STARCH-BASED TAKEAWAY

PLASTICS MANUFACTURING
INDUSTRY

Girmaye Abebe Consultancy

0994614040

SEPTEMBER 2023

1
 TABLE OF CONTENTS
TABLE OF CONTENTS ........................................................................... 2

LIST OF TABLES ...................................................................................... 4

LIST OF FIGURES .................................................................................... 5

LISTS OF ABBREVIATIONS .................................................................. 6

1. EXECUTIVE SUMMARY .................................................................... 7

2. PRODUCT DESCRIPTION AND APPLICATION ........................... 9

2. 1. Principles of Packaging ...................................................................................... 9

2. 2. Development of Biodegradable Plastic in New World .................................. 10
3. MARKET STUDY, INDUSTRY CAPACITY AND PRODUCTION

PROGRAM ............................................................................................... 13

3. 1. Market Study .................................................................................................... 13

3. 1. 1. Present Demand And Supply ..................................................................... 13
3. 1. 2. Projected Demand ...................................................................................... 19
3. 1. 3. Pricing and Distribution ............................................................................. 20
3. 2. Industry Capacity ............................................................................................. 21
3. 3. Production Program ........................................................................................ 21
4. RAW MATERIALS AND UTILITIES .............................................. 22

4. 1. Availability and Source of Raw Materials to Manufacture Starch-based

Takeaway Plastics .................................................................................................... 22
4. 2. Annual Requirement and Cost of Raw Materials and Utilities ................... 23
5. TECHNOLOGY AND ENGINEERING ........................................... 26

5. 1. Production Process ........................................................................................... 26

5. 2. Machinery and Equipment .............................................................................. 31
5. 3. Civil Engineering Cost ..................................................................................... 33
6. HUMAN RESOURCE AND ORGANIZATIONAL

STRUCTURE ............................................................................................ 34

6. 1. Human Resource .............................................................................................. 34

6. 1. 1. Training Requirement ................................................................................ 36
6. 2. Organizational Structure ................................................................................. 36
6. 2. 1. General Manager ........................................................................................ 39
6. 2. 2. Production And Technical Department ...................................................... 39
6. 2. 3. Finance and Administration Department ................................................... 39
6. 2. 4. Commercial Department ............................................................................ 39
6. 2. 5. Quality Control And Assurance Department ............................................. 39
6. 2. 6 MIS Services Department ........................................................................... 39
7. FINANCIAL ANALYSIS .................................................................... 40

7. 1. Underlying Assumption ................................................................................... 40

7. 2. Implementation Schedule ................................................................................ 40
7. 2. 1. Implementation Cost .................................................................................. 40
7. 3. Office Furniture and Equipment .................................................................... 41
7. 4. Investment ......................................................................................................... 42
7. 5. Production Costs .............................................................................................. 43
7. 6. Financial Evaluation ........................................................................................ 43
7. 6. 1. Profitability................................................................................................. 43
7. 6. 2. Payback Period ........................................................................................... 43
7. 6. 3. Internal Rate of Return, IRR and Net Present Value, NPV ....................... 43
7. 7. Economic and Social Benefit and Justification .............................................. 43
7. 7. 1. Profit Generation ........................................................................................ 43
7. 7. 2. Tax Revenue ............................................................................................... 43
7. 7. 3. Employment and Income Generation ......................................................... 43
7. 7. 4. Import Substitution and Foreign Exchange Saving .................................... 43
7. 7. 5. Environmental and Social Impact Assessment (ESIA) .............................. 43
7. 7. 6. Technology Transfer .................................................................................. 43
7. 7. 7. Diversification And Inter-Sectoral Linkage. .............................................. 43
ANNEXES: FINANCIAL ANALYSIS ................................................... 44

REFERENCES.......................................................................................... 54

3
 LIST OF TABLES
TABLE 3. 1 : EXPORT AND IMPORT OF PACKAGING PRODUCTS (IN TON) .............. 18
TABLE 3. 2 : PROJECTED DEMAND FOR PACKAGING MATERIALS (IN TON) .......... 20

TABLE 4. 1 : RAW MATERIALS AND AUXILIARY REQUIREMENT AT FULL

CAPACITY ................................................................................................................................ 24
TABLE 4. 2 : ANNUAL UTILITY REQUIREMENT AT FULL CAPACITY ........................ 25

TABLE 5. 1 : MACHINERY AND EQUIPMENT ................................................................... 32

TABLE 6. 1 : HUMAN RESOURCE REQUIREMENT ........................................................... 34

TABLE 7. 1 : CONSTRUCTION AND FINANCE; DEPRECIATION AND WORKING

CAPITAL (MINIMUM DAYS OF COVERAGE) .................................................................... 40
TABLE 7. 2 : IMPLEMENTATION COST .............................................................................. 40
TABLE 7. 3: OFFICE FURNITURE AND EQUIPMENT COST, ETB ................................... 41
TABLE 7. 4 : TOTAL INITIAL INVESTMENT (000 ETB) .................................................... 42
TABLE 7. 5 : PRODUCTION COST (000 ETB) ...................................................................... 43

4
 LIST OF FIGURES
FIGURE 3. 1 : IMPORT OF RAW MATERIALS FOR PLASTICS PRODUCTS
PRODUCTION AT ETHIOPIA (EUROMAP, 2019)................................................................ 14
FIGURE 3. 2 : GROWTH OF IMPORTING PACKAGING TECHNOLOGY (EUROMAP,
2019) ........................................................................................................................................... 15
FIGURE 3. 3 : PER CAPITA CONSUMPTION OF PLASTICS IN ETHIOPIA (EUROMAP,
2019) ........................................................................................................................................... 16
FIGURE 3. 4 : COUNTRY PLASTICS CONSUMPTION ETHIOPIA (EUROMAP, 2019)... 17

FIGURE 5. 1: THE MAIN PROCESS IN THE PRODUCTION OF BIODEGRADABLE

TAKEAWAY PLASTICS.......................................................................................................... 28
FIGURE 5. 2 : EXTRUSSION PROCESS AND ITS FLOW SHEET AS CONTINUOUS
PROCESS USED TO PRODUCE BOTH SOLID AND HOLLOW PRODUCTS THAT HAVE
A CONSTANT CROSS-SECTION ........................................................................................... 29
FIGURE 5. 3 : POLYMER INJECTION AND INJECTION MOLDING ................................ 29
FIGURE 5. 4 : BLOW MOULDING ......................................................................................... 30
FIGURE 5. 5 : VACUUM FORMING ...................................................................................... 31
FIGURE 5. 6 : COMPRESSION MOLDING IN PLASTIC PLASTIC PRODUCTS .............. 31

FIGURE 6. 1 : ORGANIZATIONAL STRUCTURE OF THE STARCH-BASED TAKEAWAY

PLASTICS MANUFACTURING INDUSTRY ........................................................................ 38

FIGURE 7. 1 : PROJECT IMPLEMENTATION SCHEDULE ................................................ 40

5
 LISTS OF ABBREVIATIONS
ANRS : Amhara National Regional State

CAGA : compound annual growth rate

CNT : Caron Nanotubes

EPA : Environmental Protection Authority

ETB : Ethiopian Birr

EUROMAP : Europe Plastics and Rubber Machinery

FMCG : Fast moving consumer goods

kt : Kilo ton

IRR : Internal Rate of Return

MIS : Management Information System

M² : Square meter

M3 : Cubic meter

NPV : Net Present Value

PVC : Polyvinyl chloride

PLA : polylactic acid

PHA : polyhydroxyalkanoate

PP : Polypropylene

PVC : Polyvinyl chloride

UNEP : United Nations Environment Programme

6
 1. EXECUTIVE SUMMARY
This project profile deals with the establishment of Takeaway Plastics Manufacturing
Industry at Debre Birhan City Administration, North Shoa Zone in Amhara National
Regional State (ANRS), Ethiopia. The following presents the main findings of the
feasibility study of Takeaway Plastics production project.

The supply of takeaway was increasing in the last decades at Ethiopia due to the
expansion and development of hotel, retail shops, transportation service providers,
cinemas, event organizers, restaurant, café, burger, pizza, confectionary, fruits and
vegetables, and other food and beverages services. Demand projection divulges that the
domestic demand for takeaway is substantial and is increasing with time. Accordingly,
the planned Starch-Based Takeaway Plastic Manufacturing Industry is set to produce
600. 00 tons annually.

Mass use of plastic products has been a worldwide problem and induced serious
environmental, social, and economic problems. The product of this takeaway package is
one of the main sources of single-use biodegradable plastics. The principal raw materials
required biodegradable disposable plastic takeaway is starch. The additives and fillers
are also used as raw materials. The plasticizers and masterbatch are additives. The
industry uses PP Film packaging as auxiliary materials. Most of the raw materials are
available locally i. e. corn-based starch and calcium carbonate filler while the all
plasticizers (glycerol, phthalate ester, and sorbitol), masterbatch, PP film and CNT filler
are imported from abroad. All utilities are local available around the industry.

The total investment cost of the project including working capital is estimated at ETB
111. 50 million at 10,000 M2 of land and creates 130 jobs and ETB 14. 09 million of
income per year. Most of the starch-based takeaway plastics product (65%) is exported
to the international market.

The financial result indicates that the Starch-based Takeaway Plastics Manufacturing
Project will generate profit beginning from the first year of operation. Moreover, the
project will payback fully the initial investment less working capital in 4 years and 8

7
months. The result further shows that the calculated IRR of the project is 16. 26% and
NPV discounted at 12% of ETB 19. 34 million.

The main benefit of the project is the removal of environmental, social and economic
impacts of the conventional takeaway plastic products. Additionally, the establishment
of such Starch-based Takeaway Plastics Manufacturing Industry will have a foreign
exchange saving effect to the country by substituting the current imports of conventional
plastics takeaway and export a huge takeaway product. The project will also create
backward linkage with mining minerals, nano-materials production, production of
chemicals, corn farming, plastic production, plastic recycling industries, production of
starch, and manufacturing sub-sector and forward linkage with the food, tourism, health,
and consumer durables manufacturing sub sectors. The industry saves hard currency by
three ways that are exporting its product to international market, substituting imported
product and substituting raw materials. The industry can be a technology transfer center
after working with research centers and universities. The project also generates income
for the Government in terms of tax revenue and payroll tax.

