PROJECT FEASIBILITY

FOR RECYCLED PLASTIC MANUFACTURING

LOCATION: HARARI REGIONAL STATE, HARAR TOWN

SUBMITTED TO

INVESTMENT MINES & ENERGY OFFICE

PROMOTERS:

JANUARY, 2023
PLASTIC RECYCLING INDUSTRY FEASIBILITY

TABLE OF CONTENTS
EXECUTIVE SUMMARY
1. INTRODUCTION ………………………………………………………5
1.1. Project Justifications………………………………………………….6
1.2. Promoter Background………………………………………..……….6
1.3. Objective ………………………………………………….………….6
1.4. Socio Economic Significance of the Project. ……………………….8
1.5. Location, Infrastructure and Land…………………………………...10
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2. MARKET STUDY, PLANT CAPACITY, AND PRICING ………….12

2.1. Demand and Supply Analysis ………………………………………16
2.1.1. Competitive Comparison ……………………………………………18
2.2. Preliminary Marketing Consideration…………………………..…...19
2.3. Market Share…………………………………………………….......21
2.4. Project Capacity and Production Program………………….……….22
2.4.1. Project Capacity………………………………………..…………….23
2.4.2. Production Program……………………………………………….....25
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3. TECHNICAL SECTION OF THE PROJECT………………………….28

3.1. Product Nature ………………………………………………………29
3.2. Raw Materials and Inputs………………………………………..…..31
3.3. Production Technology………………………………………………32
3.4. Production Process …………………………………………………..33
3.5. Utilities……………………………………………………………….35
3.6. Project Implementation Plan/ Action Plan………………………….36
4. MANPOWER AND ORANIZATIONAL MANAGEMENT………….38
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4.1. Organizational Structure……………………………………………..40

4.2. Man Power Requirement…………………………………………….44
4.3. Management of Sales………………………………………………..44
4.3.1. Functions of Sales Management Units………………………………45
4.3.2. External Interfaces…………………………………………………...45
5. INVESTMENT COST AND FINANCIAL ANALYSIS………………46
5.1. Total Initial Investment Cost…………………………………………47
5.1.1. Fixed Investment………………………………………………….....47
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5.2. Annual Production Cost at Full Capacity…………………………....47

5.3. Financial Analysis and Statements…………………………………..48
5.3.1. Underlying Assumption ……………………………………………..49
5.3.2. Sources of Fund……………………………………………………...49
5.3.3. Loan repayment Schedule……………………………………………50
5.3.4. Depreciation Schedule………………………………………………..51
5.3.5. Revenue Projection…………………………………………………..52
5.3.6. Balance Sheet (Beginning)…………………………………………..53
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5.3.7. Income/Loss Statement………………………………………………53

5.3.8. Cash Flow Statement…………………………………………………54
5.3.9. Profitability…………………………………………………………..54
5.3.10. Payback ……………………………………………………...……54

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EXECUTIVE SUMMARY
1. Project Title RECYCLED PLASTIC MANUFACTURING
2. Project Owner TESFAGERGISH ATOMBESA, FISEHA G/MICHAEL
AND G/EGZABEHER G/MICHAEL
3. Nationality Ethiopian and Eritreans
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4. Project Location SHEGER CITY ADMINISTRATION KOYE FECHE SUB

CITY TOWN, SPECIAL ZONE, OROMIA REGIONAL
STATE
5. Project Composition AFTER USE COLLECTED AND RECYCLED PLASTIC
PRODUCTS MANUFACTURING
6. Land Requirement 5000 M2
7. Total Initial Investment 50,000,000 Birr financed by the owners’ equity of 15%
Capital 25,000,000 and bank loan of 15% 25,000,000
8. Employment The Total Man power required for the project is 188 employees
Opportunity at full capacity.
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Permanent – 150
Skilled – 70
Unskilled – 110
Temporary – 38
9. Market Share 100% Domestic Market supply
10.Production Technology High precision plastic recycling and molding technology
11.Benefits of the Project Manufacture end user plastic products from recyclable after use
plastics.

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1. INTRODUCTION
Out of the total of 8.3 billion metric tons of plastic, only 9 percent has been recycled.
Plastic waste can be decomposed using one or a combination of three processes:
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recycling, incinerating, and landfilling. Out of the three processes, recycling is the
most effective because of its many advantages that extend beyond the benefits of the
other two options. Currently, the Ethiopia recycles only 7.2% of total annual plastic
waste. The most prevalent reason for the low recycling rates despite its effectiveness
is the lack of awareness about recycling; its environmental and financial benefits.
The government of Ethiopia has a conducive investment policies and guidelines that
promote the private sectors involvement in the economic development through the
various investment and business endeavors.
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Therefore, the potentially feasible business potential and those viable investment
policies attracted the promoter of the envisioned project to engage in Plastic
Manufacturing Plant in Harari Regional State Harar town.
Therefore, the investors are committed to establish the project and believe to get the
required cooperation from regional and local governments.
1.1. Project Justifications
Plastic has become an inherent component of the day-to-day life of humans.

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Consequently, global demand and the total waste generated are steadily increasing.
There is an urgent need to increase the understanding of plastic to improve the way
humans dispose of it on an individual and organizational level. Plastic is a polymer
that can be molded and set into a rigid or elastic form. Based on post-manufacturing
processing properties, plastics are divided into two major categories: Thermoset and
Thermoplastic. Plastics are also classified into seven different types based on their
chemical composition. These types of plastic help with categorizing plastic waste
into recyclable and non-recyclable plastic waste. This categorized plastic waste can
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then be handled using three methods: incineration, landfilling, and recycling.

Incineration is a process in which plastic waste is burned at hot temperatures to
harvest energy. Landfilling involves burying the plastic waste underground and
leaving it there to biodegrade naturally. Recycling collects, sorts, and reprocesses the
recyclable waste into raw materials that can later be used for creating new products.
To accommodate recyclable and non-recyclable plastic waste, a good plastic waste
management strategy uses recycling along with incineration or landfilling. This

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strategy should also incorporate different ways to increase awareness about recycling
among people.
1.2. Objective
The general objective of the project is plastic waste processing, plastic recycling and
finished products manufacturing.
Specific Objectives of the project Include:
- Minimizing environmental pollution and related negative impact of
plastic disposal;
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- Introducing advanced technologies of plastic waste processing, plastic

recycling and finished products manufacturing;

- Creating broad economic linkage between the plastic waste producers,
the plastic collection labors, the recycling plant and the wider consumer
society;

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Socio Economic Significance of the Project

The envisaged project will have a significant socio economic importance in terms of
including but not limited to creating a plastic free environment, rehabilitating low
income skilled, semi-skilled and unskilled labor through engagement on income
generating plastic collection and plant operation activities, and contributing to the
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regional as well as the national economic development and environmental protection.

