MARKET
DEVELOPMENT DEPARTMENT
MARCH, 2020
PREPARED BY: ERZA CONSULTING PLC
 ADDRESS: BAHIR DAR
 KEBELLE-07
 AMBAYE BUILDING, B-11
 MOBILE: 0912902525
 Website: www.erzaconsulting.com
BAHIR DAR, ETHIOPIA
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JENFOK TRADING PLC GARMENT FACTORY
2020
Table of Contents
Executive summary ....................................................................................................................................... 1
1.
Introduction ........................................................................................................................................... 2
1.1
Company Ownership .................................................................................................................... 2
1.2
Vision ............................................................................................................................................ 2
1.3
Mission Statement ......................................................................................................................... 2
1.4
The key success factors of the project .......................................................................................... 2
1.5
Goals and Objectives .................................................................................................................... 3
1.6
SWOT Analysis ............................................................................................................................ 3
1.6.1
Strengths ............................................................................................................................... 3
1.6.2
Weaknesses ........................................................................................................................... 3
1.6.3
Opportunities......................................................................................................................... 3
1.6.4
Threats................................................................................................................................... 4
1.7
2
3
Product Description and Application ............................................................................................ 4
Market Feasibility Analysis .................................................................................................................. 5
2.1
Market Potential ............................................................................................................................ 5
2.2
Supply-Demand Analysis ............................................................................................................. 5
2.3
Projected Demand ......................................................................................................................... 1
2.4
Pricing and Distribution ................................................................................................................ 4
Technical Feasibility Analysis ................................................................................................................ 6
3.1
Location and Site .......................................................................................................................... 6
3.2
Land, Buildings and Civil Works ................................................................................................. 6
3.3
Plant capacity and production program......................................................................................... 8
3.3.1
Plant capacity ........................................................................................................................ 8
3.3.2
Production program .............................................................................................................. 8
3.4
Raw Materials and utilities ........................................................................................................... 9
3.4.1
Raw Materials ....................................................................................................................... 9
3.4.2
Utilities ................................................................................................................................ 10
3.5
Technology and Engineering ...................................................................................................... 10
3.5.1
Production process ............................................................................................................. 10
3.5.2
Source of Technology ......................................................................................................... 14
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JENFOK TRADING PLC GARMENT FACTORY
Machinery and Equipment .................................................................................................. 15
3.5.3
3.6
4
5
2020
Project implementation schedule ................................................................................................ 17
Management and Organizational feasibility ....................................................................................... 19
4.1
Human Resource Requirement ................................................................................................... 19
4.2
Training requirement................................................................................................................... 20
Financial Analysis ................................................................................................................................ 21
5.1
Underlying Assumption .............................................................................................................. 21
5.2
Pre-production Expenses............................................................................................................. 22
5.3
Total Investment Cost ................................................................................................................. 22
5.4
Production Cost ........................................................................................................................... 23
5.5
Financial Evaluations .................................................................................................................. 23
5.5.1
Profitability.......................................................................................................................... 23
5.5.1
Financial Ratios ................................................................................................................... 23
5.5.2
Break-even Analysis ............................................................................................................ 24
5.5.3
Payback Period .................................................................................................................... 24
5.5.4
Internal Rate of Return ....................................................................................................... 24
5.5.5
Net Present Value ............................................................................................................... 25
5.6
Economic benefits ....................................................................................................................... 25
5.6.1
Earning foreign currency ..................................................................................................... 25
5.5.2
Job creation ......................................................................................................................... 25
5.5.3
Tax Revenue ........................................................................................................................ 25
ANNEXES .................................................................................................................................................... A
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JENFOK TRADING PLC GARMENT FACTORY
2020
List of Tables
Table 1: Export plan of knitted and woven garment
Table 2: List of apparel products exported from year 2008 up to 2017/ Export in Net-Mass (Kg)
Table 3: Export in CIF Value (USD)
Table 4: List of apparel products imported from year 2008 up to 2017 Import in Net-Mass (Kg)
Table 5: Import in CIF Value (USD)
Table 6: World and Ethiopian Apparel Import projections for years 2011 -2022
Table 7: Apparel Supply Gaps Projected for the years 2017-2022
Table 8፡ World supply gap
Table 9፡ Summary of Apparel Surplus Import Demand Projected for the coming 6 years
Table 10: Sales plan for the envisaged project (Export & Local sales)
Table 11: Estimated Average selling price per unit kilogram for different product categories
Table 12: Project construction area requirement (in m2)
Table 13: Annual Sales plan for the envisaged plant
Table 14: Production Program
Table 15: Raw materials requirement and Cost at full capacity
Table 16: Utilities Requirement and Cost at full capacity
Table 17: Machinery and Equipment Requirement and Cost
Table 18: Furniture and office equipment and vehicles
Table 19: Project implementation schedule
Table 20: Man power Requirement and annual salary
Table 21: Design, consultancy, training and test run cost
Table 22: Total Initial Investment
iii
6
7
7
8
8
2
3
3
3
4
5
7
8
9
10
10
15
17
18
19
22
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JENFOK TRADING PLC GARMENT FACTORY
2020
Executive summary
This project envisages the establishment of Garment factory. The business is owned by
JENFOK TRADING PLC. The total land requirement is 30,000m2.
The investment cost of the project including working capital is estimated at Birr 50.065 million.
The owner will contribute 25% (12,516,269.61) of the finance in the form of equity while the
remaining 75% (37,548,808.84) is to be financed by bank loan.The raw materials required to
produce garments include fabrics, buttons, sewing threads, and accessories like zipper, shoulder
pad, labels etc. The raw materials are locally available.
The project is financially viable with an internal rate of return (IRR) of 23% and a net present
value (NPV) of Birr 98,061,806.10 discounted at 12%.The project can create employment for
520 workers.
The establishment of such factory will have a foreign exchange saving effect to the country by
substituting the current imports and also increase hard currency by exporting 60% of the
products to south Sudan, Somali, Djibouti and Kenya. The project will also create backward
linkage with the textile fabrics and forward linkage with the households and also generate
income for the Government in terms of payroll tax.
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JENFOK TRADING PLC GARMENT FACTORY
2020
1. Introduction
1.1
Company Ownership
The business is a sole company established in Bahir Dar city. The company wants to establish its
Garment manufacturing business. Currently the company involves in Business and management
consulting business. The business name is JENFOK TRADING PLC Garment factory. The
company will be hire other staff members and operate the company efficiently and effectively.
The plan will conceive and developed by those individuals, with the intent to apply their
extensive experience and contacts in the industry to build a successful profitable company.
1.2
Vision
The company vision is providing quality Garment products for international and domestic
market, creating welfare for the community, establishing an integrated, sustainable and profitable
leader industry in Ethiopia. We establish and maintain everlasting relationship with consumers of
our products, suppliers including stake holders.
1.3
Mission Statement
JENFOK TRADING PLC Garment factory is a manufacturing company dedicated in
producing textile products and convertingtextile fabrics and apparels into commercially viable
garment products, utilizing environmentally friendly manufacturing methods. We intend to make
enough profit to generate a significant return for our investors and to finance continued growth
and continued development in quality products. We will also maintain a friendly, fair, and
creative work environment, which respects diversity, new ideas and hard work.
1.4
The key success factors of the project
 There are textile factories which provide fabrics and apparels with in the region and also
we will produce textile products.
 Secure Supply- Contract for supply of fabric products from textile factories
 Prime business location for proposed Garment factory.
 Producing Quality products
 Reasonable and competitive charges, positioned against competitors.
 On time delivery of clothes can leave good impression on the customers.
 Technical and efficient labor
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JENFOK TRADING PLC GARMENT FACTORY
2020
 There should be advertisement on websites, local cable and banners.
1.5
Goals and Objectives
Currently, the garment products are imported from abroad in large amount. The foreign currency
issue is difficult to import and meet the demand for garment products. Establishing Garment
manufacturing company will minimize such problems and this motivated me to invest on the
sector. Some of the objectives of the company are:

To form a Garment production company in Bahir Dar city

To develop a business centered around sound business practice

To ensure that garment products manufacturing is sustainable in Bahir Dar city

To create jobs
To establish an efficient and quality Garment products manufacturing factory in Bahir Dar city
and attain mean annual profit of over ETB 19,594,531.96 at the 1st year of project
implementation, by investing a total ETB 50.065 million.
1.6
SWOT Analysis
Before making the decision to invest in the Garment business, one should carefully analyze the
associated risk factors. A SWOT analysis will help in analyzing these factors, which play an
important role in making the decision.
1.6.1 Strengths

Continuous availability of raw material, i.e. high volume of fabric and apparel suppliers.

Availability of low cost labor

Product affordable to all income groups

Wide range of target market
1.6.2 Weaknesses

Inexperienced technical staff
1.6.3 Opportunities

The rapid growth of customers for garment products proportional to population growth.

Supports and available incentives from the government

Export opportunity
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1.6.4 Threats
1.7

Government policy on garment products

Fluctuation in the price of the fabrics.