8
 2. PRODUCT DESCRIPTION AND APPLICATION
Packing and labeling may be defined as a means of protecting contents from ordinary
handling, providing ease in packing and unpacking and at the same time, becoming a
means of publicizing the contents. Paper and plastic materials are the major packaging
products in the world. The trend for packaging has changed from the primitive packaging
(wooden box) to a modern and up-to-date packaging. Nowadays, packaging is used by
almost every manufacturer and supplier of perishable, non-perishable and fragile
products. Packages have inherent benefits as they are environment friendly and have
recycling capability. This is the major reason; the international market prefers packages.

Egypt seems to have pioneered food packaging. The use of tinplate for packaging dates
back to the 18th century. The first corrugated box was produced commercially in 1817 in
England. Gair discovered that by cutting and creasing he could make prefabricated
paperboard boxes. Packaging advancements in the early 20th century included Bakelite
closures on bottles, transparent cellophane over wraps, aluminum and plastic that
increased processing efficiency and improved food safety.

Traditional packaging couldn't stand the rigors of World War II which led to Military
Standard or tough military specifications in the 1940s. Polyvinyl chloride (PVC)
revolutionized food packaging. It formed a seal without clinging to itself, food or to the
container. It has low permeability to oxygen, water vapors and flavors, however there
have been concerns about its toxicity. In 21st century food packaging has evolved as a
specialized industry (Foodservice Packaging Institute, 2006).

2. 1. Principles of Packaging
Packaging of food articles should be done in a way that chances of contamination,
reaction with packed material, decomposition etc is avoided. Packaging must be done in
suitable way. The principles of packaging depends on multiple layers and production
purposes are enumerated here.
1. Primary packaging: It envelops and holds the food product what this industry wants to
manufacture,

9
2. Secondary packaging: It is exterior to the primary packaging
3. Tertiary packaging: It is the tough outermost covering that is used for bulk handling,
warehouse storage and transport/shipping.

2. 2. Development of Biodegradable Plastic in New World

Paper constitutes the most important material in the world for packaging and containers
largely because of its low cost and wide availability. It is also perceived as a sustainable
material because it is derived from plants and is recycled at a very high percentage (62%)
(EPA, 2010). Plastic ranks as the second most used packaging material in the world.
Mass use of single-use plastic products has been a worldwide problem and induced
serious environmental, social, and economic problems (UNDP, 2019). Plastics can
provide transparency, greater moisture protection, and various mechanical properties that
are superior to paper packaging. Consequently, some types of plastic packaging continue
to grow faster than other packaging materials. In contrast to the paper, only 7% of plastic
generated as waste is recycled. This explains why more plastics ultimately end up in
landfills than paper or any other packaging material (EPA, 2010). Takeaway food
package is one of the main sources of single-use plastics. This conventional takeaway
plastics has to redesign to reduce impacts based on the concept of degradability. Plastic
processors worldwide are becoming increasingly aware that environmentally sustainable
packaging has become mainstream. It can no longer be considered only a niche market
that can be ignored or given token attention. Informed consumers are demanding
sustainable packaging; state and local governments are mandating it; and now, even the
largest retailers are building it into the foundation of their marketing strategies.

The development of renewable/sustainable plastics is perceived by the industry as a

hedge against the prospect that traditional plastics will be much more costly in the future
due to dramatically higher petroleum prices. The sustainability movement is further seen
as a positive development for plastic processors since it will drive further innovation and
a new generation of materials with properties more comparable to commodity plastics
(Wood, 2010). Until recently, the biopolymers most often discussed in reference to
sustainability were starch-based polymers, cellulose, polylactic acid (PLA), and
polyhydroxyalkanoate (PHA). The most recent trends have been to broaden the spectrum
of sustainability to include materials and practices that move a step closer toward

10
sustainability by simply increasing renewable content or decreasing the overall weight
of traditional plastics used. Today’s sustainable plastics are starts to be biodegradable
that made from renewable feedstocks. PHAs are linear polyesters produced by bacteria
through a sugar or lipid fermentation process using unbalanced growth conditions. PHAs
represent a family of polymers that have a considerable potential as fully degradable
plastic polymers. Broadening the scope of sustainability has helped balance the need for
providing affordable packaging today while stimulating investment in research to
develop more sustainable alternatives for tomorrow.

Disposable packaging products are products designed to serve a single use after which
they may be recycled or disposed as solid waste. The term often implies cheapness and
short-term convenience rather than medium to long-term durability. These products
could be made of paper, plastic, cotton or polystyrene foam and includes cups, tray,
bowls, cutlery, spoons, plates, box, sandwich wraps, food containers, and other food and
pharmaceutical packaging products. Disposable packaging products are widely used in
the world due to their different merits. The food industry takes the highest share in
consumption of these products.

The takeaway products manufacture from corn-based starch. The Company will produce
a biodegradable takeaway products. Thermoforming is a manufacturing process where a
plastic sheet is heated to a pliable forming temperature, formed to a specific shape in a
mold, and trimmed to create a usable product. The sheet, or "film" when referring to
thinner gauges and certain material types, is heated in an oven to a high-enough
temperature that it can be stretched into or onto a mold and cooled to a finished shape.
The products to be manufactured include cups, plates, spoons, and pharmaceutical
packaging.

Disposable packaging products offer many advantages and thus are used by households
and companies throughout the world and Ethiopia. They are manufactured in a very
simple processing and are easy to recycle. They are ideal for all kinds of parties, function,
picnic occasions and events Non-toxic in nature, the surface and surface designs on these
products are attractive and present an inviting look. Disposable packaging products can
also be custom printed with a logo and tag line or advertising message. They are also
stylish, eloquent and come in different colors and size. Their affordability, easy to use,

11
efficient and convenience advantages have made these products popular in Ethiopia,
especially with large event organizers.

Takeaway packaging is one of the common technologies as a box having different sizes
widely used for diverse packing applications. It is used in various industries like food,
pharmaceuticals, soaps, cosmetics and consumer durables, due to its inherent advantages.
They are the most suitable to pack consignments and recently.

Manufacturing process involved include mixing, extruding, thermoforming, heating,

molding, cutting, stacking, and packing.

The out-put of the plant will serve as a packing material for food preparation and selling
business. The project has backward linkage with corn farming, starch manufacturing,
chemicals production and forward linkage with product buyers’ industries hotel, retail
shops, transportation service providers, cinemas, event organizers, restaurant, burger,
pizza, tourism, confectionary, fruits and vegetables, and others.

12
 3. MARKET STUDY, INDUSTRY CAPACITY AND
PRODUCTION PROGRAM
3. 1. Market Study
3. 1. 1. Present Demand And Supply
The value of Ethiopia’s plastics, printing and packaging sector has risen significantly in
recent years, expanding by 601. 8% between 2012 and 2017 and recording a compound
annual growth rate (CAGR) of 45%. The sector has been driven by the increasing
demands of the FMCG industry which benefits from both the large domestic market and
the country’s ongoing investments in manufacturing for export. This jump in capacity
has required substantial capital investment, with Ethiopia importing $39 million worth
of packaging machinery in 2017 - a CAGR of 48% from 2012 - making it the second-
largest importer in East and Central Africa. The sector also relies on imports for its
primary plastics as there is no local production of plastic, the most commonly used
packaging material.

As Ethiopia does not manufacture any plastics raw materials at all, 100% of raw materials
are imported (mainly from the Middle East, EU, and Asia). Thus, the Ethiopian market
has great potential for exporters of plastics in primary forms. Imports of plastics raw
materials, for instance, grew by 18. 6% annually between 2007 and 2017, from 43 kt to
237 kt. Ethiopia is the largest and fastest growing importer of plastics technology in the
last decades in Africa. Ethiopia imports of 41 million euros in 2019 related to plastics
technology. The average annual growth rate of import of plastic is 19. 2% between 2012
and 2019. As seen in FIGURE 3. 1 and 3. 2, the entire situation places Ethiopia as the
largest importer of plastic raw materials and packaging technologies respectively.

13
FIGURE 3. 1 : IMPORT OF RAW MATERIALS FOR PLASTICS PRODUCTS
PRODUCTION AT ETHIOPIA (EUROMAP, 2019)

In addition to the import of plastic inputs and technology from abroad, Ethiopia
is largest and fastest growing importer of packaging technology. Packaging
technology is strongly depending on plastic technology i. e. the printing and paper
converting technology. Ethiopia is also the largest and fastest growing importer
of packaging technology. Packaging technology has an annual growth rate of 23%
from 2012 to 2019.

14
FIGURE 3. 2 : GROWTH OF IMPORTING PACKAGING TECHNOLOGY
(EUROMAP, 2019)

In Ethiopia, the per capita plastic consumption in 2018 at 2. 8 kg, a 267% rise
from a figure that put the consumption per capita at 0. 6 kg in 2007. The per capita
consumption of plastics in Ethiopia has grown by 13. 1% annually over the past
years, from 0. 6 kg to 2. 8 kg in 2018 and estimated to be 3. 8 kg in 2022 (FIGURE
3. 3).

15
FIGURE 3. 3 : PER CAPITA CONSUMPTION OF PLASTICS IN ETHIOPIA
(EUROMAP, 2019)

Ethiopia is seeing a rise in its plastic consumption and production. EUROMAP

predicts that Ethiopia will produce 386,000 tons by 2022 and the per capita
consumption will rise to reach 3. 8 Kg.

The countries plastics consumption has grown by 15. 6% annually over the past
years, from 44 kt to 268 kt in 2018 and estimated to be 386 kt in 2022 in strong
and steady increase (FIGURE 3. 4).

16
FIGURE 3. 4 : COUNTRY PLASTICS CONSUMPTION ETHIOPIA (EUROMAP,
2019)

In Ethiopia most plastic products consumption accounted for 51% for packaging, 14%
for construction, 7% for automotive, 3% for electrical, electronics and telecom. The
remainder 25% of the plastic consumption is for various industries.

Between 1994 and 2017, there have been 198 licensed investment projects in the
Ethiopian packaging industry. Just over three-quarters of the investments were from
domestic sources, 17. 2% originated from abroad and 6. 1% were joint investments from
local and foreign sources. The highest proportion of foreign investments were from
China and India, followed by the USA. Nearly 40% of investments recorded were mixed
packaging projects, 31% were in paper packaging and another 27% were in the plastic
and flexible packaging segment. A small number of the investment projects were
intended for the manufacturing of packaging made from polystyrene, polypropylene or
metal.