The detailed project benefits are presented below.
A. Plastic Processing, Recycling and Re engineering
The project will engage on a profitable business of plastic waste processing, plastic
recycling and finished products manufacturing.
B. Mitigating Environmental Hazard
Minimizing environmental pollution and related negative impact of plastic disposal;
C. Source of Revenue
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Location, Infrastructure and Land

Location of the project is in Harari, Harar town just next to Menschen for Menschen
Collage. This will have great opportunity to access the input raw and after use plastic
materials basic and necessary for the intended project.
Harar town is a center and near to East Hararge Zone and has east dry waste landfill
particularly bulky usage and disposal of plastic materials from the center of the town
and its highly populated nearby downtowns as well as the abundant number of

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working labor available in these areas are all opportunities for the success of the
project.
Whereas, in terms of land requirement, my existing plastic shoe factory is sufficient
to accommodate the operations of the planned project.

Market Study, Plant Capacity, and Pricing

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The global recycled plastics market size by February 20, 2023 was valued at USD
27.9 billion in 2021 and is projected to reach USD 43.5 billion by 2026, growing at a
9.3% from 2021 to 2026. Favorable initiatives to promote the use of recycled plastics
in developed countries, growing acceptance of recycled plastics consumption in the
recycled plastic industry as fibers in developing countries of Asia Pacific, and cost-
effective, sophisticated recycling technologies are some of the major factors driving
the global market.
Demand and Supply Analysis
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Many research reports categorize the recycled plastics market based on source, type,
end- use industry, and region.
Based on Source, the recycled plastics market has been segmented as follows:
Bottles- Films- Fibers- Foams- Others
Based on Type, the recycled plastics market has been segmented as follows:
Polyethylene Terephthalate (PET)-Polyethylene (PE)-Polyvinyl Chloride (PVC) -
Polypropylene (PP)- Polystyrene (PS)- Others

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Based on End-use Industry, the recycled plastics market has been segmented as
follows:
Packaging- Building & Construction-Recycled plastic–Automotive
Whereas, Polypropylene (PP) is the second-most widely produced commodity
plastic, and its market is forecasted to grow even more in the following years. It is
hard and sturdy, can withstand high temperatures, and is found in car parts, thermal
vests, yogurt containers, and even disposable diapers. PP is usually used for living

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hinges. It is a thin piece of plastic that allows a part of a product to fold or bend from
1 to 180 degrees.
The population of the world is growing and almost reaching over seven billion at this
point in time. Besides this, the economy of majority of the world population is also
seen increasing from time to time. This was due to the economic policy
improvements adopted by most part of the world continents like Africa East and
Middle Asia, and South America to increase the welfare of their people. And it is
obvious that the more improved the economic welfare of people, the more they
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expend on purchase of recycled plastic products and food. Therefore, as long as the
people’s expending capacity continues improving parallel with population growth, it
makes this time the most strategic for recycled plastic industries in general and
recycled plastic factories in particular than ever before. Besides the globally
increasing demands for recycled plastic products, there are also a number of
advantages and incentives that motivate project promoters in Africa in general and in
Ethiopia in particular. Among these are:
o 75% by 25% loan scheme of Bank (specifically for manufacturing)

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o Provision of land necessary for investment at reduced rate

o Duty free import of machines and equipment, construction materials (those

not available locally), and spear parts (whose value not greater than 15% of
that of investment capital goods)
o Exemption from tax on local products

o 2 to 7 or more years of income tax exemption, for exporting investors 2 to 5

years’ holydays for loan repayment

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o High tax rate (30%) for imported recycled plastics

o 20% less tax imports of raw material

o Provisions of loss carry forward privilege, for about half of the tax

exemption period, and other.

o African Growth and Opportunity act (AGOA) of the USA, which entitles

Ethiopian manufactured export products, duty and quota free access to the
USA market.

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o Generalized System of Preference (GSP), which also allows Ethiopian

recycled plastic products to be exported to Austria, Finland, Canada,

Sweden, Japan, Norway
o All and in all Everything but Arms (EBA) facilitates privileged access to the

EU for the Ethiopian export goods.

Along with the above incentives and motivations the recycled plastic
manufacturing industries are migrating to Africa and other poor countries due to
the increase of labor cost in countries like turkey, Italy and others.
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As of to-day the recycled plastic labor costs in Ethiopia (which is around 0.2$/h) is
even lower than the lowest in the list. However, this cheapness in labor cost is no
way reflected to the quality and the eagerness of the workers to be engaged in jobs,
thus giving a great advantage for recycled plastic production in Ethiopia.
Even though, there is recycled plastic products production capacity of about 30
million pieces of recycled plastic and 65 million pieces of recycled plastics per
year in the country (attainable capacity in 2013/14- source ETIDI), there is still
bigger domestic and international recycled plastic products product demands.
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Domestic demand for recycled plastic products

Ethiopia is a big country with a population size of about 100 million people. The
demand for recycled plastic products by this huge population is obviously
enormous. Data published by Central Statistics Authority (CSA) and unpublished
data from Ethiopian Customs Authority reveals that domestic demand for recycled
plastic products is satisfied from both domestic production and import.
Data from Customs authority revealed that the trend in import of recycled plastic
products is increasing. Most residents of mainly middle and high income group
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prefer imported recycled plastic products, as the products are better quality and
more fashionable. Domestic consumption of recycled plastic products for the year
2011 -2015 is shown in the table below:
Year
Description
2011 2012 2013 2014 2014 2015

Import 18,785 19,303 22,415 22,894 28,599 16%

Domestic 2%
6,955 6,574 4,978 5,171 6,087
production

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Total demand 22,700 21,877 27,393 27,065 32,686 10%

Value of 28%
341,923 405,327 536,030 650,023 909,128
import (CIF)

Table domestic consumption of recycled plastic products (ton)

According to the above table, the import of recycled plastic products increased at a
rate of 16%, while the value of import increased by 28% which is almost double of
the quantity increment. This depicts how Ethiopia is spending its currency for the
product it could have produced at home.

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Therefore, based on the fact that serving the local market will have a profound
effect in addressing the issue of import substitution.

3.3.Raw material, Inputs and Utilities

The basic raw materials used to produce the planned recycled plastic products
include after use recyclable plastics, printed label, sticker, button and recycling
threads. The quality of these raw materials determines the quality of the outputs
directly.

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After use recyclable plastic is the major raw material required by a recycled plastic
manufacturing unit which accounts up to 60% of the total raw material costs.
Similarly, a variety of produced and after use recyclable plastics are the major raw
materials required by the envisaged project.
Availability of Raw materials
Local supply
Currently in Ethiopia though there are a number of recycled plastic mills and also
molding and accessories manufacturers, they are yet to satisfy the quality and
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quantity demanded by the manufacturers specifically manufacturers for export

market.

