Wax Candle Manufacturing Plant

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Investment Office ANRS

Project Profile on the Establishment

of Wax candle PRODUCING PLANT

Development Studies


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Table of Contents

1.Executive Summary.............................................................................3

2.Product Description and Application.................................................3

3.Market Study, Plant Capacity and Production Program................4

3.1Market Study...........................................................................................................................4

3.1.1Present Demand and Supply............................................................................................4

3.1.2Projected Demand............................................................................................................73.1.3Pricing and Distribution...................................................................................................9

3.2Plant Capacity.........................................................................................................................9

3.3Production Program..............................................................................................................10

4.Raw Materials and Utilities...............................................................10

4.1Availability and Source of Raw Materials............................................................................104.2Annual Requirement and Cost of Raw Materials and Utilities.............................................10

5.Location and Site................................................................................11

6.Technology and Engineering ...........................................................116.1Production Process................................................................................................................11

6.2Machinery and Equipment....................................................................................................12


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1. Executive Summary

The project envisages the manufacturing of 308 tons of candles per year in Amhara Regional

State.

The market study shows the existence of sufficient demand for the product.

The initial investment cost is estimated at about Birr 1.8 million.

The project will create employment opportunities for 15persons.

The internal rate of return (IRR) of the project is 28.7% and the net present value is more than

Birr 456 thousands discounted at 18%.

2. Product Description and Application

From ancient times candles have been important as sources of light, and although they were

replaced first by kerosene lamps and later by incandescent electric lamps, their use has actually

expanded because of their ornamental value. In spite of the technical progress in lighting, the

term candle power is used as a unit for measuring the brilliance of any given light.


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3. Market Study, Plant Capacity and Production Program

3.1 Market Study

3.1.1 Present Demand and Supply

Candles are sources of light for homes during evenings and as such they are items of necessity

especially in rural areas. Modern candle processing from paraffin is a young venture, but candle

making from bees wax (Tuaf) is one of the oldest and ancient traditional arts of Ethiopia. The art

is still in existence but due to the expensive nature of the input, the low quality of the product

and the finding of cheap and quality substitute for it, paraffin wax candle-drove it out of the

market.

Candle is demanded by all income groups both in urban and rural areas. However, its importance

becomes more crucial in a country like Ethiopia where modern electricity supplies are minimal

and the numbers of churches using the product are numerous.

In Ethiopia the per-capita consumption of domestic electricity, (as indicated in the report on

Large and Medium Scale Manufacturing and Electricity Industry Survey, Statistical Bulletin

403) is about 10.5 kwh, which is one of the lowest by world standard. The great majority of the

l ti b t 85% i till i th f li hti Th i l d i t d k


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practically in all parts of Amhara Region. Kerosene, as the only alternative, is only used by well

to do farmers because of its price and by low income groups of urban dwellers where there is

electric power and by most urban dwellers, where there is no power supply. For these reasons,

more than 95% of house in the rural areas and a significant number of urban with no electric

power of the Amhara Region do not have lights during the evening, especially after meals are

cooked. Hence, it could be said that Amhara land is as dark as darkness itself after sunset, which

manifests the general backwardness of the Region.

Candle in Ethiopia is not demanded by rural and urban centers with no power but also by urban

centers having power during power interruption, which is a frequent phenomenon of the country

and by a number of churches as a substitute of Tuaf. More than 3100 churches are estimated to

exist in Amhara Region and 18,000 in the country.

Orthodox Church believers usually vow to light candles in churches during high mass ceremony.

Candle is also demanded during special occasions like birthday, marriage, Christmas, vow day

etc. Hotels, bars and restaurants are also major consumers of candle.

Demand for candle in Ethiopia is satisfied through domestic production and imports.

