Final Final

Site selection suitability analysis for ASHRAF


Table of ContentsContents PageAcknowledgement......................................................................................................................5CHAPTER ONE........................................................................................................................6INTRODUCTION......................................................................................................................6

1.1 Background of the project..............................................................................................61.2 Scope the project............................................................................................................61.3 Problem statement..........................................................................................................61.4 Objectives of the project................................................................................................61.5 Methodology..................................................................................................................61.6 Expected results.............................................................................................................61.7 Benefits and beneficiaries of the project........................................................................6

CHAPTER TWO........................................................................................................................6LITERATURE REVIEW...........................................................................................................6

2.1 Introduction....................................................................................................................62.2 Working areas of Industrial engineers............................................................................62.3 Plant Design...................................................................................................................62.4 Plant location.................................................................................................................62.5. The objective of plant location decision-making..........................................................62.6. When the need for location decision arises?.................................................................62.7. Consequences of poor location decision.......................................................................62.8 Phases of site selection...................................................................................................62.9 Techniques used for selecting best plant location..........................................................62.10 Procedure for selecting a site.......................................................................................6

CHAPTER THREE....................................................................................................................6COMPANY OVERVIEW..........................................................................................................6

3.1 Establishment and land coverage...................................................................................63.2 Organizational structure.................................................................................................63.3 Raw materials for the company.....................................................................................63.4 The major process of meat and oil plants......................................................................63.5 The availability of utilities for the company..................................................................63.6 Specific site consideration.............................................................................................63.7 Human resources............................................................................................................6

CHAPTER FOUR......................................................................................................................6DATA COLLECTION................................................................................................................6

4.1 Introduction....................................................................................................................64.2 Data for general site selection........................................................................................64.3 Data for particular site selection....................................................................................6

CHAPTER FIVE........................................................................................................................6DATA ANALYSIS.....................................................................................................................6

5.1 Introduction....................................................................................................................65.2. General Site selection suitability Analysis....................................................................65.3 Data analysis for Particular site.....................................................................................6

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Acknowledgement

At the beginning and all the way to the end praise be to Almighty Allah, the Beneficent,

Merciful, Creator and Sustainer of the universe, without whose mercy and help we could not

even take a single breath in to our lungs, let alone to be a kind of person we are now.

We would like to express our deepest gratitude to our project advisor, Ato Berekete Hale

(Msc.), for his genuine advice and continuous follow up.

Our appreciation goes to Ato Solomon (office manager of meat and oil plant), Ato Tariku

(human resource manager of ASHRAF), and Ato Seid (administrative manager of ASHRAF).

Secondly we would like to appreciate Dr. Tebege and Miss.Momina for guiding us in visiting

and observing their meat and oil plant respectively.

Last but not least warm thanks to our friends who have given information about the areas

they come from and also for their participation as a decision committee member.

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LIST OF TABLES

Table 1Fields of specialization in Industrial engineering 6

Table 2global industry classification...............................................................................................6

Table 3 number of workers of the oil plant......................................................................................6

Table 4 present and future water resources, in billion m3 per year.................................................6

Table 5 production of vegetable oil crops in Kenya, 1999-2003(tones)..........................................6

Table 6 Regional oil seed production in 2005/06 (*1000 tons).......................................................6

Table 7Ethiopian production regions of sesame seed (2005/2006).................................................6

Table 8 country against site selection criteria.................................................................................6

Table 9 Evaluation of particular site selection................................................................................6

List of Graphs

Graph 1Trends in cattle population of the four regions (1997/98-2004/05)Graph 2 growth rate of cattle population in the four regions 1998/99-2004/05Graph3 trends in percentage of sheep population in four region

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CHAPTER ONE

INTRODUCTION

1.1 Background of the project

Plant design is among the various distinctive fields of specializations of industrial

engineering. The heart of this research is about site selection suitability of ASHRAF

industrial business group which is among the specialization of industrial engineering.

The term site selection is about identifying and locating a best site after a through

consideration of influential factors for determining the location of manufacturing or

service industry.

The concept of site selection assumed as being started after the occurrence of industrial

revolution. Starting from that period this concept developed various methodologies

which are helpful for making logical decision. Now a day’s selection of proper site is

becoming a determinant factor for the success or achievement of better profit.

Usually the decision of site selection follows two steps first choosing of general area or

region and second, choosing of particular site within the area selected. Location decision is

based on the organizations long term strategies such as technological, marketing, resource

availability and financial strategies. Location decisions are strategic, long term and non

repetitive in nature. Without sound and careful location planning in the beginning itself, the

new facility may create continuous operating problems in the future.

In this paper the researcher’s are going to analyze ASHRAF with two phases .The First phase

is about comparison of the country to which, ASHRAF is being located with other African

countries. After doing so the next task will be analyzing the existing site at particular level.

This analysis will be made by making use of the site selection criteria of each phase.

According to the reports from IMF Ethiopia is rapidly growing and expanding in the sector of

industry. To make sure this rapid growth continuous, every one has to minimize or avoid the

failure of business firms due to improper site selection. Consequently the need for proper site

selection will call for a research to be held in this field. This paper will play its role in

minimizing the failure of business firms due to inappropriate site.

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1.2 Scope the project

Since ASHRAF plc is wide and have a number of plants in different parts of the country we

are enforced to study site selection suitability analysis for those plants found in the head

office.

1.3 Problem statement

Many industries located in a certain area for being distributing industries all over the country.

Selecting site with out the proper consideration of determinant factors such as: availability of

raw material, availability of cheap labor etc. will lead to a serious problem.

Many business firms are suffering a continuous cost, dissatisfied customer and frustrated

employees due to improper site selection.

1.4 Objectives of the project

1.4.1 General objective of the project

In order to show how a suitable site could be selected by making use of a site selection and

plant location criteria.

1.4.2 Specific objectives of the project

The following are some specific objectives of the project

To evaluate the selected site, ASHRAF against site selection criteria

To determine whether the selected site is suitable or not

1.5 Methodology

As this paper is concerned we use the following methodologies in combination for the

success of our project:

Direct observation of the plant as well as the surrounding environment

By making interview

Data collection

Data analysis

Conclusion

Recommendation

1.6 Expected results

After the accomplishment of this paper the following results will be expected:

The problems that ASHRAF encountered with will be solved

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After our study of the project it is expected that the selected site for ASHRAF is suitable

Detailed analysis that is necessary for the establishment of suitable site

Get the significance of using site selection criteria

1.7 Benefits and beneficiaries of the project

1.7.1 Benefits of the project

This paper has more or less the following benefits

It helps as a reference for future expansion of the company’s business

It helps to minimize failure of a business due to improper site selection

It is used as a guide for new business ventures ,how to select proper site

It is used as guide or reference for future study in the field of site selection

This paper have a great advantage for company’s which have the potential to open the

branch in different part of the world

1.7.2 Beneficiaries of the project

The final product of this paper is important for a variety of business firms and companies as

well as government agencies for selecting a suitable site for their business, service facility,

etc.

New business ventures

Existing companies having a desire of expanding their business

Researchers in the field of site selection

Investment bureau

Non governmental organizations

Trade and industry bureau

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CHAPTER TWO

Literature review

2.1 Introduction

Site selection suitability is one part of industrial engineering which deals about selecting a

suitable site for a certain production or service facility.

What is Industrial engineering?

According to Wikipedia, the free encyclopedia Industrial engineering is a branch of

engineering concerned with the development, improvement, implementation and evaluation

of integrated systems of people, money, knowledge, information, equipment, energy, material

and process. It also deals with designing new prototypes to help save money and make the

prototype better. Industrial engineering draws upon the principles and methods of engineering

analysis and synthesis, as well as mathematical, physical and social sciences together with the

principles and methods of engineering analysis and design to specify, predict, and evaluate

the results to be obtained from such systems. In lean manufacturing systems, industrial

engineers work to eliminate wastes of time, money, materials, energy, and other resources.

Industrial engineering is also known as operations-management, management-science,

systems engineering, or manufacturing engineering, usually depending on the viewpoint or

motives of the user. Recruiters or educational establishments use the names to differentiate

themselves from others. In healthcare, for example, industrial engineers are more commonly

known as management-engineers or health systems engineers.