According to the data collected from ETIDI; in the range of medium to large level
manufacturing capacity there are ten produced after use recyclable plastic
manufacturing plants and fourteen after use recyclable plastic manufacturers in
Ethiopia. And most of them are cotton based production units with fewer product
varieties.

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These plants have a total installed capacity of producing 54,835,000 KG of raw

produced after use recyclable plastic and 179,781,000 meters of raw after use
recyclable plastic but their current attainable capacity is limited to 29,524,000 KG
of raw produced after use recyclable plastic and 102,597,000 meters of raw after
use recyclable plastic per annum.

S/N Type of product Unit Installed capacity Attainable capacity

1 Produced after use KG 54,835,000 29,524,000

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recyclable plastic

2 after use recyclable Meter 179,781,000 102,597,000

plastic

1.2.1. Competitive Comparison

The business is expected to have competition mainly from plastic manufacturing
industries. The least business competition will be plastic recycling industries which
remains very limited in size covering only 0.9% of local market demand of recycled
plastic products. (Ethiopian Investment Commission 2019 Report). The envisaged

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project has a significance in terms of catalyzing the local plastic recycling investment
and marketing trends.
Technical Section of the Project
Product Nature
Plastic has become ubiquitous, and with increasing global demand, its production is
also steadily increasing. As its usage has risen, the total plastic waste generated is
also piling up. There is an immediate need to raise awareness of how to handle
plastic waste on an individual and organizational level. Understanding the
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fundamental properties of plastics can aid in the development of more effective

plastic waste handling strategies.

3.1.1. Plastics
Plastic has become an inherent component of the day-to-day life of humans. Its low
production cost, versatility, and wide range of applications have made it the first
choice for manufacturers around the world. Oxford University press defines plastic
as “a synthetic material made from a wide range of organic polymers that can be
molded into shape while soft, and then set into a rigid or slightly elastic form.” A
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polymer is a chain of many small repeating components called monomers. Plastics

are split into two broad types based on post-manufacturing processing properties:
Thermoset and Thermoplastic. Plastics are also classified into seven different types
based on their chemical composition.

Types of Plastic (Based on Post Manufacturing Properties)

Thermoset
Thermosets are defined as materials that will undergo or have undergone a chemical
reaction by the action of heat, catalyst, ultraviolet light, etc., resulting in a relatively
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infusible state. The process of hardening or toughening a polymer into a Thermoset

polymer is called curing. Curing a thermosetting polymer transforms it into plastic
by cross-linking polymer chains. Cross-linking in polymers is linking two polymers
to change the physical properties, in this case toughening the polymer. Cross-linking
can be visualized as two long chains placed parallel connected at many places with
short links. Plastic made from thermosetting materials is known as Thermoset
Plastic. Thermoset Plastic is a prized material in the manufacturing industry because
of its strength and durability and is extensively used in automobiles and construction
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including applications such as adhesives, inks, and coatings (Romeo RIM

Incorporated, n.d.).

Thermosets Applications

Polyurethanes Mattresses, Cushions, Insulation

Epoxies Adhesive Glues, Coating for electronic devices, Helicopter and jet
engine blades

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Unsaturated Bathtubs, Furniture

Polyesters

Phenol- Plywood, Electronics circuit boards, and switches, electrical appliances

Formaldehyde

The infusible state of thermosetting plastic makes it very difficult to recycle, and if
heated to melt it, it starts to degrade. This degradation worsens the quality of the
plastic and leaves it unworkable.
Some examples of Thermoset plastics and their applications are as follows:
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Table 1: Different Thermoset Plastics and their common applications

Thermoplastic
Thermoplastics are defined as polymers that can be melted and recast indefinitely.
The molecules in thermoplastics are held together with secondary weak bonds that
make it easy to reform by heating and cooling, provided that the temperature is not
high enough to cause decomposition and degrade the polymer. This reformation can
be accomplished by the manufacturing processes like extrusion, injection molding,
or pressing.
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This property of thermoplastics gives them the name “reversible material” because
they can be reversed to their original form and recycled into new products. Some
common examples of thermoplastic are as follows:

Thermoplastics Applications

Polyethylene Packaging, Shampoo Bottles, Bullet-proof Vests

Polypropylene Microwave containers, Carpet fibers, Automotive bumpers

Polyvinyl Chlorides Floor and wall covering, Sheathing for electric cables, Water Pipes

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Table 2: Different Thermoplastic Plastics and their common applications

3.2. Raw Materials and Inputs

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3.2.1. Types of Plastic (Based on Chemical Composition)

The Society of Plastic Industry (SPI), now Plastic Industry Association, established a
classification system in 1988 that allowed consumers and recyclers to identify
different types of plastic based on their chemical composition. This classification
system categorized plastic into seven types, numbered from 1 to 7, based on their
chemical composition. This classification system is known as ASTM International
Resin Identification Coding System (RIC) (2EA Consulting Limited., 2018). Each
type has its symbol, and plastic manufacturers punch these symbols on all the plastic
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articles with their respective types. Table 3 shows the different types and symbols in
the RIC system.
Types Chemical Composition Symbol Recyclable/Non-Recyclable
Type 1 Polyethylene Terephthalate (PET) Recyclable

Type 2 High-Density Polyethylene (HDPE) Recyclable

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Type 3 Polyvinyl Chloride (PVC) Recyclable

Type 4 Low-Density Polyethylene (LDPE) Recyclable

Type 5 Polypropylene (PP) Recyclable

Type 6 Polystyrene Recyclable

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Type 7 All other plastic Varies based on different

materials

Table 3: Types of plastic based on the chemical composition

The seven types of plastic can be categorized in the types of plastic based on the
processes. The plastic types 1 through 6 are thermoplastics because they can be
melted and reformed into new items. Type 7 plastics include all other varieties of
plastic that do not fall into types 1 through 6. As a result, Type 7 plastics include
both thermoplastics and thermosets.

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Plastic Waste Handling

Plastic is adaptable, lightweight, flexible, moisture-resistant, durable, and reasonably
priced (Coastal Care, 2018). These are the alluring attributes that contribute to such
excessive use of plastic goods all over the world (Coastal Care, 2018). According to
the United Nations, one million plastic bottles are bought every minute, while up to 5
trillion single-use plastic bags are used worldwide every year (United Nations
Environment Programme, n.d.). Plastic is durable and takes centuries to degrade.
Plastics used by manufacturers for making products ultimately become waste.
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Nowadays, plastic waste has become ubiquitous in the natural environment, and its
presence is ever-growing. Every year, humans generate 300 million tons of plastic
waste, which is nearly equal to the weight of the entire human population (United
Nations Environment Programme, n.d.). This plastic waste stays on the surface for
centuries and adversely affects human health, oceans, food chain, wildlife, and
groundwater sources. These are a few noticeable effects of plastic, but numerous
others go unnoticed and are still being researched by scientists.

