2023

PLASTIC FACTORY PROJECT PROPOSAL

AMASILLA CONSULTING ARCHITECTS & ENGINEERS

Contents
I. EXCUTIVE SUMMARY......................................................................................6
A. DURATION OF THE PROJECT AND IMPLEMENTING AGENCY...........6
B. PRODUCT SALES............................................................................................6
C. FINANCIAL BUDGET OF THE INVESTMENT...........................................6
D. COMPANY AND INDUSTRY.........................................................................7
II. PROJECT DESCRIPTION....................................................................................7
A. OBJECTIVES OF PROJECT............................................................................8
B. PRODUCTS AND SERVICES.........................................................................8
C. FORMULATION OF PROJECT.......................................................................8
D. RISK ASSESSMENT AND ENVIRONMENTAL MANAGEMENT PLAN. 9
E. ENVIRONMENTAL MONITORING............................................................11
III. MARKET PLAN.............................................................................................11
A. MARKET RESEARCH METHOD AND IMPLEMENTATION..................12
B. PRODUCT FEATURES AND BENEFIT.......................................................12
C. CUSTOMERS..................................................................................................13
D. COMPETITION...............................................................................................13
E. NICHE.............................................................................................................13
F. MARKET STRATEGY...................................................................................14
G. PRICING..........................................................................................................14
H. SALES AND FORECAST..............................................................................15
IV. OPERATION PLAN........................................................................................15
A. RAW MATERIAL...........................................................................................15
V. TECHNOLOGY UTILIZATION & ENGINEERING........................................16
A. PRODUCTION PROCESS..............................................................................17
B. LOCATION.....................................................................................................17
C. MACHINERY AND EQUIPMENT................................................................18
D. LEGAL ENVIRONMENT..............................................................................18
E. PERSONAL.....................................................................................................19
F. MANAGEMENT AND ORGANIZATION STRUCTURES.........................19
G. PROFESSIONAL AND ADVISOR SUPPORT.............................................19
VI. ORGANIZATIONAL STRUCTURE AND CHART.....................................20
A. EFFECTIVE MANAGEMENT STYLE.........................................................20
 B. SOCIO ECONOMIC STUDY.........................................................................21
VII. FINANCIAL PLAN.........................................................................................21
A. PROPOSED RATE OF PRODUCTION.........................................................21
B. FINANCIAL BUDGET OF THE INVESTMENT.........................................22
 Total financial requirement = ETB 61,339,139.00......................................22
 Capital investment = ETB 32,967,000.00....................................................22
 Operating cost = ETB 28,372,139.00..........................................................22
C. MARKET OPPORTUNITY............................................................................23
D. BUDGET BREAKDOWN..............................................................................23
1. Summaries of the project construction costs (in ETB)................................23
2. Summaries of the Office Equipment Cost (in ETB)....................................24
E. PROJECT FINANCIAL STATEMENT.........................................................24
1. FIXED COSTS............................................................................................24
2. WORKING CAPITAL................................................................................25
3. OVERHEAD COST....................................................................................25
VIII. HUMAN RESOURCE AND ASSOCIATED EXPENSES............................26
A. STAFF REQUIREMENTS..............................................................................26
B. TRAINING REQUIREMENT.........................................................................27
IX. FORECASTED PRODUCTION.....................................................................27
A. PROJECTED PLASTIC ITEMS PRODUCTION IN G.C..............................28
1. PRODUCT 1................................................................................................29
2. PRODUCT 2................................................................................................30
3. PRODUCT 3................................................................................................31
4. PRODUCT 4................................................................................................32
5. PRODUCT 5................................................................................................33
I. PROJECT SCHEDULE.......................................................................................34
A. TABLE: ACTION PLAN................................................................................34
Table 1 Project construction costs...............................................................................23
Table 2 Office Equipment Cost...................................................................................24
Table 3 Working Capital..............................................................................................25
Table 4 Overhead Cost.................................................................................................25
Table 5 Staff Salary......................................................................................................26
Table 6 Projected items production.............................................................................28
Table 7 Product 1.........................................................................................................29
Table 8 Product 2.........................................................................................................30
Table 9 Projected Product 3.........................................................................................31
Table 10 Projected Product 4.......................................................................................32
Table 11 Projected Product 5.......................................................................................33
Table 12 Action Plan....................................................................................................34
PROJECT PROPOSAL YIMAJ’S PLASTIC FACTORY

I. EXCUTIVE SUMMARY

YIMAJ’S PLASTIC PRODUCTION COMPANY

The sources the fund are contributions of YIMAJ’S Plastic Production Company
owners and loan from bank. The total amount of money required for the project is
ETH Birr 61,339,139.00 of which 70% of this amount is from bank while the
remaining 30% is owners’ contributions
YIMAJ’S Plastic Production Company a new startup company that produces plastic
products of quality designs and sizes for customers.
The goal of the project is to establish plastic processing plant in Harari Reional State,
Harar city to produce plastic products and meet the market demand for plastic
products at competitive prices to be used by different sectors to contribute to the
development of industry sector of the region.

A. DURATION OF THE PROJECT AND IMPLEMENTING AGENCY

The Project will be implemented by the owners and the duration of the project is
going to be twenty years after the ratification of the project proposal.

