integrated agro-industrial parks feasibility study and business plan

Consultant

Integrated Agro-Industrial Parks Feasibility Study and Business Plan

Presented byB. Suresh

CEO & Managing Director

Mahindra Consulting Engineers Limited

India

FIRST INTERNATIONAL AGRO-INDUSTRY

INVESTMENT FORUM

ETHIOPIA

Government of Ethiopia


IAIP – Feasibility Study and Business Plan

Project objective and intention

Planning of Planning of Integrated

Agro Industrial

Parks

To attract private domestic and foreign investors to set up food

processing plants

To reduce post-harvest losses, to add value to local content of foods

To link farmers and farmer clusters to food processing

plants

To give forward linkages for the processed produce

To create jobs and drive rural economic growth in Ethiopia

IAIPbroad

feature

IAIPbroad

feature

Processing and production

Industry specific agri

infrastructure

Social infrastructure –

housing, recreational, commercial

Development & operation under inclusive and

sustainable industrial development (ISID)

framework and strategies



Schematic description of the IAIP land use format and infrastructure



Identified potential Agro Industrial Growth Corridors (AIGC’s)



IAIP - region and focused product lines

Region &

locationFocus crop / sector

Western

Tigray –

Baeker

Livestock, sesame,

sorghum, sugar plantation

Southwest

Amhara –

Bure

Sesame, cereals, pulses,

sugar plantation

Central

Eastern

Oromia –

Bulbula

Livestock, coffee, cereals,

fruits & vegetables, pulses,

Sugar plantation

Eastern

SNNP –

Yirgalem

Coffee



Evolving sustainable business plan

4 IAIPs and RTC’s

are under

implementation

phase.

Detailed

engineering is

under progress



Integrated ACPZ and IAIP basic definition

Integrated Agro Commodity

Procurement Zone (ACPZ) and IAIP -

Application of industrial ecology

in agro sector

High productive processing

in industrial mode

ISIDmode of develop

ment

Convergence of

production, processing

and marketing

Entire agri

value chainLegal and

contractual framework

Investor friendly farmer centric policy

ecosystem

Spatial clusters of agro

functions

Extreme level of

inclusiveness



Inclusive and Sustainable Industrial Development (ISID)



Strategies of integrated ACPZ and IAIP

Holistic approach for sustainable development of agri and allied sectors

• To position Ethiopia as a self-sufficient in agri sector and subsectors andexporting products world over

• Balanced agro and food industrialization spread across the Country

• Leveraging and harnessing the core offering of the region

• To raise the competitiveness and efficiency of SME, women entrepreneurshipand youth involvement in new agricultural practices

Sustainable agri input – agri infrastructure – agriculture – horticulture –fisheries – animal husbandry – apiculture – sericulture – agro forestry – agroand food processing development of Ethiopia

• Attract domestic and global Investments – agri infrastructure, industrialinfrastructure, agro industrial units

• Addressing domestic requirement and export led growth

• Enhanced revenue to farmers, growers, fishers, rural community

• Employment potential to local population

• To increase the industrial output

• Leadership in Innovation & high end technology

Globally competitive strategies



Comprehensive approach for site selection S.

No.

Critical success

factor (CSF)Parameters to evaluate the CSF

1 Status Land acquisition

Time

Land price

2 Connectivity Resource availability with specific reference to agro and allied

sector

Nearest rail head and its distance from the identified site

Distance from nearest highway

Nearest airport and its distance from the identified site

Nearest seaport and its distance from the identified site

Nearest urban settlement and its distance from the identified

site

3 Physical

features

Size & shape

Topography

Soil conditions

Accessibility

4 Infrastructure

availability

Industrial power & network

Water for industrial use

Sewerage disposal & storm water disposal point

5 Environment

and social

considerations

Environment regulations

Building regulations

Surrounding areas

6 Business

considerations

Presence of competing facilities

Supporting business environment

• The sites identified for

establishment of IAIP were

evaluated

• Central Eastern Oromia

– Bulbula

• Southwest Amhara –

Bure

• Eastern SNNP –

Yirgalem

• Western Tigray –

Baeker• All the sites qualify for undertaking

the development

• The sites are also augmented by

initiating proper interventions.



