FEASIBILITY STUDY FOR THE
Urban Amusement and Recreation
Park
Name of Owner
Address:
Cell Phone:
Submitted to:
Feneta
Muhamed
Motta city Administration
+251 9 77 37 78 52
Hulet Eju Enessie Woreda Land Office
June 2022
Motta
Table of Contents
PROJECT INFORMATION ................................................ Ошибка! Закладка не определена.
Executive Summary ............................................................. Ошибка! Закладка не определена.
1. Introduction ................................................................................................................................. 6
1.1. General Background ............................................................................................................. 6
1.2. Project Rationale .................................................................................................................. 8
1.3. Objective of the project ...................................................................................................... 10
2.4. The significance of the project .................................. Ошибка! Закладка не определена.
2.5. Background of the Project Location .......................... Ошибка! Закладка не определена.
2.6. Proposed Project Location.................................................................................................. 16
2. Service Description and Application ......................................................................................... 16
3. Market Study and Service Capacity .......................................................................................... 17
3.1. Market Study ...................................................................................................................... 17
3.1.1. Past Supply and Present Demand ............................................................................... 17
3.1.2. Projected Demand .............................................. Ошибка! Закладка не определена.
3.1.3. Pricing................................................................ Ошибка! Закладка не определена.
3.1.4. Marketing promotion and strategy ..................... Ошибка! Закладка не определена.
3.1.5. Marketing and Sales Strategy ............................ Ошибка! Закладка не определена.
3.2. Plant capacity ..................................................................................................................... 21
3.3. Service delivery program ................................................................................................... 21
4. Materials and Consumables and Inputs ............................ Ошибка! Закладка не определена.
4.1. Materials and Consumables....................................... Ошибка! Закладка не определена.
5. Technology and Engineering ..................................................................................................... 22
5.1. Technology ......................................................................................................................... 22
5.2 Civil Engineering Cost ........................................................................................................ 23
5.2.1. Locations and Site ...................................................................................................... 24
5.2.2. Project implementation ............................................................................................... 24
6. Manpower and Training Requirement ....................................................................................... 25
6.1. Manpower Requirement ..................................................................................................... 25
6.2. Training Requirement ........................................................................................................ 27
7. Financial Analysis ..................................................................................................................... 27
7.1. Underlying Assumption ..................................................................................................... 27
7.2. Total Initial Investment Cost .............................................................................................. 28
7.3. Operation Cost ................................................................................................................... 29
7.4. Financial Evaluation ........................................................................................................... 30
PROJECT INFORMATION
Proposed Project: Establishment of new recreation center
Project Location: East Gojam Amhara Regional State, Motta town Hulet Eju
Enessie Woreda Ayen Berhan Keble Near to zendo weha River.
Project Type: Service Industry
Requested Area: The site is 5,000 karemeter square in area, located at Motta
town Ayen Berhan Keble.
Total investment cost: 15 Million
Our value:•
Loyalty and Reliability
•
Customer focus
•
Innovative culture
•
Cost effectiveness
•
Social responsibility
•
Care for the environment
•
Compliance with code of conduct
Facilities will be provided: Recreational centers are places where people get
entertainment and enjoyment. The facilities provided include various indoor and
outdoor games, swimming pools, cinema halls and facilities to stage theaters and
music shows.
Job opportunity: The project will create employment opportunities for 67 persons
Need and Desirability: The envisaged project deemed to add to the economic
development of the nation in general and zone and town in specific with following
ways:
A.
Source of Revenue
B.
Employment opportunity
C.
Sources of social service
D.
Income
E.
Source of Fund
F.
Hospitality–focus on the customers, promoting an exceptional guest
experience.
G.
Efficiency – offer a good service with the adequate resources.
H.
Superior Customer Service
Source Of Fund: 40 % equity & 60% loan
Implementation Period: two year
Social and Economic Benefit: Provide better Building service, employment
opportunities, generation of income and benefits for the local people.
Objective:
• To construct and provide excellent child play care in a kid-friendly atmosphere
while ensuring our customers, both parent and child, receive excellent service in
a playful,
• Establish recreation facilities and services to meet the needs of the Community.
• create both short and long term job opportunity for the local community and
develop the local skills base.
Executive Summary
This profile envisages the establishment of recreational center in Motta town
Amhara Regional State. Demand projection divulges that there is high Demand
for recreational centers in the region. Accordingly, the planned plant is set to
provide recreational services in zonal capitals. The proposed Recreation Centre
will meet the current and long-term needs of the community of Motta. The total
investment cost of the project including working capital is estimated at Birr 15
million and creates 67 job opportunity .The proposed infrastructure will support
the Government’s objective to provide conditions and services. The proposed
recreation facility will enhance the tourism experience in many ways and create
opportunities for residents and businesses in Motta town.
