detail mop project proposal
detail mop project proposal
2 CONTENTS
1......................................................................................................................................................2
3 EXECUTIVE SUMMARY.....................................................................................................3
6.1.2 UTILITIES...............................................................................................................16
7.1 TECHNOLOGY...........................................................................................................17
7.3 ENGINEERING...........................................................................................................18
9 FINANCIAL ANALYSIS.....................................................................................................22
pg. 2
PROPOSAL FOR MOP, BROOM AND BRUSH MANFACTURING
pg. 3
PROPOSAL FOR MOP, BROOM AND BRUSH MANFACTURING
3 EXECUTIVE SUMMARY
This proposal envisages the establishment of a plant for the production of mop, broom
and brush with a capacity of 250,000 pieces per annum in Mekelle Tigray by the
envisioned investor. SENAY HULUF who had a profound experience in various Business
activities.
The major raw materials required are bristles, ferrules and wood of which bristles and
ferrules have to be imported while wood is available locally.
The present demand for the proposed product is estimated at 9,006,028 pieces per
annum. The demand is expected to reach 22, 534,384 pieces by the year 2024.
The Total establishment of the project requires two hectares. out of which The factory
building consists mainly of production hall ( 4, 200 sq. meters ) , stores for raw
materials and finished goods ( 3800 sq. meters ) , workers dressing rooms and latrines,
offices for production supervisions and foremen, quality control unit ( 480 sq. meters ) ,
and administration building(240 sq. meters ) which will incorporate offices for
management staff. Other social buildings (280 sq. meters) (canteen, assembly hall, etc)
can also be required. Land will also be secured for future expunction of the plant.
Consequently, it is proposed that 20,000m2 of land is needed for a broom and brush
manufacturing plant. Of the total land requirement, 10,000 sq. meters will be an
expansion built up area. At the rate of Birr 5000 per m2, the building cost will be Birr
50,000,000.00
The project's total investment cost including working capital is estimated at Birr 97.6
million, of which 30% will be financed by equity and 70% will be financed by loan.
The project is financially viable with an internal rate of return (IRR) of 37.63 % and a
net present value (NPV) of Birr 30.82 million, discounted at 12.5%.
pg. 4
PROPOSAL FOR MOP, BROOM AND BRUSH MANFACTURING
The following Ratio analysis also indicated that the health y stream of financial projection of
the proposed project.
The project can create employment for 107 persons. In addition to supply of the domestic
needs, the project will generate Birr 236 million in terms of tax revenue. The
establishment of such factory will have a foreign exchange saving effect to the country by
substituting the current imports. The project has a backward linkage effect with the wood
processing industry
The project has a backward linkage effect with the wood processing industry. The
establishment of such factory will have a foreign exchange saving effect to the country by
substituting the current imports.
Brushes are hand-operated tools designed or adapted for such uses as sweeping,
Scrubbing, painting and smoothing of surfaces. Mops and Brooms are bundles of firm
natural or artificial fibres bound tightly together, usually on the long handle, and used for
pg. 5
PROPOSAL FOR MOP, BROOM AND BRUSH MANFACTURING
sweeping and brushing. Brash for painting, shoes, hair and cloth as well as brooms are all
manufactured from bristles – short stiff filaments.
◦ High maneuverability. They can reach any corner or height of the room, which is
◦ They give protection from injuries occurring while cleaning when they are handled by
Equipment’s which help in the cleaning process by directly using manual energy of the
employees.
1)BROOMS:-
Brooms consist of long bristles gathered together and inserted into a handle. Bristles may
be made of
Types of brooms:-
-Soft Bristled brooms- Brooms made of corn fibre, grass brooms, and used on smooth
floors.
pg. 6
PROPOSAL FOR MOP, BROOM AND BRUSH MANFACTURING
-Hard bristled Brooms- Coconut fibre brooms or yard brooms are used on rough surfaces
especially
outdoors.
-Wall brooms/ Tall Turks- These are used to remove cobwebs from ceilings. They have a
soft head
2)BRUSHES:-
Parts of brush:-
b. Bristles made of horse hair, nylon, jute or coir have chisel like action which dislodges
the soil
c. Handle may also be made of wood or plastic and can be detachable or non detachable.
Types of Brushes:-
-Hard Brush- Stiff bristles and well spaced out. Removes heavy soil from rough surfaces.