IAIP planning – Robust model



Scientific treatment of waste and energy recovery

Use of eco-friendly materials

Recyclable material

Avoidance of toxic chemicals

Usage of environmental friendly products

Health & well-being

Green education

Sustainability initiatives

Site planning & management

Sustainable transport

Water conservation

Energy efficiency

Material & resource management

Waste minimization technologies



Basic details of IAIP’s

Basic information

Central

Eastern

Oromia

Southwest

Amhara

Eastern

SNNP

Western

Tigray

Total processing

area (hectares)

239.73 245.11 197.25 233.18

Total non-

processing area

(hectares)

23.36 15.24 17.61 25.44

Total area

(hectares)

263.09 260.35 214.86 258.62

Total average

water demand

(m³/day)

6660 7381 4634 6777.10

Power demand

(MVA)

45.951 46.82 34.46 45.473

Wastewater

generation

(m³/day)

4504.77 4928.73 3202.06 4659.68

Municipal solid

waste generation

(TPD)

59.38 63.47 44.93 55.07

Amhara region Oromia region

SNNP region Tigray region



7 distinctive zones within each IAIP, assorted product mix and facility

configuration

1. Industrial zone

• Focus crop processing units

(anchor and other target

units), focus crop ancillary

units, other products

processing units (anchor and

other target units), other

products ancillary units, value

addition centres, etc.

2. Specialized agri

infrastructure zone

• Grading and packing halls,

common service centers,

primary processing centers,

quarantine facilities quality

control labs, QA / QC labs,

R & D centre, etc.,

3. Logistics zone

• Loading and unloading yards,

packaging halls,

transportation hubs, cargo

handling centers, raw

material collection and

storage halls, finished goods

storage, packing and labeling,

procurement centre, etc.,

4. Institutional and

amenities zone

• Play school for toddlers,

crèche, schools, coaching

centre, knowledge cell,

marketing intelligence,

extension center, library,

shopping, retail, poly clinic,

recreational areas, parks, play

grounds, administrative

buildings, etc.

5. Multi facility complex utilities

• ETP, STP, WTP, SWM, compressor /chiller / boiler networks, sewernetwork, communication network,street lighting, wastewater network,electrical substation, etc.,

6. Residential zone

• Multi formatted housing,guest houses, etc.,

7. Greenery and walkways

• Green belt along theboundary, lawns and parks,tree plantation along theproposed roads, internalwalkways etc.,



Central Eastern Oromia regionSouthwest Amhara region



Eastern SNNP region Western Tigray region



17

Western Tigray, Baeker – aerial view



Southwest Amhara, Bure – aerial view



Central Eastern Oromia, Bulbula – aerial view



Source: MACE analysis

Eastern SNNP, Yirgalem – aerial view



Geotechnical investigation Topographical survey Eastern SNNP, Yirgalem – Detailed engineering investigations completed



Infrastructure planning approach

Infrastructure design and engineering – functional, cost effective, environment

friendly and sustainable solutions

Infrastructure planning and development alternatives examined Infrastructure planning and development alternatives examined

Infrastructure & utilities Infrastructure & utilities

• General, specific and environmental infrastructure, functional and cost effective

Modular, flexible, customer - friendly product segmentation and configuration Modular, flexible, customer - friendly product segmentation and configuration

• Phased development and cost effective

Waste minimization & green concept Waste minimization & green concept

• Built in every stage of planning, design and engineering

O&M cost, life cycle cost and VFM analysis – developer / occupant perspectiveO&M cost, life cycle cost and VFM analysis – developer / occupant perspective

Compliance to “smart city elements” applicable to Greenfield business infrastructure Compliance to “smart city elements” applicable to Greenfield business infrastructure



Power supply and street lighting withenergy efficient fittings

Extensive water harvesting andrecharge

Modernised water treatment plant,decentralized treatment system

Water distribution network

Multi piping wastewater conveyancesystem;

Wastewater treatment facilities andextensive recycling

Decentralized solid waste collection, transportationand treatment facilities and recovery system andurbanized agro and horticulture applications