The financial result indicates that the project will generate profit beginning from
the first year of operation. Moreover, the project will break even at 29.6% of
capacity utilization and it wills payback fully the initial investment less working
capital in 3 years. The result further show that the calculated IRR of the project
is 25.7% and NPV discounted at 18% of Birr 351,871.79 .In addition to this, the
Proposed project possesses wide range of economic and social benefits such as
increasing the level of investment, tax revenue and employment creation.
Generally’ the project is technically feasible, financially and commercially viable
as well as socially and economically acceptable. Hence the project is worth
implementing. To this effect, the promoter the owner of the envisaged project,
planned to establishment of recreational center in Motta town and undertaken
this project study to check the market, technical and financial feasibility of this
project. The promoter is very ambitious and committed to realize the project.
Hence, they expects to get the necessary support from Motta investment and city
administration to make the project to be operational.
1. Introduction
1.1. General Background
Ethiopia is now well-known as among the five1/ fastest growing
economies of the world. According to IMF, the average growth of the
economy is about 10.7% for the last 11 consecutive years, up to
2013/14. The development is broad-based and in paradigm
transformation. It is apparent that the development policy and
strategy of the Government created an enabling environment for the
participation of all citizens, who reside both in and outside of the
country, and contributed for the achievement of the stated fruits of
development. At this juncture all the development actors in general
and the government in particular is determined to sustain the pace
of on-going growth and transformation of the economy and it is
explicitly indicated in the Second Five Year (2015/16-2019/20) of
Growth and Transformation Plan. The stated economic growth of
the country brought a wide range of positive social and economic
outcomes, which includes, among others, the expansion of all
rounded business and investments. The project has multifaceted
contributions for the socio-economic development of a nation. In
addition to the inclusive provision of best goods and quality
services, it is also beneficial in terms of job creation, revenue
generation for the government, an induced role in business and
investment expansion and facilitation, tourist attraction, etc. It is
in this view that the promoter of establishment of recreational
center in Motta town has to first implement a plan to bridge the
demand gap of the country in general and to the city of Motta in
particular. The current fast and dynamic economic growth of
Ethiopia especially in urban area necessitates equivalent growth of
building and construction sector. The sector should expand rapidly
to support the overall economic development sustainable.
Service delivery is the provision of comprehensive and coordinated
services to people in need. Human service delivery is complex in
contemporary Eastern societies, with high community expectations,
competing demands and often delivered under fiscal constraints.
Specializations can mean that individual service providers or
agencies develop the expertise to deliver a very specific service, yet
individuals, families and communities often experience multiple
needs and interrelated problems The Government of the Federal
Democratic Republic of Ethiopia, after closely examining youth
issues, gave attention to youth problems and established the
Ministry of Youth, Sports and Culture in October 2001. This
ministry has the duty and responsibility to follow up, direct and
coordinate youth affairs. The Ministry of Youth, Sport and culture
formulated a new National Youth Policy in 2004. Following
formulation
government
of
the National
Youth
Policy,
the
the Ethiopian
developed an Urban and Rural Youth Development
Package in 2006 and has started partnering with different local
governmental organizations, community based organizations and
international agencies
for program
implementation. The Urban
Youth Development Package is a comprehensive development
package that is designed to solve the socio- economic problems of
urban youth. In Ethiopia youth Perception towards youth center
service delivery have not as such received significant research
attention of concerned bodies. This has resulted in scarce literature,
low practice and intervention on the area of youth services delivery.
To this effect, the owner of the envisioned establishment of
recreational center in Motta town Amhara Regional State who
has been living for long time in this town, planned to establishment
of recreational center in Motta and undertaken this project study to
check the market, technical and financial feasibility of this project.
The promoter is very ambitious and committed to realize the project.
Hence, expects to get the necessary support from the city
administration to make the project to be operational.
To this effect, the promoters of establishment of recreational
center in Motta committed to developing in south Eest of Gojjam
Motta town. Besides, the government policies and incentives for the
private sector investment are very promising that initiate the
promoter to engage in establishment of recreational center in
Motta project.
1.2. Project Rationale
Man's struggle for self-realization assumes many forms and has
many parts. The road to individual integrity and dignity requires the
exercise of our rights and freedoms in responsible and constructive
ways. Important among these is the way each person chooses to
exercise the right to enjoy in-caressingly longer periods of respite
from work and other responsibilities. We are changing from a workcentered society to one in which people have a better opportunity to
balance their work with meaningful recreation experiences, these
leisure experiences should bring a greater measure of satisfaction
and fulfillment into our daily lives. As we balance our individual
lives in this manner, we contribute to the proper balance of society.