The term "industrial" in industrial engineering can be misleading. While the term originally

applied to manufacturing, it has grown to encompass virtually all other industries and

services as well. The various topics of concern to industrial engineers include management

science, financial engineering, engineering-management, supply chain-management, process

engineering, Operations-research, systems-engineering, ergonomics, value engineering and

quality engineering.

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Table 1 Fields of specialization in Industrial engineering

NUMBER FIELDS OF SPECIALIZATION

1 Operations research & Optimization techniques

2 Engineering economics

3 Supply chain management & Logistics

4 Systems Simulation & Stochastic systems

5 System Dynamics & Policy Planning

6 System Analysis & Techniques

7Manufacturing systems/Manufacturing engineering

8 Human factors engineering & Ergonomics 9 Production planning and control 10 Management Sciences 11 Computer aided manufacturing 12 Facilities design & Work space design 13 Statistical process control or Quality control 14 Time and motion study

15 Operations management

16 Corporate planning

17 Productivity improvement

18 Materials management

Among the above areas of studies of industrial engineering, our research is focused on

‘Facilities design and Work space design’, under which plant location is its main component.

The activities of Facility design and work space design are to be done whenever a new plant

is designed or when expansion is required for the existing plant.

2.2 Working areas of Industrial engineers

Industrial engineers work in different industry sectors such as:

In service industry

Processing industry

Manufacturing industry

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2.2.1 Classification of Industries

There is a wide variety of basic industries including not only manufacturing but also all

others as well.

According to Groover the industries are classified into two categories:

I. Manufacturing and Process industries

II. Manufacturing industries

There are typically identified with discrete item production such as cars, computers, machine

tools, and the components that go into these products.

Process industries

They are represented by chemicals and plastics, petroleum products, food processing, soap,

steel and cement.

According to geography.about.com industries can be classified as; primary, secondary,

tertiary, quaternary and quinary.

I. Primary Sector

The primary sector of the economy extracts or harvests products from the earth. The primary

sector includes the production of raw material and basic foods. Activities associated with the

primary sector include agriculture (both subsistence and commercial), mining, forestry,

farming, grazing, hunting and gathering, fishing, and quarrying. The packaging and

processing of the raw material associated with this sector is also considered to be part of this

sector.

In developed and developing countries, a decreasing proportion of workers are involved in

the primary sector. About 3% of the U.S. labor force is engaged in primary sector activity

today, while more than two-thirds of the labor forces were primary sector workers in the mid-

nineteenth century.

II. Secondary Sector

The secondary sector of the economy manufactures finished goods. All of manufacturing,

processing, and construction lies within the secondary sector. Activities associated with the

secondary sector include metal working and smelting, automobile production, textile

production, chemical and engineering industries, aerospace manufacturing, energy utilities,

engineering, breweries and bottlers, construction, and shipbuilding.

III. Tertiary Sector

The tertiary sector of the economy is the service industry. This sector provides services to the

general population and to businesses. Activities associated with this sector include retail and

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wholesale sales, transportation and distribution, entertainment (movies, television, radio,

music, theater, etc.), restaurants, clerical services, media, tourism, insurance, banking,

healthcare, and law.

In most developed and developing countries, a growing proportion of workers are devoted to

the tertiary sector. In the U.S., more than 80% of the labor forces are tertiary workers.

IV. Quaternary Sector

The quaternary sector of the economy consists of intellectual activities. Activities associated

with this sector include government, culture, libraries, scientific research, education, and

information technology.

V. Quinary Sector

Some consider there to be a branch of the quaternary sector called the quinary sector, which

includes the highest levels of decision making in a society or economy. This sector would

include the top executives or officials in such fields as government, science, universities,

nonprofit, healthcare, culture, and the media.

According to the global industry classification (GIS) industries can be classified as

follows:

On the basis of source of raw materials used industries can be classified as:

Agro based: cotton, woolen, jute, silk textile, rubber and sugar, tea, coffee, edible oil

Mineral based: iron and steel, cement, aluminum, machine tools, petrochemicals.

Based on their main role industries classified as follows:

I. Basic or key industries which supply their products as raw materials to manufacture

other goods .e.g. iron and steel and copper smelting, aluminum smelting.

II. Consumer industries that produce goods for direct use by consumers – sugar,

toothpaste, paper, sewing machines, fans etc.

Industries can be classified on the basis of their owner-ship:

i. Public sector: owned and operated by government agencies

ii. Private sector industries: owned and operated by individuals or a group of

individuals.

iii. Joint sector industries: are industries which jointly run by the state and individuals or

a group of individuals.

iv. Cooperative sector industries: are industries owned and operated by the producers or

suppliers of raw materials, workers or both. They pool in the resources and share the

profits or losses proportionately.

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Table 2global industry classification

No Sector Industry Groups

1 Energy Energy

2 Materials Materials

3 Industrials

Capital Goods

Commercial & Professional Services

Transportation

4 Consumer Discretionary

Automobiles and Components

Consumer Durables and Apparel

Consumer Services

Media

Retailing

5 Consumer Staples

Food & Staples Retailing

Food, Beverage & Tobacco

Household & Personal Products

6 Health Care

Health Care Equipment & ServicesPharmaceuticals, Biotechnology & Life Sciences

7 Financials

Banks

Diversified Financials

Insurance

Real Estate

8 Information Technology

Software & Services

Technology Hardware & EquipmentSemiconductors & Semiconductor Equipment

9Telecommunication Services Telecommunication Services

10 Utilities Utilities

Based on the bulk and weight of raw material and finished goods:

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i. Heavy industries such as iron and steel

ii. Light industries that use light raw materials and produce light goods such as electrical

industries.

As we have discussed so far process industries are these process food, plastic, petroleum

products, soap, etc. Since ASHRAF PLC processes meat, oil, juice and plastic etc. And

therefore it is categorized as process industry. It is also can be considered as secondary sector

of the economy.

The main concern of this paper is analyzing the site selection sutability of ASHRAF which is

part of facility design and work space design which is one of the specializations of industrial

engineering.

2.3 Plant Design

The problem of arranging an industrial process has been in existence as far back as the

industrial revolution. The terms” plant layout” and “plant design” are often

confusing .According to Richman, plant design is defined as” the over all design of an

enterprise”. Planning of finances, the plant location, all the planning necessary for the

physical requirements of a plant are the consisting elements of plant design function taking in

the origin of the enterprise. On the other hand, plant layout is a more limited function, a plan

of an optimum arrangement of an industrial facility. As a result plant layout is the one among

the number of activities required for the effectiveness of overall design of enterprise. The

function of plant design is a broader activity and plant layout must be taken as one of its

important factors According to Ireson factory planning is the formulation of a complete plan

for creation of goods or services. The term factory planning includes the determination of the

location, production processes, equipment, physical arrangement, and provisions for

personnel’s, offices, and all functions that are necessary to the completion of the goods.

2.3.1 Activities within plant design

The relationship between plant layout and the overall design of an enterprise, which are the

basic decisions that management must make for effective plant design are listed below.

1. Acquisition of capital 7) product price range

2. Product design 8) plant location

3. Sales planning for requirements 9)plant layout

4. Selection of the production process 10)building type selection

5. Plant size 11) diversification

6. Make or buy 12) organizational developmental

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The relation ship between the above elements of plant design is systematically shown in the

following diagram.

Diagram 1 relation ship between elements of plant design

Acquisition of capital

The capital requirements of an industry can be categorized in to three:

A capital required for initial establishment of a certain plant,

Raising funds for the purpose of covering operation costs, and

A capital required for changing the financial structure of the ongoing enterprise and

securing funds for further expansion purposes.

After looking the proper capital requirement the next step would be identifying source of

capital. There are different sources of capital are personal savings, loans, and sale of bonds,

sale of stocks trade credits, and profit flow back. The above sources of capital have their own

advantages and disadvantages this should be considered when selecting certain type capital

source.

Product design

Plant layout is founded upon product design. The amount to be produced and the type of the

product determine the manufacturing process to be utilized. Inurn the manufacturing process

specifies the equipment, machinery and plant for effective plant layout. Therefore, the

management must be series in design of the product in order to achieve effective plant design.