Power interruptions
Product Description and Application
The garment work consists of the manufacturing of clothing by cutting and sewing fabrics.
Garment is one of the major activities that consume huge labor. The major input for garment
production is different types of textile fabrics. Important garment products include shirts, shorts,
T-shirts, under wears, fur apparel, pants, trousers, sport wears, work clothes and jackets, women
dresses and children clothes. Traditional clothes are also produced in our company by traditional
weavers.
This project envisages making men’s, women’s and children’s dresses and traditional clothes.
Transporting the product is easy too; therefore, if the factory can produce quality products at a
cost which can compete internationally.
Different fabric types; such as cotton fabrics, polyester fabrics, nylon fabrics, polyester-cotton
blended fabrics, denim fabrics, and others, are used to manufacture these products tailored to
customers’ requirement.
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JENFOK TRADING PLC GARMENT FACTORY
2020
2 Market Feasibility Analysis
2.1
Market Potential
The proposed business mainly targets both the domestic and international market. The business
should therefore be located within the industrial area of Bahir Dar city Administration. The
major target customers for the garment products are households, hotels, school age students,
bank and insurance workers, executive bodies and all human beings generally.
2.2
Supply-Demand Analysis
The population of the world is ever growing and almost reaching seven billion at this point in
time. Besides this, the economy of majority of the world population is also seen increasing from
time to time. This was due to the economic policy improvements adopted by most part of the
world continents like Africa, East and Middle Asia, and South America to increase the welfare of
their people. And it is obvious that the more improved the economic welfare of people, the more
they expend on purchase of apparel and food.
Therefore, as long as the people’s expending capacity continues improving parallel with
population growth, it makes this time the most strategic for textile industries in general and
garment factories in particular than ever before.
Besides the globally increasing demands for textile products, there are also a number of
advantages and incentives that motivate project promoters in Africa in general and in Ethiopia in
particular. Among these are:
 Tax free and unlimited quota market for textile products in economic giant continents
like US and Europe.
 75% by 25% loan scheme of Development Bank of Ethiopia
 Provision of land necessary for investment at reduced rate
 Duty free import of machineries and equipment’s, construction materials (those not
available locally), and spare parts (whose value not greater than 15% of that of
investment capital goods)
 Exemption from export tax on local products
 Duty drawback schemes on export sales
 2 to 7 or more years’ income tax exemption, for exporting investors
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JENFOK TRADING PLC GARMENT FACTORY
 3 to 5 years holiday for loan repayment
 Provisions of loss carry forward privileges, for about half of the tax exemption period,
and other.
Along with the above incentives and motivations the textile manufacturing industries are
migrating to Africa and other poor countries due to the increase of labor cost in countries like
Turkey, Italy and others. On the contrary, Ethiopia has relatively lower cost labor force and good
source of raw material. All the listed reasons fueled the textile sector to show up dramatic change
in number and influence the economy of the country.
Even though, there is apparel production capacity of about 20 million pieces of woven garment
and 53 million pieces of knitted garments per year in the country (attainable capacity in
2015/16- source TIDI), there is still bigger domestic and international apparel product demand.
The market segment for proposed project is 70% targeted to the international market and 30% to
local market for the coming 5 years. Ethiopia has exported few amount of apparel products for
the past 5 years despite the fact that the market for developing nations are still at large and the
government had planned in its five years’ Growth and transformation plan (GTP-2) to export
apparel products as it is depicted in the following table.
Table 1: Export plan of knitted and woven garment
Year(EC)
Knitted Garment
(million USD)
Weaved Garment
(million USD)
Total
(million USD)
Growth Rate
(%)
2016/17
35
30
65
-
2017/18
70
60
130
100
2018/19
158
135
293
125
2019/20
245
210
455
55
2020/21
350
300
650
43
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JENFOK TRADING PLC GARMENT FACTORY
Table 2: List of apparel products exported from year 2009 up to 2018/ Export in Net-Mass (Kg)
Products Category
2009 GC
2010 GC
2011 GC
2012 GC
2013 GC
2014 GC
2015 GC
2016 GC
2017 GC
2018 GC
Men's suits, jackets,
trousers etc& shorts
159.00
35,781.00
26,074.80
73,497.80
127,464.73
101,580.33
230,794.83
63,259.93
79,146.87
NA
Men's Shirts
0
26,898.00
113,882.10
34,918.02
137,871.68
34,035.38
133,414.37
37,887.51
84,623.30
NA
Women's blouses and shirt
0
0
16,053.00
3,343.10
14,044.80
4,588.74
3,329.15
79,551.63
17,302.40
NA
Women's suits, jackets,
NA
dresses skirts etc& shorts
2,608.00
10,929.00
56,354.30
168,343.60
132,173.75
114,430.25
178,382.56
29,748.88
15,147.27
Babies Garment
12,000.00
3,206.00
1,617.00
190.00
60.00
0
0
619.00
62.00
NA
14,767.00
76,814.00
213,981.20
280,292.52
411,614.96
254,634.70
545,920.91
211,066.95
196,281.84
NA
35,716.00
41,306.00
481,825.90
156,163.38
90,865.30
97,335.35
251,502.14
172,913.76
573,969.23
NA
50,483.00
118,120.00
695,807.10
436,455.90
502,480.26
351,970.05
797,423.05
383,980.71
770,251.07
NA
Sub Total
Others
TOTAL SUM
Source: Extracted from Ethiopian Custom & Revenue Authority’s Report Data Base
Table 3: Export in CIF Value (USD)
Products Category
Men's suits, jackets,
trousers etc& shorts
2009 GC
2010 GC
2011 GC
2012 GC
2013 GC
2014 GC
2015 GC
2016 GC
2017 GC
2018 GC
1252.66
109,395.38
133,701.84
416,199.55
256,069.92
383,349.92
640,583.54
181,833.87
372,782.61
5,523,000.00
Men's Shirts
0
81,672.84
296,523.54
150,779.52
332,130.43
161,705.54
897,504.22
173,275.85
302,803.55
3,010,000.00
Women's blouses and shirt
Women's suits, jackets,
dresses skirts etc& shorts
0
0
104,850.00
9,673.67
24,351.95
15,328.78
17,170.95
134,671.80
114,523.37
1,707,000.00
29,985.70
109,022.94
252,770.04
558,504.26
387,911.84
180,010.20
932,301.12
80,681.26
75,125.11
934,000.00
Babies Garment
14,927.52
4,789.11
2,601.42
913.75
651.59
0
0
4,465.41
556.88
1,000.00
46,165.88
304,880.27
790,446.84
1,136,070.75
1,001,115.73
740,394.44
2,487,559.83
574,928.19
865,791.52
11,175,000.00
93,812.56
139,978.44
136,632.52
441,512.79
1,281,530.73
2,071,977.57
712,240.8
1,848,311.55
283,456.27
1,284,572.00
389,269.79
1,129,664.23
1,211,135.26
3,698,695.09
949,765.65
1,524,693.84
5,504,117.22
6,369,908.74
3,904,000.00
15,079,000.00
Sub Total
Others
TOTAL SUM
Source: Extracted from Ethiopian Custom & Revenue Authority’s Report Data Base (for 2009-2018) and from International
Trade Center’s Report Data Base (for 2018)
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JENFOK TRADING PLC GARMENT FACTORY
Table 4: List of apparel products imported from year 2009 up to 2018 Import in Net-Mass (Kg)
Products Category
Men's suits, jackets,
trousers etc& shorts
2009 GC
2010 GC
2011 GC
2012 GC
2013 GC
2014 GC
2015 GC
2016 GC
2017 GC
3,338,977.9
3,975,624.03
4,607,668.03
4,174,741.29
2,803,183.56
2,567,027.71
1,166,219.67
1,362,717.44
1,400,606.93
1,261,987.18
1,090,756.96
858,196.92
1,089,465.78
4,408,382.15
5,282,327.25
4,428,796.86
3,909,073.72
3,793,738.67
3,086,521.82
3,559,410.19
2018 GC
3,386,339
3,158,269
3,117,306.1
Men's Shirts
Women’s Blouse &
Shirts
Women's suits, jackets,
dresses skirts etc&
shorts
1,058,841.00
1,075,427.00
1,424,375.00
3,352,335.00
733,204.00
1,094,561.00
1,732,912.63
2,025,307.75
1,895,197.33
1,940,545.21
2,158,051.19
2,386,480.43
3,126,041.46
Babies Garments
1,024,064.00
1,091,768.00
1,272,262.00
1,332,488.86
1,930,724.17
1,564,047.98
1,517,166.18
1,822,585.25
1,879,744.86
Sub Total
7,626,823.00
9,772,360.00
11,697,082.55
13,341,819.20
13,630,949.32
13,283,322.12
12,734,454.29
10,956,967.98
12,221,690.00
NA
2,475,492.00
3,875,495.00
3,467,175.47
3,505,380.22
3,782,793.26
4,237,241.26
4,048,017.78
4,080,570.40
4,672,460.83
NA
10,102,315.00
13,647,855.00
15,164,258.02
16,847,199.42
17,413,742.58
17,520,563.38
16,782,472.07
15,037,538.38
16,894,150.83
NA
NA
NA
NA
NA
NA
Others
TOTAL SUM
Source: Extracted from Ethiopian Custom & Revenue Authority’s Report Data Base
Table 5: Import in CIF Value (USD)
Products Category
Men's suits, jackets,
trousers etc& shorts
2008 GC
2009GC
2010 GC
2011 GC
2012 GC
2013 GC
2014 GC
2015 GC
2016 GC
2017 GC
13,766,670.83
13,130,278.60
15,001,308.90
17,974,381.63
21,889,123.00
27,225,822.62
23,062,478.78
18,855,294.69
18,717,243.38
27,843,000.00
Men's Shirts
Women’s Blouse &
Shirts
Women's suits,
jackets, dresses
skirts etc& shorts
2,789,159.25
3,120,870.93
4,394,774.93
5,401,072.27
6,247,318.39
5,660,860.32
4,315,687.65
3,953,866.70
5,282,019.74
18,992,000.00
4,045,438.95
7,245,238.58
10,129,091.21
15,484,537.70
14,248,330.31
15,172,403.72
15,250,053.17
14,174,649.41
18,983,938.03
7,109,000.00
3,264,093.32
5,306,697.13
7,667,497.75
9,547,458.51
8,900,725.81
11,233,351.41
11,693,413.43
15,651,913.47
21,326,958.79
5,801,000.00
Babies Garments
2,963,509.05
3,761,129.44
5,278,856.55
5,986,315.18
9,204,267.31
7,254,710.43
5,974,899.67
8,188,282.53
8,610,384.69
2,402,000.00
26,828,871.40
32,564,214.68
42,471,529.34
54,393,765.29
60,489,764.82
66,547,148.50
60,296,532.70
60,824,006.80
72,920,544.63
62,147,000.00
7,855,640.01
12,833,379.91
11,622,542.29
13,378,082.75
14,295,128.35
18,309,526.87
18,820,719.88
22,052,314.54
25,984,858.8
21,179,000.00
34,684,511.41
45,397,594.59
54,094,071.63
67,771,848.04
74,784,893.17
84,856,675.37
79,117,252.58
82,876,321.34
98,905,403.43
83,326,000.00
Sub Total
Others
TOTAL SUM
Source: Extracted from Ethiopian Custom & Revenue Authority’s Report Data Base (for 2009-2018) and from International
Trade Center’s Report Data Base (for 2018)
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JENFOK TRADING PLC GARMENT FACTORY
2.3
2020
Projected Demand
From previously presented export and import records (Table 2, 3, 4 and 5) of apparel products of
