Wheat flour manufacturing plant - developing a co-operative business case Raya Wakena Farmers’ Cooperative Union is a genuine farmer-owned company with a total membership of 15,967 farmers of 46 primary cooperatives. The Union’s core business is input distribution of mainly fertilizer, improved seed and chemicals through its member primary cooperatives and also distribution of consumable products. It purchases and sells linseed, teff and barley from its primary cooperatives. Other services provided are mechanization services (e.g. rent of combiner) and training of members on good agricultural practices and improved seed production.

As a result of its current position as the sole provider of fertilizers and other inputs to farmers in the region the Union has managed to achieve sound financial position and for the past three years has been able to pay dividends to its member primary cooperatives and bonus to its staff. However, there is still much room for improvement, mainly in the field of computerising the bookkeeping by installing appropriate software.

Because wheat is also an important product that is being produced and it is an important source of income for many farmers, the Union wants to develop a business case for the processing and marketing of wheat flower. 
The Union has made grain purchase of 4,215.75 quintal (qntl) of wheat during the fiscal year of 2008/09 and 1,154.83 qntl of improved wheat seed in 2009/2010. The Union aspires to grow in terms of purchasing power and wants to establish a wheat flour manufacturing plant. It also acknowledges the challenges it is currently facing (lack of working capital and as a result not being able to influence the market) and has proposed bulking as a permanent solution.

The action plan for the coming three-six months of 2011 & 2012 covers activities related to improvement of financial management by computerizing the bookkeeping as well as purchase and installation of accounting software and training of involved staff. Furthermore Training-of-trainer courses will be organised to train farmers on good agricultural practices aiming at increased productivity. A feasibility study will be carried out, assessing the current value chain in terms of supply and demand. This study will be main input for development of the business plan.

RWCU is expected to contribute at least 20% of the total budget of the action planning process. The Union has a good track record with the Government in handling input distribution (fertilizer) and delivering payment of loan on time.

Business case

Description business case and action plan
The Union aspires to grow interms of grain of purchase and establish a wheat flour manufacturing plant. It also acknowledges the challenges it is currently facing (lack of working capital and as a result not being able to influence the market) and has proposed bulking as a permanent solution. 

Currently, Ethiopia imports wheat to cover national demand.

Targets, expected output and impact
• 2500 farmers trained in good agricultural practices
• Bankable business plan
• Accounting software installed and operational

Activities
1.1 Computerizing + Accounting Software
"1.2 Training manager, two Accountants,cashier 
& Programming Officer on Computer Skills"
1.3 Provide on the job Accountance Training for accountants
1.4 Training BOD on understanding financial statements
1.5 Develop mannual financial management
1.6 Data Encoding & Accountancy Advisory
1.7 Training on Cooperative & financial management
1.8 Experience Sharing Pannel among member PCs

2.1ToT training: (1) Production, (2) Production of Improved  Seeds
2.2 Hiring ToT coordinator/monitor
2.3 Other Administrative Cost
"3.1Study supply chain of improve seed and food grain
Farmer-PCs/other buyesr- Union/other buyers"
"3.2 Develop Banakable Business Plan for wheat flour 
manufacturing plant"
3.3 Business Plan & Action Plan Monitoring

To enable RWCU to grow in terms of grain purchase and service delivery to member cooperatives as well assessment of feasibility and business plan development of wheat flour manufacturing plant