Sustainable infrastructure

Smart transport solutions

Multilevel vehicle parking solutions

Intelligent bus terminus

Feeder road to airport, port andother nodes

Green buildings and smarttownships

Modernized civic amenities

Disaster management centres,modernization of warning systems andresponse systems



Specialized agri infrastructure within ACPZ, offsite infrastructure and

connectivity to IAIP & RTC and forward linkages

Production farm linkages in ACPZ

Technology dissemination, CoE and capacity building - as a part of RTC

Knowledge cell and market intelligence cell - as a part of RTC

Network of aggregation centres

Reefer and specialized transportation systems

Access road to RTCs & IAIP

Power supply to RTCs & IAIP

Water supply to RTCs & IAIP

Loading and unloading locations connectivity

Perishable air cargo complex

Market infrastructure

Agri education and knowledge hub - as a part of RTC



The centres willprovideinformation onagrofood,businessdevelopment,prices, markettrend andcurrent marketdemand interms ofproducts andquality, amongother services

The centres willprovideinformation onagrofood,businessdevelopment,prices, markettrend andcurrent marketdemand interms ofproducts andquality, amongother services

Marketinformationcentres

Marketinformationcentres

support farmersto increaseproduction andproductivity offarmers tosupply rawmaterial ofrequiredquantity andquality to theindustries in theparks

support farmersto increaseproduction andproductivity offarmers tosupply rawmaterial ofrequiredquantity andquality to theindustries in theparks

Government andpartnersGovernment andpartners

includewarehouses, inputsupply, sorting,grading, extensionservices, pre-processingactivities andmicrofinance

includewarehouses, inputsupply, sorting,grading, extensionservices, pre-processingactivities andmicrofinance

Rural transformationcentersRural transformationcenters

RTC

Farm credit,

farm finance

Farm credit,

farm finance

Primary

Health

Primary

Health

Commercial

office space

Commercial

rural

market,

office space

Mentoring

and training

Collection

centre

Collection

centre

Agri- clinic

Village

Food and

entertainment

Village

Village

Village

Village

Village

Rural transformation centres

Rural transformation centers serve as raw material aggregation points in the catchment of each IAIP



Locations for 28 RTCs – region wise

Central Eastern Oromia

Sl. no. RTC location Woreda Zone

1 Shashemene Shashemene West Arsi

2 Dodola Dodola West Arsi

3 Robe Robe Bale

4 Bekoji Bekoji Arsi

5 Eteya Eteya Arsi

6 Welenchiti Fentale East Shewa

7 Meki Meki East Shewa

8 Biyo Biske Lume East ShewaSouthwest Amhara


1 Merawi Mecha West Gojam

2 Finote Selam Jabitehnan West Gojam

3 Dangila Dangila Awi

4 Enjibara Enjibara Awi

5 Chagni Guangua Awi

6 Amanuel Machakel East Gojam

7 Motta Mota East Gojam

Eastern SNNP


1 Dilla Dillazuria Gedio

2 Yirgachefe Yirgachefe Gedio

3 Bule Bule Gedio

4 Daye Daye Sidama

5 Aletawondo Aletawondo Sidama

6 Leku Shebedino Sidama

Western Tigray

Sl.

no.RTC location Woreda Zone

1 Maykadra Kafta humera Western

2 Setit-humera Setit-humera Western

3 Adigoshu K/humera Western

4 Adi-hirdi K/humera Western

5 Maygaba Wolkait Western

6 Dansheha Tsegede Western

7 Shire-Indaselassie Shire-Indaselassie N/west



Exhaustive mapping of inventories in RTC influence zones

Agri Infrastructure

Auction Centre

Cold Storages

Collection Centres

Drying yard

Pre-processing facilities

Processing facility (Dairy, vegetable, poutry etc)