Whether individually or as part of a group such as the family, are
find much of the balancing experience through some form of
recreation activity. The nature and quality of the experience, which
we call recreation, determines in large measure the nature and
quality of our lives.
The values we experience and demonstrate in our leisure behavior
reflect the values we hold as individuals and as a community of
human beings. Recreation is first and foremost a personal matter.
It is something that a person does voluntarily during his leisure
because he believes that it will be satisfying to him. Enjoyment of
the activity is basic to the recreation experience, but the values of
recreation which give it depth and fullness of meaning include the
maintenance and improvement of physical and psychic well-being,
the growth and development of personality, and the easing of social
adjustments. Recreation is one of the keys to abundant living.
Because of its importance in the building of our social fabric,
recreation is more than a personal responsibility. As ingenious and
resourceful as man may be, his attempts to provide for himself
recreationally, meets an impasse unless he pools his resources with
those of his fellow man to enable provision of certain kinds of
recreation opportunity.
The very things that have given us increased freedom and leisure
have also worked in many ways to our disadvantage. The rapid
increase in population and the new leisure have created vast new
economic markets and helped to promote financial affluence.
During the past quarter century while we have been depleting our
recreation resource potential, the recreation needs and demands of
the population have increased many times over. Scientific and
technological advances have prolonged life, produced labor-saving
devices, increased production per man-hour of work, and reduced
the work day and the work week. Longer life combined with
compulsory retirement practices has produced a new leisure group
of "senior citizens." The increase in leisure provides for small
allotments of time on weekdays, larger allotments on weekends and
occasional holidays, and substantial blocks of time for vacations. If
this time is to be enjoyed and used in a manner that will contribute
to
the
positive
growth
of
our
culture,
opportunities must be conveniently accessible.
suitable
recreation
1.3. Objective of the project
The major goal of this project is to contribute towards the growth of
the trade sector in Motta town. Its specific objectives include the
following:
 To provide excellent child play care in a kid-friendly
atmosphere while ensuring our customers, both parent and
child, receive excellent service in a playful, educational, and safe
environment.
 Establish recreation facilities to meet the needs of the
population;
 Provide basic recreation services to the Community.
 The proposed infrastructure upgrade will create both short
and long term job opportunity for the local community and
develop the local skills base.
 To create a service-based company this exceeds customers’
expectations.
 Become an established community destination by end of first
year.
 Educate the community on what the company has to offer.
 To create employment opportunities for the population in the
town and Contribute towards the beautification of the town
through the construction of modern building infrastructure and
facilities.
2.4. The significance of the project
The proposed development will have numerous positive impacts to the area
residents and to the general area. Some of the anticipated benefits include:A.
Source of Revenue
As public policy of any nation, the government collects different forms of taxes
from different business organizations and individuals. Among the different forms
of taxes, business income taxes, payroll income tax and VAT are collected from
undertaking business activities. Therefore, the building will serve as sources of
revenue for the town as well as for the region.
B.
Employment opportunity
One of the problems that our country faced is unemployment. Therefore, the
current objective of the government is working on tackling the problem of
unemployment and fostering the development process either through creating
self-employment or employment in other organization. This will be a significant
impact since unemployment is currently quite high in this area hence, this
project will hire 85 individuals
C.
Sources of social service
In addition to serving as a source of employment and income for the region, the
project renders social services for different group of people.
Hence, it is also providing the following services;
•
Serve as a source of mental satisfaction for the different users,
•
Since, the center encompasses different recreational areas; it will divert
the attention of the users from different evil deeds.
•
It deemed to minimize the demand of services in the area.
2.5. Background of the Project Location
As aforementioned on the introductory part the envisioned project is intended to
be located in East Gojjam zone Motta town.
Mota is a town in North West Ethiopia. Located in the East Gojjam Zone of the
Amhara Region, and on the secondary road that links Dejen with Bahir Dar
overlooking the Abay River, this town has a latitude and longitude of 11°5′N
37°52′E with an elevation of 2,487 meters above sea level.
One local landmark is Sebara Deldiy or 'the Broken Bridge', a stone footbridge
built during the reign of Emperor Fasilides. Another landmark is the church of
Weyzazirt Kidhane Mihret, which was constructed by Woizero Seble Wengel, the
daughter of Emperor Fasilides. She and her husband are buried there.