the nation, the following facts could be recognized after thorough analysis made on it.
Export on apparel products in general and some products like: women’s blouses, shirts, skirts,
trousers shorts, and Men’s shirts, trousers and shorts in particular had been increasing from year
to year for the last ten years. Only in 2018, about 11 million USD total sales had been made for
the mentioned products, which is about 136% greater than that of the preceding year, 2017
(Table 3).
Import of these same products had been also increasing consecutively from year 2008 (which
was about 26.8 million USD) to year 2016 (which was about million 72.9 USD). The increment
from year 2008 to 2016 was 172%. In 2018, the sales became 62.15 million USD which was by
14.7% less than that of 2017. The reduction in import could be logically related to the increment
in production and local sales of the nation, although there is large imbalance still, which is about
-51.15 million USD, when calculated for the mentioned products only for the year, 2018 (Table 3
and 5).
From this analysis it can be reasonably concluded that export of apparel products in general and
those mentioned products in particular, will be expected to increase for the coming ten years
also. Besides these analyses, the report of “International Trade Center (ITC)” indicates that for
the year 2012, the total world import of apparel products was about 196,786,089,000.00 USD,
from which about 83,324,000.00 USD (0.04%) was imported by Ethiopia. On the other hand,
the total value exported by Ethiopia in this same year was only 15,078,000.00 USD, according to
the report, which amounts to only 0.008% of the total amount imported by the world
(196,702,765,000.00 USD), excluding that of Ethiopia.
According to this report (ITC report), the average growth rate for apparels’ world import for the
years 2015 - 2018 was 2%, and about 16% for the years 2017-2018. The Import growth rate for
Ethiopia was reported as 4% for the years 2015 -2018 and 7% for the years 2017-2018. (But
according to data obtained from ECRA, it was indicated that there was reduction in import by
14.7% for the year 2017-2018, which was noted as the result of data differences from one source
to the other).
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JENFOK TRADING PLC GARMENT FACTORY
2020
Likewise; regarding export, it was indicated in the ITC report that the growth rate was 93% for
the year 2015-2018 and 267% for the years 2017-2018, for Ethiopia.
According to the Growth and Transformation Plan (GTP 2) of the country, it was targeted to
increase the export of apparel products, in general, as presented in table 2 above.
Therefore, assuming that the world and national imports continues to increase with the same
average growth rate of the year 2015 – 2016, which is 2% and 4% respectively; and taking the
values of 2018 as the base line, which was 196,786,089,000.00 USD and 83,324,000.00 USD
respectively, we can predict that the demands of apparel products in general to have the
following trends.
Table 6: World and Ethiopian Apparel Import projections for years 2019 -2024
Year
World Import (USD)
National Import
World /Except Ethiopia/
(USD)
Import (USD)
2019
221,613,098,100.00
105,431,441.90
221,507,666,658.10
2020
226,045,360,000.00
109,648,699.60
225,935,711,300.40
2021
230,566,267,200.00
114,034,647.60
230,452,232,552.40
2022
235,177,592,600.00
118,596,033.50
235,058,996,566.50
2023
239,881,144,400.00
123,339,874.80
239,757,804,525.20
2024
244,678,767,300.00
128,273,469.80
244,550,493,830.20
Assuming that the factories available in the year 2019 are remaining to exist and continue to
produce and sale the amount imported in that year, we can calculate the supply gaps resulted in
the market because of the demand growths in the following consecutive years. These can be
obtained by deducting the supply of the year 2019 from the projected ones for the years covered
in the plan, as presented in Table 7.
Considering the export and import situations of apparel products at national and global levels, we
can reasonably conclude that there is very huge market demand for the mentioned products both
locally and globally. Therefore, it will be the matter of competing and taking the market share
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2020
Table 7: Apparel Supply Gaps Projected for the years 2019-2024
Year
Table 8፡
Year
National Import
National Supply
Supply Gap (USD)
(USD)
(USD)
2019
105,431,441.90
83,324,000.00
22,107,441.90
2020
109,648,699.60
83,324,000.00
26,324,699.60
2021
114,034,647.60
83,324,000.00
30,710,647.60
2022
118,596,033.50
83,324,000.00
35,272,033.50
2023
123,339,874.80
83,324,000.00
40,015,874.80
2024
128,273,469.80
83,324,000.00
44,949,469.80
World supply gap
World /Except Ethiopia/
World /Except for
World Supply Gap
Import (USD)
Ethiopia/ Supply (USD)
(USD)
2019
221,507,666,658.10
196,702,765,000.00
24,804,901,658.10
2020
225,935,711,300.40
196,702,765,000.00
29,232,946,300.40
2021
230,452,232,552.40
196,702,765,000.00
33,749,467,552.40
2022
235,058,996,566.50
196,702,765,000.00
38,356,231,566.50
2023
239,757,804,525.20
196,702,765,000.00
43,055,039,525.20
2024
244,550,493,830.20
196,702,765,000.00
47,847,728,830.20
Therefore, surplus demands for apparel products at world level and national level could be
summarized as follows.
Table 9፡ Summary of Apparel Surplus Import Demand Projected for the coming 6 years
Year
World Surplus Import
National Surplus Import
Total Surplus Import
Demand (USD)
Demand (USD)
Demand (USD)
2019
24,804,901,658.10
22,107,441.90
24,827,011,117.00
2020
29,232,946,300.40
26,324,699.60
29,259,273,018.00
2021
33,749,467,552.40
30,710,647.60
33,780,180,219.00
2022
38,356,231,566.50
35,272,033.50
38,391,505,610.00
2023
43,055,039,525.20
40,015,874.80
43,095,057,411.00
2024
47,847,728,830.20
44,949,469.80
47,892,680,312.00
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JENFOK TRADING PLC GARMENT FACTORY
2020
Therefore; the world surplus demand presented in table 9 can be taken as a base to set the
capacity of the plant for export sales, and the total national demand for import, as projected and
presented in Table 7, can be used as a base to set the capacity of the plant for local market.
Accordingly, 0.02% of the world surplus demand of year 2019’s projection for apparel demand,
which is 4,960,980.33 USD, for export; and 2% of the 2019’s national total demand, which is
2,108,628.84 USD, for local market are considered to set the total production capacity of the
plant to be envisaged.
The average price per unit kilogram of garment products varies from year to year due to the
effect of factors like inflation and others. An average of 5% increment in average selling price
per unit kilogram of the products is assumed to calculate the sales achievement over the plan
year.
The following Table portrays the amount planned for export and local market, which is
calculated based on assumptions stated above.
Table 10: Sales plan for the envisaged project (Export & Local sales)
Year
World Surplus
Export Plan
National Total
Local Sales
Total Sales
Import Demand
(USD)
Import
Plan (USD)
Plan
(USD)
Demand (USD)
2019
24,804,901,658.10
4,960,980.33
105,431,441.90 2,108,628.84 7,069,609.17
2020
29,232,946,300.40
5,209,029.35
109,648,699.60 2,214,060.28 7,423,089.63
2021
33,749,467,552.40
5,469,480.81
114,034,647.60 2,324,763.30 7,794,244.11
2022
38,356,231,566.50
5,742,954.85
118,596,033.50 2,441,001.46 8,183,956.32
2023
43,055,039,525.20
6,030,102.60
123,339,874.80 2,563,051.53 8,593,154.13
2024
47,847,728,830.20
6,331,607.73
128,273,469.80 2,691,204.11 9,022,811.84
As presented in the table about 60% of the total sale will be targeted for export and the remaining
40% is reserved for local market.
2.4
Pricing and Distribution
Based on import data analyzed for the year 2018, the average price per unit kilogram of garment
products was 16.143 USD, which is equivalent to Birr 452. (Source: Data analyzed by
Marketing Directorate of TIDI, based on ERCA’s Annual Import Report) Assuming this price to
increase by 5% in the coming year, 16.95USD is taken as the average selling price for products
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JENFOK TRADING PLC GARMENT FACTORY
2020
of the envisaged company. One dollar exchange rate is 28 birr is considered for this analysis. The
project will export 65% of its product for Sudan, Kenya and Djibouti.
Table 11: Estimated Average selling price per unit kilogram for different product categories
Product Mix
U/M
Unit Price
Share of Product
Price Share
(USD/Kg)
Mix (%)
(USD)
Men's suits, jackets, trousers etc& shorts
Kg
18
25
4.5
Men's Shirts
Kg
16.8
25
4.2
Women's blouses and shirts
Kg
16.25
20
3.25
Women's suit, jackets, dresses skirts etc…
Kg
16.5
20
3.3
Babies Garments
Kg
17
10
1.7
100
16.95
Average Selling Price
Note that products mentioned as “men’s …” and “women’s …” covers all the sizes from small to
extra-large sizes, which are dressed by boys, girls, men, and women.
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2020
3 Technical Feasibility Analysis
3.1
Location and Site
Proximity to customers is one of the main factors which influence the choice of location for a
project. The proposed project focuses on solving the problems of the community by establishing
Garment factory and providing garment products in affordable price.
The selection of a particular site also considers the convenience of the market environment and
the raw material availability. So the project will run in Bahir Dar city industry zone.
3.2
Land, Buildings and Civil Works
The total area of land required for the envisaged plant is 30,000 m2 out of which 18,000 square
meters is a built-up area.
According to the Federal Legislation on the Lease Holding of Urban Land (Proclamation No
721/2004) in principle, urban land permit by lease is on auction or negotiation basis, however,
the time and condition of applying the proclamation shall be determined by the concerned
regional or city government depending on the level of development.
However, the Federal Legislation on the Lease Holding of Urban Land apart from setting the
maximum has conferred on regional and city governments the power to issue regulations on the
exact terms based on the development level of each region.
In Bahir dar, the City’s Administration is directly responsible in dealing with matters concerning
land. However, regarding the manufacturing sector, industrial zone preparation is one of the