A) Domestic production :- All commercial candles produced in the country are produced

in and around Addis Ababa. The CSA statistical bulletins reveal that the country has

produced about 593 tons, which is equivalent to 11 86 million of candle on the


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Table -1-Domestic Production of candles

Year Quantity ( In Tons)

90

91

92

93

94

95

96

97

98

99

946

719

769

559

677

614

348

256

319

725

Average 593

Source: CSA, Statistical Bulletins, 1990-1999

B) Import of Candles:- As per the record of Central Statistics and Customs Authority,


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Table -2-Imports of Candles

Year Quantity (in Tons) Value (in 000 Birr)

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

138

749

326

1231

12800

1986

670

1967

7181

1510

817

4315

2033

7756

77393

11865

4186

12280

1073

12605Average 2856 13432

Source: CSA & Customs Authority Statistical Bulletins, 1990-1999

3.1.2 Projected Demand

As indicated above the major determinants or target markets, for candles are growth in urban

population and income. In addition hotels, bars & restaurants, churches and special accessions as

well as well-to-do rural population demand candles for various reasons


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(under normal condition a candle burns for about 5 hours). This group will require

about 5,000,000 pieces of candle, which is equivalent to about 250 tons.

c) Churches :- out of the estimated churches of the country (18,000) about 50% (9,000) are

expected to celebrate a minimum of 18 holidays/month and perform high mass where in

three candles are consumed in each church during mass. This will require a total of

5,832,000 pieces for 292 tons. This will include special occasions and vowers demand.

d) Well-to-do Rural Facilities Out of the total 66,780,000 of Rural population of 2007

(13,357,400 families), o.01% of the family is expected to use two packets (16 pcs) per

year, which totals to about 2,137,184 pieces, or about 107 tons of candles per year.

e) The candle consumption will grow by the combined average growth rate of, GDP

growth of 10.7% and urban population growth of 4.5%. which is 7.6% per year.

Based on the above assumptions the forecasted demand for candle for the next ten years is

indicated in table -3- below. Aggregate demand for candles ranges from 6,630 tons in 2001 to

12,818 tons in 2010.

The comparison between effective and projected demand for candles shows that there is excess

demand at national level


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Table -3 Forecasted Demand for Candle (tons)

YearUrbanPopulation

Hotels&Bars Churches

RuralPopulation Total

2001 5981 250 292 107 6630

2002 6436 269 314 115 7134

2003 6925 289 338 124 7676

2004 7451 311 364 133 8260

2005 8018 335 391 143 8887

2006 8627 361 421 154 9563

2007 9283 388 453 166 10290

2008 9988 417 487 178 11072

2009 10747 449 524 192 11913

2010 11564 483 564 207 12818

In Amhara Region there is no plant that produces candle to date. On the other hand due to its vast

population and increased urbanization the average level of candle consumption of the region

during the last four years was (21996 - 1999) estimated to be about 165 tons which is equivalent

to 3.3 million pieces of candle (Project Idea). Thus, the future candle consumption of the Region

could grow by 7.6 % (average growth rate figure of GDP, 10.7% and urban population, 4.5%).

Consumption of candle per head and per family to the 2007 projected population of the Region

(19,624,000) could be about 0.2 and 0.9 or consumption per head and per family to the urban

population (2,299,000) could be about 1.6 candles and 7.8 candles per year, respectively.

I thi t th t bli h t f dl f t i l t ld d th l k f


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The output of the proposed plant will be about 28,000 household candles per 8 hour a day, which

is equivalent to 7.7 million Pieces or 308 tons of candles per annum (275 working days).

3.3 Production Program

The plant is assumed to start production at 80% capacity in year one which will increase by 10%

until 100% capacity is reached.

4. Raw Materials and Utilities

4.1 Availability and Source of Raw Materials

The main direct raw material required for the manufacture of household candles are paraffin

wax, a by-product of the oil refining industry, wick and a very small quantity of paraffin oil.

Paraffin wax and oil are imported items while wick is produced locally by the Ethiopian Thread

Factory.

The paraffin wax to be used for the manufacture of household candles on the machinery and

equipment described hereafter should have a maximum oil content of 0.5% and a melting point

of 56 to 62 C.

Indirect inputs such as packing for candles are packets, cartons and labels. These materials are


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Table -4 -Annual Raw Materials and Utilities and Cost (in 000 Birr)

Items Unit Quantity

Cost

TotalL F

A) Materials

Paraffin wax tons 3,08 - 2,464 2,464

Wick mt 1,771,000 18 18

Paraffin Oil lt. 3080 - 46 46

Carton Pcs 32,080 160 160Packet Pcs 962,500 963 - 963

Sub total 1,141 2,510 3,651

B) Utilities

Power Kwh 216 475 - 475

Total 1,616 2,510 4,126

5. Location and Site

The candle making plant will be located in one of the eleven zonal towns, preferably where

utilities and infrastructure are available for its normal operation. i.e Bahir Dar, Gonder or

Dessie).