It is agreed upon that good product design has the following three aspects:

Design for function,

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Plant

design

Diversificat

ion

Building type-

selection

Plant

location

Product price

range

Plant

size

Organizational

development

Product

design

Selection of

production

Make or buy

decision

Sales

planning

Plant

layout


Design for making, and

Design for selling

Design for function

In order to satisfy the customers and /or to keep the customers loyal, the product must

perform its function which the customer intends to use it.

Design for making

A product with good functional design, but impossible to manufacture, is worthless.

Nowadays, the technology gives us a wide choice of materials, such as metals, plastic, wood,

rubber, or ceramics. Making use of standard parts is important while considering product

design.

Design for selling

A product that has good feature, simplicity to manufacture and good function, with out any

demand is use less. Good design attracts the customer to buy the product or spend there

money on it.

Sales planning for requirements

Planning of requirements is an early stage in plant design .the production volume and the

quality could be determined here through market survey or any other means.

Selection of the production process

By estimating the costs of various alternative processes it is basic to select an optimum

process. The type and sequence of operations must be determined here after looking its

technical and economical suitability.

Make or buy decision

It is a decision of producing a certain item within an organization or buying the products

produced by out sliders.

The objective of this decision is in order to achieve the following:

1) Reducing unit material and processing costs

2) Minimizing cash investment, which demands consideration of both inventory control and

optimum use of facilities

3) Improving the product mix

Plant size

The size of the plant is dependent on the volume of out put proposed. The volume of the

production requirement can be determined by accurate forecasting.

Product price range

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An early decision that management must make is the choice of the price range in which they

desire their products to be produced. The decision will affect the basic quality of their product

as well as the manufacturing process.

Plant location

The major concern of this paper is about plant location. The problem of selecting a location

for a plant has been given a great consideration by many authorities selection of a location

involves large commitment of capital; as a result it must be done with the utmost care. The

problem involves selecting a region as well as specific site within that region. The most

difficult part of a plant location analysis is determining the criteria by which various

locations.

Plant layout

Plant layout is concerned with the design and installation of systems of men, materials and

equipment.

Plant layout is a plan of, or the act of planning, an optimum arrangement of industrial

facilities, including personnel, operating equipment, storage space, materials-handling

equipment, and all other supporting services, along with the design of the best structure to

contain these facilities.

Building type selection

Movement is into existing facility. The best building type should be selected which is best

suited to the overall requirement of the layout plan. Here the location of the building must be

acceptable first.

For new plant construction the building type should be selected after the plant layout fairly

well developed.

Diversification

Diversification means entering into a completely new field in addition to the existing field.

The decision to diversify has great effect upon the plant design problem, and eventually to the

plant layout problem.

Organization development

Once the overall objectives of the enterprise are clearly defined, the objectives of the various

sub division must be determined and clearly specified. The arrangement of plant facilities

will be strongly influenced by the manner in which these various functions are organized.

Here plant location is the more specific title of our project. We shall see in more detail in the

next chapter.

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2.4 Plant location

2.4.1 Definitions of Site Selection:

Many scholars, books, and sites define site selection differently. According to answers.com

site selection is the Process of choosing the optimal location for a business based on

accessibility to and availability of customers as well as considerations as to space costs, size,

and other physical characteristics, zoning regulations, investment tax credits, and the quality

of the available workforce. The greater the perceived value of the goods offered, the greater

the effort a consumer is willing to expend in order to reach the seller's place of business.

Financial-dictionary.thefreedictionary.com defines site selection as the process of choosing

the best location for an anticipated use. Large national chain retailers and restaurants typically

have very specific criteria regarding demographic profiles and densities, traffic counts, access

and proximity to competitors, and amount of land required. Smaller companies usually

piggyback on those requirements or simplify them dramatically.

By the other site, www.bdbmc.org site selection is defined as the process by which firms find

new locations for business facilities or expansion of their operations.

2.4.2 Location decision

Many writers in different books explain location decision in two stages. The First stage is

choice of general area or region and secondly, the choice of site within the selected area.

Location decision is based on the organization‘s long-term strategies such as technological,

marketing, resource availability and financial strategies.

For many small businesses, business location is an essential component in its eventual

success or failure. Site selection can be pivotal in all sorts of businesses, including retail,

service, wholesale, and manufacturing efforts. In fact, studies conducted by the Small

Business Administration (SBA) and other organizations indicate that poor location is one of

the primary causes of business failure in America. Conversely, a good business location can

be enormously beneficial to a small firm. As Fred I. Weber Jr. remarked in Locating or

Relocating Your Business, "sometimes a business that might otherwise be only marginal

makes a good profit because of an excellent location. On the other hand, a poor location can

often drag down a good business. It can affect sales adversely and help decrease the

company's profit by adding to its cost." The concept of plant location has now been

generalized into that of facility location. Here facility includes a production operation or

service system.

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2.4.3 Location Needs of Various Business Types

Retail businesses. The success of retail establishments is often predicated to a large degree on

their location. "Real estate professionals are fond of saying that the three most important

factors in choosing a business space are location, location, and location," wrote Fred S. Stein

gold in Legal Guide for starting and Running a Small Business. "For certain types of retail

stores and restaurants, this may be true. For example, a sandwich shop requires a location

with a high volume of foot traffic. Or may be you'll benefit if you're near other businesses

that are similar to yours; restaurants often like to locate in a restaurant district."

Since location is so important to most retail operations, small business retailers often have to

make significant expenditures to secure a good site on which to operate. Property owners that

offer land or buildings or office space for lease or sale in already-thriving retail areas know

that they can command a higher price because of the volume and quality of business that the

location will bring to the company.

Service businesses. Many service-oriented businesses also need to operate in "high traffic"

regions, but there are exceptions to this. Most home-based business owners, for example,

package their talents in service-oriented businesses (software development, freelance writing,

home improvement, etc.). Others, such as pest control services or landscaping services,

secure the majority of their customers through the Yellow Pages, etc., and thus do not need to

worry as much about their location (although location can become a problem because of other

factors; for example, a service business that has to travel great distances to take care of the

majority of its customers might consider relocating closer to its primary customer base). Still

other service-oriented businesses, of course, rely to a great degree on their location. Dry

cleaners, hair salons, and other businesses cannot afford to locate themselves on the outskirts

of a business district. Many of their customers frequent their business precisely because of

the convenience of their location; if that benefit dries up, so too do the customers.

Wholesale businesses. Whereas the primary consideration for retailers and some service

businesses is to locate themselves in high traffic areas hence the ubiquity of such businesses

in shopping centers and malls the major location concern of wholesalers is to find a site that

has good shipping and receiving facilities and close proximity to transportation routes.

Zoning laws are also a consideration. Most communities maintain zoning laws that restrict

where wholesalers can set up their businesses.

Manufacturing businesses. As with wholesalers, businesses engaged in manufacturing usually

have limited site location options because of local zoning laws. But manufacturers generally

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do not lack for options when the time comes to build or relocate a facility. Most communities

have any number of sites to choose from. The key is to select the land or building that will be

most beneficial to the company in the long run, taking into consideration the company's

primary market, the available labor force, transportation factors, availability of raw materials,

available buildings or building sites, community attitudes toward the industry, expense, and

convenience of access for customers.

Each of the above-mentioned business types retail, service, wholesale, and manufacturing

have different site needs that need to be considered when settling upon a location for starting

or relocating a business.

2.4.4 Planning for the Future

An important factor that small business owners need to consider when weighing various

business location alternatives is the site's ability to address the company's future needs. "You

should keep in mind the danger of putting off relocating because you 'can't afford it now,' "

warned Weber. "Some owner-managers find that, as time goes by and their competitive

positions worsen, they can afford relocating even less. They learn the hard way that if a

company stays too long in a location it can die in that location." Even a company that is

performing satisfactorily can benefit from regular reviews of the pros and cons of its location.

"What about technological improvements?" wrote Weber. "Have you ever thought that, if you

move, you could take advantage of the technological improvements that have come along in

your industry since your present facility was built? If your facility has become a competitive

liability because of such innovations, moving to another building may be the most

economical way to become competitive again."

