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									UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION
Vienna International Center P.O. Box 300, A-1400 Vienna, AUSTRIA

INVESTMENT AND TECHNOLOGY PROMOTION BRANCH
Tel: +43 1 26026/3407
E-mail: mkulur@unido.org

Fax: +43 1 26026/6870

INDUSTRIAL INVESTMENT AND TECHNOLOGY PROJECT PROFILE

Country: ISIC: Project title:

ETHIOPIA 3220

Project No.: ETH/019/V/02-7

Leather garments manufacturing - ETHIO SONG BIN

Project summary: An established leather garment and goods making factory wishing to forge a profit sharing marketing arrangement. Potential foreign partner is expected to supply of fully specified orders on a negotiated annual quantity basis in the exchange of a mutually agreed profit share of the enterprise.

This profile is divided into the following parts: PART I: PART II: Information on company proposing project (current activities) Information on proposed project (new activities)

PART I: INFORMATION ON COMPANY PROPOSING PROJECT (THE NATIONAL INVESTOR)
I.1 Name of Company: Address: Eth. Sung Bin Leather Garment Factory plc P.O. Box 2641 Addis Ababa Ethiopia +251-1-531332 +251-1-510344 esbleatherg.f@telecom.net.et

Telephone: Facsimile: E-Mail: Web-Page: Telex: Contact Person(s): Name: Position:

Mr. Hailu Bezuneh Managing Director

Name: Mrs Sofia Nadew Position: Assistant Managing Director Please attach as annex 1 brief background of person (entrepreneur) proposing the project, providing information on business experience, education and languages
CURRENT LINE OF BUSINESS A. Background and history:

I.2

The factory was rented by the present management to Korean Partners in 1991/2 who then established a production unit to manufacture leather garments. The present management and workforce worked in tandem with the Korean technicians. Marketing was done by the Korean side of the business with garments being supplied mostly to North America and South Korea. In 1996 the company ownership was transferred to the local management and the Korean partners left the country. B. Company description (including information on affiliates, subsidiaries, parent companies, etc.): If relevant to project proposed please attach description of plant equipment and other assets Description of technology currently in use and the related production process: Eth. Sung Bin is a wholly Ethiopian owned stand alone plc. It produces leather jackets and coats by conventional means mostly by the utilisation of imported machinery and equipment. C. Describe technical problems faced in current operation: Minor maintenance. D. Product(s) currently produced (estimated quantities and installed capacities): If currently producing more than one broad category of products, please list Name Leather jackets, coats, skirts
E. Employees Permanent: Seasonal:

Estimated quantity 200 pcs/mth 147

Installed capacity 2500 pcs/mth

F. Indicate if company staff has had recent training related to technology application: A comprehensive training programme on all aspects of leather garment technology was conducted by GTZ (Germany) for selected members of staff, 2 years ago. G. Specify if additional training is required In the near future CAD (Computer aided design and pattern cutting).

I.3

ANNUAL TURNOVER A. Sales: (US$ equivalent)

250,000
B. Export: (in % of sales) Nil

I.4

OWNERSHIP: (local/foreign, private/public)

100% local owners I.5
CURRENT MARKETS A. LOCAL MARKET (i) Estimated size of local market for company's products: If necessary qualify market segments served

86,844 garments
(ii) Estimated market share of the company: 2.8% or 2400 garments per year (iii) If end users are a few major buyers please describe and indicate number: Local consumers, NGO's and Diplomatic missions in Ethiopia. (iv) Marketing instruments (distribution channels, agents, ...)

1 factory shop 1 shop inside Ghion Hotel compound (v) Does company have a separate marketing / sales department: Yes for local market, owners for international markets.
(vi) Trade marks: Ethio Sung Bin B. EXPORT MARKETS (i) Annual exports:

Nil at present (ii) Characteristics of main customers (countries, types of buyers): Agents, wholesalers and distributors in North America, South Korea, Switzerland Greece and Zambia
(iii) Marketing instruments (local agents, foreign trade companies, direct approach, etc.): Direct approach to above. (iv) Special trade conditions (commercial agreements, quotas, subsidies, privileges and barriers, etc.) which directly affect your exports:

No restrictions on trade.The African Growth Opportunity Act (AGOA) may help in export to USA

I.6

BANK REFERENCES: Please specify bank name, address, contact person

Name: Address:

Awash International Bank Africa Andnet Branch P. O. Box 12638 Addis Ababa Ethiopia

Description: Commercial Bank Contact Persons: Name: Position: I.7 Etana Geleta General Manager

MAIN TRADING PARTNER REFERENCES: Name: Address: African Leather African Leather 73, Rue de Carouge 1205 Geneva Switzerland Description: Importer Name: Position: Name: Address: Mr. Murad Ysuf Managing Director Dalamar Cyprus Ltd 6, Kolokotronist Nicosia 1101 Cyprus Description: Importer Name: Position: Mrs. E. Kasidocosta Managing Director

I.8

What do you consider special strength of your company: Please indicate specific competetive advantages and factors such as R & D facilities and their objectives, patents, quality control systems, etc.) Please elaborate on each box checked.