B. PRODUCT SALES
Working with the proposed plant and machinery, the project will be capable of
producing 25,000 cards of various types, 2,7600 meters of wire and cable coverings,
5,000 bags of different sizes, 40,000 packs of packaging plastic products, 25,000
kitchenware goods and 10,000 rain cover and sun shadings annually.

C. FINANCIAL BUDGET OF THE INVESTMENT

 Total Financial Requirement = ETB 61,339,139.00

 Capital Investment = ETB 32,967,000.00

 Operating Cost = ETB 28,372,139.00

 PROJECT PROPOSAL YIMAJ’S PLASTIC FACTORY

D. COMPANY AND INDUSTRY

The Name of the Company is Plastic Products Private Limited Company (PLC)
owned by Ethiopian, located in Harari Regional State it is established to produce high
quality plastic products of different prototypes and sizes to satisfy the high demand
for the products.

II. PROJECT DESCRIPTION

Plastic Production industry is an important industrial sector in the country. Over the
last few years, the manufacturing and financial sectors including construction sector
have registered strong growth rates. These sectors are some of the major drivers of
growth for the demand of plastic products.
The Plastic industry:
 Supports the construction sector providing various types of materials for the
building activities. House furniture and various instruments and equipment’s;

 It supports the transport sector in providing the necessary materials for

manufacturing of cars, carriage utensils; number plates, small and large sized
bags;

 It is also used in designing and realization traffic signs;

 Used in the preparation of different types of gaskets to be used for different

purposes;

 Give a hand to the banking and financial institutions in providing different types
of plastic cards;

 Support associations by providing them membership cards;

 It also supports the hotel industry and recreational activities in providing rain
covers and sun shading.

The plastic products are useful for households and individuals in presenting the
necessary materials like utensils, plastics boxes, seats, and other furniture. In addition,
plastic manufacturing products are used for presents and cosmetics, document folders
and credit cards
Therefore, in line with the current development endeavors of the country, there is a
great market demand for plastic products.
PROJECT PROPOSAL YIMAJ’S PLASTIC FACTORY

A. OBJECTIVES OF PROJECT
The goal of the project is to establish plastic processing plant in Harari region to
produce plastic products and meet the market demand for plastic products to be used
by different sectors to contribute to the development endeavors of the country.

The specific objectives of this project are:

 To fill the gap between demand and supply of plastic products in the region

 To exploit untapped resources usable for the production of plastic goods

 To create job opportunity for the community and to curb the problem of
unemployment in line with the development objectives of the region

 To produce high quality and exportable plastic goods ex to get foreign/hard

currency

B. PRODUCTS AND SERVICES

Yimaj’s Plastic Production Company is planning to manufacture high quality plastic
products. Plastic Production is an important industry that supports the various sectors
in the country towards the enhancement of growth and transformation plan
implementation. The products the company to produce is. 25,000 cards of various
types, 2,7600 meters of wire and cable coverings, 5,000 bags of different sizes,
40,000 packs of packaging plastic products, 25,000 kitchenware goods and 10,000
rain cover and sun shadings in the first year and increase this amount yearly.

C. FORMULATION OF PROJECT
A project report is like a road map. It is an operating document. What information and
how much information it contain depends upon the size of the enterprise, as well as
nature of production. For example small-scale enterprises do not include technology
which is used for preparing project reports of large-scale enterprises. Within small-
scale enterprises too, all information may not be homogeneous for all units.
According to Yimaj’s project formulation divides the process of project development
into eight distinct and sequential stages as below:
PROJECT PROPOSAL YIMAJ’S PLASTIC FACTORY

 General information

 Project description

 Market potential

 Capital costs and sources of finance

 Assessment of working capital requirements

 Economic and social variables

 Project implementation

D. RISK ASSESSMENT AND ENVIRONMENTAL MANAGEMENT PLAN

While there are many manufacturing processes, most use heat to soften the plastic and
pressure to force the molten material into a mold cavity or through a dye. An effective
process safety management program should establish procedures for routinely
documented machinery inspection and service to monitor excess heat, friction,
leakage, malfunction, and control potential ignition of flammable or combustible
materials.
Remotely located emergency shutoff or automatic shut off switches should be
provided for hydraulic equipment.
A large quantity of easily ignitable dust may be generated in plastic production areas.
Plastic dust only requires a small ignition source to create a severe explosion. If not
controlled, the presence of ignitable dust and static can lead to total losses. Due to
plastic’s natural insulating ability, static electricity build up occurs in:

 The manufacturing process

 Pneumatic conveying systems used in transferring and blending plastic pellets

 Finishing activities such as shaping, trimming and sanding

 Grinding activities

 Rolling or calendaring process that forms plastic films and sheets

Machinery that produces dust should be properly fitted for a dust collection system.
PROJECT PROPOSAL YIMAJ’S PLASTIC FACTORY