Most business consultants counsel their clients to do two things to avoid getting stuck with an

inadequate business facility and/or location:

1) Plan for the future; and

2) Pay attention to the tell-tale signs that are often buried in the business's balance sheet.

"Facility costs are a normal everyday concern," wrote Wadman Daly in Relocating Your

Workplace, "but their relationship to other operating and overhead expenses can alter

gradually in ways that, once perceived, suggest a facility change. Rent, operating expense,

maintenance, taxes and insurance, etc., should be monitored as a percent of one or more

preferred productivity measures to serve as a good indicator of the need for facility change."

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2.5. The objective of plant location decision-making

The main objective of a plant location decision is to minimize the overall costs. The costs to

be minimized are incurred due to location decision. Plant location is important because of the

following:

1. Location influences plant layout facilities needed

2. Location influences capital investment and operating costs

Location decisions are strategic, long term and non repetitive in nature .with out sound and

carful location planning in the beginning it self, the new facility may create continuous

operating problem in future location decision also affects the efficiency, effectiveness,

productivity and profitability.

2.6. When the need for location decision arises?

Industries call for Location decision in the following circumstances:

When a new facility to be established,

Expansion of existing facility,

To establish additional facilities in new territories due to growing volume of business,

When original advantages of the plant have been out-weighed due to new development, and

When new economic, social, legal or political factors suggest a change of location of the

existing facility

2.7. Consequences of poor location decision

The location decision should be taken very carefully, as any mistake may cause poor location,

which could be a constant source of

Higher cost,

Higher investment,

Difficult marketing and transportation,

Dissatisfied and frustrated employees and customers,

Frequent interruption of production,

Abnormal wastage,

Delays and sub standard quality etc.

Therefore, it should be based upon a careful consideration of all factors that are essentially

needed inefficient running of a particular industry. The necessary factors in the selection of

plant location vary among industries and with changing technical and economical conditions.

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Site selection is not an easy problem because if the selection is not proper then all money

spent on factory building, machinery and their installation etc. Will go as waste and the

owner has suffer a great loss. Therefore, while selecting a site owner must consider technical,

commercial, financial aspects which may provide maximum advantages.

2.8 Phases of site selection

According to many books the problem of the site selection of a factory or a plant can be

solved in two stages:

i. The general location of the plant

ii. The selection of a particular site

2.8.1 The general location of the plant

In this phase the location of a certain organization either manufacturing or service can be

determined world wide or globally. Sometimes this decision would step-down to the

continent and to state or country level. The decision of selecting such general territories

would be determined based on general site selection criteria.

General site selection criteria

The following factors should be considered while selecting a general region where the

industry is to be located:

Availability of raw materials: As far as possible the site selected should be near from the

source of raw material, so that the cost of transporting the raw materials to the site will be

reduced. Further, if the raw materials are bulky and heavy, it becomes very essential to select

the site near it. If the raw materials are perishable, as sugarcane, proximity to supply of raw

materials is an advantage.

Proximity to markets: The cost of transporting finished goods, advertising and distribution,

etc will be greatly reduced if the factory is located near to the market. So the goods can be

sold at cheaper rates together with quicker service to the customer. It is also easy to study

customer requirements.

Transportation facilities: It is an important factor on deciding the proper plant location in

such a way that the presence of suitable road facility, rail way, air transportation is essential

for transporting raw materials, finished products, etc.

Availability of efficient and cheap labor: While selecting a site, it is necessary to consider that

whether right, kind of labor at suitable rates is available or not, because labor cost is an

important item of the of the total production cost in manufacturing.

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Availability of power and fuel: In the past, the industries were situated near coal mines or

places to which coal could be carried easily and cheaply. But due to the development of high

tension of grid system this factor is not of much importance now.

Climatic and atmospheric conditions: It is a governing factor for several industries. But now-

a-days with the development of air conditioning process, it has been possible to control the

atmospheric moisture contents in the factor as per requirements.

Availability of water: All factories in need of soft and pure water, hence its search should be

made whether good quality of water is available or not. if not available its cost of transport

has to be given prime consideration

Availability of capital: The supply of capital is an important factor on the rate of development

of a factory. Amount of capital available helps to determine the size of the plant and its future

plans.

Social and recreational facilities: Usually big factories are located away from the public,

social and recreational centers. During break time; the employees require some social and

recreational amenities which are the necessities of life. Therefore, it is essential that suitable

parks, co-operative stores, cinema and education centre should be provided by the employer

or government near factory site, if these are away from the towns or cities.

2.8.2 Selection of a particular site:

After selecting a general area for the plant, next step is to select a suitable site in that area.

The selected site in the general phase could be a certain country, next to this selection of the

more specific site to be followed. Specific site selection could have the following steps;

selecting a region within the selected country then selection of specific city/town, and finally

the specific site at which the plant to be built will be determined.

If the selected site is not proper all the money spent will go waste and the owner has to suffer

great loss. Therefore, while selecting a site, the owner must consider technical, commercial

and financial aspects so as to take maximum advantages. Sometimes, all the requirements and

features of suitable site may not be available at one particular location, in such cases it will be

advantageous to find out a suitable site with a combination of maximum essential

requirements of the particular industry from maximum overall economy point of view.

Particular site selection criteria

While selecting a particular site the following points should be considered:

Availability of raw materials: As far as possible the site selected should be near the source or

raw material, so that the cost of transporting the raw materials to the site will be less. Further,

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if the raw materials are bulky and heavy, it becomes very essential to select the site near it. If

the raw materials are perishable, as sugarcane, proximity to supply of raw materials is an

advantage.

Community attitude: Most communities usually welcome setting up of a new industry as it

would provide direct and indirect employment opportunities to the local people. However, in

case of polluting or adversely affecting industries the local populations provide resistance and

try its best that such industries stay as far away as possible. This resistance sometimes creates

law and order situation. Thus the attitude of the people and state government influence the

location of the industry.

Community facilities: These are the facilities which affect the quality of life such as; schools,

hospitals, housing, banking, communication and other facilities.

Topography: This includes subsoil conditions suitable for taking bearing loads of the building

foundation. The cost of leveling and developing the area, laying the water supply lines,

electricity, drainage, and sewage should remain within reasonable limits.

Proximity to markets: The selected site should be as close as possible to the market so that the

cost of transporting the final product to the customer is less and whole sellers or retailers can

easily access our product.

Transportation facilities: The plant site must be accessible by road and rail, so that the

transportation cost is less and movement is easy and quick.

Waste disposal: The process waste including solid, liquid and gaseous effluents are required

to be disposed off. The plant should be positioned so that prevailing winds carry out fumes

away from populated areas, and that waste may be disposed off properly and at reasonable

expenses.

Ecology and pollution: Due to growing awareness towards maintenance of natural ecological

balance, this aspect is gaining importance. Before final selection, it should be checked, if

there is any restriction imposed by local self government etc.

Size of land: The plot of land must be sufficient in size to meet the proposed plant including

parking areas and other facilities, and also space for future expansion. It should also be

ensured that available land is free from any dispute.

Supporting industries: The availability of supporting industries and other services should be

available in the near area.

Ground water: the availability of under ground water at the area to be selected should be fair.

Hydrogeology: Should be located in an area where the hydrogeology can be readily

monitored and managed with Confidence.

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Geological Stability: Located on stable ground e.g. not in a seismically active area, areas

susceptible to soil sinking, landslides or swelling, crest or sinkhole terrain.

Conservation Value: No negative impact on national Parks, nature reserves, or areas under

conservation covenants.

Heritage Value: Value No negative impact on sites of recognized cultural or historical

significance.

Transport Routes: Any traffic on local roads must be within acceptable congestion and safety

limits.

Emergency Services: Within approximately 25 minutes of adequate off-site emergency

services including medical and fire fighting.

2.9 Techniques used for selecting best plant location

The following are few important techniques used to decide best location from the available

alternatives:

1. Subjective techniques

A. Industry precedence: this occurs whenever a new facility is located in an area to

which previously selected by similar industry. This is based on the following

assumption that, ’if the location is best for similar firms in the past it must be best

for us now’.