6. Technology and Engineering


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Packaging machinery has not been included since in countries with comparatively low labor

costs the packing is better done by hand. In many countries the household candles are simply

packed in blue paper, in cellophane bags or cardboard boxes.

First paraffin wax is manually fed into the boiler. The melted paraffin is then transferred to the

machine, through pipes to fill the moulds; the moulds are cooled by water circulating through the

machine. After the wax in the moulds is solidified to a certain standard, the machine overturns by

a device and the wick is cut automatically. Each candle is collected manually and then packed in

packets for delivery. The technology and capital is simple and affordable.

The producer can use alternative technology that produces less than 40 grams in weight and 19

mm in diameter and 200 mm in length, (like local candle factories) as well as use automatic

packing machine.

6.2 Machinery and Equipment

Required machinery and equipments are:

Item Pieces

1. Electrically heated wax melting pans 22. Wax pump 1

3. Electrically heated wax feeding tanks 2

4. Candle molding machines 2


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Training of manpower could be carried out in any one of similar plants established in Addis

Ababa at marginal cost.

8. Financial Analysis

8.1 Underlying Assumption

The financial analysis of candle producing plant is based on the data provided in the preceding

chapters and the following assumptions.

A. Construction and Finance

Construction period 2 years

Source of finance 40% equity and 60% loan

Tax holidays 2 years

Bank interest rate 12%

Discount for cash flow 18%

Value of land Based on lease rate of ANRS

Spare Parts, Repair & Maintenance 3% of fixed investment

B. Depreciation

Building 5%

Machinery and equipment 10%


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Cash in Hand 30 days

Accounts Payable 30 days

8.2 Investment

The total investment cost of the project including working capital (table 6) is estimated to be

about Birr 1.8 million. The owner could contribute about 40% of the total investment while the

rest 60% could be financed by long term bank loan The foreign component of the project

accounts for Birr 0.65 million or 36% of the total investment cost.

Table 6: Total initial investment

LC FC Total

Land3,000 3,000

Building362,200 362,200

Office equipment10,000 10,000

Vehicles0 0

machinery & equipment50,000 150,000 200,000

Total Fixed Investment425,200 150,000 575,200

Pre production

28,760 28,760Total Initial Investment453,960 150,000 603,960

Working capital700,465 497,891 1,198,355


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Table -7-

Total Production Cost at full Capacity

Items Cost

1. Raw materials 3,651,000

2. Utilities 475,000

3. Wages and Salaries 133,920

4. Spares and Maintenance 17,256

Factory costs 4,277,176

5. Depreciation 44,862

6. Financial costs108,139

Total Production Cost 4,430,177

8.4 Financial Evaluation

I. Profitability

According to the projected income statement the project will generate profit beginning from the

first year of operation. The income statement and other profitability indicators show that the


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IV. Simple Rate of Return

The projects simple rate of return is 23.3% at full capacity utilization.

V. Internal Rate of Return and Net Present Value

Based on cash flow statement the calculated IRR of the project is 28.7% and the net present

value at 18% discount is Birr 456 thousands.

VI. Sensitivity Analysis

If costs of raw materials are increased by 10 %, the plant will absorb it profitably.

9. Economic and Social Benefit and Justification

Based on the foregoing presentation and analysis, we can learn that the proposed project

possesses wide range of benefits that complement the financial feasibility obtained earlier. In

general the envisaged project will improve the health condition of the population, reduce

deforestation and promote the socio-economic goals and objectives stated in the strategic plan of

the Amhara National Regional State. These benefits are listed as follows:

A. Profit Generation

The project is found to be financially viable and earns on average a profit of birr 0.36 million peryear and birr 3.6 million within the project life. Such result induces the project promoters to

reinvest the profit which, therefore, increases the investment magnitude in the region.