Due to the presence of Sebara Deldey, one of only two bridges across the Abay
River until the late 19th century, Mota became a major commercial center, which
was described by at least one group of European travellers as 'the most
considerable market' in Gojjam; it attracted merchants from as far away as
Begemder, Gondar and Tigray. To reinstate the commerce prior to the bridge
being broken, Bridges to Prosperity is building a 100-meter suspended
pedestrian bridge to provide safe access Those crossing the river are able to
obtain cotton cloth, cattle, and horses.
Likewise, Mota was the seat of an important royal fiefdom during the Gondarine
period, and a notable place for asylum in the early 19th century.
The artist Aleqa Elyas Hailu, believed to be Ethiopia's first foreign-trained artist,
was born in Mota around 1861. He worked mostly in Shewa where he decorated
manuscripts and many churches, although he also decorated one in his native
town. His son Aleqa Gebre Ezgziabher Elyas was a man of literature, writing the
Royal Chronicle of Lij Iyasu and the Empress Zewditu.
During the 1930s, its market day was on Thursday. During the East African
Campaign, units of Gideon Force managed to bluff the Italian garrison into
surrendering 24 April 1941. After the war, Mota was the administrative center
of the Mota awraja or district, which was one of the hotspots of the Gojjam
peasant revolt in 1968.
The geographical coordinates of the Motta city: latitude: 11.078501, longitude:
37.877756. The geographical coordinates of the Motta city in the Universal
Transverse Mercator (UTM) coordinates: X (easting): 377427.010931, Y
(northing): 1224890.088364, zone: 37, northern hemisphere.
Location
Motta town is located in Amhara National Regional State, East Gojam Zone,
Motta Town at a distance of 371 km from Addis Ababa and 120 km from Bahir
dar, seat of the regional government. Its astronomical location is 11º 04’ East
Latitude and 37º 52’ North Longitude.
Foundation
Motta town was founded in 1754.
Population
According to the projection of Central Statistical Authority, the population of the
town in 2013 was 33,500. Out of this 17060 (51%) were males and 16440 (49%)
females.
The coverage of basic infrastructure facilities are increasing dramatically in
recent years following free market policy of the Federal Democratic Republic of
Ethiopia’s (FDRE) in general and Regional Government of Amhara in particular.
As has been the case in the past, Government continues its commitment to give
an opportunity for its national to invest on various feasible projects, with positive
present value when compared to that of without project case. The coverage of
basic infrastructure facilities are increasing dramatically in recent years
following free market policy of the Federal Democratic Republic of Ethiopia’s
(FDRE) in general and Regional Government of Amhara in particular. With this
understanding and inspired by current fast development of the city, the
applicant has developed strong desire of investing in the town to construct and
operates recreation center.
Ecologically
Motta city lies in wet land Ecosystem .It is bounded by wet evergreen mountain
forest land ecosystem. Because of the climatic stability the green coverage of
the city, is very significant and estimated to be about 35% including farmlands
& vacant places. In the city green areas are found long streets, in urban parks,
in public & private gardens, along stream banks and flood plains, in stream
and downstream, ridges and hills and left over spaces.
In spite of the rapid urban population growth and associated growing demand
for greenery during the past 17 years, only few planned green structures, i.e.
one municipal park (Motta), Aviation recreation area,
Area:
Based on the 2007 Census conducted by the Central Statistical Agency of
Ethiopia (CSA), this Zone has a total population of 2,153,937, an increase of
26.68% over the 1994 census, of whom 1,066,716 are men and 1,087,221
women; with an area of 14,004.47 square kilometers, East Gojjam has a
population density of 153.80. While 213,568 or 9.92% are urban inhabitants, a
further 8 individuals are pastoralists. A total of 506,520 households were
counted in this Zone, which results in an average of 4.25 persons to a
household, and 492,486 housing units. The largest ethnic group reported in
East Gojjam was the Amhara (99.82%); all other ethnic groups made up 0.12%
of the population. Amharic is spoken as a first language by 99.81%; the
remaining 0.19% spoke all other primary languages reported. 97.42% of the
population said they practiced Ethiopian Orthodox Christianity, and 2.49%
were Muslim.[3]
The 1994 national census reported a total population for this Zone of
1,700,331 in 381,993 households, of whom 845,980 were men and 854,351
women; 145,295 or 8.55% of its population were urban dwellers at the time.