The type of collection system and safeguards required will depend largely on the
volume of dust being generated and the size of the particles.
Most plastics manufacturing operations regrind plastic scrap and poor quality
parts/products. The small self-contained regrind units typically do not generate
quantities of dust to be considered hazardous. Large re-grinders, normally found in
bag manufacturing plants do generate significant quantities of airborne dust which
require controls to prevent dust explosion. Plastic regrind dust is a combustible dust
comparable to wood or grain from an explosion standpoint.
Portions of system-handling powdered materials from which dust can escape should
have permanent dust collection systems. Production machinery such as hoppers,
storage bins, conveyors, conveyor ducts and grinders that come into contact with
plastic dust should be constructed with dust-tight seals and explosion venting.
Controls for static generation are variable and depend on the process involved.
Anti-static coatings, additives and sprays, and grounded metal static combs may be
used to reduce the surface resistance of plastic material. The use of conductive
belting, low conveyor belt speeds and short center drives is advisable.
Pneumatic dust conveying systems should be restricted to handle only dust and no
other waste.
Dust collection typically involves placement of local exhaust ventilation systems
close to the source of dust emissions.
The systems may be integrated with machine guards. They should have an efficient
air cleaning device and be properly maintained at regular intervals. The dust
collection duct should be galvanized metal provided with explosion venting, and
should be properly bonded and grounded.
The collected dust should be properly disposed outside and away from any ignition
sources. The areas in which combustible dusts are processed or handled should be
segregated, separated or detached to minimize damage and to avoid pollution of the
environment. Dust collection and venting equipment are typically located outside the
production building. Access to dust collection areas should be restricted. The duct
from the central collector to the storage bin should have a flashback prevention to
keep explosions from blowing back through the conveying ductwork into the building
or into other equipment. Dust bins should have an audible or visual warning system
with smoke, heat or light detectors that shut down fuel and oxygen supply in event of
a fire.
 PROJECT PROPOSAL YIMAJ’S PLASTIC FACTORY

E. ENVIRONMENTAL MONITORING
To assess the prevailing quality of air, water, noise, land etc., regular monitoring of
these parameters is necessary. This data will help to arrive at improvement in
protection measures. The project proponent has set up a permanent cell, which shall
take care of effective implementation of Environment Management Plan which is
very much necessary to preserve/protect the surrounding environment.
The functions of the environmental cell are as follows:
 Implementation of the planned mitigating measures

 Monitoring the programme of implementation

 To estimate the efficiency of the measures taken

 Environmental monitoring and maintaining the test reports in a file for each of
the monitoring parameters like air, water, soil etc.

 To bring out any other unforeseen effect on the environment not covered under
this study

III. MARKET PLAN

As clearly stated in the country’s development industrial strategy, valued adding
private sector is considered as the engine of sector growth. Because of this, the
Ethiopian government has been providing facilities and enabling investment
environment for the realization of the country’s GTP objectives. As a result, the need
of construction raw materials supply and the processing of plastic products are
increasing from time to time since the enhancement of industrial sector in the country
has been given more attention.
The current increasing trends on both the demand and supply side of plastic products
market make plastic production to initiate the industry
The Rising input prices are of other commodities cause manufacturers to seek new
efficiencies, in particular in low value added items such as packaging using plastic
products. Nationwide demand for green packaging is projected to increase annually
with food service and transport packaging growing the fastest. The currently observed
fast growing banking and financial institutions demand for various plastic cards to be
PROJECT PROPOSAL YIMAJ’S PLASTIC FACTORY

used by their clients/customers. Also the currently growing construction and transport
sectors in the country have the propensity to consume more and more plastic products.

A. MARKET RESEARCH METHOD AND IMPLEMENTATION

The Target Market is the groupings of consumers or businesses most likely to
purchase your products or services. The first group you plan to target is your Primary
Target Market; the second is your Secondary Target Market. It is very important that
you understand your target markets.
The goal of the project is to establish plastic processing plant in Harari region to
produce plastic products and meet the market demand for plastic products to be used
by different sectors to contribute to the development endeavors of the region and the
country.
The specific objectives of this project are:
 To fill the gap between demand and supply of plastic products in the region

 To exploit untapped resources usable for the production of plastic goods.

 To create job opportunity for the community and to curb the problem of
unemployment in line with the development objectives of the country

 To produce high quality and exportable plastic goods ex to get foreign/hard

currency

B. PRODUCT FEATURES AND BENEFIT

The expected beneficiaries of this project are:
 The surrounding community in obtaining job opportunity

 The various sectors that use plastic products as inputs for their activities

 Individuals who are who are trading and using plastic products.

 Government and non-government organizations will also be the expected

beneficiaries of this project.

For instance, with regard to job opportunity, the expected beneficiaries of the project
will be 15 permanent and 50 temporarily employees will be recruited as labor forces
which will reduces poverty and unemployment in Harar city in particular and in the
country in general.
PROJECT PROPOSAL YIMAJ’S PLASTIC FACTORY

C. CUSTOMERS
Start by reviewing customer complaints, questions, and comments. If you don't have a
systematic way of collecting and compiling this input, develop one. Don't just dwell
on complaints; studies show that only 2 to 4 percent of dissatisfied customers ever
complain.
In modern business philosophy business should be customer oriented and the
implementation of the main principles of continuous improvement, justifies the
importance of evaluating and analyzing customer satisfaction. In short, customer
satisfaction is considered as baseline of standardize and excellence of performance for
many business. It also helps to identify the potential market opportunities.

D. COMPETITION
Three important points to keep in mind when thinking about the objectives of
competition are: x underlying variable of competition (price, quantity, quality etc.); x
aimed level of achievement; and x competitive process that is at least partly
determined by the strategic objectives of agents.
Each firm within a particular industry faces a different competitive context. This is
because an industry typically consists of multiple product segments operated by
different but overlapping sets of industry members. Two industry members can be
regarded as direct competitors to each other when they operate in at least one common
product segment.