Across the 23-year period, just over half of the investments went into the capital Addis
Ababa, with the Oromia and Amhara regions receiving 21. 6% and 10. 6% of the
investments, respectively. The remaining 26 investment projects were spread among
three other regions. Currently, Ethiopia has 35 companies operating in Ethiopia’s
packaging industry, which are widely used in the food industry, are produced by 40% of

17
the companies listed. Paper packaging products are manufactured by seven companies,
or 31% of the total list. The same number produce packaging boxes, takeaway containers
and wrapping for the large and growing local industries, Ethiopia is Africa’s second-
largest population with expansion of many hotel and food delivery services. Plastics
bottles and lids or caps, and jute sacks and PP bags are produced by 14% and 8. % of the
companies, respectively, while 11 make various other types of packaging products.

Available demand data show that there is ample demand for box in the country. The
current domestic production of Ethiopia is about 15,200 tons per year. As the data of
ERCA shows that the average value of export and import of box are 8,349. 50 tons and
3,262. 99 tons in the last few years. Thus, it is assumed that most of packaging material
processing industry that exist in Ethiopia have no potential to cover domestic market.
Additionally, there is a potential of export of the packaging materials especially for
FMCG products like takeaway to many nations as is presented in Table 3. 1 below.

TABLE 3. 1 : EXPORT AND IMPORT OF PACKAGING PRODUCTS (IN TON)

YEAR IMPORT EXPORT
2015 2,554. 63
2016 2,626. 87 1,536. 80
2017 3,342. 59 19. 00
2018 3,111. 60 15,240. 00
2019 3,462. 67 9,494. 00
2020 3,586. 32 2,704. 80
2021 4,156. 25 21,102. 40
Average 3,262. 99 8,349. 50
Source: ERCA, 2023

The above table shows that the average annual demand for packaging materials is
growing in that derived from domestic production and decreasing that derived from
import from abroad. For the six years under consideration (2015 to 2021), the plastic
industries have a gap to cover the market. Although the trend of import and export
exhibited ups and down movements initially, it continuously grew in the last few years.

18
This is likely related to the growth in consumption and production goods in the industrial
and agricultural sector.

Even if the growth of packaging materials production recorded in Ethiopia in the last
decades as seen above, most of the inputs are imported from petroleum producing nations
especially Middle East. Much of the focus is given to manufacturing polyethylene
products, mainly plastic bottles and containers due to the number of food processing
companies in Ethiopia. This takeaway industry uses locally available raw material i. e.
starch.

3. 1. 2. Projected Demand
Global demand for biodegradable corn starch plastic granules is rising as environmental
concerns and regulations become more stringent. Biodegradable corn starch plastic
granules can be used to make a variety of products, including bags, containers, and
packaging materials. According to Markets and Markets, the packaging materials market
will reach $6. 12 billion by 2023, growing at a 14. 5% CAGR from 2018 to 2023.
According to the report, Asia-Pacific is expected to be the largest market for packaging
materials due to the region’s growing demand for sustainable products. The market map
includes revenue estimations for two-thirds of listed sector players. Of these, six
companies earn above $10 million, while 15 are in revenue brackets between $1 million
and $10 million. Addis Ababa hosts 80% of the companies listed, with the remaining
20% located in the surrounding Oromia region. The demand for packaging materials is
mainly the result of requirements in packaging by the industrial sector. As the last five
years showed a commendable improvement in this sector, similar result has been
obtained in the production and demand for packaging materials. For instance, between
2021 and 2022, the demand for the packaging materials has grown on average by more
than 11%. With more expected investment in the industrial sector in the future, the
demand for packaging will also grow considerably. However, if we conservatively
assume that demand continues to grow only by 5%, we obtain the following forecast
result (Table 3. 2).

19
TABLE 3. 2 : PROJECTED DEMAND FOR PACKAGING MATERIALS (IN TON)
Year Projected Demand

2024 16,000. 00
2025 16,800. 00
2026 17,640. 00
2027 18,522. 00
2028 19,448. 10
2029 20,420. 51
2030 21,441. 53
2031 22,513. 61
2032 23,639. 29
2033 24,821. 25

The result points out that, the overall demand for packaging materials will substantially
grow in the future. For example, by 2033, demand will reach 24,821. 25 tons. Thus, the
result obtained with conservative assumption asserts that there is attractive demand for
packaging materials.

3. 1. 3. Pricing and Distribution

In 2022, producers’ price of domestic production of packaging materials has been on
average ETB 260. 00 per kg while it was ETB 300. 00 per kg for the imported item. A
piece of packaging materials with a size of 50cm x 35cm x 30cm and 35cm x 25cm x
15cm packaging materials are equivalent to 0. 05 kg and 0. 03 kg respectively. In view
of this and also based on the market research result and the capacity of the envisaged
industry, the selling price of packaging materials has been estimated at ETB 200. 00 per
kg.

This takeaway product is selected to attract various target industries. The target
customers are manufacturers and suppliers of all types of foods. Some of the target clients
for a manufacturer of Starch-based Takeaway Plastics are hotels, restaurants, burger

20
houses, pizza houses, cafes, confectionary, fruits and vegetables and other services. The
available retail and wholesale network shall be used by the envisaged industry.

Most of the takeaway product will exported to African nations and Asian nations. The
company will export 65% of the takeaway product to the world market. The remaining
35% of the product will present to the domestic market.

3. 2. Industry Capacity
Considering the expected demand for packaging materials as presented earlier, and the
planned technology, the envisaged industry is set to biodegradable bioplastics i. e. starch-
based takeaway.

This proposed production amount is equivalent to 600. 00 tons, which is less than 5% of
the local production reported in 2024.

3. 3. Production Program
The program is scheduled based on the consideration that the envisaged industry will
work 300 days in a year in 1 shift 8 hours, where the remaining days will be holidays and
for maintenance. During the first year of operation the industry will operate at 70%
capacity, growing to 80% and 90% in the 2nd and 3rd year respectively. The capacity will
grow to 100% starting from the 4th year. This consideration is developed based on the
assumption that market and logistics barriers would take place for the first three years of
operation.

21
 4. RAW MATERIALS AND UTILITIES
4. 1. Availability and Source of Raw Materials to
Manufacture Starch-based Takeaway Plastics
The key raw materials used in producing Starch-based Takeaway Plastics is starch. In
addition to the starch, the industry uses additives and fillers to process biodegradable
takeaway product. Additives and fillers are organic and inorganic compounds that are
introduced in bioplastics in order to change the properties of the takeaway product.

1. Starch
Much of the focus on renewable and sustainable plastics involves the use of starch either
as a feedstock or as a component. Commercial starches worldwide are extracted primarily
from cereal grains such as corn (82%) and wheat (8%) and tuber crops such as potato
(5%) and cassava (5%) (Le Corre et al. , 2010). Starch continues to remain a viable
alternative to petroleum-based plastics primarily because of its low cost and abundance
and because it is a renewable material that degrades readily in composting conditions and
in many landscape and aquatic environments (Law et al. , 2010; Thompson et al. , 2004).
Corn-based starch outweighs other starch sources.

2. Additives
The most common additive in plastic are plasticizers. The most common plasticizers are
phthalate esters, sorbitol, and glycerol especially in food takeaway services. The other
additives in bioplastics production are colorants that are also required for the production
of biodegradable corn starch plastic granules. The amount of additives is about 5% by
weight of all the plastic products manufactured (Babinsky and Gastrock, 2008). Unlike
conventional plastic production, bio-plastics don’t uses UV stabilizers and antioxidants
additives.

Plasticizers, which are used to improve the flexibility and durability of the final product.
Masterbatch (MB) is a solid additive for plastic used for coloring plastics (color
masterbatch) or imparting other properties to plastics (additive masterbatch). A liquid
dosage form is called liquid color. Masterbatch is a concentrated mixture of pigments

22
and/or additives encapsulated during a heat process into a carrier resin which is then
cooled and cut into a granular shape.

3. Filler
The common fillers are CNT (Carbon Nanotubes), calcium carbonate, talc, kaolin,
barium sulphate, glass, sodium sulphate, silica, clay, and carbon. The fillers are increase
the stability of the mold and shape of the plastics by increase of tensile strength, increase
of the heat-deflection and thermal expansion or improving electrical conductivity. CNT
is widely used nanofillers in starch-based bioplastic owing to its superior mechanical,
electrical, magnetic and optical and thermal properties. This industry uses calcium
carbonate and CNT as filler.

In the bioplastics production, the industry uses 90% corn-based starch, 4% plasticizers
(glycerol, phthalate ester, and sorbitol), 5% fillers and 1% masterbatch. The source of
the raw materials and inputs are local starch production. Most of the raw materials are
locally available while few of the chemicals are imported from abroad. The auxiliary
materials are PP film. The plasticizers and masterbatch are additives. Most of the raw
materials are available locally i. e. corn-based starch and calcium carbonate filler while
the all plasticizers, masterbatch, PP film and CNT filler are imported from abroad. All
utilities are local available around the industry.

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
Starch-based Takeaway Production Industry are listed in Table 4. 1 and 4. 2 here under
at full capacity.

23
TABLE 4. 1 : RAW MATERIALS AND AUXILIARY REQUIREMENT AT FULL
CAPACITY
SR. UNIT LOCAL FOREIG TOTAL
NO. QUA COST PER COST N COST COST (IN
NTIT UNIT (IN (IN 000 (IN 000 000 ETB)
ITEMS Y ETB) ETB) ETB)
Raw
Materials
1 Ton 540. 44,604.
82,600. 00
Corn-Starch 00 00 44,604. 00
2 Plasticizers
2. 1 Phthalate Ton
6. 00 79,750. 00
Ester 478. 50 478. 50
2. 2 Sorbitol Ton 6. 00 85,250. 00 511. 50 511. 50
2. 3 Glycerol Ton 12. 00 35,750. 00 429. 00 429. 00
2. 4 Masterbatch/ Ton
6. 00 143,000. 00
Colorant 858. 00 858. 00
3 Fillers
3. 1 CNT Ton 6. 00 85,250. 00 511. 50 511. 50
3. 2 Calcium Ton
24. 00 24,750. 00
Carbonate 594. 00 594. 00
Auxiliary
Materials
5 PP Film Lump
Packaging Sum 3,420. 00
TOTAL 51,406. 50
COST

The total cost of raw materials at full capacity of production is estimated to be ETB 51.
41 million per year as presented in Table 4. 1.