The largest ethnic group reported in East Gojjam was the Amhara (99.83%); all
other ethnic groups made up 0.17% of the population. Amharic was spoken as
a first language by 99.88%; the remaining 0.12% spoke all other primary
languages reported. 96.71% practiced Ethiopian Orthodox Christianity, and
3.18% of the population said they were Muslim.[4]
According to a May 24, 2004 World Bank memorandum, 8% of the inhabitants
of East Gojjam have access to electricity, this zone has a road density of 24.2
kilometers per 1000 square kilometers (compared to the national average of 30
kilometers),[5] the average rural household has 1.1 hectares of land (compared
to the national average of 1.01 hectare of land and an average of 0.75 for the
Amhara Region)[6] and the equivalent of 0.6 heads of livestock. 11.4% of the
population is in non-farm related jobs, compared to the national average of
25% and a Regional average of 21%. 66% of all eligible children are enrolled in
primary school, and 13% in secondary schools. 61% of the zone is exposed to
malaria, and 30% to Tsetse fly. The memorandum gave this zone a drought risk
rating of 447.
2.6. Proposed Project Location
For the proposed development to be feasible, accessibility plays a major role
Before choosing project we conducted feasibility studies and market analysis
and identify the location that serve the market and benefit greatly and decided
to settle at Motta town,Zendo wuha Ayene Birehan kebele.The proposed
development site is located within the 2 Ejju enese woreda administrative city
Ayene Birehan kebele within the urban industrial area of Motta town.The
proposed project site is approximately 5,000m2.
2. Service Description and Application
Recreational centers are places where people get entertainment and enjoyment.
The facilities provided include various indoor and outdoor games, swimming
pools, cinema halls and facilities to stage theaters and music shows. At the same
time these facilities also serve for conducting various ceremonies such as
wedding, and other assemblies. The dedicated sports facility is proposed to be
provided by way of a new Community Recreation Centre (including swimming
pool, multi-use recreation hall, change rooms and ancillary rooms and service
areas). It is to be integrated with the adjacent existing community sports oval.
The proposed facilities are intended to balance the commercial and social
benefits for all community. to create a welcoming space to help cultivate a strong
sense of community, promote health and wellness in our community and
support for the needs of local residents. There will also be indirect benefits from
complimentary development which will occur adjacent to the facility, promoting
greater
business
investment
interest,
regional
awareness
and
tourism
opportunities. The proposed recreation facility will enhance the tourism
experience in many ways and create opportunities for residents and businesses
in Motta.
3. Market Study and Service Capacity
3.1. Market Study
3.1.1. Past Supply and Present Demand
At present the recreational facilities available in the various are very inadequate
in terms of the type of service and standards. As a matter of fact, with the
decentralization of government structures zonal capitals have become centers of
important administrative functions as well as commerce, industry, education,
etc. Accordingly, the population of the urban centers which are designated to be
capitals of respective zones has increased substantially. At the same time in
these and other urban centers of the region the population number is increasing
substantially. Nonetheless, there has not been a corresponding increase in
recreational facilities. For example, no indoor and outdoor games, no swimming
pools, no musical shows, and no theaters in most of the places. For example if
we assume that 10% of the population do pay visit to well established
recreational centers once in a week, then the number of individuals in the target
group would amount to 20,956 every month. This can be fairly assumed as the
current level of demand and at the same time suggests the existence of ample
demand. Therefore, if well-equipped recreation facilities are established in zonal
capitals, they will definitely have enough customers.
3.1.2. Projected Demand
The future demand for recreational services in the zonal capital will increases
mainly due to population increase. Moreover, the growth of urbanization will
attract additional traders, social workers and families into the towns.
Consequently, the number of individuals that do visit the envisaged type of
recreational services will also increase. In this connection if we assume that the
number of population in general increases by 3%, the target population will
increases substantially as shown in table 1 below.
Table 1: Projected Demand for Recreational Center (per week)
Year
Bahir Dar
Gondor
Dessie
Debre
Markos
Debre
Birhan
2007/08
20,956
25,458
19,880
10,724
8,424
2008/09
21,585
26,222
20,476
11,046
8,677
2009/10
22,232
27,008
21,091
11,377
8,937
2010/11
22,899
27,819
21,723
11,718
9,205
2011/12
23,586
28,653
22,375
12,070
9,481
2012/13
24,294
29,513
23,046
12,432
9,766
2013/14
25,023
30,398
23,738
12,805
10,059
2014/15
25,773
31,310
24,450
13,189
10,360
2015/16
26,546
32,249
25,183
13,585
10,671
2016/17
27,343
33,217
25,939
13,992
10,991
2017/18
28,163
34,214
26,717
14,412
11,321
2018/19
29,008
35,240
27,519
14,844
11,660
2019/20
29,878
36,297
28,344
15,289
12,010
According to the forecasted demand presented in table 1 above, the future is very
promising provided that quality and customer centered services are rendered by
the recreational centers.