E. NICHE
Marketer has long advocated the use of ecology or biological theory in marketing in
order to study markets. A relationship may be drawn between the ecological niche and
the market niche. This refers to ecological niche and market niche similarities. In both
cases, organisms and organizations live in their immediate physical environment and
are able to continue their life forms in a changing environment.
 Strategic Planning

 Define Mission and Objectives

 Strategies and Action

PROJECT PROPOSAL YIMAJ’S PLASTIC FACTORY

 Monitoring Key Projects/Objectives

 Organizational Realignment

F. MARKET STRATEGY
In the manufacturing industry, marketing is considered to be of significant
importance. In the Plastic Production, marketing parameters are very limited and
usually in some degree associated with the various sectors of the economy of the
country.

G. PRICING
The term pricing method in the context of compiling price indices would probably be
regarded by most price statisticians as a common concept. However when one
attempts to find a definition for this concept, or indeed a definition for various types
of pricing methods, the inadequacy of the current literature becomes apparent. This is
particularly true in the case of producer price indices for service industries (SPPI),
where defining pricing methods is crucial in many respects.
The use of a specific type of information on prices to represent the evolution of price
in price index compilation. The specific type of information specifies the method.
Pricing method is a key issue for services price statisticians because theoretical or
practical problems cause transaction pricing to be unfeasible. The main causes, which
are interrelated, are:
 Unique product transactions are not periodically price able and have to be
reduced to a standardized replicable unit;

 Complex products have to be reduced to manageable units (e.g. telephony);

 There is limited knowledge about complex products whereby the issue of

pricing to constant quality becomes (too) difficult;

 Classifications and information for a weighting scheme are not available down
to the product level, while the goal is often only the estimation of top
aggregates;

 Limited human resources;

 Representativeness of a small product panel is problematic.

 PROJECT PROPOSAL YIMAJ’S PLASTIC FACTORY

H. SALES AND FORECAST

Sales revenues are the function of projected production output and projected selling
price per plastic products. Taking the projected production the output from the above
table, we know we calculate the revenue using selling price of output. Accordingly,
the selling price of each product is expected to increase each year by proportionately
for each product item by a minimum of 15%, given the trends of the past five year in
Ethiopia, in particular and world in general, this projection wouldn’t be far from the
reality under the normal macroeconomic conditions.
In order to determine the forecasted sales revenues, we need to multiply the forecasted
selling price by the number of each plastic products.

IV. OPERATION PLAN

The purpose of the Operations section is to indicate how you plan to operate the
business. This means how you will produce the services or provide the products.

A. RAW MATERIAL
This Strategic Implementation Plan (SIP) has been developed on the basis of input
from a wide range of European stakeholders dealing with raw materials (governments,
industries, academia, NGOs), which are involved in the European Innovation
Partnership (EIP) on Raw Materials. To steer the work on the Plan, a High-Level
Steering Group was formed in 2012. To collect input to the Plan, the European
Commission established five operational groups with experts on raw materials and
various aspects of raw materials policy. From May to July 2013, four draft versions of
the Plan were issued by the services of the European Commission and commented on
by the members of the High Level Steering Group or their representatives prior to this
final version.
The EU is self-sufficient in the production of construction minerals, including
aggregates (sand, gravel, and crushed natural stone), various brick clays, gypsum and
natural ornamental or dimension stone. Europe’s production of aggregates is
 PROJECT PROPOSAL YIMAJ’S PLASTIC FACTORY

approximately 3 billion tons per year. Around 91% of all aggregates produced are
from natural resources, 5% are recycled aggregates, and 2% are of marine origin or
manufactured. The EU also has a large production of industrial minerals supplying a
very wide range of industries. For some minerals, such as magnesite, fluorspar,
bentonite, kaolin and potash, Europe is an important global producer. The EU
however is a net importer for many of these industrial minerals. Due to large
quantities of construction and industrial minerals produced and consumed, there is a
need to improve the overall sustainability performance, the materials range of the
primary production and to ensure a higher proportion of recycling.
There are many types of inventory that can be held throughout the supply chain. They
include raw material, work in process (WIP), finished goods inventory and spare
parts. In this proposal, we are more concerned with managing the inventory of raw
material. Hopp and Spearman (2000) define raw material as the components,
subassemblies, or materials that are purchased from outside the plant and used in the
fabrication/assembly process inside the plant. The idea of managing the raw material
is to have it available when it is needed by the production system. Since most of the
time we cannot receive the raw material immediately (in a just-in-time fashion),
carrying inventory stock of raw material seems appropriate. The size of the stock can
be influenced by several factors; quantity discount received from the supplier,
variability in either the supply or demand, or the materials can become obsolete.

V. TECHNOLOGY UTILIZATION & ENGINEERING

The key factors that underpin enterprise growth are labor, land, capital,
entrepreneurial spirit and innovation. In particular, it was innovation and
entrepreneurial drive that provided the motivating power for Taiwan’s economic
miracle. Today, new business development continues to depend on the flexibility and
vigor of Taiwan’s SMEs. In more concrete terms, innovation can take one of five
forms: the development of new products or the improvement of existing products, the
introduction of new methods of production, the development of new markets, the
identification of new sources of raw materials or semi-finished products, and the
establishment of new forms of industrial organization.
PROJECT PROPOSAL YIMAJ’S PLASTIC FACTORY

There are also relevant national and local institutions around the district with which
we will work in collaborations.
 Harar City Investment Office

 Harari Region Land Use and Administrative Authorities

 University and collages

 Harar City Small Enterprises

 Financial Institution and Banks

 Civil society organizations including cooperatives and kebele organization etc.