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ANNEXES


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Annex 1: Total Net Working Capital Requirements (in Birr)

CONSTRUCTION PRODUCTION

Year 1 Year 2 1 2 3 4

Capacity Utilization (%) 0.00 0.00 80% 90% 100% 100%

1. Total Inventory 0.00 0.00 1522909.52 1713273.21 1903636.90 1903636.90

Raw Materials in Stock- Total 0.00 0.00 617367.27 694538.18 771709.09 771709.09

Raw Material-Local 0.00 0.00 219054.55 246436.36 273818.18 273818.18

Raw Material-Foreign 0.00 0.00 398312.73 448101.82 497890.91 497890.91

Factory Supplies in Stock 0.00 0.00 3771.96 4243.46 4714.95 4714.95

Spare Parts in Stock and Maintenance 0.00 0.00 1505.98 1694.23 1882.47 1882.47

Work in Progress 0.00 0.00 94299.01 106086.39 117873.76 117873.76

Finished Products 0.00 0.00 188598.02 212172.77 235747.53 235747.53

2. Accounts Receivable 0.00 0.00 430080.00 483840.00 537600.00 537600.00

3. Cash in Hand 0.00 0.00 53142.11 59784.87 66427.64 66427.64

CURRENT ASSETS 0.00 0.00 1388764.35 1562359.90 1735955.44 1735955.44

4. Current Liabilities 0.00 0.00 430080.00 483840.00 537600.00 537600.00

Accounts Payable 0.00 0.00 430080.00 483840.00 537600.00 537600.00

TOTAL NET WORKING CAPITAL REQUIRMENTS 0.00 0.00 958684.35 1078519.90 1198355.44 1198355.44

INCREASE IN NET WORKING CAPITAL 0.00 0.00 958684.35 119835.54 119835.54 0.00

1


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Annex 1: Total Net Working Capital Requirements (in Birr) (continued)

PRODUCTION

5 6 7 8 9 10

Capacity Utilization (%) 100% 100% 100% 100% 100% 100%

1. Total Inventory 1903636.90 1903636.90 1903636.90 1903636.90 1903636.90 1903636.90

Raw Materials in Stock-Total 771709.09 771709.09 771709.09 771709.09 771709.09 771709.09

Raw Material-Local 273818.18 273818.18 273818.18 273818.18 273818.18 273818.18

Raw Material-Foreign 497890.91 497890.91 497890.91 497890.91 497890.91 497890.91

Factory Supplies in Stock 4714.95 4714.95 4714.95 4714.95 4714.95 4714.95

Spare Parts in Stock and Maintenance 1882.47 1882.47 1882.47 1882.47 1882.47 1882.47

Work in Progress 117873.76 117873.76 117873.76 117873.76 117873.76 117873.76

Finished Products 235747.53 235747.53 235747.53 235747.53 235747.53 235747.53

2. Accounts Receivable 537600.00 537600.00 537600.00 537600.00 537600.00 537600.00

3. Cash in Hand 66427.64 66427.64 66427.64 66427.64 66427.64 66427.64

CURRENT ASSETS 1735955.44 1735955.44 1735955.44 1735955.44 1735955.44 1735955.44

4. Current Liabilities 537600.00 537600.00 537600.00 537600.00 537600.00 537600.00


TOTAL NET WORKING CAPITAL REQUIRMENTS 1198355.44 1198355.44 1198355.44 1198355.44 1198355.44 1198355.44

INCREASE IN NET WORKING CAPITAL 0.00 0.00 0.00 0.00 0.00 0.00

2


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Annex 2: Cash Flow Statement (in Birr)


Year 1 Year 2 1 2 3 4TOTAL CASH INFLOW 301980.00 1500335.44 4372480.00 4488960.00 4981760.00 4928000.00