Storage Facilities-Warehouse

Transport facilities including refrigerated facilities

Farmer Services

Commodity Exchange Centres

Farm Mechanization & Access to machineries

Farmer Training Centres

Market Intelligence Cell / Centre

Rural Markers

Input Supply Mechanism -Agriculture

Chemicals / Pesticides

Fertilizer

Seed

Input Supply Mechanism -Livestock

Feed & Mineral Mixture

Fodder

Vaccines

Veterinary Services

Institutional Infrastructure

Agri Research Institutes

Banks

Farmer Cooperatives

Micro Finance Institutions

Primary Schools

Traders

TVETs & Colleges

University

Social Infrastructure

Commercial

Housing

Primary health centres

Sanitary facilities

Testing Facilities -Agriculture & Livestock

Agri clinics

Quality control lab

Quarantine facilities

Central Eastern Oromia Western Tigray Eastern SNNP Southwest Amhara



General details of the RTC master planArea considered for development 10 hectares

Master plan components � Livestock zone

� Milk, egg & honey zone

� Vegetables zone

� Cereals and sesame zone

� Storage

� Specialized infrastructure

� Amenities

� Utilities

� Roads

Land use pattern - RTC

Live stock zone Total area – 1.02 hectares

Components – quarantine advisory cell, inspection area, receiving area, animal

storage sheds

Milk, egg &

honey zone

Total area – 0.37 hectares

Components - milk collection centre & testing area, milk storage, honey & wax

collection centre

Vegetables

zone


Components - receiving warehouse, grading & sorting shed, washing and drying

Cereals and

sesame zone


Components - receiving warehouse, grading & sorting shed, washing and drying

Storage facility Total area – 1.24 hectares

Components - egg grading, sorting & storage, bulk storage – vegetables, cold storage

– vegetables, bulk storage – cereals and sesame



General details of the master plan

Land use pattern - RTC

Specialized

infrastructure

zone


Components - rural market, admin building, micro finance, bank, ATM,

forex facility, market information cell, agri equipment centre, agri input

centre & agri clinic, training centre & rural BPO, women self help group,

QA & QC labs

Amenities zone Total area – 1.90 hectares

Components - truck parking, public parking space, crèche, & nursing

mothers area, health centre, food court & restroom

Utilities zone Total area – 0.63 hectares

Components – common effluent treatment plant & sewage treatment

plant, solid waste management, OHT - overhead storage tank, substation

Roads Total area – 1.32 hectares

Components – black top road, paved foot paths



Master plan for RTC (typical)



Aerial view of RTC (typical)



Geotechnical investigation Topographical survey

Eastern SNNP, Dilla RTC location - Detailed engineering investigations

completed



Investment outlay – IAIP

Description

Phase I development All phases

Western

Tigray

Central

Eastern

Oromia

Southwest

Amhara

Eastern

SNNP

Western

Tigray

Central

Eastern

Oromia

Southwest

Amhara

Eastern

SNNP

Cost of land (land lease amount) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Site grading and other land development

expenses0.10 0.10 0.10 0.08 0.25 0.25 0.25 0.21

Compound wall, fencing and gates 0.20 0.22 0.20 0.31 0.52 0.57 0.52 0.80

Roads, culverts & drainage 4.49 3.73 3.15 2.07 11.52 9.57 8.07 5.30

Decentralized water supply, treatment

and distribution1.41 1.39 1.28 0.87 3.63 3.56 3.27 2.23

Electrical, street lighting & fire fighting 0.42 0.46 0.35 0.37 1.07 1.17 0.90 0.94

Telecom & communication systems 0.08 0.09 0.06 0.05 0.22 0.22 0.15 0.13

Sustainable infrastructure elements, RW

harvesting, summer storage tank &

greenery

0.20 0.19 0.15 0.15 0.52 0.49 0.40 0.38

Decentralized wastewater, network and

solid waste management1.51 1.52 1.56 1.06 3.88 3.89 3.99 2.72

Buildings - industrial / business 39.42 42.91 44.07 30.93 101.07 110.03 113.00 79.32

Buildings - commercial 2.96 2.80 2.36 2.44 7.60 7.17 6.06 6.25

Buildings - residential 7.51 4.52 2.72 2.85 19.24 11.58 6.98 7.31

(US $ in million)