The role of these institutions and their expected synergy will be utilized for the
successful implementation of the project.

A. PRODUCTION PROCESS
The project area is located in Harar City which has got convenient and accessible road
throughout the year. There is also access road from different areas and towns to the
project area. Thus, there will be no transportation problem to and from the project
area to its branches or stores located in suitable places.

B. LOCATION
Harari Regional State is one of the regions of Ethiopia, the seat of the UNESCO
registered historical town, which also known as a Living Museum and the destination
of many historical sites.
Harar city ,the capital city of Harai people’s national regional state, is located at the
wastern edge of the region on approximate geographic coordinate of 9 o 20N’ and
42010’E at a distance of 510 km away from the capital city of Addis Ababa in the east
direction .Its total urban population is counted to be 109,500 in 2007G.C census. The
region encompasses 6 urban woreda administrations, (namely Amir-Nur, Aboker,
Abadir, Shenkor, Jinella and Hakim) 3 rural woreda administrations, 19 sub kebele
administration, and 17 farmer associations. The city has total area of 20.6km 2. Its
weather condition is weynadega.
PROJECT PROPOSAL YIMAJ’S PLASTIC FACTORY

Hakim Wereda, Hameresa kebelle 19, which is one of the wereda in which this plastic
card production PLC vision to be established has distinct characteristics and,
relatively standardized part of the region, constituting modern and high standard
industrial facilities as well as very poor people who live with no income per day,
cultural center, public offices, different social and economic over heads, industrial
areas, etc.
The project is located in Harar city, which this plastic card production PLC is going to
be established has distinct characteristics and, relatively standardized part of the
region, constituting modern and high standard industrial facilities as well as very poor
people who live with less income. In addition, the availabilities of facilities like road,
utilities and easy access to the target markets are other factors for the selection of the
site.

C. MACHINERY AND EQUIPMENT

Machinery and equipment have moving parts. The action of moving parts may have
sufficient force in motion to cause injury to people. When assessing machinery and
equipment for possible mechanical hazards, consider:

 Machinery and equipment with moving parts that can be reached by people

 Machinery and equipment that can eject objects (parts, components, products
or waste items) that may strike a person with sufficient force to cause harm

 Machinery and equipment with moving parts that can reach people, such as
booms or mechanical appendages (arms)

D. LEGAL ENVIRONMENT
Legal & Administrative 
Legal Form (proprietorship, partnership, corporation, cooperative). 
Share Distribution (Corporation Only) 
Directors and Officers (Corporation Only) 
Buy Sell Agreement (Corporation and Partnerships Only) 
PROJECT PROPOSAL YIMAJ’S PLASTIC FACTORY

List of key legal agreements such as contracts, leases, agreements, franchise

agreements, personal loan guarantees etc. The actual documentation is often put into
the appendix of the business plan. 
Insurance/Risk management. 

E. PERSONAL
A personal marketing plan is a strategic marketing plan that can help you ensure the
efficiency and effectiveness of your personal brand or image and how it is perceived
by different entities like potential employers, businesses, engineering lawyer,
technical and professionals.

F. MANAGEMENT AND ORGANIZATION STRUCTURES

Harari Regional State, is one of the industrial, commercial and cultural center of the
country. Being the seat of various regional institutions, it is an important cultural and
commercial hub of Africa.
It is socio –economically vibrant city and peoples of different culture engaged mostly
in trade and live in peace, tolerance and solidarity. The city administration aspires to
achieve its vision which stated as “We aspire to see an attractive, cozy & globally
competitive Harar which is endowed with a strong and sustainable economy
specializing on trade, industry, Tourism & service sectors.”

G. PROFESSIONAL AND ADVISOR SUPPORT

 Accountant, Lawyer, Engineering and Technician, human resource is use in
project of plastic production in Harari region.

 Bank Services, Business Advisors and Mentors (it can be helpful to provide
single-paragraph biographies on key business advisors.)
 PROJECT PROPOSAL YIMAJ’S PLASTIC FACTORY

VI. ORGANIZATIONAL STRUCTURE AND CHART

Business form: this business is going to be established in the form of sole
proprietorship.

General
Manager

Legal Advisor

Human
Finance Marketing Resource
Manager Manager Manager

Marketing Personnel General

Accountant
Officer officer Services Officer

Cashier

A. EFFECTIVE MANAGEMENT STYLE

Management style is a managerial parlance often used to describe the how of
management. It is a function of behavior associated with personality.
Management style can be understood as a way to manage an organization. According
to this company, management style is “the adhesive that binds diverse operations and
 PROJECT PROPOSAL YIMAJ’S PLASTIC FACTORY

functions together”. It is the philosophy or set of principles by which the manager

capitalizes on the abilities of the workforce. Management style is not a procedure on
how to do but it is the management framework for doing. A management style is a
way of life operating throughout the enterprise and permits an executive to rely on the
initiative of the personnel of an entity.

B. SOCIO ECONOMIC STUDY

The major beneficial impacts of this project are change in employment and income
opportunity, infrastructure, community development, communication, transport,
educational, commercial, recreational and medical facilities. In addition this project
will accommodate many labor forces. As a result, the income theses labor forces will
increase and enable them support their households and fulfill their basic needs (food,
health, shelter and social necessities)

ECONOMIC BENEFIT FOR THE COMMUNITY: As the matter of fact, any

organization has social responsibility in creating job opportunity and involving in
different social affairs. The economic benefit of this project is not far from this truth.