1. Inflow Funds 301980.00 1500335.44 430080.00 53760.00 53760.00 0.00

Total Equity 120792.00 600134.18 0.00 0.00 0.00 0.00

Total Long Term Loan 181188.00 900201.26 0.00 0.00 0.00 0.00

Total Short Term Finances 0.00 0.00 430080.00 53760.00 53760.00 0.00

2. Inflow Operation 0.00 0.00 3942400.00 4435200.00 4928000.00 4928000.00

Sales Revenue 0.00 0.00 3942400.00 4435200.00 4928000.00 4928000.00

Interest on Securities 0.00 0.00 0.00 0.00 0.00 0.00

3. Other Income 0.00 0.00 0.00 0.00 0.00 0.00

TOTAL CASH OUTFLOW 301980.00 301980.00 5099252.51 4363597.14 4911687.90 4722952.91

4. Increase In Fixed Assets 301980.00 301980.00 0.00 0.00 0.00 0.00

Fixed Investments 287600.00 287600.00 0.00 0.00 0.00 0.00

Pre-production Expenditures 14380.00 14380.00 0.00 0.00 0.00 0.00

5. Increase in Current Assets 0.00 0.00 1388764.35 173595.54 173595.54 0.00

6. Operating Costs 0.00 0.00 3449689.30 3880003.34 4310317.38 4310317.38

7. Corporate Tax Paid 0.00 0.00 0.00 0.00 139404.51 145892.84

8. Interest Paid 0.00 0.00 260798.86 129766.71 108138.93 86511.149.Loan Repayments 0.00 0.00 0.00 180231.54 180231.54 180231.54

10.Dividends Paid 0.00 0.00 0.00 0.00 0.00 0.00

Surplus(Deficit) 0.00 1198355.44 -726772.51 125362.86 70072.10 205047.09

Cumulative Cash Balance 0.00 1198355.44 471582.93 596945.79 667017.88 872064.97

3


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Annex 3: DISCOUNTED CASH FLOW-TOTAL CAPITAL INVESTED


Year 1 Year 2 1 2 3 4

TOTAL CASH INFLOW 0.00 0.00 3942400.00 4435200.00 4928000.00 4928000.00


Sales Revenue 0.00 0.00 3942400.00 4435200.00 4928000.00 4928000.00


2. Other Income 0.00 0.00 0.00 0.00 0.00 0.00


3. Increase in Fixed Assets 301980.00 301980.00 0.00 0.00 0.00 0.00



4. Increase in Net Working Capital 0.00 0.00 958684.35 119835.54 119835.54 0.00

5. Operating Costs 0.00 0.00 3449689.30 3880003.34 4310317.38 4310317.38


NET CASH FLOW -301980.00 -301980.00 -465973.66 435361.11 358442.57 471789.78

CUMMULATIVE NET CASH FLOW -301980.00 -603960.00 -1069933.66 -634572.54 -276129.98 195659.80

Net Present Value (at 18%) -301980.00 -255915.25 -334655.03 264974.21 184880.69 206223.66

Cumulative Net present Value -301980.00 -557895.25 -892550.28 -627576.06 -442695.38 -236471.72

5


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Annex 3: DISCOUNTED CASH FLOW-TOTAL CAPITAL INVESTED (Continued)

PRODUCTION

5 6 7 8 9 10

TOTAL CASH INFLOW 4928000.00 4928000.00 4928000.00 4928000.00 4928000.00 4928000.00


Sales Revenue 4928000.00 4928000.00 4928000.00 4928000.00 4928000.00 4928000.00


2. Other Income 0.00 0.00 0.00 0.00 0.00 0.00


3. Increase in Fixed Assets 0.00 0.00 0.00 0.00 0.00 0.00



4. Increase in Net Working Capital 0.00 0.00 0.00 0.00 0.00 0.00

5. Operating Costs 4310317.38 4310317.38 4310317.38 4310317.38 4310317.38 4310317.38


NET CASH FLOW 465301.44 457087.51 450599.17 444110.83 444110.83 444110.83

CUMMULATIVE NET CASH FLOW 660961.24 1118048.75 1568647.92 2012758.75 2456869.58 2900980.42

Net Present Value (at 18%) 172362.33 143491.21 119876.58 100127.48 84853.80 71910.00

Cumulative Net present Value -64109.39 79381.82 199258.40 299385.88 384239.68 456149.68

Net Present Value (at 18%) 456,149.68

Internal Rate of Return 28.7%

6


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Annex 4: NET INCOME STATEMENT ( in Birr)

PRODUCTION

1 2 3 4 5

Capacity Utilization (%) 80% 90% 100% 100% 100%

1. Total Income 3942400.00 4435200.00 4928000.00 4928000.00 4928000.00

Sales Revenue 3942400.00 4435200.00 4928000.00 4928000.00 4928000.00

Other Income 0.00 0.00 0.00 0.00 0.00

2. Less Variable Cost 3399657.90 3824615.14 4249572.38 4249572.38 4249572.38

VARIABLE MARGIN 542742.10 610584.86 678427.62 678427.62 678427.62

(In % of Total Income) 13.77 13.77 13.77 13.77 13.77

3. Less Fixed Costs 94893.40 100250.20 105607.00 105607.00 105607.00

OPERATIONAL MARGIN 447848.70 510334.66 572820.62 572820.62 572820.62

(In % of Total Income) 11 12 12 12 12

4. Less Cost of Finance 260798.86 129766.71 108138.93 86511.14 64883.36

5. GROSS PROFIT 187049.84 380567.95 464681.69 486309.48 507937.26

6. Income (Corporate) Tax 0.00 0.00 139404.51 145892.84 152381.18

7. NET PROFIT 187049.84 380567.95 325277.19 340416.64 355556.08

RATIOS (%)