B. Preferential factor: this usually involves personal preferences. This is not a

professional approach and so that it is not a good business decision making.

C. Dominant factor: This occurs whenever the location decision influenced by one

dominant factor. For example, mining or petroleum drilling operations must be

located in the areas where the mineral resource is available.

2. Qualitative techniques

This technique is also known as factor ranking system. Ranking may be conducted on an

overall location or individual factor basis. In both these cases, no comparative relationship for

values within the factor other than position in the list is established. A location is either better

than worse than another for the particular factor. Ranking is therefore unsatisfactory.

3. Semi-quantitative techniques

This technique is also known as factor weight-rating system. In this technique rating scales

are used to compare countries, regions, communities, or sites against each other. The rating

techniques are used to substitute a point value when monitory values unobtainable. In this

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system variable weights are assigned to each of the factors and each location is evaluated

along the factor scale.

4. Quantitative techniques

The following are important quantitative techniques used for selecting a best location:

a. Break-even analysis: selecting best location based on the time at which the

cost incurred and the revenue earned is equal.

b. Economic/cost analysis

c. Transportation model

2.10 Procedure for selecting a site

Whenever selecting a site the following procedure should be adopted:

1. Formation of site selection committee

This committee should comprise people having knowledge and experience in

different fields of specialization like; layout engineer, economist, environmentalist,

marketing personnel, etc.

2. Determining company needs

Needs of the company should be determined by establishing the goals, objectives,

and criteria including the size building and the plant size required based on their

financial capacity.

3. Deciding criteria for selection

For the purpose of deciding criteria for selecting the region and actual site either a

check list or a questionnaire is prepared.

4. Accumulate the data

The necessary data or information which may influence site selection are collected.

This involves first locating of sources of data, then the actual collection and finally

tabulating or arranging them in formats.

5. Analyze the data

After collecting, all the facts, figures and information are then analyzed. A base map

pinpointing all suitable sites and such major features as: industrial, zoning

boundaries, road, rail, air, and water transportation network and major utility lines-

water, sewage disposal, gas and power.

6. Evaluate the alternatives

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Evaluation process requires the quantification of as many tangible factors as possible,

with a judgment evaluation process applied to the intangible factors. The most

common method of comparing the factors is by giving them a value or weight.

Evaluation of a site is done in the following steps:

Select the important factors for the enterprise,

Rank them in order of their importance, and

Evaluate each region or site for criterion

7. Reduce the number of alternatives

The number of alternatives is then reduced to about six or less for detailed analysis.

8. Investigation in detail

Each of the potential sites should then be visited by selection committee along with

such other personnel as deemed advisable. This includes inviting consultants,

architects, builders, etc.

9. Collect and analyze further data

In the final stage of site selection sometimes it is found necessary to obtain additional

information and data. After obtaining such data, committee then takes a final view.

CHAPTER THREE

Company overview

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3.1 Establishment and land coverage

ASHRAF business group is a private limited company which is established in 2005 G.C by

Sudan investor. Its head quarter is located in Amhara region, in the city of Bahir Dar.

ASHRAF Agricultural and Industrial PLC is a Bahir Dar, Ethiopia-based group of companies

engaged in various activities such as water and juice production, edible oil production, export

slaughterhouse and meat processing, animal feeds production, PE, PVC and PET production,

animal husbandry, etc. The main office is located in the south-west of Bahir dar city 2 km

from the River Abay.

This factory covers a land of area 80,000m2.They have leased the land for 60 years period

having an interest rate with annual payment of approximately (2-3) million Birr. This area is

the future industry zone and facilities such as electric power, Telecommunication service, etc,

are distributed. They have a problem with internet service at the plant site in which meat plant

is found.

This company has different plants in different parts of Bahir dar and in different parts of the

country. The Company has the following plants in different parts of Bahir dar city:

Meat plant: this plant has the potential to process 1500 (1k-type) goat and sheep per day in

one of its process line. It has also a potential of processing 600 cattle (Borena hybrid) per day

in the other process line when it runs in full capacity.

Edible oil plant: this plant can produce the same quality meal oil by using different raw

materials such as: sun-flower, rape oil, olive oil, soybean, etc. This plant has the capacity to

crash any type of raw material which is important for oil processing except white cotton seed.

It has a potential of crashing 50 tons per day when it runs in its full capacity.

PVC plant: This plant uses a number of petroleum by products and molasses as an input

material. The output of this plant are like; plastic film, oil-packer etc.

Cattle feeding plant: this plant uses the by products of meal oil as an input material. The

cattle which are bought in different parts of the country stay for a certain period of time in

their quarantines use this processed by product as a food.

Juice and water packing plant: in this plant mineral water and fruits are processed for the

local customer.

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3.2 Organizational structure

The factory has a general manager in the main office. The managers of each plant are

responsible for their corresponding office managers. Departments such as ICT, HRM,

Marketing, Administration, etc. are responsible for the general manager.

Fig 3.1 Organizational structure of the major departments

3.3 Raw materials for the company

3.3.1 Raw material for meat plant

The meat processing plant uses different raw materials for its process. The major raw

materials for this plant are;

Cattle from Borena (Borena hybrid)

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General

Manager

Office

manager

ICT

dept

Office

manager

HRM dept Administrat

ion

Marketing

Plant manager

of meat plant

Plant manager

Oil plant

Plant

manager of

oil plant

Plant

manager of

PVC plant

Plant

manager of

feeding


Goat and sheep (1-k) type

The company has quarantine services in different parts of the country to avoid weight loss of

cattle while transporting from market to the company. They also have fattening services by

which they can provide raw material for their meat plant. The reason for processing Borena

hybrid is due to its costumed taste by the customer. The company plans to introduce the meat

of cattle from other places.

3.3.2 Raw material for oil plant

The raw material for this plant are Oilseeds which are important agricultural commodities

widely grown in Ethiopia. Major oilseeds are sesame seed, groundnuts, soy beans (partly

used for oil extraction), rapeseed, Gomenzer, Noug or Niger seeds, linseed, sunflower,

cottonseed and others. The Oil plant of ASHRAF can extract all of the above oil seeds except

cottonseed, which have the same quality oil. They prepare animal feeds from the by-products

of oil extraction (oil cake). Raw material for oil plant will found around Humera, Gonder,

Tigray, etc.

In the current situation, market competition for extracted oil from the local oil seeds is too

tight. At processors levels companies complain about high levels of competition with oil

coming into the country through food aid. The introduction of VAT, low purchasing capacity

of customers, lack of awareness about quality, imported the cheap palm oil etc. The above

problems are the main constraints for oil companies to be competitive in the local market. But

it is possible to compete at the local market by the local oil seeds if the government adds a

certain tax on imported palm oil items and avoid VAT on local oil products.

The company can be competent in international market by its oil that extracted from domestic

oil seeds. Ethiopian oilseeds and pulses are known for their flavor and nutritional value as

they are mostly produced organically. For instance, the Ethiopian white sesame seed is used

as a reference for grading in international markets.

3.3.3 Raw material for PVC (Polyvinyl Chloride) plant

Polyvinyl chloride, (IUPAC Poly (chloroethanediyl)) commonly abbreviated PVC, is a

thermoplastic polymer. It is a vinyl polymer constructed of repeating vinyl groups (ethenyls)

having one of their hydrogen’s replaced with a chloride group.

Polyvinyl chloride is the third most widely produced plastic, after polyethylene and

polypropylene. PVC is widely used in construction because it is cheap, durable, and easy to

assemble. (en.wikipedia.org)

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It can be made softer and more flexible by the addition of plasticizers, the most widely used

being phthalates. In this form, it is used in clothing and upholstery, and to make flexible

hoses and tubing, flooring, to roofing membranes, and electrical cable insulation. It is also

commonly used in figurines and in inflatable products such as waterbeds, pool toys, and

inflatable.

The Raw material for this plant will be imported from Egypt and South Africa. This plant

uses a number of petroleum by products and molasses as an input material. ASHRAF has a

machinery and equipment that can produce semi-processed plastic products from the raw

material. These products can be used for packaging purposes of oil, juice, meat, milk, etc.

The plastic products can be sold to other factories as water packing, milk packing, etc.

