ADDIS ABABA UNIVERSITY

COLLEGE OF BUSINESS AND ECONOMICS

DEPARTMENT OF MANAGEMENT (Msc)

Project Management Individual Assignment

By: Tediros Bacha Guluma

ID: GSE/2086/15

Dec: 28 2023

Addis Ababa, Ethiopia.

 Table of Contents

1. EXECUTIVE SUMMARY....................................................................................................................... 2
2.INTRODUCTION .......................................................................................................................................... 3
3.BUSINESS NAME......................................................................................................................................... 3
4.BUSINESS ANALYSIS ................................................................................................................................... 3
5.ADDITIONAL COSTS .................................................................................................................................... 5
6. DISTRIBUTION AND PROMOTION ......................................................................................................... 5
6.1 Distribution Channels:......................................................................................................................... 5
6.2 Promotion Strategies: ......................................................................................................................... 6
7. NATURE OF BUSINESS ........................................................................................................................... 6
8. BUSINESS OBJECTIVES OR PURPOSE ..................................................................................................... 7
9. BUSINESS GOALS ................................................................................................................................... 7
10. MARKET ANALYSIS ............................................................................................................................ 8
10.1Market Size and Growth: ................................................................................................................... 8
10.2 Market Trends:.................................................................................................................................. 8
10.3 Key Players:..................................................................................................................................... 9
10.4 Challenges:....................................................................................................................................... 9
10.5 Future Prospects: ............................................................................................................................ 9
11. MARKETING STRATEGIES .................................................................................................................. 9
11.1 Product Differentiation: .................................................................................................................. 10
11.2 Branding and Messaging: ................................................................................................................ 10
11.3 Marketing Channels: ....................................................................................................................... 10
11.4 Promotional Strategies: .................................................................................................................. 11
12. HOW TO FINANCE THE BUSINESS ................................................................................................... 11
13. ORGANIZATION/MANAGEMENT .................................................................................................... 11
14. PROPOSED WORKERS’ SALARIES/WAGES ....................................................................................... 12
15. CONCLUSION ................................................................................................................................... 13

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 CHIBO CANDLE PRODUCTION PLC

1. EXECUTIVE SUMMARY

Candle production is a mature and diverse industry with a rich history and global reach. Fueled by
a combination of functional and aesthetic value, candles cater to various segments, including home
décor, aromatherapy, religious ceremonies, and emergency lighting. The global candle market is
estimated to reach USD 10.4 billion by 2027, growing at a CAGR of 3.4%.

This project is also try to develop the business project for the new candle production company that
has 2,063,000 ETB starting capital the project is includes the overall business structure like
business analysis, distribution and promotion, business goals, market analysis, price structure,
demand/supply analysis and other detail issues which is helps for development of the business
project.

 Company Name: Chibo Candle Production PLC

 Address: Ethiopia, Addis Ababa
 Total Capital Investment: 2,063,000 ETB
 Date Of Commencement: January 2024
 Bank Name: Dashen Bank S.C, Amoudi Branch
 Bank Address: Addis Ababa, Ethiopia
 Benefits Of The Project To Investors

 Large expected profit.

 Participation in management
 Quality management
 Appropriate investment structure
 Opportunity for diversification of business
 Opportunity for further investment into other business
 Corporate governance and structure

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2. INTRODUCTION

Ethiopia is a nation with an estimated population of 120,000,000, with a dwindling epileptic power
supply which is below 12,000 megawatts. Which is still not sufficient for the mass people of the
country this precarious situation we found ourselves had caused many cities, towns and villages to
be thrown into darkness for weeks or months. This situation has also made the Addis Ababa City
and its environs to be in blackout at night sometimes which has resulted in the high rate of crime,
for example, armed robbery, stealing, kidnapping, rape, and has also made the residents to seek
for other alternatives instead of electric power supply. Some residents buy rechargeable lamp, but
due to its exorbitant prices and the fact that rechargeable lamp depends on electricity, some prefer
going for candle which is cheaper than rechargeable lamp, and has become essential commodity
in Addis Ababa City and its environs. It is in this light that we deem it necessary to go into mass
production of candle for commercial purpose for the residents of Addis Ababa City and its environs
at an affordable price.