Gross Profit/Sales 5% 9% 9% 10% 10%

Net Profit After Tax/Sales 5% 9% 7% 7% 7%

Return on Investment 29% 30% 24% 24% 23%

Return on Equity 26% 53% 45% 47% 49%

7


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Annex 4: NET INCOME STATEMENT (in Birr):Continued

PRODUCTION

6 7 8 9 10

Capacity Utilization (%) 100% 100% 100% 100% 100%

1. Total Income 4928000.00 4928000.00 4928000.00 4928000.00 4928000.00

Sales Revenue 4928000.00 4928000.00 4928000.00 4928000.00 4928000.00

Other Income 0.00 0.00 0.00 0.00 0.00

2. Less Variable Cost 4249572.38 4249572.38 4249572.38 4249572.38 4249572.38

VARIABLE MARGIN 678427.62 678427.62 678427.62 678427.62 678427.62


3. Less Fixed Costs 99855.00 99855.00 99855.00 99855.00 99855.00

OPERATIONAL MARGIN 578572.62 578572.62 578572.62 578572.62 578572.62


4. Less Cost of Finance 43255.57 21627.79 0.00 0.00 0.00

5. GROSS PROFIT 535317.05 556944.83 578572.62 578572.62 578572.62

6. Income (Corporate) Tax 160595.11 167083.45 173571.79 173571.79 173571.79

7. NET PROFIT 374721.93 389861.38 405000.83 405000.83 405000.83

RATIOS (%) Gross Profit/Sales 11% 11% 12% 12% 12%

Net Profit After Tax/Sales 8% 8% 8% 8% 8%

Return on Investment 23% 23% 22% 22% 22%

Return on Equity 52% 54% 56% 56% 56%

8


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Annex 5: Projected Balance Sheet (in Birr)


Year 1 Year 2 1 2 3 4

9


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TOTAL ASSETS 301980.00 1802315.44 2419445.28 2673541.68 2872347.32 3032532.42

1. Total Current Assets 0.00 1198355.44 1860347.28 2159305.68 2402973.32 2608020.42

Inventory on Materials and Supplies 0.00 0.00 622645.21 700475.86 778306.51 778306.51

Work in Progress 0.00 0.00 94299.01 106086.39 117873.76 117873.76

Finished Products in Stock 0.00 0.00 188598.02 212172.77 235747.53 235747.53

Accounts Receivable 0.00 0.00 430080.00 483840.00 537600.00 537600.00Cash in Hand 0.00 0.00 53142.11 59784.87 66427.64 66427.64

Cash Surplus, Finance Available 0.00 1198355.44 471582.93 596945.79 667017.88 872064.97

Securities 0.00 0.00 0.00 0.00 0.00 0.00

2. Total Fixed Assets, Net of Depreciation 301980.00 603960.00 559098.00 514236.00 469374.00 424512.00

Fixed Investment 0.00 287600.00 575200.00 575200.00 575200.00 575200.00

Construction in Progress 287600.00 287600.00 0.00 0.00 0.00 0.00

Pre-Production Expenditure 14380.00 28760.00 28760.00 28760.00 28760.00 28760.00

Less Accumulated Depreciation 0.00 0.00 44862.00 89724.00 134586.00 1 79448.00

3. Accumulated Losses Brought Forward 0.00 0.00 0.00 0.00 0.00 0.00

4. Loss in Current Year 0.00 0.00 0.00 0.00 0.00 0.00

TOTAL LIABILITIES 301980.00 1802315.44 2419445.28 2673541.68 2872347.32 3032532.42

5. Total Current Liabilities 0.00 0.00 430080.00 483840.00 537600.00 537600.00Accounts Payable 0.00 0.00 430080.00 483840.00 537600.00 537600.00

