appraisal of compost manufacturing and marketing
TRANSCRIPT
Tuesday, April 18, 2023 1
Appraisal of Compost Manufacturing and marketing Submitted
to
Nigussie Semie (PhD): Advanced project planning and analysis
St.Mary’s University
School of Graduate Studies
By
Molla Deribie
ID.No.MAEC/0182/2005
Semester two Year One
August 2013, Addis Ababa
Tuesday, April 18, 2023 2
Project face sheet
Project Title: Appraisal of compost manufacturing and
marketing
Project site: Addis Ababa City Administration, Arada sub city,
Atikilit Tera
Project lifetime: 13 years
Total project budget: Birr 5849035.5
business: sole proprietorship
Tuesday, April 18, 2023 3
Project background and justification
Compost has a great significant on conditioning soil fertility.
It adds valuable organic matter, improving soil structure,
improves the moisture holding capacity of light sandy soils.
It can automatically enhance agricultural production.
It is being practiced in AAEPA and AASWRDPO at small scale.
Tuesday, April 18, 2023 4
Cont…
In general this project is relying on collecting solid and
semisolid wastes from different waste generation sources.
This business is focusing on manufacturing compost with a
modern and at macro level approach and selling it for the
potential customers.
Tuesday, April 18, 2023 5
Business Objectives
to produce quality compost and
to maximize profit of the business.
Tuesday, April 18, 2023 6
Business ownership description
It is a sole proprietorship which is owned by Mr. Molla
Deribie.
The project owner has an experience on solid waste type,
character and management.
And also has an information on manufacturing of organic
fertilizer (hereinafter called compost).
Tuesday, April 18, 2023 7
Credit and donation Relation:-
The business has been applied a bank application form in
search of loans.
From a particular bank 77% (birr 4,481,785)of the total
expense of the first year is from loan per the current interest
rate.
Tuesday, April 18, 2023 8
Technical study
Project location:
This project is going to be launched at Arad sub-city of Addis
Ababa (Atikilit Tera).
This area is endowed with availability of numerous
organizations and trade activities.
Tuesday, April 18, 2023 9
Cont…(tech)
Material inputs
Compostable brown and green waste
Compostable brown waste =carbon
Compostable green waste =nitrogen
Tuesday, April 18, 2023 10
Cont…(tech)
Plant capacity
Compost tumbler (composting bin) is originated from
England/China and has a capacity to produce 107,899.7 kg of
compost /day.
speeds up the composting process;
cannot be accessed by rodents, raccoons, dogs or other
critters and
Tuesday, April 18, 2023 11
Cont…(tech)Project Chart and Layout
the project has lied on 154 m.2 plot of land.
One processing and packaging room (40m2) ,product
storage(4m2), store house(10m2 ), one bathroom and
staff(100m2).
Processing is in-vessel systems.
Tuesday, April 18, 2023 12
Cont….(tech)Raw material
end product
organic waste, water, microorganisms,
mixingprocess curing Organic
matter
Tuesday, April 18, 2023 13
Demand and Market analysis
The potential consumers:-
Both urban and rural farmers:- agriculture, Landscaping and
nurseries activities.
Urban environment authority :-Soil conditioner for closed
landfill.
Tuesday, April 18, 2023 14
Cont…(mkt)
Purchasing power of the consumers (demand):-Target Total
target %age of buyers
Quantity demand/year
Price /kg
Market potential (total demand/year)
farmers 2243 5 237 4 26.6Flowers-farms
59 125 875 4 645
House holds
194260 20 87 8 3351
hotels 5 20 100 12.5 100total 196567 1299 4362
Tuesday, April 18, 2023 15
Cont…(mkt)
Past supply of compost at Addis Ababa:-
Based on the data gotten from ENDA Ethiopia, the total
produced of compost was 54000tons/year at an average.
Present demand of compostPast demand of compost
Current demand of compost
remark
1299 392000
Tuesday, April 18, 2023 16
Cont…(mkt)
Current price and quantity demanded of compost:-
Target Total target %age of buyers
Quantity demanded/year
Price /kg Market potential (total demanded)
Project price(ETB)
farmers 2243 5 237 4 26.6 7
Flowers-farms
59 125 875 4 645
House holds 194260 20 87 8 3351hotels 5 20 100 12.5 100
total 196567 1299 4362
Tuesday, April 18, 2023 17
Cont…(mkt)Future compost supply and price forecastingyear Compost ss(kg) Price remark1 392,000 72 439,040 83 491,724.817 94 550,731.776 105 616,819.589 116 690,837.939 127 773,738.492 138 866,587.1117 149 970,577.5651 15
10 108,7046.8729 16
11 121,7492.123 17
12 376,3591.1744 18
13 4,215,222.112 19
Tuesday, April 18, 2023 18
Cont…(mkt)
Demand and supply gap analysis
year Quantity
demanded(kg/year)
Quantity
supplied(kg/year
)
Demand and supply gap
kg/year
2011 1299kg 4362kg-3063
2012 350000kg 5400000kg-5050000
2013 392000 39,383,400
-38991400
Tuesday, April 18, 2023 19
Organisation & Management
the project manager is on the top, the units heads are at the
middle and experts are at the bottom.