3. BUSINESS NAME

The business name shall be called”CHIBO CANDLE PRODUCTION PLC. “The business
name is unique in the sense that it is a torch used in the Ethiopian Orthodox ceremonies of Buhe,
Meskel, and Enkutatash (the Ethiopian New Year). Chibo is Amharic for "bundle of sticks tied
together." Chibo represents the following period of sunny days, from the previous seasons of rain
and clouds it was due to the fact that candle in time immemorial has been used as a source of light
in the early centuries.

4. BUSINESS ANALYSIS

After due research and consultation with residents of Addis Ababa City and its environs and the
relevant stakeholders in the production industry, we have had formal brainstorming and have come
out with a good business idea, to go into mass production of candle for the teeming resident
population of Addis Ababa City and its environs. The company will be going into the production
of candle that burns slowly and with perfect lightening of its surrounding. Due to the present high
cost of candle and which burns faster we have developed new idea of candle production that burns

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slowly and last longer which gives it an advantage over other candles in the market. And with an
affordable price of fifteen ETB 20 per candle and one hundred ETB 200 per packet lower than
others which are sold for twenty ETB 25 and one hundred and fifty ETB respectively. This product,
with its durability and low price, we hope, will stand the test of time and demand for it will be on
the high side even in the short and long run, appreciating the fact that there are many strong
competitors of this same product who have been in the business for years, we have worked on their
weak points on producing the same product which we believe will be able to attract potential
customers.

In the course of conducting the cost plan, both primary and secondary methods were used in
collecting relevant data for analysis. From the analysis, the following discoveries were made: that
the setting up of the business will cost as much as 2,063,000 ETB and the monthly production cost
is as follows:

Wick or thread 90,000 ETB

Carton 120,000 ETB

Paraffin wax 240,000 ETB

Paraffin Oil 228,000 ETB

Stearic Acid 60,000 ETB

Tax 12,000 ETB

Miscellaneous 84,000 ETB

Depreciation 48,000 ETB

This gives us a total sum of 882,000 ETB

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5. ADDITIONAL COSTS

House Rent for 1 year 600,000 ETB

Transportation /Cost of distribution (5 litter fuel per day) 12000 ETB (monthly)
Business Reserve 200,000 ETB
TOTAL 812,000 ETB

6. DISTRIBUTION AND PROMOTION

Addis Ababa, with its vibrant culture and growing disposable income, presents a promising market
for your candles. Here's a tailored distribution and promotion strategy to light up your success:

Addis Ababa, with its vibrant culture and growing disposable income, presents a promising market
for your candles. Here's a tailored distribution and promotion strategy to light up your success:

6.1 Distribution Channels:

 Supermarkets (mini markets) and specialty stores: Partner with major supermarkets like
Hayat or queen to cater to a broad audience seeking every day and gift-worthy candles.
 Craft markets and artisan shops: Collaborate with Merkato's vibrant artisan community or
independent craft shops in Bole or Piazza to reach culturally inclined customers.
 Coffee shops and restaurants: Partner with trendy cafes or traditional tej houses to offer
scented candles that enhance the ambience and attract customers.
 Home décor stores and furniture shops: Partner with furniture showrooms in affluent areas
like Haile Gebre Selassie Avenue to target homeowners seeking luxury accents.
 E-commerce platforms: Utilize local platforms like Afrotie or korojo to reach online
shoppers and expand your reach beyond physical stores.

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6.2 Promotion Strategies:

 Culturally relevant storytelling: Infuse your brand with Ethiopian themes, incorporating
local ingredients like coffee or incense, or referencing cultural practices like coffee
ceremonies.
 Community engagement: Participate in cultural events, sponsor local artists, or collaborate
with NGOs to connect with your target audience and build brand goodwill.
 Social media marketing: Utilize platforms like Facebook and Instagram to showcase your
candles' beauty, engage with local influencers, and run targeted campaigns.
 Radio and television advertising: Consider targeted ads on popular radio stations or TV
channels to reach a wider audience beyond social media.
 Promotional offers and discounts: Offer special discounts during holidays or cultural events
to attract new customers and boost sales.
 Scent marketing: Partner with hotels, spas, or beauty salons to diffuse your candle scents
in their spaces, creating a memorable sensory experience.