Investment outlay – IAIP

Description

Phase I development All phases

Western

Tigray

Central

Eastern

Oromia

Southwest

Amhara

Eastern

SNNP

Western

Tigray

Central

Eastern

Oromia

Southwest

Amhara

Eastern

SNNP

Buildings - MEP 0.20 0.17 0.12 0.11 0.51 0.43 0.31 0.28

Buildings - social infrastructure

development0.07 0.08 0.05 0.07 0.19 0.20 0.13 0.18

Specialized agri infrastructure facilities

within IAIP0.62 0.62 0.62 0.62 1.58 1.58 1.58 1.58

Miscellaneous fixed assets 0.09 0.09 0.09 0.09 0.24 0.24 0.24 0.24

Manpower cost during pre operative

period0.15 0.15 0.14 0.11 0.38 0.38 0.36 0.27

Preliminary expenses & company

formation expenses0.44 0.44 0.43 0.32 1.14 1.13 1.09 0.81

Project consultancy, detailed engineering

and project supervision cost0.89 0.88 0.85 0.63 2.28 2.26 2.19 1.62

Initial marketing and project launch

expenses1.33 1.32 1.28 0.95 3.42 3.40 3.28 2.43

Pre operative and other expenses 1.33 1.32 1.28 0.95 3.42 3.40 3.28 2.43

Contingency 5.93 5.89 5.69 4.21 15.20 15.09 14.59 10.79

Interest during construction 3.29 3.27 3.16 2.34 3.29 3.27 3.16 2.34

Total 72.67 72.15 69.71 51.55 181.18 179.88 173.81 128.53

(US $ in million)



Sl.

No.Description

Western

Tigray

Central

Eastern

Oromia

Southwest

Amhara

Eastern

SNNP

1 Rural power supply through solar PV 8.10 8.10 8.10 8.10

2 Cost of refurbishing and revamping existing

abattoirs

1.62 4.86 1.62 1.62

3 Additional investment in COE for livestock

specific pre processing infrastructure linking

RTCs and IAIPs

12.96 6.48 12.96 12.96

4 On farm processing infrastructure 0.39 0.39 0.39 0.39

5 RTC 17.11 22.12 18.24 14.80

6 Collection centers or aggregation centers 0.91 1.30 0.78 1.17

7 Reefer vans and specialised transport vehicles

for linking RTCs, identified livestock specific

pre processing zones and IAIPs

1.43 1.43 1.43 1.43

Total of agri infrastructure required in ACPZ 42.51 44.67 43.51 40.46

Investment outlay - specialized agri infrastructure within ACPZCost in US $ in million



Investment outlay - external connectivity and offsite infrastructure

Sl. No. DescriptionWestern

Tigray

Central

Eastern

Oromia

Southwest

Amhara

Eastern

SNNP

1 RTC approach roads 2.11 3.89 4.37 3.40

2 Power connectivity to IAIP 5.64 2.84 3.32 0.97

3 Power connectivity to RTC 0.53 0.97 1.09 0.85

4 Water intake system

comprising of infiltration

gallery and others

0.41 0.41 0.71 0.97

5 Water transmission mains -

Water linkage pipelines0.41 0.41 0.71 0.97

6 Water intake bore wells and

supply to RTC0.06 0.06 0.06 0.05

Total of external connectivity

and offsite infrastructure cost9.14 8.57 10.26 7.22

Cost in US $ in million



Summary of investment outlay - IAIP, specialised agri infrastructure

and external connectivity

Sl.

No.Regions

Cost in US$ million

IAIPSpecialized agri

infrastructure

External

connectivity Total

1. Western

Tigray

181.18 42.51 9.14 232.83

2. Central

Eastern

Oromia

179.88 44.67 8.57 233.12

3. Southwest

Amhara

173.81 43.51 10.26 227.58

4. Eastern

SNNP

128.53 40.46 7.22 176.21



(US $ in million)