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To take care of all the plastic waste, governments across the globe employ plastic
waste management strategies like landfilling, incineration, and recycling.

Production Technology

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Recycling of post-consumer plastics includes various processes involving dedicated

equipment from the advanced worldwide recycling products range.
Also, converting of recycled plastic is very different from that of virgin material and
therefore requires particular equipment as well.
Post-consumer recycled (PCR) converters in raw materials need solutions that ensure
high and consistent production standards.
Producers, using PCR plastic must be able to adapt their plants to allow them to
handle a material that is neither standard nor constant in terms of batch quality, as it
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may come from different sources. As a result, the chemical and physical
characteristics may vary greatly as well as the presence of low boiling volatiles
(VOC) and other contaminants (NIAS).
Improper use of post-consumer material, such as RPET or flakes, could cause:
 Reduction in the useful life of the equipment
 Process instability
 Presence of potential contaminants in the final product.

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The Advanced technologies worldwide offers unique solutions for the treatment and
production of recycled plastics (PET, PP, HDPE - but not only these), in different
forms such as granules or flakes, which guarantee production quality and maximum
equipment utilization.
The offer includes conveying systems, shredders and grinders for the size reduction
of the material to be recycled, crystallizers to crystallize materials in the amorphous
state and dehumidifiers and hot-air dryers. The materials in the amorphous state and
dehumidifiers and hot-air dryers. The Advanced technologies worldwide also
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produces deodorization systems, solutions for the condensation of low-boiling

contaminants and analysis instruments to detect the presence of contaminants in real
time. Finally, it develops software to support the quality control system by tracking
of production processes and products parameters, storing data for years and
interfacing with the company ERP.
The use of advanced technologies worldwide machineries, specific to the treatment
of recycled plastic, contributes to an increase in the quality of the final product and at
the same time, controls scrap, energy consumption and costs.
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3.4. Production Process: Machinery and Equipment

The production process of the planned plastic processing and recycling plant
involves 7 major processes and several modern procedures explained below based on
the advanced technology machineries intended to be imported, installed and utilized
for the operations of the plant.

A. Feeding and Conveying

B. Drying and Dehumidifying
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C. Dosing and Blending

D. Storage
E. Software
F. Lab-Tech
G. Granulation

The lines of plastic processing and recycling, in addition to the after use plastic input
materials readily collected, industrial chemicals required pre-processing, during and
post-processing will be imported and handled appropriately.
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A. Feeding and Conveying

This processing phase will be the initial procedure after input plastic materials get
collected, identified, refined, dried and suitably stored. The range of these technology
solutions spans from stand – alone single material loaders to central multiple material
systems. The following standard plastic recycling and processing lines will be

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applied. The description on the bottom of the machineries' images presented below
will be applied alternatively based on the requirements of each type of process:

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B. Drying and Dehumidifying

In this phase of processing broad selection of technologies will be applied to perform

the drying process in the best condition possible for the raw material.

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The various drying stages based on the type, quantity and the end product
requirements are crucial in selecting and utilizing the drying and dehumanizing
process of plastics involved.
C. Dosing and Blending
In this phase of plastic processing and recycling advanced technology of line
production including Volumetric, gravimetric, loss-in-weight, continuous or
batch, are the technologies implemented in the series of blenders and dosing units.

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The wide range of solutions involved under this phase include the small movable
storage silos on wheels, up to the external silos to stock tons of material. The
solutions can be totally tailor made on customer request. The storage process is
intended to be handled following universal standards applicable in high fidelity
product handling as this phase is highly exposed to risks of major product defect
and environmental contamination.

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E. Software

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Integration of processes is key to utmost efficiency of operation and highest

production output. Therefore, installation, commissioning, maintenance and prompt
services of the required operating and integration software with trained operators

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assigned for each and specific technology is intended to be availed for the plant. The
following integrated operating software shall be maintained.

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F. Lab – Tech
This phase of processing applies the simplest way of measuring AA levels in PET
preforms. The intended modern Lab-Tech range allows utmost production
monitoring, by providing real time analysis of acetaldehyde content in the PET
preforms. The following Lab-Tech Systems will be applicable for the plant.

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G. Granulation
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Under this phase of granulation, small, medium and large capacities, with the latest
design for size reduction, granulation, recycling devices and accessories, represent
the range of equipment of modern granulation equipment and systems will be
installed, commissioned, maintained and serviced. Trained operating personnel will
be assigned accordingly.

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Raw material requirement by the envisaged project

The details of input raw materials required by the envisaged project including
respective cost of raw materials are illustrated in the table below. At stipulated
production capacity i.e. the threshold of 100% capacity utilization, the unit

projected to consume 186,093 KG of produced after use recyclable plastic,

523,729 meters of after use recyclable plastic and various quantities of molding
and accessories with an estimated cost of ETB 64.14 million per annum.
Plant capacity & Production program
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Production Program

Parameters like market size, capacity of machineries to be installed, operational

hours and other factors are taken into consideration in determining plant capacity.
Accordingly, the following assumptions are considered:

Assumptions

No. of working hours/day 8

Working minutes/day 480
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No. of working days/month 26

No. of production days/year 300
Starting capacity utilization % - produced lines 70%

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SWOT Analysis

A short SWOT analysis illustrates the Ethiopian companies’ current position in

terms of their international position, showing where the problems are and also
where strengths and potential are to be found. Thus, the key SWOT summary
presented as follows.

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Strength
- There is a reliable consumer market for this product.
- Low production price (low energy costs; inexpensive labor) -
Ample of easily trainable work force.
Weakness

- Absence of (local) after use recyclable plastics – generally limited assortment of

after use recyclable plastics & Accessories

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- The requirement of credit and/or delay of payments from customer side might
cause disturbance in the cash cycles.
- Very small base of available skilled machinists.
- Lack of trained technicians and line / middle management.

Opportunity

- Certain investment climate

- Continuous development in the country will definitely raise personal disposable
income to be budgeted for plastic products.
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- The government focus on recycled plastic sector particularly in dyeing,

processing and finishing sectors will be the other factors to reduce the raw
material cost that motivates to enjoy the sector.
- Discount on duty of imported raw materials.

Threats

- Continuous power interruption

- Skilled operators in the recycled plastics are quite unstable. Technical expertise
is not available at the best possible level. This restricts the industry to the basic
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recycled plastics and only limits the entry into the manufacturing of high quality
recycled plastics.
4. Technical Study
4.1. Location of the project
The company is established in Harari Regional State, Harar Town where
appropriate manpower especially for recycling operators is abundant.

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Project Engineering

Production building
The rented flat provides spaces for the core processes of the project i.e. cutting,
recycling and finishing. In addition to that there is also a separated room for raw
material storage as well as finished goods store.