7. NATURE OF BUSINESS

Craft: At its core, candle production can be seen as a craft, involving the blending of waxes,
essential oils, and colors into aesthetically pleasing and fragrant candles. It can be a creative and
fulfilling process, allowing for experimentation with different techniques, styles, and scents.

Manufacturing: On a larger scale, candle production can also be categorized as a manufacturing

business. This involves managing supply chains, sourcing raw materials, optimizing production
processes, and ensuring quality control. Scaling up production requires different skills and
knowledge compared to small-batch, artisanal candle making.

Retail: Ultimately, candle production businesses are engaged in retail, selling their wares to either
consumers directly or through intermediaries like wholesalers and retailers. Understanding market
trends, customer preferences, and effective marketing strategies is crucial for success in this aspect.

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Additional considerations:

 Sustainability: There is a growing market for eco-friendly candles made from natural waxes
like soy or beeswax. Businesses focused on sustainability may also emphasize ethical sourcing
of materials and minimizing their environmental impact.
 Customization: Offering personalized or customizable candles can be a profitable niche
market. This allows customers to create candles with specific scents, colors, or designs that
resonate with them.
 Luxury niche: High-end candles made with rare ingredients or unique designs can cater to a
luxury market willing to pay premium prices. This requires focusing on premium materials,
branding, and customer service.

8. BUSINESS OBJECTIVES OR PURPOSE

The objectives or purpose of the business is to meet the demand for candle in Addis Ababa City
and its environs at an affordable price. Secondly, to use this avenue as an opportunity to engage
the teeming unemployed population of our youth, in order to disengage them from crime or other
social vices. And above all, to make efficient and effective use of the materials and equipment at
a lower cost in order to make more profit.

9. BUSINESS GOALS
In the next five (5) years or more, our assessment of the business environment and the resources
at our disposal taking into account of setting goals in the area of:

 Marketing: The sales growth of the business in the next five (5) years in terms of
marketing will be 50% of annual sales growth, customer services, new product
development, quality product and price will increase greatly.
 Production: During the planning period the state of production facilities and utilization
will be improved upon.
 Personnel: Training programmes will enable the employees to acquire new skills to
improve quality of workmanship and increase in productivity to avoid hazards.
 Financial: There shall be an increase in capital base of the business.

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 Public Responsibility: Taxes shall be paid to the government, preservation of the

environment, special packages to orphanage homes and consumer protection.
 Profitability: 50% return on investment and 50% increase in net profit over a period of
time.
 Growth: Through diversification and expansion.

10. MARKET ANALYSIS

10.1 Market Size and Growth:

Estimates suggest the Ethiopian candle market was worth about $47 million in 2019, with Addis Ababa
as a major contributor. The market is expected to grow at a compound annual growth rate (CAGR)
of 5-7% due to factors like increasing disposable income, urbanization, and rising demand for home
decor and gifting items.

10.2 Market Trends:

 Shift towards natural and handmade candles: Consumers are increasingly conscious of
health and environmental concerns, driving demand for candles made with soy
wax, beeswax, and other natural ingredients. Artisanal and handcrafted candles are also gaining
popularity.
 Religious and cultural significance: Candles play a significant role in Ethiopian Orthodox
Christian and other religious practices, creating a steady demand for specific types of candles
throughout the year.
 Growing awareness of aromatherapy: The use of candles for their fragrance and potential
therapeutic benefits is gaining traction, opening up opportunities for scented candles with
essential oils.
 Increased online presence: Online platforms like Instagram and Facebook are becoming
important sales channels for candle makers, providing wider reach and accessibility.

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10.3 Key Players:

 Established brands: Beza Candle, Lucy's Candles, and Alemitu Candles are among the
well-known brands in Addis Ababa, offering a variety of traditional and scented candles.
 Small-scale entrepreneurs: A growing number of small businesses and micro-
entrepreneurs are entering the market, offering unique and artisanal candle creations.

10.4 Challenges:

 Competition: The market is becoming increasingly competitive, with both established

brands and new entrants vying for customer attention.
 Raw material availability and cost: Fluctuations in the availability and cost of essential
oils and waxes can impact profitability.
 Limited access to finance: Obtaining funding for starting or expanding a candle business
can be challenging for small entrepreneurs.
 Power outages: Frequent power outages in some areas of Addis Ababa can disrupt
production and sales.