The production of the takeaway product requires electricity, water, fuel and lubricant oil
for the smooth process. The industry can get ICT services with low cost from the local
company. All the utilities are locally available. The consumption of water and energy to
process Starch-based Takeaway Plastics is 180 li/kg and 0. 28 KWH/kg respectively.

The cost of utilities item are detailed in the following Table 4. 2. The total cost related to
utilities are ETB of 2. 01 million per year.

The total running cost for raw materials and utilities reaches to ETB 53. 42 million per
year.

24
TABLE 4. 2 : ANNUAL UTILITY REQUIREMENT AT FULL CAPACITY
SR. QUAN FOREI TOTAL
NO. TITY COST GN COST
PER LOCAL COST (IN 000
UNIT COST (IN ETB)
(IN (IN 000 000
UTILITY UNIT ETB) ETB) ETB)
1 Electricity 168,000
KWH 3. 40 571. 20 571. 20
. 00
2 Fuel 4,100.
Li 77. 00 315. 70 315. 70
00
3 Lubricant
Oil Kg 19. 20 550. 00 10. 56 10. 56

4 Water 108,000
M3 10. 00 1,080. 00 1,080. 00
. 00
5 ITC 37. 00 37. 00
Total Cost 2,014. 46

25
5. TECHNOLOGY AND ENGINEERING
5. 1. Production Process
Plastic granules made from corn starch are biodegradable and have similar properties to
traditional plastic granules. The production process of the takeaway products are
presented in Figure 5. 1. The following steps are involved in the production of
biodegradable corn starch plastic granules:

 Making a slurry of corn starch, water, and plasticizers,

 The slurry is extruded through a die to form long strands,
 Making small pellets out of the strands,
 The pellets are being dried,
 Colorants and fillers are added to the pellets, and
 The pellets can then be used to make a variety of biodegradable products.

Most commodity grade and engineering grade starch-based pellets are blow molded in
case of biodegradable plastics production. As seen the physical properties of the pellets,
they are existing in solid phases that molded into many shapes and different diameters
by using heat supply.

The manufacturing consists of plasticizing and homogenizing compound and melting

through extruder. Extruders are mechanical mixers consisting of long metallic screws
used for processing solids and viscoelastic materials. Many different types of extruder
can be used to produce biodegradable plastics, the main two commercial types are single-
screw extruders and twin-screws extruders and they differ in the transport mechanism.
In most single-screw extruders the processed material rotates with the screw and is
kneaded by contact with the barrel wall. The material characteristics and the channel wall
affect the transport mechanism of this type of extruders. In contrast, the material cannot
rotate with the screws in the twin-screws extruders as a result of the intermeshing
occurred between the two screws. Therefore, twin-screws extruders are more suitable for
thermoplastic because of the water content and twin-screws extruder is less dependent
on the material properties than a single-screw extruder.

26
This hot molten compound is extruded through a circular sheet form where the size of
takeaway plastic products will be governed. So using different sizes of sheets in roll form
with different sizes of products and different sizes will be manufactured and will pass
through a vacuum sizing and cooling tank where the dimension of the products can be
accurately set to standard size and finally cut required length using motorized moving
cutting process. The basic material which on polymerization produces biodegradable
plastic products is inputs which is starch. The rigidity can be controlled by controlling
the percentage of plasticizer at the time of compounding. Continuous process used to
produce the takeaway that have a constant cross-section. The tapered screw compacts the
plastic as it becomes elasticised. The end of the extruder barrel determines the cross-
section of the extrusion. Thicker cross-sections are extruded more slowly as more time
is required for the initial heating and subsequent cooling of the larger quantities of
material which are involved. As the extrusion leaves, it is cooled by passing through a
cooling trough (below) containing cold water. Vacuum sizing reduces the percentage of
wastage considerably. As the products being extruded is rigid in form. So an inline
motorized cutting device should be provided for cutting the products into required sizes.

For ascertaining the consistency in product quality the unit should be equipped with
process control laboratory for preliminary testing of raw materials. The unit may also
have arrangement for quality testing of finished products. The products are suitable for
almost all the food products that have used for takeaway services as packaging.

The plastic products may be injection molded, fabricated or thermoformed. The

thermoformed material finally stacked for packing process. The packing process uses PP
plastics for appropriate transportation and prevent damage.

The following section will briefly describe the operations of each technique. Equipment
to mold products consists of a mold and an injection molding press, as shown in the
following figure (Figure 2-6). The molded part is created by filling the cavity in the mold
block through a filling port, called a gate. The material volume needed to fill the mold
cavity is called a shot.

27
 Mixer Of Starch and Additives for Granules Production

Extruding for Sheet Roller Production

Forming

Heating

Molding /Thermoforming Machine

Cutting

Stacking

Packing of Finished Takeaway Product

FIGURE 5. 1: THE MAIN PROCESS IN THE PRODUCTION OF BIODEGRADABLE

TAKEAWAY PLASTICS

28
FIGURE 5. 2 : EXTRUSSION PROCESS AND ITS FLOW SHEET AS CONTINUOUS
PROCESS USED TO PRODUCE BOTH SOLID AND HOLLOW PRODUCTS THAT
HAVE A CONSTANT CROSS-SECTION

FIGURE 5. 3 : POLYMER INJECTION AND INJECTION MOLDING

29
FIGURE 5. 4 : BLOW MOULDING

30
FIGURE 5. 5 : VACUUM FORMING

FIGURE 5. 6 : COMPRESSION MOLDING IN PLASTIC PLASTIC PRODUCTS

5. 2. Machinery and Equipment

The machineries and equipment required for producing Starch-based Takeaway Plastics
is detailed in Table 5. 1 below. The total cost of machinery and equipment including
freight, insurance and bank cost is estimated to be about ETB 33. 13 million.

31
TABLE 5. 1 : MACHINERY AND EQUIPMENT
QUAN COST PER LOCAL FOREIG TOTAL
SR. TITY UNIT COST (IN N UNIT COST (IN
DESCRIPTION
NO. (ETB) 000 ETB) (IN 000 000 ETB)
ETB)
1 4,106,223.
High Speed Mixer 1
45 4,106. 22 4,106. 22
2 Granulated Pellet 5,107,601.
1
Production Machine 23 5,107. 60 5,107. 60
3 Extruder Machine
3,206,502.
With Complete Line 1
76
Set 3,206. 50 3,206. 50
4 Thermoforming 3,665,721.
1
Machine 10 3,665. 72 3,665. 72
5 3,105,405.
Heating Machine 1
71 3,105. 41 3,105. 41
6 Forming
4,711,315.
Machine/Hydraulic 1
27
Press Machine/ 4,711. 32 4,711. 32
7 3,111,050.
Cutting 1
67 3,111. 05 3,111. 05
8 3,102,772.
Stack Machine 1
84 3,102. 77 3,102. 77
Total FOB - 30,116.
59 30,116. 59
Freight, Insurance, -
Bank Charges,
Handling Charges,
etc 3,011. 66 3,011. 66
Total CIF 33,128. 25

The following are some of the machineries suppliers’ address for the envisaged project
1. Litai Machinery Co. Ltd
 Tel : 0086-577-65558777/0086-577-65558188
 E-mail : litai@litai. cc
 Address : Nongchang Road, Xinxing Industry, Haixi Town, Pingyang County,
Wenzhou City, Zhejiang Province, China
 Office Address : Room 1201-1203, Building 1, Xifuhui, Hongpu Road,
Shangcheng District, Hangzhou City, Zhejiang Province, China
 Fax : 0086-577-65551298
 www. litai. cc/www. litaimachine. com/www. litaithermoformer. com

32
2. Sinoplast Machinery Co. , Ltd.
 Xingbei Road, Doubei Village, Haixi Town, Pingyang Country, Wenzhou City,
Zhejiang Province, China
 E-mail: market@sinoplast-thermoform. com
 Tel: +86-18758704685
Fully automated machinery employs lesser labor and gives the highest production. But
as the proposed business will be initially order based and the targeted capacity is not as
such huge, it is recommended that the envisaged industry should concentrate on
capturing the market while keeping the project costs at lower end. Moreover, it is
important to notice that there is a huge difference in the costs of the two methods where
the fully automated technology costs 4 times higher than the semi-automated one.
Therefore, the proposed project will be operating on semi manually operated bioplastics
processing technology.

5. 3. Civil Engineering Cost

Total site area for the envisaged industry is estimated to be 10,000 m2. The major
buildings and civil works include buildings for production, offices, workshops and
warehouses. Total cost of building and other civil works is estimated at ETB 34. 28 million.
The alternative technological option available involves the use of fully automated
machinery.

33
6. HUMAN RESOURCE AND ORGANIZATIONAL
STRUCTURE
6. 1. Human Resource
The list of required manpower for the envisaged industry is stated in Table 6. 1 below.
The envisaged industry therefore, creates 130 jobs and about ETB 14. 09 million of
income. The professionals and support staffs for the envisaged industry shall be recruited
from the surrounding region of the Debre Birhan City. The key experts related to this
industry has to supervised and managed by chemists and chemical engineers.