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1500M2
RAW MATERIAL BULK STORAGE
500 M2
250M2 RAW MATERIAL WASHING &
ADMINISTRATION OFFICE ROOMS PREPROCESSING
____________________________
250M2
STAFF RESTAURANT & CAFÉ
CHANGING ROOMS
1500M2 1000 M2
FINISHED GOODS STORAGE PRODUCTION SITE
Fig. Macro-layout

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Machinery and Equipment In this technological advancement era, there are also
enormous technological advancements in the field of recycled plastic and recycled
plastic products sectors as well. These technological advancements helped the sector
in productivity and quality improvements throughout the overall value chain of
recycled plastic and recycled plastic products manufacturing business.

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However, the acquisition of these technologies requires an outlay of huge capital

investments and also their maintenance and spare part cost also considerably high.

Hence, such technologies are not advisable and/or not feasible for startup
businesses like recycled plastic products manufacturing because the business is
labor intensive by its nature. And also in countries like Ethiopia there is huge
potential for easily trainable and comparatively cheaper labor force.

Therefore, in this project proposal medium level technologies that enable the
project to achieve its objectives are considered throughout the manufacturing
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process. And it is planned to be purchased from abroad.

Plant Machinery and Equipment

The main plant that is required for the project is recycling machines & auxiliary
equipment, cutting equipment, backup electric power generator as well as
compressor and the total cost is estimated to be ETB 25,244,760.

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1
Dense Pneumatic Conveying Material system
2
Production Monitoring
3
Manual Coupling station

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4
Piping and Accessories
5
Vacuum Unit Enhance Filtering
6
TN – Drying Hopper
7
CDF – Condensation Unit
8
RPA – Mould Dryer
9
T1 – Drying Hopper
10
GMP – Dryer
11
PURETECH – High-Tech Filter for VOC Filtration

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12
MDP – MdP2 – Volumetric Doser
13
MDW – Gravimetric Blender
14
QUANTUM – High Precision Gravimetric Blender
15
LYBRA LG – LGR – Continuous Weight Loss
Gravimetric Doser
S/
N
LYBRA LV – LVR Volumetric Dosing Unit
GS SERIES – Positive Pressure Loading Stations

16
SILOS - Storage Silos

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17
GDS – Loss in Weight Blenders, for Pellet, Flakes,
Regrind, Additives and Powder
18
BIG-BAG STATION – Unloading Station
19
BT – SERIES – Modular Silos
20
WINFACRORY 4.1 – Industry 4.0 Process Control
Total Estimated Cost ETB 25,244,760
Table: Plat machinery and Equipment

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Utilities
Electricity and Power Supply
The electric power will provide power required to run machineries and light for the
building.

And the overall requirement estimated as follows:

Lighting requirement

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S/N Sections Area (Sq.m) Wattage required No. of tube

lights

1 Factory (Cutting + recycling + finishing) 1000.0 18000 450

Raw material Store (Molding + after use 400.0 7200 180

recyclable plastic)

2 Finished goods store 300.0 5400 135

Total 30600 765

Total after reducing due to accession to natural light 18360 459

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KVA required for lighting 22.95

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Total In KW 18.36

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Total in kwh/day 146.88

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Power requirement summary

S/N Area KVA KW KWH/day
(8 working Hrs)

1 Lighting 22.95 18.36 146.88

2 Machinery & 58.99 47.19 377.52

equipment

3 Total 81.94 65.55 524.40

Table: Power requirement summary

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The required total KVA is 81.94 and assuming 8 hours’ production day a total of
524.40 KWH is required. Thus a power backup generator (assuming 20% allowance
and future expansion) with a total capacity of 100 KVA is recommended.

Utilities Consumption and Cost

Assumptions:
- Water: 20 liters/employee

- Generator fuel: 18.17 Liter/Hr. @ full load

- Power usage: 90% from main grid (EEPCO)

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- Car fuel: 100 KM/day & 10 KM/Liter

Utilities Consumption and cost

S/ Area Unit Consumption Rate Cost/day Cost/month Cost/annum

N
1 Electricity KWH 524.40 0.49 256.956 6680.856 77,086.8
0
2 Water Liters 660 0.025 16.5 429 4,950.0
0
3 Generator fuel Liters 14.536 17 247.112 6424.912 74,133.6
0
4 Car fuel Liters 10 17 170 4420 51,000.0
0

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5 Telecommunications Minutes 100 2600 30,000.0

0
Total 790.5 20,554.77 237,170.4
7 0

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4.4. Environment Impact Assessment

TESFAGERGISH ATOMBESA, FISEHA G/MICHAEL AND
G/EGZABEHER G/MICHAEL Recycled plastic factory determined to
produce a variety of produced and products which are none washable and
requiring simple value addition process through screen printing whose
chemical consumption is negligible to pollute the environment.
Therefore, the project is considered as purely environmental friendly.

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4.5. Project Implementation Schedule

Months
Activities
1 2 3 4 5 6 7 8 9 10 11 12
Setting up facility and
installations
Raw material purchase
Production operation
commencement
Table: Implementation Plan

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5. Organization, Management & Manpower requirement

5.1.Organization Structure
The company's management philosophy is based on responsibility and
mutual respect. The company will have an organizational structure that
encourages productivity and respect for customers and fellow employees. A
well-structured organizational management system is one of the success
factors of an enterprise. The decision-making process, coordination between
different units and the communication process are determined by the nature
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of the adopted organizational structure which affects the overall efficiency

and performance of the enterprise.
The detail of the Organizational structure (Organogram)is given as follows:

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General manager

Production Maintenance Finance Quality Marketing

manager manager manager manager manager

warehouse in
Cutting in charge Mechanic
charge

Recycling in charge Electrician

Finishing in charge

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Fig: Organizational chart

5.2.Manpower requirement and Costs

Recycled plastic industry is labor intensive where use of skilled and qualified labor is
the most determining success factor. Availability of training is also crucial to improve
the efficiency and effectiveness of man power in every level of the organization.