Technical expertise Managerial expertise Technology X X Quality control Other: Description

Exports Marketing Financial resources R&D

Category Quality control: Other:

Strict quality control from start to finish of production processes ensuring customer satisfaction Production capacity to manufacture medium to large orders quickly

PART II: INFORMATION ON PROPOSED PROJECT
II.1
PURPOSE OF THE PROJECT: E.g. expand production of current facilities, improve quality of current products, introduce new products, establish new facilities, etc.

To seek out and establish a long term relationship with an international partner with market access on a profit sharing basis. II.2
DESCRIPTION OF PRODUCTS TO BE PRODUCED AND THEIR QUANTITIES: Please put clear description of each product

Name Leather jackets Leather coats Leather trousers Leather skirts Leather ladies bags Leather men's folios and wallets II.3 (all pieces per year)

Capacity Unit 16.500,00 pieces 7.500,00 " 7.500,00 " 7.500,00 " 6.000,00 " 5.000,00 "

RATIONALE BEHIND THE PROJECT: What are the main reasons to expect success; what are competitive advantages (such as special access to raw materials, specific markets, unique technology etc.) that the project seeks to exploit?

The company has established a manufacturing facility with a large enough capacity to satisfy the production runs required in developed markets. It is fully equiped from design and pattern making to manufacturing. This is an attractive factory to international marketing professionals. II.4
TARGET MARKETS A. LOCAL MARKET (i) Characteristics of potential customers:

Top 10% of urban dwellers who are economically active. Diplomatic staff and managers of NGO's
(ii) Potential size of the market and expected growth rate: Indicate sources for estimates, e.g. market surveys, government statistics, inference from related studies, etc.

Name Leather jackets (all pieces per year) Leather coats Leather trousers Leather skirts Leather ladies bags Leather men's folios and wallets

Potential size 236071 98363 n/a n/a n/a n/a

Expected growth 3% per annum "

(iii) Anticipated advantages of the proposed project in comparison to the competition:

Company receives latest designer wear magazines from Europe before any season starts and produces a collection which attracts local clients. The company is the second largest in Ethiopia for garments after the recently privatised State company

(iv) Expected market share to be achieved:

Name Leather jackets (all pieces per year) Leather coats Leather trousers Leather skirts Leather ladies bags Leather men's folios and wallets
(v) Current local prices of the products:

Expected market share 7.0% 7.5% n/a n/a n/a n/a

Name Leather jackets (all pieces per year) Leather coats Leather trousers Leather skirts Leather ladies bags Leather men's folios and wallets B. EXPORT MARKETS (i) Export target (in % of total sales): Name Leather jackets (all pieces per year) Leather coats Leather trousers Leather skirts Leather ladies bags Leather men's folios and wallets

Price 84.00 107.00 50.00 40.00

Price unit U.S.$ " " "

Export target 20.00% 20.00% 20.00% 20.00% 20.00% 20.00%

(ii) Is there any already secured market (if yes, please explain):

No secure market at present
(iii) Other potential markets:

Regional Africa II.5 ESTIMATED TOTAL INVESTMENT COSTS (in US $): Amount: 974,000.00 Factory, machinery and equipment working capital II.6
INPUTS TO BE PROVIDED BY LOCAL PARTNER A. In-kind inputs (plant, machinery, equipment): give details as annex

Description Machinery & equipment B. Cash: Description Working capital C. Land: Size, location, quality Description Building and land

Value (US $) 108,000.00 Value (US $) 530,000.00

Value (US $) 213,000.00

D. Other: Specify in detail Description Pre-operating expenses Vehicles, furniture, fittings F. Local Credit access: Description

Value (US $) 123,000.00

Value (US $)

II.7

INPUTS NEEDED FROM A FOREIGN PARTNER: The supply of fully specified orders on a negotiated annual quantity basis in the exchange of a mutually agreed profit share of the enterprise.
WHAT FORM OF COLLABORATION IS SOUGHT: Please elaborate on each box checked

II.8

Joint-venture (equity) Loan X X Market access Sub contracting Buy-back arrangement Equipment purchase X Other: Profit sharing Description

Management expertise Technical expertise Marketing expertise Technology transfer Joint R&D

Category Market access: Sub contracting: Other: II.9

A marketeer with excellent contacts with buyers in European and/or North American markets. Provision of a well equiped modern production facility In return for an agreed production and marketing plan a mutually agreed percentage of profit earned on that plan.