TABLE 6. 1 : HUMAN RESOURCE REQUIREMENT

MONTHLY ANNUAL
SR.
POSITION NO. SALARY SALARY IN
NO.
IN ETB 000 ETB
1 Overhead Labour

1. 1 General Manager Office

1. 1. 1 General Manager 1 25,000. 00 300. 00

1. 1. 2 Executive Secretary 1 10,000. 00 120. 00

Sub Total 2 420. 00

Finance And Administration
1. 2
Department
1. 2. 1 Department Head 1 15,000. 00 180. 00

1. 2. 2 Senior Accountant 1 10,500. 00 126. 00

1. 2. 3 Junior Accountant 2 7,500. 00 180. 00

1. 2. 4 Senior Cost Accountant 2 7,500. 00 180. 00

1. 2. 5 Personnel 2 6,000. 00 144. 00

1. 2. 6 General Service 2 5,000. 00 120. 00

1. 2. 7 Driver 2 12,500. 00 300. 00

1. 2. 8 Security Head 1 7,500. 00 90. 00

1. 2. 9 Guard 3 5,000. 00 180. 00

34
1. 2. 10 Janitors 7 5,000. 00 420. 00

1. 2. 11 Gardner 3 5,000. 00 180. 00

Sub Total 26 2,100. 00

Management Information System
1. 3
Service
1. 3. 1 Service Head 1 15,000. 00 180. 00

1. 3. 2 IT Expert 2 7,500. 00 180. 00

Sub Total 3 360. 00

1. 4 Commercial Department

1. 4. 1 Department Head 1 15,000. 00 180. 00

1. 4. 2 Purchaser 2 7,500. 00 180. 00

1. 4. 3 Salesperson 3 7,500. 00 270. 00

1. 4. 4 Storekeeper 1 7,500. 00 90. 00

1. 4. 5 Assistant Store Keeper 2 6,000. 00 144. 00

Sub Total 9 864. 00

Total 40 3,744. 00
Employee’s Benefit and Expense (20%
748. 80
Of Basic Salary)
Total Overhead Labour 40 4,492. 80

2 Direct Labour

2. 1 Production And Technical Department

Department Head Specialized in
2. 1. 1 1 15,000. 00 180. 00
Chemical Engineer
Production Supervisors specialized in
2. 1. 2 2 11,000. 00 264. 00
Chemical Engineer
2. 1. 3 Operators 21 7,500. 00 1,890. 00

2. 1. 4 Assistant Machine Operators 10 7,000. 00 840. 00

2. 1. 5 Laborers 31 6,000. 00 2,232. 00

2. 1. 6 Senior Mechanic 7 10,500. 00 882. 00

2. 1. 7 Junior Mechanic 4 7,500. 00 360. 00

2. 1. 8 Senior Electrician 4 7,500. 00 360. 00

35
 2. 1. 9 Junior Electrician 3 7,500. 00 270. 00
Sub Total 83 7,280. 00
2. 2 Quality Control and Assurance Service
2. 2. 1 Service Head Specialized in Chemistry 1 15,000. 00 180. 00
2. 2. 2 Quality Controller 3 7,500. 00 270. 00
Plastic Processing Experts Specialize in
2. 2. 3 3 7,500. 00 270. 00
Chemistry or Chemical Engineer
Sub Total 7 720. 00
Employee’s Benefit and Expense (20%
1,357. 20
Of Basic Salary)
Total Direct Labor Cost 90 - 9,597. 60
Grand Total Cost 130 - 14,090. 40

6. 1. 1. Training Requirement
Training of key personnel is very essential and shall be conducted in collaboration with
the suppliers of the industry machineries. The training should primarily focus on the
production technology and machinery maintenance and trouble shooting. It is suggested,
to train production and technical manager, production and technical head, and quality
control head, mechanics, electricians and operators on-the-job training at the actual site
on the actual working condition by competent expert of the machinery and technology
supplier for about one month during erection and commissioning period.

6. 2. Organizational Structure
There are numerous reasons why having an organizational structure is key for a Starch-
based Takeaway Plastics processing business:
 Provides a management planning tool: An organizational structure can help a
company plan more strategically for the future so it can meet its goals. It can help
determine the hiring process and how it plans to expand in the future.
 Improves decision-making: It creates a company-wide understanding of how
information flows throughout the business, whether it's from executives to manager
to employee or employee to employee.
 Helps employee engagement: Having an organizational structure gives each
employee a specific role within the industry. It can help employees understand how
their work fits with the industry’s vision and may enable more effective teamwork
and management expectations.

36
 Provides a visual: Many industries that use an organizational structure create a chart
that they can use as an employee.
The company organizational structure shall consist of the following six departments
related to Starch-based Takeaway Plastics Manufacturing Industry:
 General Manager Department,
 Management Information System Service
 Production and Technical Department,
 Finance and Administration Department,
 Commercial Department, and
 Quality Control And Assurance Department.
The organizational structure of the industry is shown in Figure 6. 1.

37
FIGURE 6. 1 : ORGANIZATIONAL STRUCTURE OF THE STARCH-BASED TAKEAWAY PLASTICS MANUFACTURING INDUSTRY

GENERAL MANAGER

QUALITY CONTROL DEPARTMENT INFORMATION MANAGEMENT SERVICES

ADMINISTRATION AND PRODUCTION AND TECHNICAL COMMERCIAL

FINANCE DEPARTMENT DEPARTMENT DEPARTMENT

Finance Division Production Division Procurement and Stores

Division
Personnel and General Service Technical Division
Division Market Research and Sales
Division

38
 Functional description of each of the six department units is as summarized below.
6. 2. 1. General Manager
The General Manager1 discharges all the du ties and respon sib ilities. Bes ides strategic and p olicy directing role, the General Manager is in charge of the following main duties an d responsibilities.
 Develops strategic and operational plans and organizes, admin isters and contro ls the o verall operation of the indus try in line with Company policy ,
 Manages the day to day affairs of the industry ,
 Represents the in dustry before courts of law and all other parties, and delegates his power as may be necessary ,
 Draws, signs, endorses, accepts and negotiates any commercial documents in accordance with the internal regulation s of the industry ,
 Authorizes expenditures, sign checques and auth orize s ignatories on checques as appropriate,
 Ensures the accomplishm ent of the enterprise objectives, plans and policies set,
 Issues policy guidelines to the various managerial staff, and
 Chairs management and other higher committee meetings of the in dustry .

6. 2. 2. Pro ductio n A nd Technical Department

The major duties and responsibilities to be performed by the Production and Technical Department include:
 Planning, organizing , directing, coord inatin g and supervis ing the productio n and technical operation s of the industry ;
 Ensures that the necessary manpower, equipment and facilities that are organized for in dustry and maintenance operations;
 Assess the requirements in relatio n to pro duction capacity and performance, manpower availability and materials supply ;
 Sets in dustry processing and performance targets in consultation with to p management;
 Ensures that the required ty pe, quality and quantity of raw materials are available to maintain continuous and optimum level of operation;
 Ensures that industry plan and program, records etc are properly maintained for future reference;
 Stud ies equipment developments and improved indus try techniques;
 Devises inspection program to control quality and develops indus try reporting procedures;
 Ensures that all equ ipment and machinery are operated and maintained in accordance with the required standards;
 Develops and recommends equipment management sy stem for efficient operation, usage maintenance and replacement of equipment a nd machinery
 Assists management in establishing criteria, policies and procedures for replacement, disposal or obso lesce of equipment and vehicles
 To carry out the above activities, the Productio n and Technical Department will have tw o functional division s, namely
 Production Division, and
 Technical Service Division

6. 2. 3. Fina nce and A dministration Depart ment

The major duties and responsibilities to be performed by the Finance and Administration Department inclu de:
 Plans, directs, coordinates, organizes and con trols the overall activities of personnel, man power planning and develo pment, health and safety and general service activities;
 Ensures that personnel polic ies, regulation s and procedures of the company are compiled;
 Develops an efficient human resource planning and development sy stem and on approval, ensures its implementation ;
In consultation wit h concerned departments, performs personnel actions such as recruitment, placement, promotions; and demotio ns;
 Ensures that maintenance of vehicles are properly carried out;
 Provides efficient office services in the areas of communications (telephone), transpor t, safety protections, and cleanlines s;
 Makes sure that, the properties of the in dustry are identified, well pro tected, safely handled and guarded;
 Makes sure that each personnel file is up-to-date and well documented with the pertinent information. Handles also the general archives and records management sy stem;
 Ensures that the indus try has modern accounting and costing sy stems and fiscal policies and procedures; als o ensures their implementation ;
 Keeps up-to-date and reliable accounting and cos t records;
 Coordinates the preparation of annual bud gets and contro ls its allocations and u tilizations ;
 Checks and ensures the regularity and authority of requests for pay ment and effects disbursements;
 Sends bills and statement of accounts to clients and ens ures their prompt pay ment;
 Receives cash and deposits daily collections intact in the in dustry ’s Ban k Accounts;
 Ensures timely reconciliation of ban k accounts, creditors, debtors and other accounts;
 Effectively manages the working capital of the company and with the approval of the Board of Directors and/or Management, arranges short and long-term bank credits; and
 Prepares and issues daily , monthly and annual financial reports.
The Finance and Adminis tration Department is internally structured comprising d ivis ions includ ing:
 Finance Division and
 Personnel and General Service Division.

6. 2. 4. Co mmercial Department
The major duties and responsibilities to be performed by the Procurement and Marketing Department include:
 Plans, organizes d irects, coordinates and con trols the overall activities of the domestic and foreign sales and purchase and the s tore and property administration;
 Develops sy stems and procedures necessary for the efficient and effective operation of the sales, purchasing and storage function s of the industry ;
 Promotes the business of the company through sales campaigns and advertisements;
 Identifies suitable supp ly markets for local and foreign purchases on the basis of estab lished sy stems and procedures and bargains prices; ascertains the delivery of supplies o n time;
 Ensures that all supp lies purchased are of the required ty pe, quality and standards;
 Initiates and prepares operational directives and guidelines governin g procurement, sales and store and property administration of the company ;
 Ensures that all materials (raw materials, spare parts, office supplies and fin ished prod ucts) are properly received and kept in stores as per established rules and regu lation s; and
 Exercises inventory control and materials programming that ensures an effective materials management sy stem
The Procurement and Marketin g Department is internally structured comprisin g div isio n includ ing:
1. Procurement divisio n and
2. Market research and sales division

6. 2. 5. Q uality Co ntrol And As sura nce Departme nt

The major duties and responsibilities to be performed by the Quality Control and Ass urance include:
 Select easy quality control and assurance methods for Starch-based Takeaway Plastics production process,
 Respons ible to prepare environmental management plan per year,
 Develops a standard of the raw materials for Starch-based Takeaway Plastics processing and Starch-based Takeaway Plastics product and over all activities in written d ocument to other department,
 States the q uality of the inp uts and outpu ts of the sy stems of Starch-based Takeaway Plastics processing,
 Branding the quality of its products for local and global cu stomers with the state-of-art-technology , and
 Training the s taff of the indus try in consideration of g lobal s tandard related to Starch-based Takeaway Plastics processing.