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The manpower requirement of the envisaged project is estimated to be 188 personnel

including managers and operators on a permanent basis. Operators are skilled and
semiskilled employees working in different positions. The details are presented as
follows:

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S/N Position No. Rate Total/month Total/annum

1 General Manger 1 6,000 6,000 72,000
3 accountant 1 5,000 5,000 60,000
4 executive secretary 2 3,000 3,000 36,000
6 Production Manager 3 4,000 4,000 48,000
7 Supervisor 2 3,000 3,000 36,000
8 Quality manager 1 3,000 3,000 36,000

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9 QC 1 2,000 2,000 24,000

10 Warehouse in charge 31 1,500 1,500 18,000
11 Operators 33 3,600 118,800 1,425,600
12 Helper 2 800 1,600 19,200
13 Recycling master 6 2,500 2,500 30,000
14 Machine operators 15 2,500 2,500 30,000
15 Cutting helper 7 800 800 9,600
16 Inspection 4 1,200 2,400 28,800
17 Ironing 2 1,200 2,400 28,800
18 Folding & packing 6 1,000 2,000 24,000
19 Maintenance superintendent 2 2,500 2,500 30,000

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20 Driver 3 2,000 2,000 24,000

21 Guard 3 1,200 1,200 14,400
Total 155
54,000.00 166,200.00 1,994,400.00
Direct labor expense
140,500.00 1,686,000.00
Salary and wages
25,700.00 308,400.00
Employer pension contribution @ 11%
18,282.00 219,384.00
Table: Manpower requirement and cost

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Utilities
Electricity and Power Supply
The electric power will provide power required to run machineries and light for the
building.
The overall requirement estimated as follows:
Lighting requirement
S/N Sections Area (Sq.m) Wattage required No. of tube
lights

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1 Factory (Cutting + recycling + finishing) 1000.0 18000 450

Raw material Store (Molding + after use 400.0 7200 180

recyclable plastic)
2 Finished goods store 300.0 5400 135
Total 30600 765
Total after reducing due to accession to natural light 18360 459
KVA required for lighting 22.95
Total In KW 18.36
Total in kwh/day 146.88

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Power requirement summary
S/N Area KVA KW KWH/day
(8 working Hrs)

1 Lighting 22.95 18.36 146.88

2 Machinery & 58.99 47.19 377.52

equipment

3 Total 81.94 65.55 524.40

Table: Power requirement summary

The required total KVA is 81.94 and assuming 8 hours’ production day a total of
524.40 KWH is required. Thus a power backup generator (assuming 20% allowance
and future expansion) with a total capacity of 100 KVA is recommended.
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Utilities Consumption and Cost

Assumptions:
- Water: 20 liters/employee

- Generator fuel: 18.17 Liter/Hr. @ full load

- Power usage: 90% from main grid (EEPCO)

- Car fuel: 100 KM/day & 10 KM/Liter

Utilities Consumption and cost

S/ Area Unit Consumption Rate Cost/day Cost/month Cost/annum

N

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1 Electricity KWH 524.40 0.49 256.956 6680.856 77,086.8

0
2 Water Liters 660 0.025 16.5 429 4,950.0
0
3 Generator fuel Liters 14.536 17 247.112 6424.912 74,133.6
0
4 Car fuel Liters 10 17 170 4420 51,000.0
0
5 Telecommunications Minutes 100 2600 30,000.0
0
Total 790.5 20,554.77 237,170.4
7 0

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Projected Financial Study

Investment Costs
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The financial analysis is made on the assumption that all planned investments are
made at the same time and during the initial year.
The total investment cost of the project shall : ETB 51,064,890.73 (Eighty Six
Million Sixty Four Thousand Eight Hundred Ninety and 73/100)
Fixed Investment Costs
The total fixed investment cost is estimated to be about ETB 1,420,397.70. The
summary of the required fixed investment costs is presented in table below:
Fixed Investment
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Item Description Total costs

Fixed investment costs Total costs

Land acquiring cost -

Land development cost -

Building & construction -

Plant & machinery 1,244,760.00

Vehicle (one pick up and one minibus) -

Office furniture &equipment 175,637.70

Total fixed investment costs 1,420,397.70

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Table: Fixed investment costs

Pre-operative expenses

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Pre-production costs include expenses for feasibility study, environmental impact

study, and services and interests as well as other technical study costs. The total
approx. preproduction cost for this project is ETB 145,400
Pre-operative expenses

Hiring Cost (One month salary for key staffs) 21,000

Consultancy fee (Business plan devt and technology selection) 15,000
Operators half of one month salary while training 59,400
Training 25,000
Electrical Installations 25,000
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Total Pre-operative expenses 145,400

Table: Pre-operative expenses

Total investment costs

The total investment costs include the estimated fixed investment costs and
preproduction costs. As the project is new, working capital is also included.

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The total investment cost including working capital is estimated to be ETB 9.91
million. The details are shown in the table below:
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Total Investment

Item Description Total costs

Fixed investment costs Total costs
Land acquiring cost -
Land development cost -
Building & construction -
Plant & machinery 1,244,760.00
Vehicle (one pick up and one minibus) -
Office furniture & equipment 175,637.70
Total fixed investment costs
1,420,397.70

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Pre-operative expenses

Hiring Cost (One month salary for key staffs) 21,000.00

Consultancy fee (Business plan devt and technology selection) 15,000.00
59,400.00

Operators half of one month salary while training

Training 25,000.00
Electrical Installations 25,000.00

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Total Pre-operative expenses

145,400.00
Working capital

Working capital (Three-month Direct & indirect expenses) 8,344,254.60

Grand Total (FOB)
9,910,052.30
Table: Total investment cost

6.2.Financing Plan

Total Investment Financing Plan

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Bank loan Equity

Item Description Total costs
Fixed investment costs Total costs
Land acquiring cost -
Land development cost -
Building & construction -
Plant & machinery 1,244,760.00 1,244,760.00
Vehicle (mini-van) -
-
Office furniture & equipment 175,637.70
175,637.70

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Pre-operative expenses
-
Hiring Cost (One month salary for key staffs) 21,000.00
21,000.00
Consultancy fee (Business plan devt and technology 15,000.00
selection) 15,000.00
Operators half of one month salary while training 59,400.00
59,400.00
Training 25,000.00
25,000.00
Electrical Installations 25,000.00
25,000.00
Working capital
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Working capital (3 months of Direct & indirect 8,344,254.60 8,344,254.60

expenses)
Grand Total 9,910,052.30 8,344,254.60 2,986,195.40

Table: Financing plan

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6.3. Production, Revenue and Operating Cost

6.3.1. Production
Parameters like market size, capacity of machineries to be installed, operational
hours and other factors are taken into consideration in determining plant capacity.
Accordingly, the following assumptions are considered:
Assumptions
No. of working hours/day 8
Working minutes/day 480

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No. of working days/month 26

No. of production days/year Starting 300
capacity utilization % - produced lines 70%
Table: Production program assumptions

Operating costs
Direct Operating Cost
The direct operating cost items of the project are operator’s remuneration and raw materials (after
use recyclable plastics, molding and accessories, and packaging materials). The total cost for the
first years is ETB 39.81 million and it is assumed that this cost will increase by 5 % annually.
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Summary of Direct cost

Description Projected Years (5% Increment)
1 2 3 4 5
Operators’ remuneration 1,686,000.00 1,770,300.00 1,858,815.00 1,951,755.75 2,049,343.54
Raw material 35,273,867.53 37,037,560.90 38,889,438.95 40,833,910.90 42,875,606.44
Packaging material 2,850,201.11 2,992,711.17 3,142,346.73 3,299,464.06 3,464,437.27
Total Direct cost (FOB) 39,810,068.64 40,030,272.07 42,031,785.67 44,133,374.96 46,340,043.71