Technological difference may the existence of accessories of the desired type technology.

Due to this reason the company is expected to bring spare parts and training services from the

technology provider company. For maintenance purposes may not possible to get highly

skilled professionals in Ethiopia. To overcome this problem they should train their personnel

by foreign professionals.

3.4 The major process of meat and oil plants

3.4.1 Process of meat plant

The meat plant has a serious of processes starting from the preparation of cattle, sheep and

goat for slaughtering to the final steps of freezing at -40 0c, covering by plastic film and

delivering to customer.

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Eviscera

tion

Cattle

leverage

Slaught

ering

De-

hiding

Final

washing

Goat

&sheep

leverag

e

Covering

by film

Shipping

Dripping

Freezing

(-2up to1ºc)

Slaught

ering

De-

hiding

Eviscera

tion

Final

washing

Dripping

Freezing

At (-400c)SmokingDe-boning Dispatch


3.4.2 Process of oil plant

The process of oil plant

. 2 big tanks

Bucket

Elevator

The major process of oil plant

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10 machines

PressingCooking

and

pressing

Filtering Filtered oil tankCrud oil

tank

Cake

De- gemming

Filling

Cooling

Refining Die tank

Soap oil

washing

Reservoir

Crud oil tank

Bleaching

De-stoner

Bagging

10 machines

Cooking

and

pressing

…Cake

Filtering

Filtering

1st floor

Ground

2nd floor

Pressing…


3.5 The availability of utilities for the company

Electric power

The existing line can satisfy the company’s requirements. But sometimes they face stoppage

problem. They prepare three standby generators having a capacity of 4.5 MW. The problem

of stoppage is not only in Bahir Dar but also country wide.

Transportation

Truck transportation

The minimum weight restriction does not affect the company because it does not transport

huge products that are beyond a limit. The products from this site are easily transported to

AFRICAN Arabs such as Sudan, Egypt, Morocco, Tunisia, etc; these are target market for

product of meat plant.

Air transportation

The Ginbot20 international airport of Bahir Dar is an international airport even though; it

does not start international flight. The construction of Cargo for this airport is going on.

Concerning the schedules and rates of the air line:

The airport will adjust its schedules according to customer requirements. As ASHRAF is one

of the permanent of their customer they give emphasis for them. As it is displayed by media

the Ginbot20 international airport will start flying its trial flight by transporting flower to

European countries.

3.6 Specific site consideration

In general the topography of land in Bahir Dar is good. The factory has good land with

leveled feature. They have purchased a land of area 80000m2 to be paid within 60 years

period having an interest rate with annual payment of 3 million Birr. This area is the future

industry zone and facilities such as electric power, Telecommunication service, etc, are

distributed. They have a problem with internet service at the plant site in the head quarter.

Fire aspects

Fire force of the city is not as such organized to catch an accidental fire occurrence. They

have planned to have their own fire extinguisher for the future.

Labor availability

The shortage of experienced professional is a country wide problem, especially, at the senior

management position or staffs. Since the shortage is very high, the company tries to find such

professional through vacancy announcement by internet and direct contact with these

professionals in South Africa and Dubai.

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When we consider the competition of the local industry, around this area there is no as such

strong industry to compete with ASHRAF as the administrator of the company said “we do

have a potential to compete with any other industries to get experienced personnel by

providing them with good wage rate and house promotion, etc.”

Availability of water

The existing line of water supply is too small that it cannot satisfy the requirement of the

company. The company requires a large amount of water.

950Litre of water to process single cattle sheep or goat

45Litre of water to process a single sheep or goat

When it runs in full capacity the company processes 600 cattle (Borena hybrid) and 1500(1k-

type) sheep and goat per day. So, the daily requirement of water will be

= (950*600) + (1500*45)

=637,500Liter per day

If we neglect other requirements of water 637,500 liters of water is required on a daily basis.

This large amount of water cannot be supplied by the existing distribution line. Usually in the

summer (sunny) season after, March the water supply in Bahir Dar will be reduced

considerably.

To overcome this problem the government of the Amhara regional state is supporting the

company by providing them with bored underground water which costs (400,000-500,000)

Birr. In addition the company is going to pull water directly from Abay River by its expense.

Water pollution

The factory has a treatment plant for waste water, due to this reason there is no any threat

related to water pollution. Rather the treated pure water is to be delivered will help the

surrounding farmers to grow plant by irrigation. The existence of the company may create

opportunity for the surrounding farmers rather threat of water pollution.

3.7 Human resources

The company has around 340 employees in both meat and oil plants. Most employees that are

going to be recruited in the company are Ethiopians.

Table 3 number of workers of the oil plant

No Profession Total per three shift 1 Boiler operator 32 Boiler engineer 33 electrician 34 Electrical engineer 35 Refiners 9

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6 Semi operator 127 Chemist 68 Maintenance

personnel6

Total 45

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CHAPTER FOUR

Data collection

4.1 Introduction

In order to accomplish this thesis we use different methodologies discussed earlier. Data

collection is one of the components that helpful to collect data from different sources.

4.2 Data for general site selection

4.2.1 Profile of Egypt

Egypt is the most populated country in the Middle East and the third most populous on the

African continent, with about 78,866,635 (July 2009 est.). The last 40 years have seen a rapid

increase in population due to medical advances and massive increase in agricultural

productivity, made by the Green Revolution. Egypt's population was estimated at only 3

million when Napoleon invaded the country in 1798. In 1939, Egypt had a population of 16.5

million.

Almost all the population is concentrated along the banks of the Nile (notably Cairo and

Alexandria), in the Delta and near the Suez Canal. Approximately 90% of the population

adheres to Islam and most of the rest to Christianity, primarily the Coptic Orthodox

denomination. Apart from religious affiliation, Egyptians can be divided demographically

into those who live in the major urban centers and the fellahin or farmers of rural villages.

Egyptians are by far the largest ethnic group in Egypt at 91% of the total population. Ethnic

minorities include the Abazas, Turks, Greeks, Bedouin Arab tribes living in the eastern

deserts and the Sinai Peninsula, the Berber-speaking Siwis (Amazigh) of the Siwa Oasis, and

the Nubian communities clustered along the Nile. There are also tribal communities of Beja

concentrated in the south-eastern-most corner of the country, and a number of Dom clans

mostly in the Nile Delta and Faiyum who are progressively becoming assimilated as

urbanization increases.

Egypt also hosts an unknown number of refugees and asylum seekers, but they are estimated

to be between 500,000 and 3 million. There are some 70,000 Palestinian refugees, and about

150,000 recently arrived Iraqi refugees but the number of the largest group, the Sudanese, is

contested. The once-vibrant Greek and Jewish communities in Egypt have almost

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disappeared, with only a small number remaining in the country, but many Egyptian Jews

visit on religious occasions and for tourism. Several important Jewish archaeological and

historical sites are found in Cairo, Alexandria and other cities.

Egypt's economy depends mainly on agriculture, media, petroleum exports, and tourism;

there are also more than three million Egyptians working abroad, mainly in Saudi Arabia, the

Persian Gulf and Europe. The completion of the Aswan High Dam in 1970 and the resultant

Lake Nasser have altered the time-honored place of the Nile River in the agriculture and

ecology of Egypt. A rapidly growing population, limited arable land, and dependence on the

Nile all continue to overtax resources and stress the economy.

Egypt has a developed energy market based on coal, oil, natural gas, and hydro power.

Substantial coal deposits are in the north-east Sinai, and are mined at the rate of about

600,000 metric tons (590,000 LT; 660,000 ST) per year. Oil and gas are produced in the

western desert regions, the Gulf of Suez, and the Nile Delta. Egypt has huge reserves of gas,

estimated at 1,940 cubic kilometers, and LNG is exported to many countries.

Economic conditions have started to improve considerably after a period of stagnation from

the adoption of more liberal economic policies by the Government, as well as increased

revenues from tourism and a booming stock market. In its annual report, the IMF has rated

Egypt as one of the top countries in the world undertaking economic reforms. Some major

economic reforms taken by the new Government since 2003 include a dramatic slashing of

customs and tariffs. A new taxation law implemented in 2005 decreased corporate taxes from

40% to the current 20%, resulting in a stated 100% increase in tax revenue by the year 2006.