6. 2. 6 MI S Services Department
The major duties and responsibilities to be performed by the MIS Services Department include:

 Develop input-o utpu t follow-up software platform for staff of the production to customize the goo d wor kin g practice within the sy stem,

 Coordinate researchers from Production and Technical Department and Quality Contro l and Ass urance Department to innovate a ne w way of sustainable biodegradable plastic productio n in con sideration of takeaway quality and profit,

 Promotes the business of the company through modern internet platform in discus sion w ith commercial department,

 Prepare business pamphlets as a company profile in local and in ternational lang uages, and

 Develop accessible data for all the staffs in written and on line for sus tainable production and technology transfer.

The MIS services department in ta keaway production develops computer sof tware platforms used to track to and document transformation of raw materials to the finished pro ducts. The data management within the sy stem of the industry used to monitor the flow of inpu ts and products throu ghout the organiza tion that up date the critical bus iness data. Ad ditionally , this department coordinates research and product development within the biodegradable takeaway production process. All the experts wh o have bachelor degree in chemistry and other related discipline will participate to get a more degradable plastics. The research will loo ks into inputs of ta keaway to transportation of the different product. Finally , the MI S grows into Research and Product Development.

1 The General Manager of the company has to have at least Bachelor Degree in
Chemistry or Related field

39
7. FINANCIA L ANALY SI S
7. 1. Underlying As sumptio n
The financial analy sis of Starch-based Takeaway Plastics Manufacturing Indus try is based on the data prov ided in the preceding sections and the following as sumption s as seen in Table 7. 1-7. 3.

TABLE 7. 1 : CO NST RUCTION AND FINAN CE; DEPRE CIATION AND WORKING CAPITAL (MINIMUM DAY S O F COVE RAGE)

CONST RUCTION AND FINAN CE UNITY VALUE

Construction Period y ear 1

Tax Holiday s y ear 2

Source Of Finance (Equity ) % 30%

Source Of Finance (Loan) % 70%

Wall and Roof Pay ment ETB 4,800. 00

Ban k Interest Rate % 11. 5%

Discount For Cas h Flow % 12%

DEPRECIATION UNITY VALUE

Building % 3%

Machinery And Equipment % 10%

Office Furniture % 10%

Vehicles % 10%

WORKING CAPITAL UNITY VALUE

Raw Material Local day 10

Raw Material Foreig n day 110

Factory Supplies In Stoc k day 50

Spare Parts In Stoc k And Maintenance day 55

Cash In Hand day 20

Accounts Pay able day 30

Work in progress day 2

Finished products day 30

Accounts receivable day 30

7. 2. I mpleme ntatio n Sc hedule

The implementation schedule covers the activities starting from the project construction to operation period , bid-purchase-trial run of machineries, and commissionin g. It is envisaged that the complete implementation program requires a total of 12 months as seen in Figure 7. 1.

FIGURE 7. 1 : PRO JECT I MPLEMENTATION SCHEDUL E

ITEM ACTIVITIES MONTH

SR. NO. 1-2 3-5 6-9 10 11 12

1 Preparatory Period, 1. Approval Of Feasib ility Study , 2. Financial Arrangement xxxx

2 Tender Document Preparation For Machinery Supply xxxxx xxxx

3 Tendering For Machinery Supp ly xxxxx xxxx

4 Tender Evaluation, Negotiation,, And Contracting xxx

5 Design of Installation of Machinery And Equipment xxxxx

6 Equipment Delivery xxx

7 Erection xxx

8 Manpower Recruit And Train ing xxx

9 Trial Run An d Commissioning xxx

10 Start Of Operation xxx

The formation of implementation team, employment of the implementation consultant and financial arrangement will be carried out with in one month after the approval of the feasibility study .

Machinery and Equipment: Tender document preparation for production machinery and equipment will start a month after project approval and will ta ke 2 mon th period. Tender floating will s tart 2 month after the approval of the project study and will be completed with in 2 month. Tender evaluation, contr act negotiation, sign ing and L C opening, which w ill also s tart 2 months after the approval of the project, will be completed with in 1 month . Installation s tarch-based takeaway plastics manufacturing machinery and equipment will start after 4 months from project approval and supply will be completed with in 5 months ’ time frame from contract is signed.

Erection of machinery and equipment will s tart after completion of the machinery and equipment delivery and will ta ke one month. Delivery of raw materials will be arranged before of erection of machinery and equipment is completed.
Rent of Warehouse: Finalizin g of the rentin g of warehouse from industrial par k will commence after 2 months from approval of the project in consideration of machine arrival to the par k.

Recruitment and training of human resource will start 6 months after the project approval and before the start of erection of machinery and equipment and will continue up to commissionin g and start u p. The production will s tart commissioning 11 months after the project approval and will be completed in 1 month. Similarly , technology and kn owhow transfer wil l be conducted s tarting from together with the erection and commission ing activities for one-month duration.

Finally , the industry will start production at the end of 12th months from the approval of the project and be operational then after. Moreover, project activities will be handled by project management tools so as to optimize time and project cost utilization towards rea lization of the project on the ground with minimum project implementation cost and time as per the planned d uration. Many activities of the project may undertake in similar period if it does no t need sequential wor k plan.

7. 2. 1. I mple mentatio n Cost

The Starch-based Takeaway Plastics production project implementation cost for wh ich comprises project office running and follow-up expenses, and erection and commissionin g is es timated at ETB 2 . 75 million the breakdown of which is ind icated in Table 7. 2 .

TABLE 7. 2 : IMPLEMEN TATION CO ST

DURATION COST ( IN 10 00 ET B)

SR. NO. POSITION NO.

MONTH MONTHLY ANNUAL

I Project Staff

1. 1 Project Manager 1 12 25,000. 0 0 300. 00

1. 1. 1 Project Coordinator 1 12 15,000. 00 180. 00

1. 1. 2 Executive Secretary 1 12 7,000. 00 84. 00

1. 2 Finance And Administrative Team 12 0. 00

1. 2. 1 Accountant 1 12 8,000. 00 96. 00

1. 2. 2 Personnel And General Service 1 12 5,000. 00 60. 00

1. 2. 3 Driver 1 12 15,000. 00 180. 00

1. 2. 4 Security Guards 2 12 5,000. 00 120. 00

1. 3 Procurement And Supp ly Team 12 0. 00

1. 3. 1 Procurement Expert 1 12 8,000. 00 96. 00

1. 3. 2 Supplies and Store Management Expert 1 12 6,000. 00 72. 00

40
 1. 3. 3 Store Keeper 1 12 5,000. 00 60. 00

1. 4 Engineering, Technical and Quality Control Team 12 0. 00

1. 4. 1 Takeaway Technologist 1 12 12,000. 00 144. 00

1. 4. 2 Civil Engineer 1 12 12,000. 00 144. 00

1. 4. 3 Mechanical Engineer 1 12 12,000. 00 144. 00

1. 4. 4 Electrical And Automation E ngineer 1 12 12,000. 00 144. 00

Sub To tal 1,824. 00

Ii Project Supplies And Office Runn ing

Sr. No Descriptions Quantity Unit Unit Cost Amount

1 Fax 1 Pcs 15,000. 00 15. 00

2 Telephone 1 Pcs 13,000. 00 13. 00

3 Printer 1 Pcs 17,000. 00 17. 00

4 Office Furniture 7 Set 18,500. 00 129. 50

5 Office Running Cost 1 Set 270,000. 0 0 270. 00

Sub To tal 444. 50

Iii Detailed Design, Supervis ion, Erection and Commissio ning

1 Engineering, Erection and Commission ing Service 240. 00

Sub To tal 240. 00

Iv Erection Machineries Rent

Rate Duration

Sr. No. Descriptions Quantity Cost

Day Day s

1 Crane 10 10 2400. 00 240. 00

Grand - Total 2,748. 50

7. 3. Office Fur niture a nd Equipment

The office furniture and equipment are vital component of the in itial investment for conducive enviro nment of the productio n processes. The details of the furniture and equipment are presented in Table 7. 3. The total cos t related to office furniture and e quipment is estimated at ET B 2. 87 million .

TABLE 7. 3 : OFFICE FU RNITURE A ND EQUIPMENT CO ST, E TB

SR. NO. ITEM DESCRIPTION UNIT QUANTITY UNIT PRICE (ETB) TOTAL PRICE (IN 000 E TB)

1 Presidential High Back Gas Lift Swivel

Chair (Genuine Leather) And Executive Set 300,000 300. 00

Desk, Hang ing Side Cabinet

2 Conference Table And 8 Standard Chairs Set 1 200,000 200. 00

4 High Quality Guest Chair Pcs 7 17,500 122. 50

5 Executive Managerial Table And Chair With H igh Back Gas L ift Swivel, Side Cabinet Set 3 40,000 120. 00

6 Office Chair And Table Pcs 21 20,000 420. 00

7 Shelves Pcs 2 25,000 50. 00

8 Filing Cabinet Pcs 3 25,000 75. 00

9 Guest Chairs Pcs 12 13,500 162. 00

10 Laptop Pcs 7 25,000 175. 00

11 Personal Computers with Accessories Pcs 6 22,000 132. 00

41
 12 Printer Pcs 2 26,000 52. 00

13 Copy Machine Pcs 2 50,000 100. 00

14 Scanner and Fax Machine Pcs 2 22,000 44. 00

15 Telephone Sy stem Set 1 150,000 150. 00

16 Cafeteria Furniture and Equ ipment Set 1 770,000 770. 00

Total Co st 2,872. 50

7. 4. I nvestme nt
The total in vestment cost of the project including wor king capital is estimated at ETB 11. 50 million as sh own in Table 7. 4 below . The Owner shall con tribute 30% of the finance in the form of equity while the remaining 70% is to be financed by bank loan. The foreign component of the project accounts for 28. 81% of the total investment cost. Most of the to tal inves tment goes wor kin g capital, machineries, and warehouse construction . The remaining goes to vehicles and others.