-Soft brush- Softer bristles and set close together. Removes loose soil from smooth
surfaces like
-Scrubbing Brushes- These have short, hard bristles designed for cleaning stains and
heavy soil. Also known as T brushes. Other brushes are Toilet Brushes/Johnny Mops,
Bottle Brushes, Cloth scrubbing Brush, Carpet brushes, Feather Brush etc.
3)MOPS:-
#Dry mops:- Also called dust control mops. These are used to remove dust from floors,
wall, ceiling. Mops have handle, to which a metal frame is attached. The mop head made
pg. 7
PROPOSAL FOR MOP, BROOM AND BRUSH MANFACTURING
of dense cotton fringes are inserted into the frame and stretched over it.#Wet/damp
mops:-
These mops are used along with buckets to remove dirt from the floor surfaces. The mop
consistsof a handle and cotton fringes or sponge which are capable of absorbing water.
a)Do-all-mops- Consists strands of twisted cotton fixed to a circular metal plate which is
fixed to a stock. b)Kentucky mop-Cotton strands fixed to a length of cotton fabrics which
is inserted into a metal stock
d)Squeeze- Consists of a rubber blade attached to a metal handle to remove excess water
from the floor.
4)CLOTHS: -
Various cloths are used in dry and wet cleaning. For efficient usage, cloth can be color-
coded and
Types of cloths-
a) Dusters/ cloths- soft absorbent plain or checked cotton material or yellow flannelette
used for
b) Swabs and Wipes- These are made of loosely woven cotton cloths which are soft,
absorbent
pg. 8
PROPOSAL FOR MOP, BROOM AND BRUSH MANFACTURING
material used for wet cleaning of surfaces above floor level. Mainly used for cleaning
bathtubs
and washbasins.
c)Floor cloths – These are coarse knitted cotton cloths which are bigger, thicker and used
to clean
floors.
d) Glass Cloths/ Scrim- These are lint-free loosely woven linen material and is used for
cleaning
e) Cotton Rags or cloths- Disposable cotton or cloths used for applying polishes and
cleaning agents.
f) Chamois leather- Obtained from Chamois goat and used for cleaning windows and
mirrors,
polishing silver.
g) Dust sheets- Made of thin cotton material which are discarded from linen room like
bedsheets or
h) Drug gets- Linen, canvas or plastic material placed on the floor in doorways to absorb
excessive
i)Bucket cloths/Splash mats-Thick fabric placed under buckets to prevent water marks
formation on
surfaces.
5)CONTAINERS:-
pg. 9
PROPOSAL FOR MOP, BROOM AND BRUSH MANFACTURING
The staff require containers to carry, transport, and store items of use and collect waste
products.
Types of containers-
a)Buckets- Made of plastic or galvanized iron. Used to collect water and used with mops
for
cleaning.
b)Dustpans- Used along with brushes to collect dust and made of plastic or metal. The
edge in
c)Dustbins- Made of plastics, wood, metals, leather , jute and placed in rooms, public
areas and all
e) Spray bottles- Lightweight containers which deliver a fine mist of water or cleaning
solution on
f) Hand caddies- Made of metal, wood or plastic consists of a tray with slots for storing
chemical
agents, supplies, and cleaning equipment required for guestroom cleaning and stored in
the guest
pg. 10
PROPOSAL FOR MOP, BROOM AND BRUSH MANFACTURING
ii)Janitorial trolley- Used for cleaning and storing cleaning supplies for public area
cleaning.
iii)Mop wringer trolley- This piece of equipment consists of mop and buckets to carry
cleaning
iv) Linen trolley- Used for transfer of linen from guestrooms to laundry for washing and
is made
6) BOXSWEEPER: -
These are manually operated carpet sweepers used for removing crumbs from the
surfaces. It
consists of a brush that revolves when equipment is pushed over the carpet and crumbs
get
Brooms and brushes are used as sweeping, brushing, scrubbing and painting. Import is
the main source of supply of Mops, brooms and brushes to the domestic market . Import
of brooms and brushed for the past eight years is given in Table 3.1.
pg. 11
PROPOSAL FOR MOP, BROOM AND BRUSH MANFACTURING
Table 3.1
Year Import
2013 546,465
2014 666,641
2015 527,818
2016 770,274
2017 1,190,737
2018 2,936,567
2019 2,893,367
2020 2,276,516
From Table 3.1. it can be observed that import of the products during the past eight years
has been fluctuating although the general trend is increasing. Imported quantity during
the reference period ranged from the lowest 527,818 during year 2015 to about 2.27
million during year 2020.