project manager
unit head
s
experts
/secretary
unit head
s
experts
/secretary
unit head
experts
/secretary
unit head
experts
unit head
experts
uinit head
experts
unit head
experts
unit head
experts
uint head
experts
Tuesday, April 18, 2023 20
Financial Analysis
Compost manufacturing and marketing business has done a
feasibility study towards financial viability of the project.
Project Feasibility study
Cost analysis
Investment costs=4,481,785birr/year
Tuesday, April 18, 2023 21
Cont…
Operation and maintenance (O&M) costs=835,520birr/year
Financial Benefits analysis
Sale of compost=2,744,000 birr/year in the first year of
production with 7birr/kg of compost.
Tuesday, April 18, 2023 22
Cont…
Profitability
financially it is not profitable throughout its life time since
demand –supply gap analysis is negative.
Tuesday, April 18, 2023 23
Cont…
Financial internal rate of return
This project bears 44.6% of FIRR which makes net present value zero. It
is greater than market interest rate(R1-6% ). Even if FIRR makes net
present value zero since demand –supply gap analysis is negative the
project is unacceptable.
NPV=65824440;B/C=1.6
Payback Period
this venture has taken 5 years to generate cash equal to the investment
and pay the company back.
Tuesday, April 18, 2023 24
Cont….
IRR Sensitivity Analysis
this project is not that much responsive as a result of different
external factors.
As sales volume (demand) decreased by 10%, then financial
internal rate of return becomes 44.7%.
Tuesday, April 18, 2023 25
Stakeholder assessment or analysisIdentified
stakeholders
Interests Potential project
impact
Relative priorities of
interest
Primary:
Employees, other
compost producers,
Job opportunity,
cooperation ,knowledg
e sharing
Lowering Production
of quality and quantity,
resource abuse
salary
Secondary:
Agriculture ,flower
producers ,hotels ,hous
eholds
Purchasing compost Increasing benefit Purchasing compost
External :
EPA,ENDA Ethiopia
Environmental
protection, policy
implementation
Increasing benefit Environmental
protection and
increasing benefit,
policy research
Tuesday, April 18, 2023 26
Economic analysis Economically this project has a welfare concept on wards cost
savings like on.
•landfill disposal
•waste transportation to landfills
composting reduces the need for landfill disposal by diverting
organic waste to a composting facility.
Tuesday, April 18, 2023 27
Cont….
with composting, the city saves the transportation
cost of waste depending on the distance between
the landfill and the markets.
As a result of project implementation, externalities
are going to be estimated. This includes both social
costs and benefits.
Tuesday, April 18, 2023 28
Cont…
year total waste diverted to a composting plant (kg/year)
Cost saving from land filling remark
2013 392000 1176002014 439040 1317122015 491724.8 147517.42016 550731.776 165219.52017 616819.589 185045.92018 690837.939 207251.42019 773738.492 232121.52020 866587.1117 259976.12021 970577.5651 291173.32022 1087046.8729 326114.12023 1217492.123 365247.62024 3763591.1744 11290772025 4215222.112 1264567
Tuesday, April 18, 2023 29
Cont…
Social costs: house to house waste collectors (small and
micro waste collector enterprises) income will
decrease.
Social benefits: - This includes but not limited to,
compost production (increasing soil productivity),
waste minimization (clean air), and land fill life time
increment at large.
Tuesday, April 18, 2023 30
Environmental Analysis
No likely damage as a result of the project. Here the
abetment cost is zero all in all.
Tuesday, April 18, 2023 31
Cross-cutting Analysis
Gender- Here the project can give women an opportunity to decide economic and environmental impact of the project.
Project impact on
Labor Time Resource control
Social/ Culture impact of the
project
Women + + + +
Man + + + +
Household + + + +
Community + + + +
Tuesday, April 18, 2023 32
Risk Analysis
Personal risks: - since the business is sole proprietorship, it will
be faced with management risk.
Owner might be faced with physical disorder state in
supervising the venture.
The business can be faced with loss.
The remedy should be incorporating the family(sisters ,
brothers)in the business.
Tuesday, April 18, 2023 33
Thank You!