TABLE 7. 4 : TOTAL INITIAL INVESTMENT (00 0 ETB)

SR. NO. COST ITE MS LOCAL CO ST FOREIGN COST TOTAL CO ST %

1. 0 Fixed Investment

1. 1 Land 3,100. 00 2. 78

3,100. 00

1. 2 Building An d Civil Wor k 34. 88

38,892. 42 38,892. 42

1. 3 Machinery And Equipment 31. 69

3,212. 66 32,126. 59 35,339. 25

1. 4 Vehicle 2,519. 20 2. 26

2,519. 20

1. 5 Office Furniture and Equipment 2,872. 50 2. 58

2,872. 50

Sub -Total 50,596. 78 32,126. 59 82,723. 37

74. 19

2. 0 Pre-Operating Cos t -

2. 1 Pre-Expenditure2 2. 47

2,748. 50 2,748. 50

2. 2 Interest During First Year/Co nstruction

Sub -Total 2. 47

2,748. 50 2,748. 50

Total Investment

53,345. 28 32,126. 59 85,471. 87 76. 66

3. 0 Workin g Capital

26,028. 82 26,028. 82 23. 34

2
Pre-production capital expenditure includes - all expenses for pre-investment studies,
consultancy fee during construction and expenses for company‘s establishment, project
administration expenses, commission expenses, preproduction marketing and interest
expenses during construction.

42
 Grand Total 79,374. 10 32,126. 59 111,500. 7 0

100. 00

Foreign Currency

28. 81

7. 5. Production Costs
The total production cos t at full capacity operation is es timated at ETB 51. 41 million as detailed in Table 7. 5 belo w. Mos t of the prod uction cos t goes to raw materials and inputs. The main raw material in this industry is corn-starch. The y ield of corn has experienced unprecedented transformation in the la st decades that helped to initiate the promoter.

TABLE 7. 5 : PRODU CTION CO ST (000 ETB)

ITEMS COST %

Raw Material And Inpu ts 51,406. 50

61. 32

Utilities 2,014. 46

2. 40

Maintenance And Repair

5,100. 24 6. 08

Labor Direct

9,597. 60 11. 45

Labor Overheads

4,492. 80 5. 36

Administration Co sts

350. 00 0. 42

Cost of Marketing An d Dis tribution

300. 00 0. 36

Wall and Roof Pay ment 4. 80

0. 01

Total Operating Costs 73,266. 40 87. 39

Depreciation 4,290. 51

5. 12

Cost of Finance 6,283. 06

7. 49

Total Production Cos t 83,839. 98 100. 00

7. 6. Fina ncial Evaluatio n

7. 6. 1. Profita bility
According to the projected income statement attached in the annex part (see Annex) the project will generate profit beginn ing from the second y ear of operation. Ratios s uch as the percentage of net profit to total sales, return on equity and return on total investment rises in the subsequent y ears. Furthermore, the income statement and other profitability indicators sh ow that the project is viable.

7. 6. 2. Pay bac k Period

Investment cost and income statement projection are used in estimating the project pay back period. The projects will pay back fully the initial investment less wor king capital in 4 y ears and 8 months.

7. 6. 3. I nternal Rate of Return, IRR a nd Net Present Value, NPV

Based on cash flow s tatement described in the annex part, the calculated IRR of the project is 16. 26% and the NPV at 12% discount is ET B 19. 34 millio n. These two parameters showed the profitability of the project.

7. 7. Eco no mic a nd Socia l Benefit and J ustificatio n

The envisaged ta keaway production project possesses wide range of benefits which promote the socio-economic goals and objectives stated in the s trategic plan of the AN RS. It also boosts the services of the h otel, retail s hops, transportation service providers, cinemas, event organizers, restaurant, café, burger, pizza, confectionary , fruits and vegetables, and other food and beverages services. At the same time, therefore, it helps diversify the economic activity of the region.
The other major benefits are listed as follow s:

7. 7. 1. Profit Generation
The takeaway production project is found to be financially viable and earns a total of E TB 26 2. 73 million w ith in the project life. Such resu lt in duces the project promoters to reinvest the profit which, therefore, increases the investment magnitude in the region.

7. 7. 2. Tax Revenue
In the project life under consideration, the region w ill collect about E TB 9 2. 37 million from corporate tax pay ment alone (i. e. excluding income tax, sales tax and VAT). Such result creates additional fund for the regional government that w ill be used in expand ing socia l and other basic service s in the region.

7. 7. 3. Employ ment a nd Inco me Generation

The proposed ta keaway production project is expected to create employment opportunity to several citizens of the region. That is, it will provide permanent employ ment to 130 persons with different discip lines and laborers. Con sequently , the project creates income of ETB 14. 09 millio n per y ear. This would be one of the commendable accomplishments of the project.

7. 7. 4. I mport Substitutio n a nd Foreign Exc hange Sav ing

In line with the volume of production and the import volume, it is ass umed that this ind ustry substitutes a h uge amount of the import v olume. Accordingly , takeaway manufacturing will save an estimated amount of US Do llar 14. 18 millio n. At the same time this indu stry uses starch instead of imported p lastic materials from petroleum producing nations. Additionally , in the future, the project can also expand its investment related to biodegradable ta keaway plastic production. This w ill create room for the saved hard currency to be allocated to other vital and strategic sectors. In short, the indu stry saves hard currency by three way s. The three way s of hard currency saving are exporting its product to in ternational ma rket, subs titu ting imported product and substitu ting raw materials. Starch substitute imported ta keaway plastics raw materials.

7. 7. 5. Env ironmenta l a nd Socia l I mpact Assess ment (ESIA)

The proposed production process is environment friendly . Based on cleaner production principles, an ESIA has been conduc ted for the envisaged in dustry with the objectives of identification of effects or impact of production of takeaway on the environment (if any ) and if negative impacts are identified for proposing poss ible measures that could compensate for the damaging consequences. Accordingly , for the purpose of iden tify ing the main environmental problems of the env isaged indu stry (if any ), an EIA has been conducted. The following environmental regulations must be observed in E thiop ia. These are Environmental Policy of Ethiopia (1997); EIA Proclamation (2002), Environmental Pollutio n Co ntrol Proclamation (2002), Regulation to Provide for the Prevention of Industr ial Pollu tion (20 08) and Solid Was te Management Proclamation (2007).
Potential pos itive env ironmental impacts among other benefits, the project is to:
1. Create opportun ity for the community or population related to cereals especially corn cultivation sector.
2. Ma kes job opportun ity for 130 people wh ich generate income.
3. Con tributes to the realization of the development strategy particularly in the area of life-standard facilities improvements.
4. Earns considerable profit to the promoters as well as to the city administration thro ugh tax.
Takeaway packaging were started to be a culture for Ethiopian in urban areas that need indus tries like starch-based packaging. Increases of ta keaway production aside, ta keaway production in itself has a profound, adverse impact on the environment, includ ing d iminish ing b iodiversity during corn cultivatio n, depletion of natural resources, and contribu tions to climate change. The diminis hing biod iversity and resilience, depletio n of natural resources and global warming are the backward and forward impact of the Starch-Based Takeaway Plastics Manufacturing Indus try . The major and specific adverse environmental impacts expected as a result of the Starch-based Takeaway Plastics project are generation of solid was te, noise env ironment and offensive odor. The assessment has been made considering the follow ing three main thematic areas:
 Environmental pollution to the medium (soil, air, water, liv ing and n on-liv ing matter).
 Resource utilization
 Human health hazard and safety issues.
The industry does not create pollutants of land, so il, n oise, air and so lid was te. This indus try has designed to s olve the impacts p lastic in dustry to environmental, s ocial and economic conditions.
Generally , the Starch-Based Takeaway Plastics Manufacturing Industry does not have any serious hazard impact on the human and environment since the process u ses renewable sources. This makes it a goo d backup ind ustry when abrupt changes in weather and environmental cond ition s occur. At the sam e time, the production process has no waste.

7. 7. 6. Techno logy Transfer

As stated above th is in dustry has established to combat the conven tional p lastics impact in the environmental medium, this ind ustry will be the best technology transfer place. The new biodegradable plastic technology is als o harnessing new inpu ts of plas tic production like straw, waste and other. The refore, the indus try will try to get a new inp uts for its industry as alternative to corn-starch in co llaboration w ith universities and other research centres. As the technology is related to biodegradable plastic indu stry , it will transfer basic applicatio n and production of ta keaway and plastic related sciences. The indu stry will wor k with research centres related to paper and packaging processing concepts. The universities are the main stoc kho lders to transfer the technology to communities.

7. 7. 7. Diversification A nd I nter-Sectoral Linkage.

The proposed project helps to d iversify ANRS’ and Ethiop ian economy . It contributes to industr ialization of the region as well as the county ’s economy . mining minerals, nano-materials production, production of chemicals, corn farming, plastic production, plas tic recy cling industries, productio n of starch, and manufacturing sub-sector and forward lin kage with the food, to urism, health, and cons umer durables manufacturing sub sectors.