If we divide the eight years data in to two periods the following major points are
observed. During the period 1999-2002 the annual average level of import has been at
about 37,800. During the period 2013-2016 the annual average is very high which is
about 1.62 million. This is because of the exceptionally high figure registered during
year 2014 which is 5,936,567. This is expected to be due to data encoding error and has
to be excluded in estimating the demand to be safe from misleading.
pg. 12
PROPOSAL FOR MOP, BROOM AND BRUSH MANFACTURING
In order to determine the present demand the recent three years average i.e. 2013-2016
(by excluding year 2004) is fairly assumed to reflect the affective demand for the year
2016. This is found to be 186,873. To arrive at the current (2018) demand urban
population growth and income rise has been considered. Consequently, a 5% yearly
growth rate is applied on the base year. Accordingly, current demand is estimated at
2.206,028 pieces.
Table 3.2
2023 4.226,631
2024 5,249,294
2025 6,274,223
2026 7,301,645
2027 8.331,810
2028 9,364,992
pg. 13
PROPOSAL FOR MOP, BROOM AND BRUSH MANFACTURING
Demand for brooms and brushes will grow from 2,226,631 pieces in 2019 to 4,226,631
pieces and 9,364,992 pieces by the year 2013 and 2018, respectively.
Based on the CIF price of the external trade statistics for 2020 ( the latest data available )
and allowing 30% for import duty and other clearing expenses, the average factory gate
price for paint brushes, shoes, hair and cloth brushes and sweeping brooms & brushes is
estimated at Birr 250 per unit.
The product can get its market outlets through wholesale and retail networks.
According to the market study indicated above, the projected demand for Mop, brooms
and brushers (paint brushes, shoes, hair and cloth brushes) in the year 2019 will be
226,361 pieces. This demand will grow to 401,490 pieces and 534,384 pieces in 2015 and
2018, respectively. In 2020, the projected demand for assorted products will be 249,294
pieces. It is, therefore, suggested that the envisaged plant will have an annual production
capacity of 250,000 pieces. The percentage share of each product can be decided based
on prevailing market demand. The plant will operate a single shift 8 hours a day and 300
days a year.
pg. 14
PROPOSAL FOR MOP, BROOM AND BRUSH MANFACTURING
The production programee is scheduled in such a way that the plant will assume
production at 75 % of full capacity during the first year then production will rise to 85 %
and 100 % in the 2nd and 3rd years, respectively. Table 3.3 below shows the production
program
Table 3.3
PRODUCTION PROGRAMME
(Assorted products )
For this study, the product mix and corresponding quantity that would be produced
annually is given below.
pg. 15
PROPOSAL FOR MOP, BROOM AND BRUSH MANFACTURING
The major raw materials required for the production of bushes and brooms are bristles,
ferrules and handle. Auxiliary material includes paint and varnish. Annual requirements
at full capacity production and corresponding costs are given in Table 4.1 below.
Bristles and ferrule will be procured from foreign markets. Other materials such as wood
and paint and varnish can be purchased from local markets.
pg. 16
PROPOSAL FOR MOP, BROOM AND BRUSH MANFACTURING
Table 4.1
Cost
(,000
Sr. Description Qty Birr )
No. LC FC TC
A. Raw Materials
1 Bristles ………….(tonnes) 12 2304 2304
2 Ferrule ………….(tonnes) 6 280 280
3 Wood …………. (tonnes) 15 160 160
6.1.1 UTILITIES
Electricity and water are utilities required for the broom and brash manufacturing plant.
Electricity is used to operate production equipment and for the power sockets and
lighting. Water is used for sanitation and general purpose. Annual consumption of
electricity is estimated 25,000 kWh and water consumption is estimated to be 250 m 3.
The annual consumption of utilities and their costs is shown in Table 4.2
Table 4.2
pg. 17
PROPOSAL FOR MOP, BROOM AND BRUSH MANFACTURING
7.1 TECHNOLOGY
Production of wooden and plastic materials for the production of Mop, Broom and
brushes come to first. then Tufts of filling materials of fibers are first picked up and
automatically inserted in the ferrules knot picking machine. Mixing, metering and
dispersion as well as assembly is carried out in the respective machines.