PRODUCTION INPUTS LOCALLY AVAILABLE: A. Machinery and equipment to be purchased locally: (suppliers, prices)

Machine Imported machines B. Technical know how: Well trained pattern cutters C. Labour: (skill level, wage rates) SkillLevel Unskilled Semi-skilled Skilled Technical Managerial
D. Raw materials: Material Garment leather Supplies

Supplier

Price Currency

Wage 220.00 350.00 440.00 2,000.00 5,000.00

Currency birr birr birr birr birr Quantity Needed 1.400.000,00 35.000,00

Price Currency 9.21 birr 1.00 US$

E. Infrastructure available at proposed site: (provide unit costs where applicable) (i) Transport facilities:

Description Category Rail Djibouti,ton Road Djibouti, ton/km Sea Djibouti 20' container Air Frankfurt >500kg (ii) Telecommunications: Category Description Telecommunication birr per min. EU (iii) Electricity: Category Description Grid Industrial per kwh (iv) Fuel: Category Description Diesel per litre Oil Industrial per litre (v) Water: Category Description Municipal lines above 40m3 per mth (vi) Waste disposal: Category Description Municipal sewage minimal (vii) Indicate if project is to be placed in a special zone or park: NO II.10 MATERIALS TO BE IMPORTED: A. Machinery and equipment to be imported: (suppliers, prices) Machine
B. Raw materials: Material Non wovens Linings Accessories

UnitCost Currency 194.00 birr 0.23 birr 1,000.00 U.S.$ 1.13 U.S.$ UnitCost Currency 13.50 birr UnitCost Currency 0.42 birr UnitCost Currency 2.30 birr 2.21 birr UnitCost Currency 1.67 birr UnitCost Currency

Supplier

Price Currency

Price 1.00 1.50 0.50

Currency US$ US$ US$

Quantity Needed 35.000,00 35.000,00 35.000,00

II.11 WHAT STUDIES ARE AVAILABLE FOR THE PROJECT: (Please list and give date when they were carried out and by whom, including studies under preparation, or studies which require updating). If please summary is available please attach: Study done by Africa Project Development Facility (World Bank) in November 2000 II.12 WHAT SPECIAL CONDITIONS OR INCENTIVES WILL/COULD APPLY TO THE PROPOSED PROJECT: E.g.: tax rates, tax holidays, loss carried forward, subsidies, profit repatriation and ownership laws, export/import restrictions or incentives, etc. Raw materials imported for export orders are allowed into Ethiopia tax free. Tax free importation of machinery Tax free importation of materials for re-export Income tax holiday from 1 - 5 years Ability to carry forward losses for 3 to 5 years Remittance of capital

INDUSTRIAL INVESTMENT AND TECHNOLOGY PROJECT PROFIL - SUMMARY SHEET
Country, Investment forum:

ETHIOPIA Leather garments manufacturing - ETHIO SONG BIN ETH/019/V/02-7

ISIC: 3220 Date: 30.07.2002

Project title: Project No.: 1. Project summary:

An established leather garment and goods making factory wishing to forge a profit sharing marketing arrangement. Potential foreign partner is expected to supply of fully specified orders on a negotiated annual quantity basis in the exchange of a mutually agreed profit share of the enterprise. 2. Products to be produced: Name Leather jackets (all pieces per year Leather coats Leather trousers Leather skirts Leather ladies bags Leather men's folios and wallets Total: Site location: Factory has its own site in Addis Ababa Capacity 16.500,00 7.500,00 7.500,00 7.500,00 6.000,00 5.000,00 Unit pieces " " " " " Planned sales (US$) 1,386,000.00 802,500.00 375,000.00 300,000.00 120,000.00 100,000.00 3.083.500,00 % % Local Export 80 20 80 20 80 20 80 20 80 20 80 20 80 20

3. 4.

Estimated total investment costs (in US$): Amount: 974,000.00 Factory, machinery and equipment working capital

5. 6.

Project classification: Local enterpreneur: X

New project Private sector Public sector Other:

X

Expansion/rehabilitation

Annual turnover: Sales (US$ equivalent) / Export (in % of sales): 250,000 Nil Current line of business: Manufacturer of leather garments and small leather goods

7.

What form of collaboration is sought:

Joint-venture (equity) Loan X Market access X Sub contracting Buy-back arrangement Equipment purchase

Management expertise Technical expertise Marketing expertise Technology transfer Joint R & D X Other: Profit sharing

8.

Studies available: Study done by Africa Project Development Facility (World Bank) in November 2000


								
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