3.1.3. Pricing
The envisaged plant as a startup will focus on providing entertainment activities
such as video games, snooker, watching of video films and refreshment drinks.
Moreover, the center shall rent its hall and compound for weeding and meeting
purposes. Based on the market research result and the capacity of the envisaged
plant, the following selling price is set.
•
Birr 3 for one session video game
•
Birr 5 per snooker played
•
Birr 2,000 for renting the hall for weeding ceremony
•
Birr 600 per day for renting the hall for assembly purpose
•
Birr 5 per person for watching video film and;
•
Birr 15 on average per person for soft drinks, hot drinks and food.
3.1.4. Marketing promotion and strategy
Nowadays the sphere of professional commercial activity is being developed
rapidly in Ethiopia. There are several operating modern hotel centers in
large cities, the large amount of projects are in development and are going to
entry into the market in the coming years. According to the plan mentioned
above for developing of the consumer market by means of complete meeting
clients’ requirements, providing them with safe and high quality goods and
services in civilized way, and also for making-up principally new ways of market
wholesale trade providing goods that are high-performance and high-demand
on inner and outer market. In order to penetrate and gain considerable market
share, one of the major marketing strategies for the project is consistently
rendering quality service to its tenants. Due emphasis must be placed on
improving quality of service and facilities. The major marketing strategies to
promote the project and gain considerable market share include:
• Advertising through different means focusing on the existing service and
facilities Promote in association to the key location and nearby business working
on sustained promotional work.
• Organization with a capacity of making decision.
• improving with changing situations.
3.1.5. Marketing and Sales Strategy
The marketing strategy for this new hotel is going to be driven basically by
making available standard excellent customer service and provision of
complimentary services. We will work hard to build a loyal customer base;
customers that will always patronize us over and over again and as well help us
use word of mouth publicity to get their friends and acquaintance to patronize
us. Our marketing strategy is a simple one: satisfied customers are our best
marketing tool. When a customer leaves our business, they know that they got
the best price and service money can buy, our name and service will stand on
its own via our cheaper process and very competitive prices.
In view of that, we are going to adopt the following strategies to ensure that we
do not only attract customers but ensure that they become loyal customer. Part
of the marketing strategies that we will adopt is; introduce our hotel by sending
introductory
• Open our business with a party so as to capture the attention of residence that
is our first targets
• Advertise our our hotel on national dailies, local TV stations and local radio
station.
• Promote online via our official website and all available social
media platforms and Continuous improving the performance of our
brands
• Hire the services of experts to make our brands the first choice •
delivering consistent customer experiences to all our clients;
making our first impression count positively.
3.2. Plant capacity
Thus, given the expected demand for the service, and the planned
technology, the envisaged plant is set to attract the following
number of visitors.
•
50 individuals per day for video game
•
50 visitors per day to play snooker
•
120 individuals per day to watch video film in two programs
•
Accommodate 50 wedding ceremonies in a year
•
Accommodate 25 meeting programs and workshops in a year
that take on average 3 days per program.
•
Cater food and beverage for 100 individuals per day.
3.3. Service delivery program
The program is scheduled based on the consideration that the envisaged plant
will work 300 days from 8 A.M till 8 P.M where the remaining days will be for
maintenance. During the first year of operation the plant will operate at 70
percent capacity and then it grows to 85 percent in the 2ndyear. The capacity
will grow to 100 percent starting from the 3rd year. This consideration is
developed based on the assumption that market and logistics barriers would be
eliminated gradually within the first two years of operation.
4. Materials and Consumables and Inputs
4.1. Materials and Consumables
The raw materials used in providing the cervices stated earlier are mainly
beverages and various ingredients used to prepare food.
4.2 Annual Requirement and Cost of Raw Materials and Utilities
The annual raw material and utility requirement and the associated cost for the
envisaged plant is listed in table 2 here under.
Table 2: Material and Utility Requirement
Material and Input
QUANTITY
Total Cost
L.C
Various ingredients to prepare food
Lump sum
1,988.85
300 kg
45,000
Milk
3,000 lit
60,000
Tea
400 kg
14,000
15,000 bottle
150,000
Roasted coffee
Soft Drinks
TOTAL MATERIAL COST
F.C
2,257.85
Utility
Electricity
25,000 kwh
13,750
Kerosine
5,000 lit
20,000
Water
3,500 m2
9,275
Total utility cost
43,025
2,300.87
According to the above table the annual cost of material and utility at full
capacity of operation is estimated to be Birr 2 million
5. Technology and Engineering
5.1. Technology
The machineries and equipment required for providing the various
services stated earlier is detailed in table 3 below.