ECONOMIC CONTRIBUTION TO THE COUNTRY: This project has

paramount importance in reducing unemployment rate and helping industry sector in
providing raw materials and thereby supplementing the country’s GTP of industrial
objectives. Furthermore, the linkage between various sectors of the economy will be
increased.

VII. FINANCIAL PLAN

The Company will earn a large amount of revenue from the sales of products of
plastic production of high quality. The details of the financial status of the company
and its profitability are indicated in in the section below, under the financial plan.
PROJECT PROPOSAL YIMAJ’S PLASTIC FACTORY

A. PROPOSED RATE OF PRODUCTION

The proposed rate of production of the project are 25,000 cards of various types,
2,7600 meters of wire and cable coverings, 5,000 bags of different sizes, 40,000 packs
of packaging plastic products, 25,000 kitchenware goods and 10,000 rain cover and
sun shadings in the first year and increase this amount yearly.

B. FINANCIAL BUDGET OF THE INVESTMENT

 Total financial requirement = ETB 61,339,139.00

 Capital investment = ETB 32,967,000.00

 Operating cost = ETB 28,372,139.00

Here, operating costs refer to those costs which are not included in the project capital
costs and hence are not subjected to periodical depreciation. These costs include such
costs as labor costs; costs for equipment operations and maintenance such as fuel cost
and repair and maintenance cost, depreciation cost, utility expenses such as telephone
charges, employee salaries, and other miscellaneous expenses.

 Repair and Maintenance cost: operating cost for operation and maintenance
of machineries and equipment is taken to be 5% of initial investment costs
beginning after the acquisition i.e., 61,339,139 *.05 = ETB 3,066,956.95

 Utility expenses: this includes such periodical costs as incurrence of

liabilities (payments of cash) for fuel consumptions and telephone expenses.
Although such types of expenses changing with the volume of operations, it is
forecasted that a minimum of ETB 10,027,000.00 forecasted for the first year
of project operation.

 Supplies cost: such costs include the cost of stationary materials needed for
office use. It is forecasted for first year as ETB 20,000.00 and increase at least
by 5% as the activities of the project increases.

 Miscellaneous expenses: Expenses for which it is neither economical nor

convenient to specific account code and hence, should be merged together
PROJECT PROPOSAL YIMAJ’S PLASTIC FACTORY

under miscellaneous expenses. These include entertainment expenses,

employee benefits, litigation expenses and others. As a result, such expenses
estimated to be ETB 25,000.00 and increase at least by 5% as the activities of
the project increases.

Source of fund: the sources of fund for this project are the owner itself and banks.

C. MARKET OPPORTUNITY
The current increasing trends on both the demand and supply side of plastic products
market make plastic production very important. The current rising input prices are
causing manufacturers to seek new efficiencies, in particular in low value added items
such as packaging goods, preferably plastic products. In addition, nationwide, demand
for green packaging is projected to increase annually with food service and transport
packaging growing the fastest’ It is observed that the fast growing banking and
financial institutions demand for various plastic cards
The currently growing construction and transport sectors in the country have the
propensity to consume more and more amount of plastic products. In a recent survey
completed by the promoter, most of consumers responded that they would choose
environmentally-friendly various types of quality plastic products.

D. BUDGET BREAKDOWN

1. Summaries of the project construction costs (in ETB)

Unit Cost in Total Cost

No Construction items Quantity
ETB in ETB
1 Production Building 1 8,500,000 7,500,000.00
2 Dust Dumping Building 1 2,500,000 2,100,000.00
3 Guardian houses 1 30,000 30,000.00
4 Store 3 100,000 300,000.00
5 Fence with wire around 1 100,000 100,000.00
production Plant
6 Generator (medium) 1 100,000 100,000.00
PROJECT PROPOSAL YIMAJ’S PLASTIC FACTORY

Subtotal Cost 10,130,000.00

Physical and relative price change contingency (10%) 1,013,000.00
Total cost 11,143,000.00

Table 1 Project construction costs

2. Summaries of the Office Equipment Cost (in ETB)

Units
No Item Unit Unit cost Total
needed
1 Desk top computer &
Pcs 1 10,000.00 10,000
printer
2 Laptop computer Pcs 1 12,000.00 12,000.00
3 Shelves Pcs 2 2000.00 4000.00
4 Managerial chairs Pcs 1 7000.00 7000.00
5 Secretarial chair Pcs 1 4000.00 4000.00
6 Guest chair Pcs 5 1000.00 5000.00
7 Guest table Pcs 5 1000.00 5000.00
8 Computer table Pcs 1 1000.00 1000.00
9 Leather bag Pcs 5 800.00 4000.00
Estimated cost 52,000.00
Contingency due to price fluctuation (10%) 5,200.00
Total estimated office equipment cost 57,200.00

Table 2 Office Equipment Cost

E. PROJECT FINANCIAL STATEMENT

OPERATIONAL DATA
The plant is to start production at 70% of capacity thereby increased by 10% in the
next three years till the plant operates at 100% which is to be maintained for the next
twenty five years.
PROJECT PROPOSAL YIMAJ’S PLASTIC FACTORY

1. FIXED COSTS
Land and Plant Building ……………………………..…….. 11,143,000.00
Plant & Machinery………………………………….........…. 10,500,000.00
Direct material & labor Cost ………………………….…….. 8,174,000.00
Furniture & Fixtures & Office Equipment ………………….... 650,000.00
Other utilities …………………………………………..….… 28,372,139.00
Vehicles …………………………………………………….….. 2,500,000.00
Total Project Investment ……………………………….…..... 61,339,139.00
Note: Land for setting up the proposed plastic production unit would be acquired on
lease for a period of 25 years. Lease concession would be granted by the Industrial
Development Authority of the concerned Area.