The bristles are then secured to the wooden handles by ferrules in the stapling machines.
Trimming and sizing are performed in their respective machine. Finally, it is varnished
or painted and then inspected. Production of Mop, brooms and brushes does not have a
negative impact on the environment.
pg. 18
PROPOSAL FOR MOP, BROOM AND BRUSH MANFACTURING
Broom and brush manufacturing involves the application of simple technology. The
machinery and equipment have been in use for several years in the past by different
countries in Europe, Asia, and even in Africa. There are thus well-experienced machinery
suppliers. The address of one such supplier is given below.
7.3 ENGINEERING
As indicated about the technology of broom and brush manufacturing involves simple
machinery like picking machine, trimming m/c, stapling and sanding machines, circular
saw, etc. Details of machinery and equipment required by the envisaged plant and related
investment in local and foreign component are given in Table 5.1 below.
Table 5.1
Sr Qt Cost (,000
. Description y. Birr )
N (N
o. o.) LC FC TC
1 Circular saw 1 - 336 336
2 Planning & thickening 1 - 640 640
3 Two – sided shaper 1 - 520 520
4 Sounding machine 1 - 560 560
5 Flirting machine 1 - 920 920
380 380
6 Stapling machine 1 - 0 0
172 172
7 Trimming machine 1 - 0 0
pg. 19
PROPOSAL FOR MOP, BROOM AND BRUSH MANFACTURING
30,6 33,7
CIF Landed Cost - 3064.6 46 11
Land is required for the factory and administrative buildings. The factory building
consists mainly of a production hall ( 4, 200 sq. meters ) , stores for raw materials and
finished goods ( 3800 sq. meters ) , workers' dressing rooms and latrines, offices for
production supervisions and foremen, quality control unit ( 480 sq. meters ) , and
administration building(240 sq. meters ) which will incorporate offices for management
staff. Other social buildings (280 sq. meters) (canteen, assembly hall, etc) can also be
required. Land will also be secured for future expunction of the plant. Consequently, it is
pg. 20
PROPOSAL FOR MOP, BROOM AND BRUSH MANFACTURING
proposed that 20,000m2 of land is needed for a broom and brush manufacturing plant. Of
the total land requirement, 10,000 sq. meters will be an expansion built-up area. At the
rate of Birr 5000 per m2, the building cost will be Birr 50,000,000.00
According to the Federal Legislation on the Lease Holding expansion of Urban Land
(Proclamation No 272/2002) in principle, urban land permit by the lease is on an auction
or negotiation basis, however, the time and condition of applying the proclamation shall
be determined by the concerned regional or Mekelle city government depending on the
level of development.
The legislation has also set the maximum on the lease period and the payment of lease
prices. The lease period ranges from 50 years. Moreover, advance payment of lease
based on the type of investment ranges from 20% to 30%.The lease price is payable after
the grace period annually. Those who pay the entire amount of the lease will receive
0.5% discount from the total lease value and those who pay in installments will be
charged interest based on the prevailing interest rate of banks
Accordingly, the total lease cost, for 50 years with the cost of Birr 2000 per m 2, is
estimated at Birr 40 million of which 20% or Birr 8 million will be paid in advance. The
remaining Birr 39.2 million will be paid in equal instalments within 50 years, i.e., Birr
784,000 annually.
pg. 21
PROPOSAL FOR MOP, BROOM AND BRUSH MANFACTURING
The envisaged plant requires both skilled production workers and administrative staff.
The details of manpower and monthly and annual salaries are given in the T
Table 6.1
Monthly
Sr. Description Req. Salary (Birr) Annual Salary (Birr)
No. No.
A. ADIMINISTRATION
B. PRODUCTION -
pg. 22
PROPOSAL FOR MOP, BROOM AND BRUSH MANFACTURING
The production of brushes and booms is not a complicated process. It requires operational
know-how related to woodworking industries. Thus, training operators and technicians
could be handled by making arrangements in one of the local woodworking industries.
The cost of such training is estimated at Birr4 20,000.
9 FINANCIAL ANALYSIS
The financial analysis of the broom and brush project is based on the data presented in
the previous chapters and the following assumptions: -
70 % loan
pg. 23
PROPOSAL FOR MOP, BROOM AND BRUSH MANFACTURING
The major breakdown of the total initial investment cost is shown in Table 7.1.