Bank Overdraft 0.00 0.00 0.00 0.00 0.00 0.00

6. Total Long-term Debt 181188.00 1081389.26 1081389.26 901157.72 720926.18 540694.63

Loan A 181188.00 1081389.26 1081389.26 901157.72 720926.18 540694.63

Loan B 0.00 0.00 0.00 0.00 0.00 0.00

7. Total Equity Capital 120792.00 720926.18 720926.18 720926.18 720926.18 720926.18

Ordinary Capital 120792.00 720926.18 720926.18 720926.18 720926.18 720926.18

Preference Capital 0.00 0.00 0.00 0.00 0.00 0.00

Subsidies 0.00 0.00 0.00 0.00 0.00 0.00

8. Reserves, Retained Profits Brought Forward 0.00 0.00 0.00 187049.84 567617.79 892894.97

9.Net Profit After Tax 0.00 0.00 187049.84 380567.95 325277.19 340416.64

Dividends Payable 0.00 0.00 0.00 0.00 0.00 0.00

Retained Profits 0.00 0.00 187049.84 380567.95 325277.19 340416.64

Annex 5: Projected Balance Sheet (in Birr): Continued

PRODUCTION

5 6 7 8 9 10

TOTAL ASSETS 3207856.96 3402347.35 3611977.19 4016978.02 4421978.85 4826979.69

1. Total Current Assets 2828206.96 3061807.35 3310547.19 3754658.02 4198768.85 4642879.69

Inventory on Materials and Supplies 778306.51 778306.51 778306.51 778306.51 778306.51 778306.51

10


30/30

Work in Progress 117873.76 117873.76 117873.76 117873.76 117873.76 117873.76

Finished Products in Stock 235747.53 235747.53 235747.53 235747.53 235747.53 235747.53

Accounts Receivable 537600.00 537600.00 537600.00 537600.00 537600.00 537600.00

Cash in Hand 66427.64 66427.64 66427.64 66427.64 66427.64 66427.64

Cash Surplus, Finance Available 1092251.51 1325851.90 1574591.75 2018702.58 2462813.41 2906924.25

Securities 0.00 0.00 0.00 0.00 0.00 0.002. Total Fixed Assets, Net of Depreciation 379650.00 340540.00 301430.00 262320.00 223210.00 184100.00

Fixed Investment 575200.00 575200.00 575200.00 575200.00 575200.00 575200.00

Construction in Progress 0.00 0.00 0.00 0.00 0.00 0.00

Pre-Production Expenditure 28760.00 28760.00 28760.00 28760.00 28760.00 28760.00

Less Accumulated Depreciation 224310.00 263420.00 302530.00 341640.00 380750.00 419860.00

3. Accumulated Losses Brought Forward 0.00 0.00 0.00 0.00 0.00 0.00

4. Loss in Current Year 0.00 0.00 0.00 0.00 0.00 0.00

TOTAL LIABILITIES 3207856.96 3402347.35 3611977.19 4016978.02 4421978.85 4826979.69

5. Total Current Liabilities 537600.00 537600.00 537600.00 537600.00 537600.00 537600.00


Bank Overdraft 0.00 0.00 0.00 0.00 0.00 0.00

6. Total Long-term Debt 360463.09 180231.54 0.00 0.00 0.00 0.00Loan A 360463.09 180231.54 0.00 0.00 0.00 0.00

Loan B 0.00 0.00 0.00 0.00 0.00 0.00

7. Total Equity Capital 720926.18 720926.18 720926.18 720926.18 720926.18 720926.18

Ordinary Capital 720926.18 720926.18 720926.18 720926.18 720926.18 720926.18

Preference Capital 0.00 0.00 0.00 0.00 0.00 0.00

Subsidies 0.00 0.00 0.00 0.00 0.00 0.00

8. Reserves, Retained Profits Brought Forward 1233311.61 1588867.69 1963589.63 2353451.01 2758451.84 3163452.68

9. Net Profit After Tax 355556.08 374721.93 389861.38 405000.83 405000.83 405000.83

Dividends Payable 0.00 0.00 0.00 0.00 0.00 0.00

Retained Profits 355556.08 374721.93 389861.38 405000.83 405000.83 405000.83

11

Documents

Wax Candle Manufacturing Plant