2. WORKING CAPITAL
Following are the initial working capital requirements for the Plastic Production for
first year.
DESCRIPTION Amount in ETHB.
First year Salaries (Production staff) ……………………...…… 650,000.00
First year Utilities Charges (Other than fuel/diesel) ................... 13,138,956.00
First year Fuel Inventories (Diesel) …………………………..... 7,524,000.00
First year Misc. Expenses ………………………………...……. 10,027,000.00
Cash balance required ………………………………………….. 1,775,000.00
TOTAL …………………………………………………..…… 33,114,956.00

Table 3 Working Capital

3. OVERHEAD COST
Following Overheads are assumed to occur in the first year of production.
EXPENSE Year amount (Br)
Utilities……………………………………………………………… 13,138,956.00
Depreciation…………………………………………………………. 30,000.00
Maintenance…………………………………………...……………... 10,000.00
Selling and Distribution………………………………………………. 55,000.00
Miscellaneous……………………………………………..…………. 10,027,000.00
 PROJECT PROPOSAL YIMAJ’S PLASTIC FACTORY

TOTAL …………………………………………………………….. 23,260,956.00

Table 4 Overhead Cost

VIII. HUMAN RESOURCE AND ASSOCIATED EXPENSES

Man power is decisive factor for the successful implementation and operation of a
project. Hence, careful identification and qualification of the man power requirement
of the project is indispensable. Accordingly, although the details of responsibility and
accountability relationship will be determined latter, the following table shows the
manpower requirement with qualifications:

A. STAFF REQUIREMENTS

Minimum Monthly Total

No Staff Qty.
Qualification Salary Salary
BA in Mgt/Econo.
General related & 8 years’
1 1 8,500 102,000.00
Manager experience
BA in Mgt/Econo.
Deputy
2 related & 5 years’ 1 7,500 90,000.00
Manager
experience
Sale BA in marketing related
3 & 5 years’ experience 1 6,500 78,000.00
Manager
BA in accounting & 4
4 Accountants years’ experience 1 6,000 72,000.00
Diploma in Accounting
5 Cashier & 2 years’ experience 1 2,500 30,000.00
Diploma in Office
6 Secretary management & 2 years’ 1 2000 24,000.00
experience
Diploma in Accounting
7 Purchaser & 2 years’ experience 1 2,000 24,000.00
3rd Grade Driving
8 Drivers 2 2,000 48,000.00
License
9 Production License 10 1,200 144,000.00
 PROJECT PROPOSAL YIMAJ’S PLASTIC FACTORY

workers
10 Store keeper Diploma in the field 1 1,200 14,400.00
6th grade & 2 years’
11 Guard 1 980 11,760.00
experience

TOTAL SALARY 21 638,160.00

Table 5 Staff Salary

NB: For cost calculation, take 15% of the total cost as contingency and sum up with
the total cost so as to get the grand cost.

B. TRAINING REQUIREMENT
Training will be required for supervisor and production workers. It is recommended
that machinery supplier will provide on-job training for about two weeks.

IX. FORECASTED PRODUCTION

In order to estimate the production of plastic products, we have utilized opinions of
experts in the field of geology. Accordingly, the following tables shows the
projected/expected yearly outputs.
PROJECT PROPOSAL YIMAJ’S PLASTIC FACTORY
 PROJECT PROPOSAL YIMAJ’S PLASTIC FACTORY

A. PROJECTED PLASTIC ITEMS PRODUCTION IN G.C

No PRODUCT ITEMS 2021 2022 2023 2024 2025 2026 2027 2028 2029

Plastic cards of different

1 25,000 25,625 26,266 26,922 33,653 42,066 48,376 55,632 63,977
types
2 Plastic Packaging products 40,000 41,000 42,025 43,076 44,153 45,256 46,388 47,547 48,736
Kitchenware, toys, sporting
3 goods, medical products and 25,000 25,625 26,266 26,922 27,595 28,285 28,992 29,717 30,460
footwear, boxes, bags
Production of plastic bags of
4 5,000 5,750 6,613 7,604 8,745 10,057 11,565 13,300 15,295
different sizes
Home and industrial
5 appliances, wire and cable 2,500 2,563 2,627 2,692 2,760 2,829 2,899 2,972 3,046
coverings
Table 6 Projected items production

Note that: then the above projections are based on the expert’s opinions in the field as well as the existing experiences. In essence, if the project
is to be implemented and run in accordance with the recommendation of the expertise and experiences, these projections are supposed to be
achievable.
PROJECT PROPOSAL YIMAJ’S PLASTIC FACTORY

Annual Revenue of Plastic Production in ETB:

The total Revenue from the above plastic production over the next 9 years is indicated on the following table. The projected unit selling price of
the plastic product items are indicated in the following table or five product items.