Table 3: Machinery and Equipment
Machinery and Equipment
QUANTITY
Video Game Equipment’s
5
Refrigerator
2
Coffee Machine
3
Snooker Table
2
Various Tools
As required
The, total cost of machinery and equipment including is estimated to be about
Birr 5 million.
5.2 Civil Engineering Cost
The total site area for the envisaged plant is estimated to be 5,000
m2 is allocated to the building for the various game playing area,
hall, café and related activities. The remaining space is left open
compound. The following outlines the functional components of the
proposed multiple use.
Recreation Centre:
Lobby/Foyer; Reception, Staff administration offices; Kitchen / Kiosk; Public
toilets/change rooms; staff toilets; Creche/Child minding facilities, a multipurpose sports hall to cater for net ball, volley ball, basketball, equipment stores,
hall viewing and seating, multi-purpose activity room, Gymnasium, First aid,
25m pool, External paving / Hardstand for pedestrians, Car parking and drop
off facilities, General power and site lighting, Sewage collection from toilet
facilities, Stormwater and runoff collection, treatment and disposal and screen
fencing.
Gymnasium
The envisaged gymnasium will composed of one machine room (200sq.mt), one
Aerobics studio (100 sq. mt) Laundry Center
The laundry center provides in-house cleaning service to bed room, and
sauna/stem bathrooms by providing clean towels, linens, covers and uniform of
the employees with the required time and quantity.
The main processes of
laundry center are sewing (if any), washing, and squeezing drying, folding and
pressing. The laundry center will have a daily capacity of providing 200 clean
sets of towels, 300 sets of linen and cover 100 sets of uniforms and other
miscellaneous items.
Children’s Play Ground
The facilities included in the children’s playground are swings, sliding stands,
tunnels, merry go round, sand filled pits, and coin operated toy vehicles and
different kinds of arcade video games. The whole area of the playground shall be
free from any obstruction that could result in accident and the recreational tools
are installed in such a way that they will not cause any accident. The arcade
coin operated video game room having an area of about 100 m2will be
constructed from prefabricated material with ventilation and lighting, and it will
be carpeted. It should also be free from any visible electrical connections and
free from an accident or hazard. The provision of such service doesn't have any
adverse impact on environment.
5.2.1. Locations and Site
The appropriate locations for the envisaged project in view of the
availability of infrastructure as well as market for the output are
Motta city Ayen Berhan Kebele.
5.2.2. Project implementation
The project’s implementation is expected to take 24 months. The
major activities include Bank loan processing construction of the
building, cleaning the area around the building, Procurement of
equipment and start rendering services. The time schedule for the
above matured major activities is presented below:
Table: project Implementation schedule
Activity
June July Aug
Sept Oct
Nov Dec
Marc April
Jan Feb
May
2022/2023
Land acquisition
Done
Document Preparation

Construction of Factory
Buildings
Debt Financing
Import of Machinery





Purchase of Vehicles &
Equip
Recruitment, Installation
and Commissioning










Operation
Grace Period
6. Manpower and Training Requirement
6.1. Manpower Requirement
The envisaged hotel requires 85 labor forces. The list of manpower
and the annual cost of labor is indicated in Table
Table 6.1 Manpower Requirement and Annual Labour Cost
Human resource plan


SN
Position
No
Qualification
Monthly in Annual In
salary
salary
Birr
Birr
3000
36,000
1
General manager
1
BA in management
2
Building admin
1
BA in Acct/Mgt
2500
30,000
3
Secretary
1
10+2 in secretariat science
900
10,800
4
HRM Officer
1
10+2 in HRM/Management
950
11,400
5
1
Diploma in building maintenance
1500
18,000
6
Technical and maintenance
manager
Finance head
1
BA in Accounting
2500
30,000
7
IT Technician
1
Diploma in computer science/IT
1150
13,800
8
Marketer
1
Diploma in marketing
1150
13,800
9
Accountant
1
Diploma in accounting
1150
13,800
10
Guards/Security
8
Basic
500
48,000
11
General Service head
1
Diploma in Management
1500
18,000
12
Purchaser
2
Diploma in purchasing &Sup Mgt
1150
27,600
13
Electrician
1
10+2 in general electricity
1000
12,000
14
Plumber
2
10+2 in general mechanic
1000
24,000
15
Casher
4
10+1 in bookkeeping
850
40,800
16 Cleaner
10 Unskilled
450
54,000
17 Maintenance officer
2
10+2 in General mechanic
1000
24,000
18 Driver
3
10 completed
850
30,600
19 Guard
15
800
144,000
20 waitress
10
1000
120,000
Total
67
975,67
Benefit (20%)
243,93
Grand Total
1,219,580
6.2. Training Requirement
All the staffs, in the catering and recreation sections, including physiotherapists,
and supervisors should be given at least two weeks on the-job-training by the
equipment supplier’s
expert
during
commissioning.