43
ANNEXES: FINANCIAL ANALYSIS

44
ANNEX 1 : NET WORKING CAPITAL (IN 000 ETB)
Construction Production Production Production Production
Items
Year1 Year 2 Year 3 Year 4 Year 5

Total
0 35,624. 70 40,713. 95 45,803. 19 50,892. 44
inventory

Accounts
0 3,598. 46 4,112. 52 4,626. 59 5,140. 65
receivable

Cash-in-hand 0 2,398. 97 2,741. 68 3,084. 39 3,427. 10

Total Current
0 29,627. 28 33,859. 75 38,092. 22 42,324. 69
Asset

Accounts
0 3,598. 46 4,112. 52 4,626. 59 5,140. 65
payable

Total Current
0 3,598. 46 4,112. 52 4,626. 59 5,140. 65
Liabilities

Net Working
0 26,028. 82 29,747. 23 33,465. 63 37,184. 04
Capital

45
Production Production Production Production Production Production

Year 6 Year 7 Year 8 Year 9 Year 10 Year 11

50,892. 44 50,892. 44 50,892. 44 50,892. 44 50,892. 44 50,892. 44

5,140. 65 5,140. 65 5,140. 65 5,140. 65 5,140. 65 5,140. 65

3,427. 10 3,427. 10 3,427. 10 3,427. 10 3,427. 10 3,427. 10

42,324. 69 42,324. 69 42,324. 69 42,324. 69 42,324. 69 42,324. 69

5,140. 65 5,140. 65 5,140. 65 5,140. 65 5,140. 65 5,140. 65

5,140. 65 5,140. 65 5,140. 65 5,140. 65 5,140. 65 5,140. 65

37,184. 04 37,184. 04 37,184. 04 37,184. 04 37,184. 04 37,184. 04

46
ANNEX 2 : PRODUCTION COST (IN 000 ETB)
yea
Item year 1 Year 2 Year 3 Year 4 Year 5
r0

Raw material 35,984. 55 41,125. 20 46,265. 85 51,406. 50 51,406. 50

Utilities 1,208. 68 1,611. 57 1,813. 01 2,014. 46 2,014. 46

Repair and

maintenance 5,097. 24 5,098. 24 5,099. 24 5,100. 24 5,101. 24

Direct Labor 5,758. 56 7,678. 08 8,637. 84 9,597. 60 9,597. 60

Overhead Labor 2,695. 68 3,594. 24 4,043. 52 4,492. 80 4,492. 80

Administrative

costs 245. 00 280. 00 315. 00 350. 00 350. 00

Marketing costs 210. 00 240. 00 270. 00 300. 00 300. 00

Wall and Roof

4. 80 4. 80 4. 80 4. 80 4. 80
Payment

Total Operating
51,204. 51 59,632. 13 66,449. 27 73,266. 40 73,267. 40
Costs

Depreciation 50. 96 5,092. 04 4,671. 66 4,290. 51 3,944. 76

Cost of Finance 8,975. 81 8,078. 23 7,180. 64 6,283. 06 5,385. 48

Total Cost 60,231. 28 72,802. 39 78,301. 57 83,839. 98 82,597. 65

47
Year 6 Year 7 Year 8 Year 9 Year 10

51,406. 50 51,406. 50 51,406. 50 51,406. 50 51,406. 50

2,014. 46 2,014. 46 2,014. 46 2,014. 46 2,014. 46

5,102. 24 5,103. 24 5,104. 24 5,105. 24 5,106. 24

9,597. 60 9,597. 60 9,597. 60 9,597. 60 9,597. 60

4,492. 80 4,492. 80 4,492. 80 4,492. 80 4,492. 80

350. 00 350. 00 350. 00 350. 00 350. 00

300. 00 300. 00 300. 00 300. 00 300. 00

4. 80 4. 80 4. 80 4. 80 4. 80

73,268. 40 73,269. 40 73,270. 40 73,271. 40 73,272. 40

3,630. 96 3,345. 99 3,087. 06 2,851. 65 2,637. 46

4,487. 90 3,590. 32 2,692. 74 1,795. 16 897. 58

81,387. 27 80,205. 72 79,050. 21 77,918. 21 76,807. 45

48
ANNEX 3 : INCOME STATEMENT (IN 000 ETB)

Item Year0 Year1 Year 2 Year 3 Year 4 Year 5

- 84,001. 96,002. 108,000. 120,000. 120,000.
Sales revenue
00 00 00 00 00
41,743. 48,803.
Less variable costs 54,903. 69 61,004. 10 61,004. 10
11 28
42,257. 47,198.
Variable Margin - 53,096. 31 58,995. 90 58,995. 90
89 72
in % of sales
50. 31 49. 16 49. 16 49. 16 49. 16
revenue
10,828.
Less fixed costs 111,500. 70 9,461. 40 11,545. 58 12,262. 30 12,263. 30
85
(111,500. 32,796. 36,369.
Operational Margin 41,550. 73 46,733. 60 46,732. 60
70) 49 87
in % of sales
39. 04 37. 88 38. 47 38. 94 38. 94
revenue

Financial costs 8,975. 81 8,078. 23 7,180. 64 6,283. 06 5,385. 48

Depreciation 50. 96 5,092. 04 4,671. 66 4,290. 51 3,944. 76

(111,500. 23,769. 23,199.

Gross Profit 29,698. 43 36,160. 02 37,402. 35
70) 72 61
in % of sales
28. 30 24. 17 27. 50 30. 13 31. 17
revenue

Income (corporate)
- - 8,909. 53 10,848. 01 11,220. 71
tax

(111,500. 23,769. 23,199.

Net Profit 20,788. 90 25,312. 01 26,181. 65
70) 72 61
in % of sales
28. 30 24. 17 19. 25 21. 09 21. 82
revenue

49
Year 6 Year 7 Year 8 Year 9 Year 10

120,000. 00 120,000. 00 120,000. 00 120,000. 00 120,000. 00

61,004. 10 61,004. 10 61,004. 10 61,004. 10 61,004. 10

58,995. 90 58,995. 90 58,995. 90 58,995. 90 58,995. 90

49. 16 49. 16 49. 16 49. 16 49. 16

12,264. 30 12,265. 30 12,266. 30 12,267. 30 12,268. 30

46,731. 60 46,730. 60 46,729. 60 46,728. 60 46,727. 60

38. 94 38. 94 38. 94 38. 94 38. 94

4,487. 90 3,590. 32 2,692. 74 1,795. 16 897. 58

3,630. 96 3,345. 99 3,087. 06 2,851. 65 2,637. 46

38,612. 73 39,794. 28 40,949. 79 42,081. 79 43,192. 55

32. 18 33. 16 34. 12 35. 07 35. 99

11,583. 82 11,938. 28 12,284. 94 12,624. 54 12,957. 77

27,028. 91 27,856. 00 28,664. 85 29,457. 25 30,234. 79

22. 52 23. 21 23. 89 24. 55 25. 20

50
ANNEX 4 : CASH FLOW FOR FINANCIAL MANAGEMENT (IN 000 ETB)
Item Year 0 Year 1 Year 2 Year 3 Year 4 Year 5
Total Cash Inflow
Inflow Funds
33,450.
Equity
21
78,050.
Bank Loan
49
84,001. 96,002. 108,000. 120,000. 120,000.
Inflow Operation -
00 00 00 00 00
Other Income - - - - -
111,500. 84,001. 96,002. 108,000. 120,000. 120,000.
Sub Total
70 00 00 00 00 00
Total Cash Outflow
Increase In Fixed 82,723.
- - - -
Assets 37
Pre-Production
2,748. 50
Costs
Initial Working 26,028.
Capital 82
51,204. 59,632. 66,449. 73,266. 73,267.
Operating Costs -
51 13 27 40 40
10,848. 11,220.
Income Tax - - - 8,909. 53
01 71
Financial Costs - 8,975. 81 8,078. 23 7,180. 64 6,283. 06 5,385. 48
Loan Repayment - 5,203. 37 5,203. 37 5,203. 37 5,203. 37 5,203. 37
111,500. 65,383. 72,913. 87,742. 95,600. 95,076.
Sub Total
70 68 72 81 84 96
18,617. 23,088. 20,257. 24,399. 24,923.
Net Cash Flow -
32 28 19 16 04
Cumulative Cash 18,617. 41,705. 43,345. 44,656. 49,322.
Balance 32 60 47 35 20
Net Cash Flow For (111,500. 18,617. 23,088. 20,257. 24,399. 24,923.
NPV and IRR 70) 32 28 19 16 04

51
Year 6 Year 7 Year 8 Year 9 Year 10

120,000. 00 120,000. 00 120,000. 00 120,000. 00 120,000. 00

- - - - -
120,000. 00 120,000. 00 120,000. 00 120,000. 00 120,000. 00

- - - - -

73,268. 40 73,269. 40 73,270. 40 73,271. 40 73,272. 40

11,583. 82 11,938. 28 12,284. 94 12,624. 54 12,957. 77
4,487. 90 3,590. 32 2,692. 74 1,795. 16 897. 58
5,203. 37 5,203. 37 5,203. 37 5,203. 37 5,203. 37
94,543. 49 94,001. 38 93,451. 45 92,894. 47 92,331. 11
25,456. 51 25,998. 62 26,548. 55 27,105. 53 27,668. 89
50,379. 55 51,455. 13 52,547. 18 53,654. 08 54,774. 42

52
ANNEX 5 : DISCOUNTED CASH FLOW (IN 000 ETB)
Item year0 Year 1 Year 2 Year 3 Year 4 Year 5
Total Cash 111,500. 96,002. 108,000. 120,000. 120,000.
84,001. 00
Inflow 70 00 00 00 00
Total Cash 111,500. 72,913. 87,742. 95,600. 95,076.
65,383. 68
Outflow 70 72 81 84 96
Net Cash 23,088. 20,257. 24,399. 24,923.
- 18,617. 32
Flow 28 19 16 04
Net Cash
Flow for (111,500. 23,088. 20,257. 24,399. 24,923.
18,617. 32
NPV & IRR 70) 28 19 16 04
Calculation

Year 6 Year 7 Year 8 Year 9 Year 10

120,000. 00 120,000. 00 120,000. 00 120,000. 00 120,000. 00

94,543. 49 94,001. 38 93,451. 45 92,894. 47 92,331. 11

25,456. 51 25,998. 62 26,548. 55 27,105. 53 27,668. 89

25,456. 51 25,998. 62 26,548. 55 27,105. 53 27,668. 89

53
 REFERENCES
Babinsky, R. and Gastrock, F. 2008. Foundation for Strategic Growth. Addcon 2008,
BRICs, Barcelona, Spain.
EPA, 2010. Municipal Solid Waste in The United States-2009 Facts And Figures.
Washington DC: United States Environmental Protection Agency. www. epa.
gov/epawaste/nonhaz/municipal/msw99. htm.
EUROMAP, 2019. Ethiopian Packaging Industry. Accessed 2023.
Foodservice Packaging Institute, 2006. A Brief History of Foodservice Packaging.
Law, K. L. , Et Al. 2010. Plastic accumulation in the North Atlantic subtropical gyre.
Science, 329, 1185–1188.
Le Corre Et Al. , 2010. Starch Nanoparticles: A Review. Biomacromolecules, 11, 1139–
1153.
Thompson, R. C. , Et Al. 2004. Lost At Sea: Where Is All The Plastic? Science, 304,
838.
UNEP, 2019. Addressing Single Use Plastic Products Pollution. https://leap. unep.
org/content/unea-resolution/addressing-single-use-plastic-products-pollution.
Wood, B. 2010. Wood on Plastics: Sustainable Packaging: A Lot More Than Buzzwords.
Plastics Technology. Cincinnati, OH: Gardner Publishing, Inc.

54