1. PRODUCT 1
Unit Selling
Year Product Item Quantity Total sales in ETB
Price in ETB
2021 Plastic cards of different types 25,000 100 2,500,000

2022 Plastic cards of different types 25,625 115 2,946,875

2023 Plastic cards of different types 26,266 130 3,414,531

2024 Plastic cards of different types 26,922 145 3,903,729

2025 Plastic cards of different types 33,653 160 5,384,453

2026 Plastic cards of different types 42,066 175 7,361,557

2027 Plastic cards of different types 48,376 190 9,191,430

2028 Plastic cards of different types 55,632 205 11,404,629

2029 Plastic cards of different types 63,977 220 14,074,982

Table 7 Product 1
PROJECT PROPOSAL YIMAJ’S PLASTIC FACTORY

2. PRODUCT 2

Year Product Item Quantity Unit Selling Total sales in ETB

Price in ETB
2021 Plastic Packaging products 40,000 80 3,200,000

2022 Plastic Packaging products 41,000 92 3,772,000

2023 Plastic Packaging products 42,025 104 4,370,600

2024 Plastic Packaging products 43,076 116 4,996,773

2025 Plastic Packaging products 44,153 128 5,651,522

2026 Plastic Packaging products 45,256 140 6,335,886

2027 Plastic Packaging products 46,388 152 7,050,936

2028 Plastic Packaging products 47,547 164 7,797,779

2029 Plastic Packaging products 48,736 176 8,577,556

Table 8 Product 2
PROJECT PROPOSAL YIMAJ’S PLASTIC FACTORY

3. PRODUCT 3

Year Product Item Quantity Unit Selling Total sales in ETB

Price in ETB
Kitchenware, toys, sporting goods, medical products and 25,000 1,000 25,000,000
2021
footwear, boxes, bags
Kitchenware, toys, sporting goods, medical products and 25,625 1,150 29,468,750
2022
footwear, boxes, bags
Kitchenware, toys, sporting goods, medical products and 26,266 1,300 34,145,313
2023
footwear, boxes, bags
Kitchenware, toys, sporting goods, medical products and 26,922 1,450 39,037,285
2024
footwear, boxes, bags
Kitchenware, toys, sporting goods, medical products and 27,595 1,600 44,152,516
2025
footwear, boxes, bags
Kitchenware, toys, sporting goods, medical products and 28,285 1,750 49,499,109
2026
footwear, boxes, bags
Kitchenware, toys, sporting goods, medical products and 28,992 1,900 55,085,437
2027
footwear, boxes, bags
Kitchenware, toys, sporting goods, medical products and 29,717 2,050 60,920,145
2028
footwear, boxes, bags
Kitchenware, toys, sporting goods, medical products and 30,460 2,200 8,577,556
2029
footwear, boxes, bags
Table 9 Projected Product 3
PROJECT PROPOSAL YIMAJ’S PLASTIC FACTORY

4. PRODUCT 4

Year Product Item Quantity Unit Selling Total sales in ETB

Price in ETB
2021 Production of plastic bags of different sizes 5,000 300 1,500,000

2022 Production of plastic bags of different sizes 5,750 345 1,983,750

2023 Production of plastic bags of different sizes 6,613 390 2,578,875

2024 Production of plastic bags of different sizes 7,604 435 3,307,903

2025 Production of plastic bags of different sizes 8,745 480 4,197,615

2026 Production of plastic bags of different sizes 10,057 525 5,279,813

2027 Production of plastic bags of different sizes 11,565 570 6,592,223

2028 Production of plastic bags of different sizes 13,300 615 8,179,561

2029 Production of plastic bags of different sizes 15,295 660 10,094,775

Table 10 Projected Product 4

PROJECT PROPOSAL YIMAJ’S PLASTIC FACTORY

5. PRODUCT 5

Year Product Item Quantity Unit Selling Total sales in ETB

Price in ETB
2021 Home and industrial appliances, wire and cable coverings 2,500 150 375,000

2022 Home and industrial appliances, wire and cable coverings 2,563 173 442,031

2023 Home and industrial appliances, wire and cable coverings 2,627 195 512,180

2024 Home and industrial appliances, wire and cable coverings 2,692 218 585,559

2025 Home and industrial appliances, wire and cable coverings 2,760 240 662,288

2026 Home and industrial appliances, wire and cable coverings 2,829 263 742,487

2027 Home and industrial appliances, wire and cable coverings 2,899 285 826,282

2028 Home and industrial appliances, wire and cable coverings 2,972 308 913,802

2029 Home and industrial appliances, wire and cable coverings 3,046 330 1,005,182

Table 11 Projected Product 5

PROJECT PROPOSAL YIMAJ’S PLASTIC FACTORY

I. PROJECT SCHEDULE

A. TABLE: ACTION PLAN

First quarter Second quarter Third quarter Fourth quarter
Activity
Jan. Feb. Mar. Apr. May June Sept. Oct. Nov. Dec. Jan. Feb.
Prepare Project
Proposal

Submit the proposal

and process license
Purchase machines and
other related equipment
Installation of the plant

Construction of office
and store
Purchase of Office
furniture
Man power
Recruitment

Start the work

Table 12 Action Plan

PROJECT PROPOSAL YIMAJ’S PLASTIC FACTORY

Note: The civil works and installation of plant is estimated to complete in 3 months.