FDI (Foreign Direct Investment) into Egypt has increased considerably in the past few years

due to the recent economic liberalization measures taken by minister of investment Mahmoud

Mohieddin, exceeding $6 billion in 2006.

Although one of the main obstacles still facing the Egyptian economy is the trickle down of

the wealth to the average population, many Egyptians criticize their Government for higher

prices of basic goods while their standards of living or purchasing power remains relatively

stagnant. Often corruption is blamed by Egyptians as the main impediment to feeling the

benefits of the newly attained wealth. The Government promises major reconstruction of the

country's infrastructure, with a large part of the sum paid for the newly acquired third mobile

license ($3 billion) by Etisalat.

Oil seeds in Egypt

The oil seed production in Egypt decreases sharply from 996,600 in 1990 to 636,800 in

2000.this is due to the concentration is given to other seeds rather than oil seed. Egypt’s oil

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seed production decreases annually by 4.23%.The reduction in each oil seeds is as follows:

cotton seed decreased by 89%, linseed by 4.7%, soybean by 1.7%, sunflower seed by 4.3%.

Water resource in Egypt

Water resources in Egypt are becoming scarce. Surface-water resources originating from the

Nile are now fully exploited, while groundwater sources are being brought into full

production. Egypt is facing increasing water needs, demanded by a rapidly growing

population, by increased urbanization, by higher standards of living and by an agricultural

policy which emphasizes expanded production in order to feed the growing population. The

population is currently increasing by more than one million people a year. With a population

of approximately 55 million in 1994, Egypt is expected to see an increase to some 63 million

by the year 2000, and 86 million by 2025. As Falkenmark notes, the main constraint for most

countries, at medium term, is the capability to develop a sophisticated and far-sighted water-

management strategy, along with the legislation and administration necessary to support

them. The per capita water resources is expected to drop from a current value of about 922 m3

per year (1990) to about 337 m3 per year in 2025.

Except for the Nile itself, every bit of the Egyptian water conveyance system is man-made

and thus an expression of planned effort. It consists of the Aswan High Dam, eight main

barrages, approximately 30,000 km of public canals, 17,000 km. of public drains, 80,000 km.

of private canals (mesqas) and farm drains, 450,000 private water-lifting devices (sakias or

pumps), 22,000 public water-control structures, and 670 large public pumping stations for

irrigation. Throughout this system, approximately 59 billion m3 of water are distributed

annually, not only for cultivated land, but also for municipal and industrial use, for generation

of hydro-electricity and for the navigation of freighters and tourist boats on the Nile.

Table 4 present and future water resources, in billion m3 per year

Sources 1990 2000

River Nile water 55.5 57.5*

Ground water 2.6 4.9

Agricultural drainage water 4.7 7

Treated municipal sewage water 0.2 1.1

Saving flow water

management programmes - 1

Deep groundwater (deserts) 0.5 2.5

Total 63.5 74

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Source: Abu-Zeid, "Water Resources

4.2.2 The profile of Ethiopia

Ethiopia a land locked state in the Horn of Africa. Ethiopia, it is the second most populous

nation in Africa with over 79.2 million people and the tenth largest by area with its

1,100,000 km2. The capital is Addis Ababa. Ethiopia is bordered by Djibouti and Somalia to

the east, Kenya to the south, Sudan to the west and Eritrea to the north.

Ethiopia is currently the United States' 121st largest goods trading partner with $454 million

in total (two way) goods trade during 2008. Goods exports totaled $302 million; Goods

imports totaled $152 million.

Ethiopia is eligible for trade benefits under the African Growth and Opportunity Act

(AGOA). In 2008 U.S. imports from Ethiopia under AGOA and the Generalized System of

Preferences were valued at over $18.1 million, up from $8.97million in 2007. Most of this

consisted of apparel, live plants, edible vegetables and tubers, and fruits and nuts.

Exports

Ethiopia was the United States' 111th largest goods export market in 2008.U.S. goods exports

to Ethiopia in 2008 were $302 million, up 80.1% ($134 million) from 2007.The top export

categories (2-digit HS) in 2008 were: Cereals (wheat and grain) ($113 million), Aircraft ($73

million), Vegetables (peas) ($24 million), Special Other (low value shipments and articles

donated for relief) ($23 million), and Fats and Oils ($19 million).U.S. agricultural exports to

Ethiopia in 2008 were $169 million. Leading categories include: wheat ($89 million), pulses

($24 million), and coarse grains ($24 million).

Imports

It was the United States' 117th largest supplier of goods imports in 2008.U.S. goods imports

from Ethiopia totaled $152 million in 2008, a 72.5% increase ($64 million) from 2007.

Ethiopia is the five largest import categories in 2008 were: Spices, Coffee and Tea (coffee)

($77 million), Miscellaneous Grain, Seed, and Fruit (Niger seeds) ($34 million), Special

Other (returns) ($21 million), Knit Apparel ($7 million), and Preserved Food ($4

million).U.S. imports of agricultural products from Ethiopia totaled $121 million in 2008.

Leading category include: coffee (unroasted) ($76 million).

Investment

U.S. foreign direct investment (FDI) in Ethiopia (stock) was $2 million in 2007 (latest data

available), the same as 2006.Though most African nations are, in their modern form, less than

a century old, Ethiopia has been an independent state since ancient times, being one of the

oldest countries in the world.

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The country is a land of natural contrasts, with spectacular waterfalls and volcanic hot

springs. Ethiopia has some of Africa's highest mountains as well as some of the world's

lowest points below sea level.

Oil seeds in Ethiopia Oilseeds and Pulses in Ethiopia

Ethiopia produces large quantities sesame seed, Niger seed and linseed Ethiopia is the fifth

world producer in linseed and the sixth in sesame seed and an important producer of noug

(Niger seed). Ethiopia is the third world exporter of sesame seed after India and Sudan. And

Ethiopia is a leading exporter of Noug. The Ethiopian shares in world production of other

oilseeds are negligible. The fatty acid composition of Ethiopian oilseeds does not differ from

oilseeds produced in other countries: in this respect, they are not special. Sesame seed has the

highest value per ton of Ethiopian oilseeds, more than twice the value of linseed. World

sesame and olive oil import prices are the highest: 3 to 4 times the price of almost all other

edible oils. Ethiopian oilseeds and pulses are known for their flavor and nutritional value as

they are mostly produced organically. For instance, the Ethiopian white sesame seed is used

as a reference for grading in international markets. Ethiopia's major oilseed and pulse exports

include sesame seeds, nigger seeds, linseeds, sunflower seeds, groundnuts, rapeseeds, castor

oil seeds, pumpkin seeds, haricot beans, pea-beans, horse beans and chick peas.

Potentials to double oilseed production

Oilseeds production is labor intensive, low-input, and rain fed. The potentials to increase the

production are huge. Only 20% of the total available agricultural land, mainly in the

highlands, is used, of which only 7% for oilseeds. Productivity per ha can be doubled with

higher input levels like fertilizer and improved seeds and with adequate water management.

The abundantly availability of land and labor will not restrict the production growth and

hence export potentials. Higher production levels are also required, as the Ethiopian food

demand will increase at least one third until 2020 due to population and income growth.

Ethiopian Niger Seed

Niger is an oilseed (Noug) crop that is produced from Guizotia Abyssinica. Niger seed is

found mostly in the northern and central highlands at elevations between 1,800 and 2,500

meters. Since Niger seed is high in edible fat, oil and protein it is one of the main staple foods

in Ethiopia.

Outside of Ethiopia, Niger seed is widely used for industrial purposes such as soap making

and paints preparations and preparation of different types of emulsions. In addition, this seeds

are used for bird feeding since it contains oil which is as a source of energy by the birds.

Ethiopian Safflower Seed

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Safflower is an annual oilseed crop native to parts of Africa and Asia. The safflower plan

grows from 0.3 to 1.2 meters high and has flowers that may be red, orange, yellow, or white.

The dried flowers may be used to obtain textile dye. Oil is the other substance obtained from

the plan seed.