strategic intervention measures adopted by the City Administration for the promotion of the
sector and all manufacturing projects are assumed to be located in the developed industrial
zones.
Moreover, the Bahir darcity Administration has recently adopted a new land lease floor price for
plots in the city. The new prices will be used as a benchmark for plots that are going to be
auctioned by the city government or transferred under the new “Urban Lands Lease Holding
Proclamation.”
The highest rate of the industrial Zone will be applicable in most areas of the city that are
considered to be main industrial areas that entertain high level of business activities.
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2020
The price rate ranges from Birr 0.75 cents to Birr 60 per m2.Accordingly, in order to estimate the
land lease cost of the project, it is assumed that all new manufacturing projects will be located in
industrial zones. Therefore, for the project a land lease rate of Birr 60 per m2 which is the
highest price of the industrial zone is adopted.
On the other hand, some of the investment incentives arranged by the Bahir dar City
Administration on lease payment for industrial projects are granting longer grace period and
extending the lease payment period. The criterions are creation of job opportunity, foreign
exchange saving, investment capital and land utilization tendency etc. For the purpose of this
project, the five years grace period, 40 years payment completion period and 10% down payment
is used. The land lease period for industry is 80 years.
Accordingly, the total land lease cost at a rate of Birr 60 per m2 is estimated at Birr 1,800,000 of
which 10% or Birr 180,000 will be paid in advance. The remaining Birr 1,720,000 will be paid in
equal installments within 40 years i.e. Birr 26,700 annually. The total construction cost is
estimated about birr 22,250,000.
Table 12: Project construction area requirement (in m2)
No Description
Quantity M2
Unit cost
Total cost
1 Raw material store
2,000.00
1,500.00
3,000,000.00
2 Processing line
7,000.00
1,500.00
10,500,000.00
2,500
1,500.00
3,750,000.00
4 Administrative Office
800
1,500.00
1,200,000.00
5 Cafeteria
400
1,500.00
600,000.00
6
600
1,500.00
900,000.00
7 Guard house
200
1,000.00
200,000.00
8 Parking
4500
200
900,000.00
3
Product store
Reception area
Sub total
8 Loading, Circulation, green area, etc
Total land area
7
18,000.00
12,000.00
30,000.00
21,050,000.00
100
1,200,000.00
22,250,000.00
2020
JENFOK TRADING PLC GARMENT FACTORY
3.3
Plant capacity and production program
3.3.1 Plant capacity
Based on sales plan and the average sales price, we can get that the annual production capacity of the
plant will be 740,275 Kg of garments totally. From the total products: - 25% (185,068Kg) will be:
Men's suits, jackets, trousers etc& shorts; 25% (185,068Kg) will be: Men's Shirts; 20% (156,058Kg)
will be: Women's blouses and shirt; 20% (148,055) will be: Women's suits, jackets, dresses skirts etc&
shorts; and 10% (74,027Kg) will be: Babies Garments.
The following Table presents summary of the production capacity of the plant, converting the
measuring units from Kg to pieces. Total of 320 working days per annum, 8 hour per day in one shift
is assumed to set the plant capacity.
Accordingly, a total of 1,826,562 pieces of different garments will be produced on 100% capacity
utilization, and a total of Birr 479,404,074, with average exchange rate of 1 USD = 30 Birr) sales is
planned to be achieved.
Table 13: Annual Sales plan for the envisaged plant
Product Mix
Men's suits, jackets, trousers,
jeansetc& shorts (1 pc = 750 gm)
Men's Shirts (1 pc = 350gm)
Women's blouses and shirts
(1 pc = 300gm)
Women's suits, jackets, dresses
skirts, etc& shorts (1 pc = 600 gm)
Babies Garments (1 pc = 300gm)
Total
Traditional clothes
Grand total
Annual Production
Capacity
Quantity
Quantity
(Kg)
(Piece)
185,069
246,759
Average
Unit Price
/piece
(USD)
13.50
Selling Price
(USD)
(Birr ’000)
3,331,246.50
93,274,902.00
185,068
148,055
528,768
493,517
5.88
4.88
3,109,155.84
2,408,362.96
87,056,363.52
67,434,162.88
148,055
246,758
9.90
2,442,904.20
68,401,317.60
74,028
246,760
5.10
1,258,476.00
35,237,328.00
740,275
1,762,562
7.12
12,549,441.44
351,404,074.00
64,000
71.43
1,826,562
128,000,000
479,404,074.00
Note that the average weight for unit product categories is taken by estimation, taking the size
(small – extra-large) and material variations (cotton, polyester, nylon, etc...) in to considerations.
3.3.2 Production program
The planned capacity will be achieved in the fourth year of the establishment year of the factory.
In a period of 12 months project time, the project will be realized. It is estimated that production
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JENFOK TRADING PLC GARMENT FACTORY
2020
starts at 85% plant capacity in the first year, 95% in the second year, and 100% in the third year
and will continue to work with this capacity for the coming 10 years. Since production capacity
of garment factory is highly dependent on operator’s performance, here the average attainable
Ethiopian machine operator’s performance is taken in to consideration to determine the overall
capacity of the envisaged plant. The factory is assumed to work 320 days in a year and 8 hours
per day in a single shift.
Table 14: Production Program
Product Categories
U/M
Men's suits, jackets, trousers
etc& shorts
Men's Shirts
Women's blouses and shirts
Women's suits, jackets, dresses
skirts etc& shorts
Babies Garments
Traditional garments
Total
Pcs
>>
>>
>>
>>
>>
>>
Plant Capacity Utilization
1st year
2nd year
3rd year and
(85%)
(95%)
above (100%)
209,745
449,453
419,489
234,421
502,330
468,841
209,744
209,746
234,420
234,422
54,400
1,552,578
60,800
1,735,234
246,759
528,768
493,517
246,758
246,760
64,000
1,826,562
The factory will have a set up to accommodate production facilities for both knitted and woven
garment products. Based on assumptions stated above the plant will have a total capacity of
manufacturing 5,508 pieces of varies woven and knitted garments and 200 complete traditional
clothes on average per day in one shift. Depending on the simplicity of the product type and
improvement in operators’ performance, even more production capacity could be achieved with
the same plant setup.
3.4
Raw Materials and utilities
3.4.1 Raw Materials
The raw materials required to produce Garment s include embroidery treads, mag, fabrics,
buttons, sewing threads, and accessories like zipper, shoulder pad, labels etc. Except some
materials and accessories which are not produced locally, for a short run, all the raw materials
will be purchased locally. However, in the near future all the raw materials will be expected to be
available locally as there are a number of projects in the pipeline and also some bonded
9
2020
JENFOK TRADING PLC GARMENT FACTORY
warehouses to be opened locally by foreign manufacturers. Table 16 below presents annual
requirements and corresponding costs of raw materials at full production capacity.
Table 15: Raw materials requirement and Cost at full capacity
S/N material type
U/M
Qty
unit Price
Total Cost
1
Fabric
Kg
822,289.00
320
263,132,480.00
2
Buttons
Kg
22554
162
3,653,748.00
3
Sewing thread
Kg
9789
245
2,398,305.00
4
Embroidery treads
128,000.00
120
15,360,000.00
5
Yarn
12,800.00
1,000.00
12,800,000.00
6
Mag
64,000.00
180
11,520,000.00
7
Accessories
-
Lump sum
-
6,440,263.00
8
Packing material
-
>>>>
-
8,064,158.00
Grand Total
323,368,954.00
3.4.2 Utilities
Electricity and water are the two major utilities required by the envisaged plant. Total annual
cost of major utility items at full operation capacity of the plant is Birr 4,528,000.00. Details are
shown in the table below:
Table 16: Utilities Requirement and Cost at full capacity
No.
Description
Unit
Qty.
Unit price (Birr)
Cost ( Birr)
1
Electricity
kWh
500,000
0.59
295,000.00
2
Water
m3
65,000
8.2
533,000.00
4
fuel oil
Lt
200,000
18
3,600,000.00
6
Telephone and internet
Birr
Total
3.5
100,000.00
4,528,000.00
Technology and Engineering
3.5.1 Production process
Generally, apparel manufacturing process involves Product Design, Fabric Selection and
Inspection, Patternmaking, Grading, Marking, Spreading, Cutting, Bundling, Sewing, Pressing or
Folding, Finishing and Detailing, Dyeing and Washing, QC etc.
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JENFOK TRADING PLC GARMENT FACTORY
2020
The major processes involved in the production processes of apparel products of the envisaged
factory are discussed as under.
Receiving fabrics
Under this process step the fabric to be used in production process of apparels will be received
from the supplier. Depending on the type of procurement and type of products, the supplier could
be either the manufacturer, or whole seller or retailer. The fabrics received from the supplier are
preserved in the raw material stores temporarily before they are issued for next step.
Fabric Relaxing
“Relaxing” refers to the process that allows material to relax and contract prior to being
manufactured. This step is necessary because the material is continually under tension
throughout the various stages of the textile manufacturing process, including weaving, dyeing,
and other finishing processes. The relaxing process allows fabrics to shrink so that further
shrinkage during customer use is minimized.
Fabric relaxing could be done either manually or mechanically. Manual fabric relaxing typically
entails loading the bolt of fabric on a spinner and manually feeding the material through a piece
of equipment that relieves tension in the fabric as it is pulled through. Mechanical fabric relaxing
performs this same process in an automated manner.
Quality assurance process is integrated into this process to ensure that the quality of the fabric
meets customer standards. This step is performed by manually spot-checking each bolt of fabric
using a backlit surface to identify manufacturing defects such as color inconsistency or flaws in
the material. Fabrics that fail to meet customer standards are returned to the supplier
(manufacturer or whole seller of retailer).
Spreading, Form Layout, and cutting
After fabric has been relaxed, it is transferred to the spreading and cutting area of the garment
manufacturing facility. The fabric is first cut into uniform plies and then spread either manually
or using a computer-controlled system in preparation for the cutting process. Fabric is spread to:

allow operators to identify fabric defects;

control the tension and slack of the fabric during cutting; and

Ensure each ply is accurately aligned on top of the others.
The number of plies in each spread is dependent on the fabric type, spreading method, cutting
equipment, and size of the garment order.
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JENFOK TRADING PLC GARMENT FACTORY
2020
Next, garment forms or patterns are laid out on top of the spread, either manually or programmed
into an automated cutting system. Lastly, the fabric is cut to the shape of the garment forms
using either manually operated cutting equipment or a computerized cutting system.
Embroidery and Screen Printing
Embroidery and screen printing are two processes that occur only if directly specified by the
customer; therefore, these processes are commonly subcontracted to off-site facilities.
Embroidery is performed using automated equipment, often with many machines concurrently
embroidering the same pattern on multiple garments. Each production line may include between
10 and 20 embroidery stations. Customers may request embroidery to put logos or other
embellishments on garments.
Screen printing is the process of applying paint-based graphics to fabric using presses and textile
dryers. Specifically, screen printing involves sweeping a rubber blade across a porous screen,
transferring ink through a stencil and onto the fabric. The screen printed pieces of fabric are then
dried to set the ink. This process may have varying levels of automation or may largely be
completed at manually operated stations. Like embroidery, screen printing is wholly determined
by the customer and may be requested to put logos or other graphics on garments or to print
brand and size information in place of affixing tags.
Sewing
Garments are sewn in an assembly line, with the garment becoming more complete as it
progresses down the sewing line. Sewing machine operators receive a bundle of cut fabric and
repeatedly sew the same portion of the garment, passing that completed portion to the next
operator. For example, the first operator may sew the collar to the body of the garment and the
next operator may sew a sleeve to the body. Quality assurance is performed at the end of the
sewing line to ensure that the garment has been properly assembled and that no manufacturing
defects exist. When needed, the garment will be reworked or mended at designated sewing
stations. This labor-intensive process progressively transforms pieces of fabric into designer
garments.
Spot Cleaning and Laundry
In addition to identifying manufacturing defects, employees tasked with performing quality
assurance are also looking for cosmetic flaws, stains, or other spots on the garment that may have
occurred during the cutting and sewing processes. Spots are often marked with a sticker and
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JENFOK TRADING PLC GARMENT FACTORY
2020
taken to a spot-cleaning area where the garment is cleaned using steam, hot water, or chemical
stain removers.
Some customers request that a garment be fully laundered after it is sewn and assembled;
therefore, garment factories often have an on-site laundry or have subcontract agreements with
off-site laundry operations. Commercial laundry facilities are equipped with at least three types
of machines: washers, spinners, and dryers. Some facilities also have the capability to perform
special treatments, such as stone- or acid-washing.
Ironing
After a garment is fully sewn and assembled, it is transferred to the ironing section of the facility
for final pressing. Each ironing station consists of an iron and an ironing platform. The irons are
similar looking to residential models, but have steam supplied by an on-site boiler. Workers
control the steam with foot pedals and the steam is delivered via overhead hoses directly to the
iron. In most facilities, the ironing platforms are equipped with a ventilation system that draws
steam through the ironing table and exhausts it outside the factory.
Packaging and Shipping
In the last steps of making a product retail-ready, garments are folded, tagged, sized, and
packaged according to customer specifications. Also, garments may be placed in protective
plastic bags, either manually or using an automated system, to ensure that the material stays
clean and pressed during shipping. Lastly, garments are placed in cardboard boxes or pp bags
and shipped to client distribution centers to eventually be sold in retail stores, or to customers, if
they are produced on orders.
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JENFOK TRADING PLC GARMENT FACTORY
2020
Fabric Reception
Fabric Relaxing
Fabric Spreading, Form
Layout, and Cutting
Sewing
Inspection
Spot cleaning and
Laundry
Ironing
Packing
Apparel Shipping
Figure 1: Apparel production process flow chart
3.5.2 Source of Technology
The machinery and equipment required to manufacture apparel products are conventional and
available in different technological levels, in general. Selection among alternatives was made based
on the competitive advantages it provides to the stakeholder in the context of the country. The major
criterions taken in to consideration are: resource utilization (especially labor), job opportunity,
operability, and maintainability. Therefore; the labor intensive machineries and equipment’s are
selected for the envisaged plant. Suppliers of labor intensive technologies are available in Europe,
Asia and Far East.
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JENFOK TRADING PLC GARMENT FACTORY
2020
3.5.3 Machinery and Equipment
The envisaged plant is planned to produce knitted and woven garments,traditional clothes and
jeans products and therefore the machineries and equipment’s to be purchased will be in such a
way as to accommodate all required facilities. The list of machinery and equipment, quantity and
associated costs are presented in Table 17. As shown in the table, the total cost of machinery and
equipment is estimated Birr 28,894,078.45.
Table 17: Machinery and Equipment Requirement and Cost
No Item Name
1 Single needle LOCK STITCH MACHINE
2 2 needle 4thread over lock
3
Blind stitch
QTY Unit price
60
14,767.70
12
Total cost
886,062.00
14,767.70
33,010.15
42,888.38
177,212.40
66,020.30
42,888.38
4
2 Needle flatbed Bottom cover stitch Belt –loop making
2
1
5
6
7
8
9
10
11
12 Needle flatbed Double chain stitch
Double needle lock stitch machine
Basis –Cutting &winding machine
Flatbed top bottom cover stich machine univ. type
Cylinder-bed top&bottm cover stitch machine
2 Needle 5thread over lock machine
SNLSmachine with vertical EDGETRIMMER
5
6
1
3
3
8
6
47,380.74
33,985.77
33,915.42
40,898.01
53,366.91
15,960.20
22,240.69
236,903.70
203,914.62
33,915.42
122,694.03
160,100.73
127,681.60
133,444.14
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
Single needle flatbed double chain stitch machine
Feed of the arm2-needle double chain stitch machine
Computer control button sewing machine
Computer control BARTACKING Machine
Computer control bottomholing machine
Fusing press machine
Trade terminal machine
Vacuum table with standard buck
Stain removing machine
Full steam Iron
Steam generating Boiler
Spreader machine
Spreader Table
Pneumatic collar Turing machine
Air compressor
Sub total
2
5
2
2
3
2
1
18
1
18
6
2
2
1
1
42,144.90
69,470.91
74,315.65
51,045.09
72,569.02
50,623.75
20,698.38
10,473.88
27,930.34
1,918.92
27,600.89
47,841.54
73,602.38
20,199.62
157,053.82
4,095,919.25
84,289.80
347,354.55
148,631.30
102,090.18
217,707.06
101,247.50
20,698.38
188,529.84
27,930.34
34,540.56
165,605.34
95,683.08
147,204.76
20,199.62
157,053.82
4,049,603.45
15
JENFOK TRADING PLC GARMENT FACTORY
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
21
22
23
24
25
26
1
2
1
2
3
Finishing machinery
Steam boiler
120 kw
Steam boiler
75 kw
Iron
Full steam iron
Steam iron hose
Shirt iron press (box plate)
“
“ “ (back)
“
“ “ (said)
“
“ “(collar)
Court “
“( solder )
“
“ “ (front master )
“
“ “ (back)
“ “
“ (front)
“ “
“ (solder)
“ “
“ (side)
“ “
“ (collar)
Thread sacker
Shirt folding machine
Sacker for court
Compressor
(350 kg)
Catron banding machine
Snap button machine (panama tic)
needle detector (metal caking )machine
stane removing (sport cleaning )
Sub total
Complete Jeans Machine
Traditional weaving machine
Knitting machine
Circular knitting machine
Tubular circular knitting machine three thread
fleece 30” g
Single jersey Tubular circular knitting machine
Sub total
Grand total
16
1
1
50
100
300
5
5
5
3
2
2
1
1
1
1
1
2
3
1
1
2
15
1
3
1 set
500
5
8
2020
50,400.00
32,500.00
11,684.00
5,800.00
1,760.00
3,500.00
3,500.00
3,500.00
3,500.00
3,500.00
3,500.00
3,500.00
3,500.00
3,500.00