The
management
members should also be given a two weeks training in local training centers. The
total cost of training is estimated at Birr 200,000.
7. Financial Analysis
The financial analysis of the international standard hotel project is
based on the data presented in the previous chapters and the
following assumptions:-
7.1. Underlying Assumption
The financial analysis of milk powder producing plant is based on
the data provided in the preceding chapters and the following
assumptions.
Construction and Finance
Depreciation
Working Capital (Minimum Days of Coverage)
7.2. Total Initial Investment Cost
The total investment cost of the project including working capital is
estimated at Birr 15 million. The major breakdown of the total initial
investment cost is shown in Table 7.1.
Table 7.1 Initial Investment Cost
Items
L.C
F.C
Total
Land lease
1,000,000
Building and civil work
6,000,000
Office equipment
Vehicles
plant machinery & equipment
Total fixed investment cost
500,000
700,000
5,000,000
13,200,000
Pre-production capital expenditure
200,000
Total initial investment
13,400,000
Working capital at full capacity
1,600,000
Total
15,000,000
N.B Pre-production expenditure includes interest during construction, training
(Birr 200 thousand) and Birr 25000 costs of registration, licensing and formation
of the company including legal fees, commissioning expenses, etc.
7.3. Operation Cost
The annual production cost at full operation capacity is estimated
at Birr 12.06 million (see Table 7.2). The major components of the
production cost depreciation, financial cost and material and input
which account for 26.82%, 22.63% and 18.72%, respectively. The
remaining 31.82% is the share of direct labour, utility, repair and
maintenance, labour over head and other administration cost.
Table 7.2 Annual Production Cost at Full Capacity ('000 Birr)
Items
Cost
%
Material and Inputs
2,257.85
18.72
Utilities
1,544.44
12.81
Maintenance and repair
500.07
4.15
Labour direct
975.67
7.14
Labour overheads
243.93
2.97
Administration cost
573.92
4.76
-
-
6,095.86
50.54
Land Lease
TOTAL OPERATING COST
Deprcciation
3,235.15
26.82
Cost of finance
2,729.82
22.63
12,060.83
100
TOTAL PRODUCTION COST
7.4. Financial Evaluation
I. Profitability
According to the projected income statement attached in the annex
part (see annex 4) the project will generate profit beginning from the
first year of operation. Ratios such as the percentage of net profit to
total sales, return on equity and return on total investment are 10%,
14% and 22% in the first year and are gradually rising.
Furthermore,
the
income
statement
and
other
profitability
indicators show that the project is viable.
II.
Breakeven Analysis
The breakeven point of the project is estimated by using income
statement projection. Accordingly, the project will break even at
29.6% of capacity utilization.
III.
Payback Period
Investment cost and income statement projection are used in
estimating the project payback period. The projects will payback
fully the initial investment less working capital in 3 years.
IV.
Simple Rate of Return
For the envisaged plant the simple rate of return equals to 25.1%
V.
Internal Rate of Return and Net Present Value
Based on cash flow statement described in the annex part, the
calculated
IRR of the project is 25.7% and the net present value at 18 %
discount
VI. Sensitivity Analysis
The envisaged plant is profitable even with considerable cost
increment. That is the plant maintains to be profitable starting from
the first year when 10 % cost increment takes place in the sector.
This result is accompanied with payback period of 3 years and 5
months.
9 Economic and Social Benefit and Justification
The envisaged project possesses wide range of benefits that
promotes the socio-economic goals and objectives stated in the
strategic plan of the motta town Amhara regional state. It also plays
a role in diversifying the economic activity of the region. These other
benefits are listed as follows
A. Profit Generation
The project is found to be financially viable and earns a profit of Birr
2.48 million Within the project life.
B. Tax Revenue
In the project life under consideration, the region will collect about Birr about
1million from corporate tax payment alone (i.e. excluding income tax and). Such
result create additional fund for the regional government that will be used in
expanding social and other basic services in the region
C, Employment and Income Generation
The proposed project is expected to create employment opportunity to several
citizens of the region. That is, it will provide permanent employment to 67
professionals as well as support stuffs.
ANNEXES