Table: Direct operating costs

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Indirect Costs

The indirect costs of the project are those costs which do not vary with the production scale of the
project. The annual indirect cost in the first year is ETB 950,416.36 and it is assumed this will
increase by 5 % each year

Assumptions

Insurance on: Rate

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Equipment & fixed assets 1%

Spare parts insurance 1%

Building 1%

Summary of Indirect cost

Description Projected Years (5% Increment)

1 2 3 4 5

Salary and wages 308,400.00 323,820.00 340,011.00 357,011.55 374,862.13

Electric power cost 77,086.80 80,941.14 84,988.20 89,237.61 93,699.49

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Fuel and oil 125,133.60 131,390.28 137,959.79 144,857.78 152,100.67

Leasing cost 93,750.00 98,437.50 103,359.38 108,527.34 113,953.71

Repair and maintenance 50,000.00 52,500.00 55,125.00 57,881.25 60,775.31

Tele communication 30,000.00 31,500.00 33,075.00 34,728.75 36,465.19

Employer pension 219,384.00 230,353.20 241,870.86 253,964.40 266,662.62

contribution

Spares & Consumables 33,875.60 35,569.38 37,347.85 39,215.24 41,176.00

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Total insurance cost 12,786.36 13,425.67 14,096.90 14,801.24 15,541.90

Total Indirect cost 950,416.36 997,937.17 1,047,834.0 1,100,225.73 1,155,237.02

3
Table: Indirect costs

Project Financial Results

Business results include the projected income statement, projected balance sheet,
and projected cash flow. Each of the business results are described in the following

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sections:

Projected Income Statement

The projected income statement indicates that the project starts to give profit
right from the first year and that is anticipated to be a net profit of ETB 8.41
million in the first year, ETB 18.05 million in the fifth year and so on.
Description Projected years

1 2 3 4 5
Sales 54,388,561.48 59,438,927.90 64,669,553.56 70,085,628.67 75,692,478.96

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Less Direct cost of goods sold 39,810,068.64 40,030,272.07 42,031,785.67 44,133,374.96 46,340,043.71
Gross profit 14,578,492.84 19,408,655.83 22,637,767.88 25,952,253.71 29,352,435.26
Less indirect cost 950,416.36 997,937.17 1,047,834.03 1,100,225.73 1,155,237.02
Profit before Dep. Int. & tax 13,628,076.48 18,410,718.66 21,589,933.85 24,852,027.98 28,197,198.23
Less Depreciation 156,579.77 156,579.77 156,579.77 156,579.77 156,579.77
Profit before Int. & tax 13,471,496.71 18,254,138.89 21,433,354.08 24,695,448.21 28,040,618.46
Less financial costs 1,460,244.56 3,129,095.48 2,837,046.57 2,544,997.65 2,252,948.74
Profit before tax 12,011,252.16 15,125,043.41 18,596,307.52 22,150,450.55 25,787,669.72
Less profit tax 3,603,375.65 4,537,513.02 5,578,892.25 6,645,135.17 7,736,300.92
Net Profit/Loss 8,407,876.51 10,587,530.39 13,017,415.26 15,505,315.39 18,051,368.81
Retained Earning 2,101,969.13 2,646,882.60 3,254,353.82 3,876,328.85 4,512,842.20
Retained Earnings previous - 2,101,969.13 4,748,851.72 8,003,205.54 11,879,534.39

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Retained Earnings cumulative 2,101,969.13 4,748,851.72 8,003,205.54 11,879,534.39 16,392,376.59

Dividend 6,305,907.38 7,940,647.79 9,763,061.45 11,628,986.54 13,538,526.60
Table: Projected income statement

6.4.2. Projected Cash Flow

The cash flow analysis shows surplus for all of the years and the volume is affected
by different cash flow components mainly of operating costs. As financial costs and
loan repayment diminish, the volume of surplus concomitantly grows. At the end of
the fifth year, the cumulative cash balance reaches ETB 27.07 million.
Projected year
Description 0 1 2 3 4 5

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Cash flows from

operating activities
Cash received from - 54,388,561.48 59,438,927.90 64,669,553.56 70,085,628.67 75,692,478.96
customers
Indirect operating - 926,666.36 972,999.67 1,021,649.66 1,072,732.14 1,126,368.75
expense
Direct operating - 39,810,068.64 40,030,272.07 42,031,785.67 44,133,374.96 46,340,043.71
expense
Employers Pension
contribution
corporate tax 3,603,375.65 4,537,513.02 5,578,892.25 6,645,135.17 7,736,300.92
Net Balance - 10,048,450.84 13,898,143.13 16,037,225.97 18,234,386.40 20,489,765.59
Cash flows from
Financing activities
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Loan from Bank 8,344,254.60 - - - - -

Promoters Contribution 2,986,195.40 - - - -
(Equity)
Interest payable - 1,460,244.56 3,129,095.48 2,837,046.57 2,544,997.65 2,252,948.74
Dividend - 6,305,907.38 7,940,647.79 9,763,061.45 11,628,986.54 13,538,526.60
Net Balance 11,330,450.00 (7,766,151.94) (11,069,743.27) (12,600,108.01) (14,173,984.19) (15,791,475.35)
Cash flows from
Investing activities
Purchase of fixed assets 1,420,397.70 - - - -
Pre-operative expenses 145,400.00 - - - - -
Net Balance 1,565,797.70 - - - - -
Previous year cash - 9,764,652.30 12,046,951.20 14,875,351.07 18,312,469.03 22,372,871.24
balance

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Current year cash 9,764,652.30 2,282,298.90 2,828,399.87 3,437,117.96 4,060,402.21 4,698,290.24

balance
Cumulative cash 9,764,652.30 12,046,951.20 14,875,351.07 18,312,469.03 22,372,871.24 27,071,161.48
balance
Table: cash flow

6.4.3. Projected Balance Sheet

The Balance Sheet Forecast is shown in annex – 1

6.4.4. Viability and Other Measures of Project Worth

6.4.4.1. Financial IRR

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The FIRR will be 85.0%.

6.4.4.2. Net Present Value (NPV)

As per the NPV’s criteria, an investment project having positive NPV will be
accepted otherwise it shouldn’t be. Thus, this project has a positive NPV i.e. ETB
43,236,806.54 at 12.5% discounted rate.
Payback Period
The payback period is 1.1 years.

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7. Socioeconomic Impacts
7.1. Socio-Economic Significance of the Recycled plastic Industry
Employment creation: one of the major problems of developing countries is
unemployment and government has designed a policy and made economic decisions
which enhance the job opportunity for unemployed citizens. Since the recycled
plastic sector use labor intensive technology, its prime benefits to the country’s
economy is in terms of employment creation accordingly, the project under

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consideration will create an employment opportunity for about 88 direct and indirect
operators.