Table 7.1
pg. 24
PROPOSAL FOR MOP, BROOM AND BRUSH MANFACTURING
The working capital requirement at full operation capacity is estimated at Birr 15.6
million (see Table 7.2). The raw material cost accounts for 26.75 per cent of the total.
The other major components of the working capital requirements are salary, maintenance
and service and others
Table 7.2
pg. 25
PROPOSAL FOR MOP, BROOM AND BRUSH MANFACTURING
15,638,712.00
Key Observations:
pg. 26
PROPOSAL FOR MOP, BROOM AND BRUSH MANFACTURING
1. Net Profit Growth: Net profit rises steadily due to declining interest expenses as
the loan is repaid.
2. Tax Impact: A 30% corporate tax reduces the profits significantly.
3. Operating Efficiency: Stable operating costs suggest efficient cost control.
pg. 27
PROPOSAL FOR MOP, BROOM AND BRUSH MANFACTURING
1. Profitability Analysis
Profitability metrics, including Net Profit Margin (NPM), Return on Assets (ROA),
and Return on Equity (ROE), show consistent growth over the 5 years:
Net Profit Margin rises from 35.95% in Year 1 to 43.6% in Year 5. This is
largely due to:
o Declining interest expenses as loans are repaid.
pg. 28
PROPOSAL FOR MOP, BROOM AND BRUSH MANFACTURING
The Current Ratio of 5.16 throughout the 5 years suggests robust liquidity:
The business has more than 5 times its current liabilities covered by current
assets.
Sufficient working capital reduces the risk of short-term financial distress.
Accounts receivable, inventory turnover, and cash-in-hand assumptions (5–30
days) provide strong liquidity management, allowing smooth operations.
However, maintaining such high liquidity could lead to underutilized capital. The
business may consider reinvesting excess liquidity into growth opportunities, such as
production capacity expansion or vertical integration.
The Debt-to-Equity Ratio declines sharply over 5 years (from 1.08 in Year 1 to 0.01 in
Year 5), highlighting significant de-leveraging:
By Year 5, all loans are fully repaid, reducing financial risk and interest expenses.
A low leverage ratio makes the company attractive to investors due to the reduced
financial burden.
Interest Coverage Ratio improves drastically, from 4.76 in Year 1 to 23.78 in
Year 5, showing the ability to cover interest costs more than adequately. This
allows the business to reinvest earnings into value-added activities.
While the reduced debt profile minimizes risk, it also reduces the tax shield that debt
provides. Future decisions should balance equity and debt to optimize financial leverage.
pg. 29
PROPOSAL FOR MOP, BROOM AND BRUSH MANFACTURING
Payback Period
The pay back period, also called pay – off period is defined as the period required to
recover the original investment outlay through the accumulated net cash flows earned by
the project. Accordingly, based on the projected cash flow it is estimated that the
project’s initial investment will be fully recovered within 6 years.
The internal rate of return (IRR) is the annualized effective compounded return rate that
can be earned on the invested capital, i.e., the yield on the investment. Put another way,
the internal rate of return for an investment is the discount rate that makes the net present
value of the investment's income stream total to zero. It is an indicator of the efficiency or
quality of an investment. A project is a good investment proposition if its IRR is greater
pg. 30
PROPOSAL FOR MOP, BROOM AND BRUSH MANFACTURING
than the rate of return that could be earned by alternate investments or putting the money
in a bank account. Accordingly, the IRR of this porject is computed to be 37.63 %
indicating the vaiability of the project.
Net present value (NPV) is defined as the total present ( discounted) value of a time
series of cash flows. NPV aggregates cash flows that occur during different periods of
time during the life of a project in to a common measuring unit i.e. present value. It is a
standard method for using the time value of money to appraise long-term projects. NPV
is an indicator of how much value an investment or project adds to the capital invested. In
principal a project is accepted if the NPV is non-negative.
Accordingly, the net present value of the project at 12.5% discount rate is found to be
Birr 3.82 million which is acceptable.
The project can create employment for 107 persons. In addition to supply of the
domestic needs, the project will generate Birr 236 million in terms of tax revenue. The
establishment of such factory will have a foreign exchange saving effect to the country by
substituting the current imports. The project has a backward linkage effect with the wood
processing industry.
pg. 31