Appraisal of Compost Manufacturing and marketing

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


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


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.


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.


Business Objectives

to produce quality compost and

to maximize profit of the business.


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).


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.


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.


Cont…(tech)

Material inputs

Compostable brown and green waste

Compostable brown waste =carbon

Compostable green waste =nitrogen


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


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.


Cont….(tech)Raw material

end product

organic waste, water, microorganisms,

mixingprocess curing Organic

matter


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.


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


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


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


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


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


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


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


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.


Cont…

Profitability

financially it is not profitable throughout its life time since

demand –supply gap analysis is negative.


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.


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%.


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


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.


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.


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


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.


Environmental Analysis

No likely damage as a result of the project. Here the

abetment cost is zero all in all.


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 + + + +


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.


Thank You!

http://eartheasy.com/yard-garden/raised-garden-beds-kits-planters

Appraisal of Compost Manufacturing and marketing

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