Source of government revenue: Recycled plastic industry is one of the recently

flourishing subsectors unlike that of recycled plastic industry which is long lived.
Even though recycled plastic is at its infancy stage it shows encouraging results that
is why the government gives priority for the subsector by opening the door for both
inland and foreign direct investors. At the same time from this effect the government

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generates income in the form of income tax, receivable fee for different securities
and investment licenses.

Means of import substitution: Nowadays, export promotion and import substitution

are the main strategic issue of Ethiopian economy. To meet such strategic objective,
the government gives priority for manufacturing subsectors. Recycled plastic
industry is one of such priority areas which substitutes imported recycled plastic
products by homeland products which solves the shortage of foreign currency.
CONCLUSION AND RECOMMENDATION
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Conclusion
In this document, the business plan of recycled plastic producing project is studied.
As narrated in section two, the project will be established in Harar Town with a total
investment cost of ETB 50.91 million. The project will produce total annual rated
production capacity of 1,560,206 pieces of recycled plastic products.

As shown in the financial section, a five-year projected profit and loss statement
shows that the project is feasible; the enterprise will make an average annual profit of
ETB 13.1 million.
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The feasibility of the project is also robust to different risk factors.

Recommendation
As one of the strategies to encourage investment in the industry sector in general and
the manufacturing sector in particular, the Ethiopian government is developing
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modern industrial parks in different parts of the country. While the response from
international investors has so far been very encouraging, the government also
recognizes the importance of attracting domestic investors to the industrial parks; to
that end the government is planning to provide an attractive incentive package for
domestic investors who can join the industrial parks and produce selected
manufacturing products including recycled plastic and recycled plastic products with
a primary intention of exporting their product (at least 80% export). Our project is a
100% import substitution.
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Projected Balance Sheet

Description 0 1 2 3 4 5

Assets

Current Assets

Cash 9,764,652.30 12,046,951.20 14,875,351.07 18,312,469.03 22,372,871.24 27,071,161.48

Account receivable - 543,885.61 1,138,274.89 1,784,970.43 2,485,826.72 3,242,751.51

Inventory

Total current assets 9,764,652.30 12,590,836.82 16,013,625.96 20,097,439.46 24,858,697.95 30,313,912.99

Non-current assets

Total fixed assets 1,420,397.70 1,263,817.93 1,107,238.16 950,658.39 794,078.62 637,498.85

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Less Accum. depreciation - 156,579.77 156,579.77 156,579.77 156,579.77 156,579.77

Pre-operative expenditure 145,400.00 145,400.00 145,400.00 145,400.00 145,400.00 145,400.00

Total non-current assets 1,565,797.70 1,409,217.93 1,252,638.16 1,096,058.39 939,478.62 782,898.85

Total Assets 11,330,450.00 14,000,054.75 17,266,264.12 21,193,497.85 25,798,176.57 31,096,811.84

Liabilities

Current Liabilities

Account payable - 567,635.61 2,855,813.31 5,197,544.15 7,594,744.95 10,049,388.93

bank over draft -

Total current liabilities - 567,635.61 2,855,813.31 5,197,544.15 7,594,744.95 10,049,388.93

Long term Liabilities

Bank loan 8,344,254.60 8,344,254.60 6,675,403.68 5,006,552.76 3,337,701.84 1,668,850.92

Total Liabilities 8,344,254.60 8,911,890.21 9,531,216.99 10,204,096.91 10,932,446.79 11,718,239.85

Owners Equity 2,986,195.40 2,986,195.40 2,986,195.40 2,986,195.40 2,986,195.40 2,986,195.40

Retained earnings Cumulative - 2,101,969.13 4,748,851.72 8,003,205.54 11,879,534.39 16,392,376.59

Total Owners Equity 2,986,195.40 5,088,164.53 7,735,047.12 10,989,400.94 14,865,729.79 19,378,571.99

Total Equity & Liabilities 11,330,450.00 14,000,054.74 17,266,264.12 21,193,497.85 25,798,176.58 31,096,811.84
PLASTIC RECYCLING INDUSTRY FEASIBILITY

Annexes
9.1.Annex-1 – Projected balance sheet

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Annex-2 – Loan repayment schedule

Principal Amount payment

Repayment date Interest Outstanding balance
repayment per year (Int. + Loan)

Year 0 8,344,254.60
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Year 1 1,460,244.56 1,460,244.56 8,344,254.60

Year 2 1,460,244.56 1,668,850.92 3,129,095.48 6,675,403.68
Year 3 1,168,195.64 1,668,850.92 2,837,046.57 5,006,552.76
Year 4 876,146.73 1,668,850.92 2,544,997.65 3,337,701.84
Year 5 584,097.82 1,668,850.92 2,252,948.74 1,668,850.92
Year 6 292,048.91 1,668,850.92 1,960,899.83 -

Annex-3 – Depreciation & amortization

Projection
Description Dep. Rate
0 1 2 3 4 5

Building & construction 5% - - - - - -

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Depreciation amount - - - - -

Plant & machinery 10% 1,244,760.00 1,120,284.00 995,808.00 871,332.00 746,856.00 622,380.00

Depreciation amount 124,476.00 124,476.00 124,476.00 124,476.00 124,476.00

Vehicle 10% - - - - - -

Depreciation amount - - - - -

Office furniture &equipment 10% 175,637.70 158,073.93 140,510.16 122,946.39 105,382.62 87,818.85

Depreciation amount 17,563.77 17,563.77 17,563.77 17,563.77 17,563.77

Total Pre-operative expenses 10% 145,400.00 130,860.00 116,320.00 101,780.00 87,240.00 72,700.00

14,540.00 14,540.00 14,540.00 14,540.00 14,540.00

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Total Depreciation - 156,579.77 156,579.77 156,579.77 156,579.77 156,579.77

Annex – 4 – Financial Indicators

NPV & IRR
NPV (at 12.5% discounted rate)
Year Cumulative cash flow Present Value (PV) IRR
0 (11,330,450.00) (11,330,450.00)

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1 12,046,951.20 10,708,401.07
2 14,875,351.07 11,753,363.81
3 18,312,469.03 12,861,432.29 85.0%
4 22,372,871.24 13,967,273.37

5 27,071,161.48 15,022,571.42

NPV 52,982,591.95

Payback period

Payback period
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Recovery of initial outlay Payback year

Year Cumulative cash flow
Needed Balance
0 - 11,330,450.00 11,330,450.00
-
1 12,046,951.20 11,330,450.00 (716,501.20) 1.00
2 14,875,351.07 (716,501.20) (0.05) (0.05)
3 18,312,469.03
4 22,372,871.24
5 27,071,161.48
Payback period 1.1

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