10.5 Future Prospects:

 The Addis Ababa candle market holds promising potential for growth, driven by rising demand
and evolving consumer preferences.
 Opportunities exist for businesses that cater to specific niches like natural, religious, or luxury
candles.
 Innovation in design, fragrance, and sustainability practices can help businesses stand out from
the competition.
 Building strong online presence and brand recognition will be crucial for success in the future.

11. MARKETING STRATEGIES

Standing out in the growing Addis Ababa candle market requires a well-defined marketing
strategy. Here are some key strategies to consider:

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11.1 Product Differentiation:

 Natural and sustainable: Offer candles made with soy wax, beeswax, or other natural
ingredients to cater to health and eco-conscious consumers. Highlight ethical sourcing
practices and minimize your environmental impact.
 Unique designs and scents: Develop candles with distinctive shapes, colors, or fragrance
combinations that resonate with your target audience. Consider partnering with local artists or
perfumers for collaborations.
 Customization: Allow customers to personalize their candles with scents, colors, or messages
to cater to special occasions or individual preferences.

11.2 Branding and Messaging:

 Develop a strong brand identity: Create a logo, tagline, and visual style that reflect your
brand's values and appeal to your target audience. Consider storytelling to weave your brand's
narrative into your messaging.
 Focus on the benefits: Highlight the emotional and functional benefits of your candles, such
as relaxation, aromatherapy, home decor, or religious significance.
 Emphasize quality and craftsmanship: Communicate the care and attention to detail that
goes into making your candles to justify premium pricing.

11.3 Marketing Channels:

 Online presence: Build a user-friendly website and active social media profiles like Instagram
and Facebook. Showcase your products, share stories, and engage with potential
customers. Utilize targeted online advertising to reach your ideal audience.
 Offline channels: Participate in craft fairs, markets, and pop-up shops to gain visibility and
connect with customers directly. Collaborate with local cafes, boutiques, or interior design
stores to sell your candles.
 Public relations: Reach out to local media outlets and bloggers for product reviews or
features. Consider sponsoring relevant events or partnering with influencers to spread brand
awareness.

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11.4 Promotional Strategies:

 Offer discounts and promotions: Run seasonal or special occasion sales, loyalty programs, or
referral incentives to attract new customers and encourage repeat purchases.
 Bundle deals: Create gift sets or pairing candles with complementary products like essential
oils or diffusers.
 Host workshops and events: Organize candle-making workshops or scent blending sessions
to create a unique customer experience and build brand loyalty.

Due to a successful marketing strategy involves a combination of these elements, tailored to our
specific brand, target audience, and resources. By consistently delivering high-quality products,
building a strong brand identity, and employing effective marketing tactics, we will establish our
candle business in the vibrant Addis Ababa market.

12. HOW TO FINANCE THE BUSINESS

The total amount needed to operate the business effectively and efficiently is 2,063,000 ETB the
finance will come from the personal resources/contributions of the partners as equity.

13. ORGANIZATION/MANAGEMENT

As initially mentioned the business is partnership run by the partners and employing eight (8)
workers as follows:

 Manager 1
 Operation manager 1
 Finance officer 1
 Machine operator 1
 Assistant machine operator 1
 Mixer 2
 Packager 2
 Marketing manager 1
 Sales persons 5
 Security person 2

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14. PROPOSED WORKERS’ SALARIES/WAGES

Workers’ Salaries

Manager 50,000 ETB

Operation manager 45,000 ETB

Finance officer 30,000 ETB

Marketing manager 40,000 ETB

Machine operator 40,000 ETB

Assistant machine Operator 30,000 ETB

Mixer 1 15000 ETB

Mixer 2 15000 ETB

Packager 2 12000 ETB(24000 ETB)

Sales persons (5) 12,000 ETB(60,000 ETB)

Security person (2) 10,000 ETB(20’000 ETB)

TOTAL 369,000 ETB

NOTE: Salaries of workers will be paid monthly from sales of the product.

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15. CONCLUSION

With the provision of relevant data and systematic analysis of this business plan coupled with the
demand for candle in Addis Ababa City and its environs, we believe and hope that if this business
is being embarked on and supported with the needed financial resources, this business will thrive
both in the short and long run.

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