3,500.00
3,500.00
2,500.00
17,500.00
24,500.00
54,200.00
16,500.00
13,545.00
21,000.00
12,500.00
50,400.00
32,500.00
584,200.00
580,000.00
528,000.00
17,500.00
17,500.00
17,500.00
10,500.00
7,000.00
7,000.00
3,500.00
3,500.00
3,500.00
3,500.00
3,500.00
5,000.00
52,500.00
24,500.00
54,200.00
33,000.00
203,175.00
21,000.00
37,500.00
2,300,475.00
2,300,000.00 2,300,000.00
10,000.00
5,000,000.00
1,312,000.00
268,000.00
6,560,000.00
2,144,000.00
8,704,000.00
18,854,078.45
JENFOK TRADING PLC GARMENT FACTORY
2020
Table 18: Furniture and office equipment and vehicles
Item
Computer
Printer
Photocopy machine
Telephone sets
Table
Chair
Shelf
Miscellaneous
Total
Vehicles
Toyota hilux-4wd double
Total
3.6
Quantity
10
4
1
6
50
50
12
Unit cost
10,000
10,000
30,000
500
3,000
2,000
4,000
Total cost
100,000
40,000
30,000
3,000
150,000
100,000
48,000
30,000
501,000
1
1,500,000.00
1,500,000.00
1,500,000.00
Project implementation schedule
The major activities to be carried during the project implementation period are grouped under the
following four major categories. These are:
1. Activation and organization activities
2. Operation activates
3. Construction and erection
4. Performance testing
Activation and organization activities
These are activities that need to be carried as a pre-requisite for the project to become operational
or they are preliminary activities. The tentative list of activities under this category is: Necessary
document collection, such as preliminary designs, plant layout, technological drawing of plant
and machinery, architectural drawing of the plant building and civil works and specification of
building, process machinery, auxiliary equipment’s and utility equipment,0btain investment
license and trade registration and ownership of project area submitting feasibility study and other
legal documents to the bank for financial arrangement.
Operational activities:
The project operational activities will actually start after securing the land from the municipality.
And the next activity will be organizing the project management and undertaking steps to get the
required fund from lending banks and concluding financial agreement.
17
JENFOK TRADING PLC GARMENT FACTORY
2020
Establishing project criteria early before starting design, is critical to the success of the optimized
project. The team entity must develop a clear, mutually held understanding of all project and
team entity goals, values, and objective. A concise description of project scope and program,
along with a preliminary budget aligned with the scope is vital to setting a project up for success.
Construction and Erection
The development of a construction plan is very much analogous to the development of a good
facility design. The time schedule for construction and erection has been standardized through
identification of the following requirements.
Performance testing activities
Performance testing will be carried right after completion of plan Erection and the normal
production operation of the plan starts after 12 months of project implementation. Training of the
recruited personnel is carried out within a period a month.
Table 19: Project implementation schedule
No
1.
2.
3
4
Activity
Activation and organization activities
Preparing necessary documentation
Procuring consultant for detailed project design
Plan check approvals secured
Procuring construction consultants
Operational activates
Recruiting project implementing staff
Completing financial arrangements
Arrangement for acquisition of machinery & equipment
Construction Erection
Site facility establishing & material mobilization
Site preparation and foundation work
Finishing the civil work
Erection of machinery
Performance testing & production activities
Training of recruited personal
Performance testing
Actual production starts
18
First year quarters of 2018
1
2
3
4
2020
JENFOK TRADING PLC GARMENT FACTORY
4 Management and Organizational feasibility
4.1
Human Resource Requirement
The total human resource requirement of the envisaged project is 520 persons. Details of the
human resource requirement and estimated annual labor cost including fringe benefits are given
in the Table 20 below.
Table 20: Man power Requirement and annual salary
S/N
Description
No
Monthly salary
Annual salary
1
Factory Manager
1
10,000.00
120,000.00
2
Executive Secretary
1
2,500.00
30,000.00
3
Departmental Secretaries
2
4,000.00
48,000.00
4
Production and Tech Manager
1
8,000.00
96,000.00
5
Quality Head
1
6,500.00
78,000.00
6
Production supervisor
2
12,000.00
144,000.00
7
Quality Control supervisor
2
12,000.00
144,000.00
8
Mechanical maintenance supervisor
1
3,500.00
42,000.00
9
Electrical maintenance Supervisor
1
3,500.00
42,000.00
10
traditional weavers
75
500,000.00
6,000,000.00
11
Machine Operators
100
600,000.00
7,200,000.00
12
operator helpers
40
160,000.00
1,920,000.00
13
spinning
50
400,000.00
4,800,000.00
14
Wilders
35
140,000.00
1,680,000.00
15
Warping
15
30,000.00
360,000.00
16
Ironing
30
60,000.00
720,000.00
17
Packaging
10
20,000.00
240,000.00
18
Cutting
50
100,000.00
1,200,000.00
19
Knitting operator
20
80,000.00
960,000.00
20
Helper
50
100,000.00
1,200,000.00
21
Quality Inspectors
1
2,500.00
30,000.00
19
JENFOK TRADING PLC GARMENT FACTORY
2020
22
Mechanic
1
3,500.00
42,000.00
23
Electrician
1
3,500.00
42,000.00
24
Marketing Manager
1
8,000.00
96,000.00
25
Sales person
3
9,000.00
108,000.00
26
Administration manager
1
8,000.00
96,000.00
27
General service personnel
1
6,000.00
72,000.00
28
HR Personnel
1
4,000.00
48,000.00
29
Nurse
2
6,000.00
72,000.00
30
Guard
6
6,000.00
72,000.00
31
Messengers
1
2,000.00
24,000.00
32
Driver
1
10,000.00
120,000.00
33
Cleaner
5
4,000.00
48,000.00
34
Financial manager
1
8,000.00
96,000.00
35
Accountant
1
4,000.00
48,000.00
36
Cashier
2
3,000.00
36,000.00
37
Purchasers
2
6,000.00
72,000.00
38
Store Keepers
2
6,000.00
72,000.00
520
2,351,500.00
28,218,000.00
235,150.00
2,821,800.00
2,586,650.00
31,039,800.00
Sub Total
Employee Benefit (10%)
Grand Total
4.2
Training requirement
On job training for operators and short term trainings for supervisors, technicians, and designers is
planned, with estimated cost of Birr 100,000.00.
20
JENFOK TRADING PLC GARMENT FACTORY
2020
5 Financial Analysis
5.1
Underlying Assumption
The financial analysis of the envisaged plant is based on the data provided in the preceding
chapters and the following assumptions.
Financial Assumptions
A. Construction and Finance
Construction period
Source of Finance
12 months
25% equity and 75% Loan from bank
Tax Holidays
5 years
Bank Interest rate
11.50%
Discount for cash flow
Value of Land
Spare parts & Repair and Maintenance
12%
Birr 60/M2
5% of the fixed investment
B. Depreciation & Amortization
Building
5%
Machinery and Equipment
10%
Office Furniture
10%
Vehicles
10%
C. Working Capital(Minimum day of coverage)
Raw Material Local
30 days
Raw Material Foreign
120 days
Factories supplies in stock
30 days
Spare part in stock and Maintenance
60 days
Work in Progress
5 days
Finished Product
20 days
Account receivable
30 days
Cash in Hand
20 days
Accounts payable
21
30 days
JENFOK TRADING PLC GARMENT FACTORY
5.2
2020
Pre-production Expenses
The total cost required for design, consultancy, training and commissioning is estimated to be
Birr 260,000.00.
Table 21: Design, consultancy, training and test run cost
S/N Description
Estimated Budget(Birr)
1
Engineering, Design & consultancy fee
60,000.00
2
Training
100,000.00
3
Commissioning and test run with 10% contingency
50,000.00
4
Other pre-production expenses
50,000.00
Total
260,000.00
Remark: Other pre-production expenses include costs like costs of registration, licensing and
formation of the company including legal fees, commissioning expenses, etc.
5.3
Total Investment Cost
The investment cost of the project including working capital is estimated at Birr 50.065 million.
The owner shall contribute 25% (12,516,269.61) of the finance in the form of equity while the
remaining 75% (37,548,808.84) is to be financed by bank loan.
Table 22: Total Initial Investment
No
1
1.1
1.2
1.3
1.4
1.5
2
3
22
Item
Fixed asset
Land
Building and Civil Work
Office Equipment
Vehicles
Plant machinery and equipment
Total Fixed investment cost
Pre-Production
Working capital at full capacity
Total
Equity
Loan
Total
180,000.00
22,250,000.00
501,000.00
1,500,000.00
18,854,078.45
43,285,078.45
260,000.00
6,520,000.00
50,065,078.45
12,516,269.61
37,548,808.84
2020
JENFOK TRADING PLC GARMENT FACTORY
5.4
Production Cost
The total production cost at full capacity operation is estimated at Birr 365 million. Raw
materials account for 88.59%, while the rest together costs 11.41% of the total production cost.
No
Items
%
1
Raw Material and Inputs
2
Utilities
4,528,000.00