Phase I development - 72.67

All phases - 181.18

DSCR - 2.30

Project IRR (Post tax) - 16.10%

Benefit to cost ratio - 1.35:1

Payback period - 3 years +


All phases - 179.88

DSCR - 2.34




Western Tigray Central Eastern Oromia


All phases - 173.81

DSCR - 2.38





All phases - 128.53

DSCR - 2.32




Southwest Amhara Eastern SNNP

IAIP - key financial indicators



Risk matrixDescription Internal Partners Customer Competition PESTEL

Volume, value, cost, growth, governance, brand

Potential impact on success of integrated ACPZ and IAIP

Likelihood of occurrence

Western Tigray Central Eastern Oromia

Southwest Amhara Eastern SNNP

Risk assessment Rating

Risk assessment during

implementation period

1.82

Risk assessment during operation

period

B




1.79


period

B




1.87


period

B




1.89


period

B

Low risk

1

Medium risk

2

High risk

3

Very high risk

4

Extreme risk

5

Low risk

A

Medium risk

B

High risk

C

Very high risk

D

Extreme risk

E

Implementation period Operation period



Major activity Western Tigray Central Eastern

Oromia

Southwest

Amhara

Eastern SNNP

Feasibility study and

business plan Completed

Site investigations for

detailed engineering Under progress Completed

Detailed engineering Nov. ’16

IAIP – Phase I

implementation Sept ’17

Model RTC - Phase I July ’17

IAIP – subsequent

phases March’ 19 – Dec‘’20

RTC subsequent phases Nov‘19 – Sept’20

IAIP and RTC Implementation schedule



DescriptionShort term – within 2

years

Medium term - 3 to

4 years

Long term - more

than 4 years

Southwest Amhara region

Area occupancy (industrial area and

specialised infrastructure)

30 % of the area

74 hectares

80 % of the area

196 hectares

90 % of the area

221 hectares

Processing capacity, MTPA 186162 496432 558486

Direct and indirect employment,

numbers63693 162841 629368

Transaction (million ETB) 4674 12463 14021

Transaction (million ETB) / hectare 63.56 63.56 63.56

Central Eastern Oromia region



30% of the area

49 hectares

80% of the area

129 hectares

90% of the area

146 hectares



numbers

213249 546326 552637



Quantity assessment of benefits



DescriptionShort term – within

2 years

Medium term - 3 to

4 years

Long term - more

than 4 years

Eastern SNNP region



30 % of the area

59 hectares

80 % of the area

158 hectares

90 % of the area

178 hectares



numbers33326 85002 398889



Western Tigray region

Area occupancy (industrial area

including specialised infrastructure)

30 % of the area

43 hectares

80 % of the area

116 hectares

90 % of the area

130 hectares



numbers78386 200526 779307


Transaction (million ETB ) / hectare 135.03 135.04 135.04

Quantity assessment of benefits



Possible cooperation areas with the private sector

Agriculture and

farm sector Agri engineering Agri infrastructure

Agri industry and

food processing

Capacity building,

skill

development &

training

Agri logistics Others

Agri input, agri

chemicals, organic

fertilizers and

organic pesticides

Green house

manufacturing

Post-harvest

infrastructure

Agro based

industry

Hi-tech and

biotechnology

based agriculture

and research

Handling of

perishable and

non-

perishable commo

dities

Agri and rural

financing

Irrigation sector –

micro irrigation

Energy management in

agriculture and

processing

Mechanized handling

facilities

Tissue culture Agri education &

knowledge hub

Transportation and

warehousing

solutions

Agri tourism

Hi-tech and

precision

agriculture and

horticulture

Farm mechanization,

conveying, transport and

storage facilities

Modern silo storage

system

Food technology

& food

engineering, food

processing

Soil, water and

nutrient testing

Bulk material

handling and

conveyor systems

Renewable

energy

Bio energy, soil

conservation,

plant growth

regulators and

micro nutrients

Field handling and

storage systems

Mechanization of the

harvest operation

Fruits and

vegetables

processing

Dissemination of

market

information data

People

transportation

from and within

development

nodes

IT application in

water

resources,

irrigation,

agriculture

Seeds,

greenhouse

cultivation

Grain processing Agri portal, agri

clinics

Crop insurance

Thank you

integrated agro-industrial parks feasibility study and business plan

Documents