1.24%
3
Maintenance and repair (5%)
1,042,753.92
0.29%
4
Labor direct
31,039,800.00
8.50%
5
Overhead cost
500,000.00
0.14%
6
Administration Costs
500,000.00
0.14%
7
Cost of marketing and distribution
500,000.00
0.14%
361,479,507.92
99.04%
3,198,007.85
0.88%
323,288.09
0.09%
365,000,803.86
100.00%
Total Operating Costs
8
Depreciation
9
Insurance
Total Production Cost
5.5
Cost (in Birr)
323,368,954.00
88.59%
Financial Evaluations
5.5.1 Profitability
Based on the projected profit and loss statement, the project will generate a profit beginning from the
first year of operation and increase on wards throughout its operation life. Annual net profit after tax
will grow from Birr 5.642 million to Birr 24.35 million during the life of the project. Moreover, at
the end of the project life the accumulated cash flow amounts to Birr 162.893 million.
5.5.1 Financial Ratios
In financial analysis financial ratios and efficiency ratios are used as an index or yard stick for
evaluating the financial position of a firm. It is also an indicator for the strength and weakness of the
firm or a project. Some of these ratios calculated for the first year of the project life are:
Return on sales = Net income/Revenue
= 5,642,485.93/383,467,612.00
= 0.018 (1.8%)
23
JENFOK TRADING PLC GARMENT FACTORY
2020
Return on equity = Net profit/Equity
= 5,642,485.93/12,516,269.61
= 0.45 (45%)
Return on investment = Net profit/Total Investment
= 5,642,485.93/50,065,078.45
= 0.11 (11%)
These financial ratios for all years of the operation life of the project are found to be satisfactory and
hence indicate that it is profitable and viable.
5.5.2 Break-even Analysis
The break-even analysis establishes a relationship between operation costs and revenues. It indicates
the level at which costs and revenue are in equilibrium.
BEP = Fixed Cost/ (Average Unit selling price – Average Variable cost per unit product)
Fixed costs:
Average Sales price per unit:
Average Variable cost per unit:
Break-even point (units):
Break-even point (total sales):
43,105,078.45
223
176.96
934,991
208,559,834.38
5.5.3 Payback Period
The payback period is defined as the period required recovering the original investment outlay
through the accumulated net cash flows earned by the project. Accordingly, based on the
projected cash flow it is estimated that the project’s initial investment will be fully recovered
within 3.26 years.
5.5.4 Internal Rate of Return
The internal rate of return (IRR) is the annualized effective compounded return rate that can be
earned on the invested capital, i.e., the yield on the investment. Put another way, the internal rate
of return for an investment is the discount rate that makes the net present value of the
investment's income stream total to zero. It is an indicator of the efficiency or quality of an
investment. A project is a good investment proposition if its IRR is greater than the rate of return
that could be earned by alternate investments or putting the money in a bank account.
24
JENFOK TRADING PLC GARMENT FACTORY
2020
Accordingly, the IRR of this project is computed to be 23 % indicating the viability of the
project.
5.5.5 Net Present Value
Net present value (NPV) is defined as the total present (discounted) value of a time series of cash
flows. NPV aggregates cash flows that occur during different periods of time during the life of a
project in to a common measuring unit i.e. present value. It is a standard method for using the time
value of money to appraise long-term projects.
NPV is an indicator of how much value an
investment or project adds to the capital invested. In principal a project is accepted if the NPV is nonnegative. Accordingly, the net present value of the project at 12% discount rate is found to be Birr
237.462 million which is acceptable.
5.6 Economic benefits
5.6.1 Earning foreign currency
In addition to saving hard currency by substituting import of garment products, the project will have
a role of earning of foreign currencies by exporting 60 % of its products.
5.5.2 Job creation
This project creates permanent job opportunities for 520 persons.
5.5.3 Tax Revenue
In the project life under consideration, the region will collect about Birr 4.616 million from corporate
income tax. Such result create additional fund for the government that will be used in expanding
social and other basic services in the region.
Impact on Environment
The project is purely environment friendly. The proposed project is an exemplary business solution
for environmental pollution. The experience of this business can be used to tackle other
environmental problems as well.
25
2020
JENFOK TRADING PLC GARMENT FACTORY
ANNEXES
1A: Sales projection volume in birr
Description
Year 1
Year 2
Year 3
Year 4
Year 5
592,220.00
666,247.50
740,275.00
740,275.00
740,275.00
unit price
474.60
498
523
549
577
Sub total
281,067,612.00
332,011,116.68
387,346,302.79
406,713,617.93
427,049,298.82
51,200.00
57,600.00
64,000.00
64,000.00
64,000.00
unit price
2000
2,100
2,205
2,315
2,431
Sub total
102,400,000.00
120,960,000.00
141,120,000.00
148,176,000.00
155,584,800.00
Total
383,467,612.00
452,971,116.68
528,466,302.79
554,889,617.93
582,634,098.82
products in kg
Traditional clothes in pcs
1B: Sales projection volume in birr
Description
Year 6
Year 7
Year 8
Year 9
Year 10
740,275.00
740,275.00
740,275.00
740,275.00
740,275.00
unit price
606
636
668
701
736
Sub total
448,401,763.76
470,821,851.95
494,362,944.55
519,081,091.78
545,035,146.37
64,000.00
64,000.00
64,000.00
64,000.00
64,000.00
unit price
2,553
2,680
2,814
2,955
3,103
Sub total
163,364,040.00
171,532,242.00
180,108,854.10
189,114,296.81
198,570,011.65
Total
611,765,803.76
642,354,093.95
674,471,798.65
708,195,388.58
743,605,158.01
products in kg
Traditional clothes in pcs
A
2020
JENFOK TRADING PLC GARMENT FACTORY
2: Depreciation forecasting
No
Cost Items
1
Building and civil work
2
Machinery and equipment
3
Vehicles
4
Office furniture and equip.
Total
Original value
Depreciation and Amortization %
Annual depreciation
22,250,000.00
5%
1,112,500.00
18,854,078.45
1,500,000.00
5%
1,885,407.85
10%
150,000.00
501,000.00
10%
50,100.00
43,105,078.45
3,198,007.85
3: Annual repair and maintenance expenses
No
Cost Items
Original value
Maintenance rate
Annual maintenance cost
1
Machinery and equipment
18,854,078.45
5%
942,703.92
2
Vehicles
1,500,000.00
5%
75,000.00
3
Office furniture and equip.
501,000.00
5%
25,050.00
Total
B
20,855,078.45
1,042,753.92
JENFOK TRADING PLC GARMENT FACTORY
Loan Amount
37,548,808.84
Annual Interest Rate
11.50 %
Loan Period in Years
Number of Payments Per Year
4: loan repayment schedule
Scheduled Payment
2020
6,510,107.72
Scheduled Number of Payments
10.00
10
Actual Number of Payments
10.00
1
Total Early Payments
Start Date of Loan
11/28/2019
Total Interest
Payment Date
Beginning
Scheduled
Total
Balance
Payment
Payment
11/28/2020
37,548,808.84
6,510,107.72
6,510,107.72
2,191,994.71
11/28/2021
35,356,814.13
6,510,107.72
6,510,107.72
11/28/2022
32,912,740.03
6,510,107.72
11/28/2023
30,187,597.41
11/28/2024
27,552,268.39
Ending
Cumulative
Balance
Interest
4,318,113.02
35,356,814.13
4,318,113.02
2,444,074.10
4,066,033.63
32,912,740.03
8,384,146.64
6,510,107.72
2,725,142.62
3,784,965.10
30,187,597.41
12,169,111.75
6,510,107.72
6,510,107.72
3,038,534.02
3,471,573.70
27,149,063.39
15,640,685.45
27,149,063.39
6,510,107.72
6,510,107.72
3,387,965.43
3,122,142.29
23,761,097.96
18,762,827.74
11/28/2025
23,761,097.96
6,510,107.72
6,510,107.72
3,777,581.46
2,732,526.27
19,983,516.50
21,495,354.00
11/28/2026
19,983,516.50
6,510,107.72
6,510,107.72
4,212,003.33
2,298,104.40
15,771,513.18
23,793,458.40
11/28/2027
15,771,513.18
6,510,107.72
6,510,107.72
4,696,383.71
1,813,724.02
11,075,129.47
25,607,182.42
11/28/2028
11,075,129.47
6,510,107.72
6,510,107.72
5,236,467.83
1,273,639.89
5,838,661.64
26,880,822.31
11/28/2029
5,838,661.64
6,510,107.72
5,838,661.64
5,167,215.55
671,446.09
-
27,552,268.39
C
Principal
Interest
JENFOK TRADING PLC GARMENT FACTORY
2020
Financial Statements
5A: Projected Income statement
Year 2
Year 3
368,299,116.68
429,682,302.79
Description
Total Sales
Year 1
311,787,612.00
Year 4
451,166,417.93
Year 5
473,724,738.82
COGS
258,695,163.20
305,583,661.53
356,514,271.79
374,339,985.37
393,056,984.64
Gross profit
53,092,448.80
62,715,455.15
73,168,031.00
76,826,432.55
80,667,754.18
Expenses
Utility expense
4,528,000
4,980,800.00
5,478,880.00
6,026,768.00
6,629,444.80
Salary & benefit
31,039,800.00
32,591,790.00
34,221,379.50
35,932,448.48
37,729,070.90
Admin. Cost
1,000,000.00
1,050,000.00
1,102,500.00
1,157,625.00
1,215,506.25
Overhead cost
1,000,000.00
1,050,000.00
1,102,500.00
1,157,625.00
1,215,506.25
Maintenance & repair
1,042,753.92
1,042,753.92
1,042,753.92
1,042,753.92
1,042,753.92
Depreciation
3,198,007.85
3,198,007.85
3,198,007.85
3,198,007.85
3,198,007.85
323,288.09
323,288.09
323,288.09
323,288.09
323,288.09
Marketing & promotion
1,000,000.00
1,000,000.00
1,000,000.00
1,000,000.00
1,000,000.00
Interest
4,318,113.02
4,066,033.63
3,784,965.10
3,471,573.70
3,122,142.29
Total expenses
47,449,962.87
49,302,673.48
51,254,274.46
53,310,090.03
55,475,720.34
EBT
5,642,485.93
13,412,781.66
21,913,756.54
23,516,342.52
25,192,033.84
Income Tax (30%)
Net Income
5,642,485.93
13,412,781.66
21,913,756.54
23,516,342.52
25,192,033.84
Withdrawal (20%)
846,372.89
2,011,917.25
3,287,063.48
3,527,451.38
3,778,805.08
4,796,113.04
11,400,864.41
18,626,693.06
19,988,891.14
21,413,228.76
Insurance
Retained earning
D
JENFOK TRADING PLC GARMENT FACTORY
Gross Sales
Total Sales
COGS
Gross profit
Expenses
Utility expense
Salary & benefit
Admin. Cost
Overhead cost
Maintenance & repair
Depreciation
Insurance
Marketing
Interest
Total expenses
EBT
Income Tax (30%)
Net Income
Withdrawal (20%)
Retained earning
Total profit
Average
E
Year 6
497,410,975.76
412,709,833.88
84,701,141.89
7,292,389.28
39,615,524.44
1,276,281.56
1,276,281.56
1,042,753.92
3,198,007.85
323,288.09
1,000,000.00
2,732,526.27
57,757,052.97
26,944,088.92
8,083,226.68
18,860,862.24
2,829,129.34
16,031,732.91
2020
5B: Projected Income statement
Year 7
Year 8
522,281,524.55
548,395,600.78
433,345,325.57
455,012,591.85
88,936,198.98
93,383,008.93
8,021,628.21
41,596,300.67
1,340,095.64
1,340,095.64
1,042,753.92
3,198,007.85
323,288.09
1,000,000.00
2,298,104.40
60,160,274.41
28,775,924.57
8,632,777.37
20,143,147.20
3,021,472.08
17,121,675.12
197,401,463.36
19,740,146.34
8,823,791.03
43,676,115.70
1,407,100.42
1,407,100.42
1,042,753.92
3,198,007.85
323,288.09
1,000,000.00
1,813,724.02
62,691,881.44
30,691,127.49
9,207,338.25
21,483,789.24
3,222,568.39
18,261,220.86
Year 9
575,815,380.82
477,763,221.44
98,052,159.38
Year 10
604,606,149.86
501,651,382.51
102,954,767.35
9,706,170.13
45,859,921.48
1,477,455.44
1,477,455.44
1,042,753.92
3,198,007.85
323,288.09
1,000,000.00
1,273,639.89
65,358,692.25
32,693,467.13
9,808,040.14
22,885,426.99
3,432,814.05
19,452,612.94
10,676,787.14
48,152,917.56
1,551,328.22
1,551,328.22
1,042,753.92
3,198,007.85
323,288.09
1,000,000.00
671,446.09
68,167,857.08
34,786,910.27
10,436,073.08
24,350,837.19
3,652,625.58
20,698,211.61
JENFOK TRADING PLC GARMENT FACTORY
2020
6A: Projected Balance Sheet
Description
ASSET
Current Asset
Cash
Accounts Receivable
Finished goods inventory
Total current asset
Fixed assets
Land
Building and infrastructure
vehicles
Machinery and equipment
Furniture and equipment
Total fixed asset
Total asset
Liabilities & owners’ equity
Long term liabilities
Lease payable
Long term debt
Total long term liabilities
Owners’ equity
Paid up capital
Retained earning
Total capital
Total capital and liabilities
F
Year 1
Year 2
Year 3
Year 4
Year 5
6,780,000.00
6,780,000.00
5,802,126.18
4,032,785.45
2,688,523.64
12,523,435.27
17,956,924.34
3,841,149.12
2,560,766.08
24,358,839.55
37,056,482.63
3,484,389.71
2,322,926.47
42,863,798.81
57,204,847.59
3,022,315.94
2,014,877.30
62,242,040.83
1,800,000.00
22,250,000.00
1,500,000.00
18,854,078.45
501,000.00
44,905,078.45
51,685,078.45
1,800,000.00
21,137,500.00
1,363,636.36
16,968,670.61
455,454.55
41,725,261.51
54,248,696.78
1,800,000.00
20,080,625.00
1,239,669.42
15,271,803.54
414,049.59
38,806,147.55
63,164,987.10
1,800,000.00
19,076,593.75
1,126,972.20
13,744,623.19
414,049.59
36,162,238.73
79,026,037.54
1,800,000.00
18,122,764.06
1,024,520.18
12,370,160.87
376,408.72
33,693,853.83
95,935,894.66
1,620,000.00
37,548,808.84
39,168,808.84
1,579,500.00
35,356,814.13
36,936,314.13
1,539,000.00
32,912,740.03
34,451,740.03
1,498,500.00
30,187,597.41
31,686,097.41
1,458,000.00
27,149,063.39
28,607,063.39
12,516,269.61
12,516,269.61
4,796,113.04
17,312,382.65
54,248,696.78
12,516,269.61
16,196,977.45
28,713,247.07
63,164,987.10
12,516,269.61
34,823,670.51
47,339,940.13
79,026,037.54
12,516,269.61
54,812,561.66
67,328,831.27
95,935,894.66
12,516,269.61
51,685,078.45
JENFOK TRADING PLC GARMENT FACTORY
Description
ASSET
Current Asset
Cash
Accounts Receivable
Finished goods inventory
Total current asset
Fixed assets
Land
Building and infrastructure
vehicles
Machinery and equipment
Furniture and equipment
Total fixed asset
Total asset
Liabilities and equity
Accounts payable
Total current liabilities
Lease payable
Long term debt
Total long term liabilities
Owners’ Equity
Paid up capital
Retained earning
Total capital
Total capital and liabilities
G
Year 6
2020
6B: Projected Balance Sheet
Year 7
Year 8
Year 9
Year 10
78,428,118.76
2,420,986.73
1,613,991.15
82,463,096.65
93,880,278.06
1,733,703.52
1,155,802.35
96,769,783.93
109,987,957.70
928,646.70
619,097.80
111,535,702.20
126,750,802.69
53,403.54
35,602.36
126,839,808.59
144,164,955.65
1,800,000.00
17,216,625.86
931,381.98
11,133,144.78
376,408.72
31,457,561.34
113,920,657.99
1,800,000.00
16,355,794.57
846,710.90
10,019,830.31
342,189.74
29,364,525.51
126,134,309.44
1,800,000.00
15,538,004.84
769,737.18
9,017,847.27
342,189.74
27,467,779.03
139,003,481.23
1,800,000.00
14,761,104.60
699,761.07
8,116,062.55
311,081.58
25,688,009.80
152,527,818.38
1,800,000.00
14,023,049.37
636,146.43
7,304,456.29
311,081.58
24,074,733.67
168,239,689.32
1,336,500.00
15,771,513.18
17,108,013.18
1,296,000.00
11,075,129.47
12,371,129.47
1,536,225.82
1,536,225.82
1,255,500.00
5,838,661.64
7,094,161.64
12,516,269.61
12,516,269.61
92,257,523.32
109,379,198.45
104,773,792.94
121,895,468.06
126,134,309.44
139,003,481.23
7A: Projected cash flow statement
12,516,269.61
127,640,419.30
140,156,688.91
152,527,818.38
12,516,269.61
147,093,032.24
159,609,301.86
168,239,689.32
1,417,500.00
23,761,097.96
25,178,597.96
12,516,269.61
76,225,790.42
88,742,060.03
113,920,657.99
1,377,000.00
19,983,516.50
21,360,516.50
144,164,955.65
JENFOK TRADING PLC GARMENT FACTORY
Description
year 0
2020
Year 1
Year 2
Year 3
Year 4
Year 5
Sales revenue
311,787,612.00
368,299,116.68
429,682,302.79
451,166,417.93
473,724,738.82
Total cash inflow
311,787,612.00
368,299,116.68
429,682,302.79
451,166,417.93
473,724,738.82
COGS
258,695,163.20
305,583,661.53
356,514,271.79
374,339,985.37
393,056,984.64
Total operating costs
44,251,955.03
46,104,665.64
48,056,266.61
50,112,082.19
52,277,712.50
-
-
-
-
-
2,191,994.71
2,444,074.10
2,725,142.62
3,038,534.02
3,387,965.43
846,372.89
2,011,917.25
3,287,063.48
3,527,451.38
3,778,805.08
305,985,485.82
356,144,318.51
410,582,744.50
431,018,052.96
452,501,467.65
5,802,126.18
12,154,798.16
19,099,558.29
20,148,364.97
21,223,271.17
5,802,126.18
17,956,924.34
37,056,482.63
57,204,847.59
78,428,118.76
Inflow
Owners contribution
12,516,269.61
Loan
37,548,808.84
Cash out flow
Income tax
Loan repayment
Withdrawal
Total Cash outflow
Investment
50,065,078.45
Net inflow
(50,065,078.45)
Cumulative cash
H
JENFOK TRADING PLC GARMENT FACTORY
2020
7B: Projected cash flow statement
Description
Year 6
Year 7
Year 8
Year 9
Year 10
sales revenue
497,410,975.76
522,281,524.55
548,395,600.78
575,815,380.82
604,606,149.86
Total cash inflow
497,410,975.76
522,281,524.55
548,395,600.78
575,815,380.82
604,606,149.86
COGS
412,709,833.88
433,345,325.57
455,012,591.85
477,763,221.44
501,651,382.51
Total operating costs
54,559,045.12
56,962,266.56
59,493,873.60
62,160,684.40
64,969,849.23
Income tax
8,083,226.68
8,632,777.37
9,207,338.25
9,808,040.14
10,436,073.08
Loan Repayment
3,777,581.46
4,212,003.33
4,696,383.71
5,236,467.83
5,167,215.55
Withdrawal
2,829,129.34
3,021,472.08
3,222,568.39
3,432,814.05
3,652,625.58
481,958,816.47
506,173,844.91
531,632,755.79
558,401,227.87
585,877,145.95
Net inflow
15,452,159.29
16,107,679.64
16,762,844.99
17,414,152.95
18,729,003.91
cumulative cash balance
93,880,278.06
109,987,957.70
126,750,802.69
144,164,955.65
162,893,959.55
Inflow
Cash out flow
Total Cash outflow
Investment
I
2020
JENFOK TRADING PLC GARMENT FACTORY
8A Net present value of income (Discounting at 12%)
Description
Year 1
Year 2
Year 3
Year 4
Year 5
5,802,126.18
12,154,798.16
19,099,558.29
20,148,364.97
21,223,271.17
1
0.89
0.8
0.71
0.64
PV of income
5,802,126.18
10,817,770.36
15,279,646.63
14,305,339.13
13,582,893.55
cumulative pv of income
5,802,126.18
16,619,896.54
31,899,543.17
46,204,882.30
59,787,775.85
CF
Discount factor
8B Net present value of income (Discounting at 12%))
Description
Year 6
Year 7
Year 8
Year 9
Year 10
15,452,159.29
16,107,679.64
16,762,844.99
17,414,152.95
18,729,003.91
0.57
0.51
0.45
0.4
0.36
PV of income
8,807,730.80
8,214,916.62
7,543,280.25
6,965,661.18
6,742,441.41
cumulative pv of income
68,595,506.64
76,810,423.26
84,353,703.51
91,319,364.69
98,061,806.10
CF
Discount factor
IRR = 23%
J