Safflower oil does not yellow with age; making is useful in preparing varnish and paint. Most

of the oil, however, is consumed in the form of soft margarines, salad oil, and cooking oil. In

addition, Safflower provides two other main products: meal, and birdseed.

Ethiopian Seasame Seed (Humera Type)

Sesame Seeds is the seed from Sesamum Indicum which has numerous types and varieties

belonging to the family Pedaliaceae. It is cultivated since ancient times, for its seeds, which

are used as food, flavoring and oil. The chief constituent of the seed is its fixed oil, which

usually amount to about 44 to 60 percent. Noted for its stability, the oil resists oxidative

rancidity.

The whitish Sesame Seeds produced in Ethiopia are called Humera type Sesame Seed. We

import sesame seeds that are cultivated with no application of chemicals which are produced

in the lowlands of Ethiopia. Humer type Sesame Seed contains 49.0-52.1% pure oil.

Water resources in Ethiopia

Except for the Democratic Republic of Congo, Ethiopia´s 12 major river basins represent the

second largest potential water resource in Africa. But its distribution is uneven: annual

rainfall in the parched north east region of the Ogaden, beside Somalia, is less than 200 mm

while over 2000 mm of rain falls in some parts of the lush Great Rift Valley in the south west.

Ethiopia has 12 river basins with an annual runoff volume of 122 billion m3 of water and an

estimated 2.6 - 6.5 billion m3 of ground water potential, which makes an average of 1575 m3

of physically available water per person per year, a relatively large volume. However, due to

lack of water storage infrastructure and large spatial and temporal variations in rainfall, there

is not enough water for most farmers to produce more than one crop per year. Frequent dry

spells and droughts exacerbate the incidence of crop failure and hence food in security and

poverty. Given and desert areas, it is evident that the promotion of water development

technologies, especially irrigation, at both small and large-scales, can provide an opportunity

to improve the productivity of land and labor and increase production volumes.

4.2.3 The profile of Kenya

Kenya's population has rapidly increased over the past several decades, and consequently it is

relatively young. Some 73% of Kenyans are under 30. In 80 years, Kenya's population has

grown from 2.9 million to 37 million. Kenya is a country of great ethnic diversity. Most

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Kenyans are bilingual in English and Swahili, also a large percentage speak the mother

tongue of their ethnic tribe.

U.S.-Kenya Trade Facts

Kenya is currently the United States' 102nd largest goods trading partner with $818 million in

total (two way) goods trade during 2008. Goods exports totaled $474 million while goods

imports totaled $344 million.

Kenya is eligible for trade benefits under the African Growth and Opportunity Act (AGOA).

In 2008 U.S. imports from Kenya under AGOA and the Generalized System of Preferences

were valued at over $255 million and include apparel, nuts, cut flowers, sporting equipment,

plastic goods, and jewelry. Apparel has traditionally made up the largest share of this

country's AGOA trade.

Exports

U.S. goods exports to Kenya in 2008 were $474 million, down 17.9 percent ($104 million)

from 2007.The top export categories (2-digit HS) for 2008 were: Aircraft ($124 million),

Machinery ($81 million), Electrical Machinery ($40 million), Vehicles ($33 million), and

Cereals (mostly grain) ($25 million).U.S. exports of agricultural products to Kenya totaled

$94 million in 2008. Leading categories were: vegetable oils (excluding soybean oil) ($22

million), and coarse grains ($21 million).

Imports

U.S. goods imports from Kenya totaled $344 million in 2008, a 5.6 percent increase ($18

million) from 2007.The five largest import categories in 2008 were Woven Apparel ($151

million), Knit Apparel ($95 million), Spices, Coffee, and Tea (coffee) ($43 million), Special

Other (returns) ($10 million), and Miscellaneous Food ($7 million).U.S. imports of

agricultural products from Kenya totaled $63 million in 2008. Leading categories include:

coffee (unroasted) $36 million and tea (including herb tea) ($13 million).

Investment

U.S. foreign direct investment (FDI) in Kenya (stock) was $193 million in 2007 (latest data

available), up 16 percent from 2006.

Oil seeds in Kenya

In Kenya agriculture accounts for about 24% of Kenya’s GDP with an estimated 75% of the

population depending on it either directly or indirectly. The sector grew by 1.5% in 2003, as

compared to 0.8% the previous supported and encouraged local farming of vegetable oil

crops and specifically palm oil. Kenya has been undertaking continued research through the

Vegetable Oil Protein System (VOPS). The objective of VOPS is to support an integrated,

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sustainable, applied research and extension program on the vegetable oil / protein system

aimed at the removal of constraints to domestic oilseed production, processing and use of

edible oils.

The range of oil crops in Kenya include sunflower, cottonseed, soya, groundnuts, rapeseed,

bambara nuts, castor, palm oil, sim-sim, linseed, nuts, grains, beans, seeds (e.g. Sesame),

maize germ, copra and olives amongst others.

Kenya is making efforts to satisfy the local and export demand for various vegetable oil

crops, and in spite of unreliable climatic conditions in recent years, production has remained

steady, with commendable growth in some of the crops. The total area covered by vegetable

oil crops has increased form 120,667 hectares in 2002 to 127,997 hectares in 2003. The

vegetable oil crop production corresponds to the land area under crop. In recent years, the

crop production has remained fairly stable, as described in the table below.

Table 5 production of vegetable oil crops in Kenya, 1999-2003(tones)

Oil seed item Years

1999 2000 2001 2002 2003

Cotton 9727 23000 19314 12808 17776

Coconut 57430 54930 58706 61052 56937

Cashew nuts 14615 14023 11653 7626 11075

Groundnuts 5861 5496 13910 14776 14094

Sunflower 3819 4025 4370 6820 8129

Others 1650 1267 1031 1047 1376

Total 93102 102741 108984 104129 109387

Local production of oil crops is projected at 10 million metric tones by the year 2005, of

which over 5 million metric tones are expected to come from the Lake Basin Region.

Water resource of Kenya

According to Nobel Laureate Wangari Maathai’s warning unless Kenyans are insistent in

protecting forests, the country will only have a third of the water it currently has by 2012.

Professor Maathai said if deforestation continues, availability of water in the country will be

extremely difficult.

“It is estimated that per capita need of water is 1700m³. Kenyans are using 600m³ which is

less than half but by the year 2012, unless we are very aggressive in protecting our forests

and harvesting rain water, it is estimated that Kenyans will have a per capita of 190 m³ which

would be precarious,” the Nobel Laureate said.

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She lauded the government for the commitment it had shown in the Mau forest conservation

efforts. The Mau forest complex is the largest water tower in the country occupying an area

of 400,000 hectares out of which 100,000 has been destroyed through illegal encroachment

and logging. The Mau has been at the centre of controversy for the past year with the

government efforts to reclaim the degraded forest being opposed by some leaders who are

demanding for compensation of all the settlers in the forest.

[Source: www.greenbeltmovement.org]

4.2.4 The profile of Nigeria

Nigeria is classified as an emerging market, and is rapidly approaching middle income

status], with its abundant supply of resources, well-developed financial, legal,

communications, transport sectors and stock exchange (the Nigerian Stock Exchange), which

is the second largest in Africa. Nigeria is ranked 37th in the world in terms of GDP (PPP) as

of 2007. The bulk of economic activity is centered in 4 main cities: Lagos, Kaduna, Port

Harcourt, and Abuja. Beyond these three economic centers, development is marginal.

Previously, economic development had been hindered by years of military rule, corruption,

and mismanagement, the restoration of democracy and subsequent economic reforms have

successfully put Nigeria back on track towards achieving its full economic potential as one of

the Major Economies in Africa. According to the Economist Intelligence Unit and the World

Bank, Nigerian GDP at purchasing power parity has nearly doubled from $170.7 billion in

2005 to 292.6 billion in 2007. The GDP per head has jumped from $692 per person in 2006 to

$1,754 per person in 2007.

During the oil boom of the 1970s, Nigeria accumulated a significant foreign debt to finance

major infrastructural investments. With the fall of oil prices during the 1980s oil glut Nigeria

struggled to keep up with its loan payments and eventually defaulted on its principal debt

repayments, limiting repayment to the interest portion of the loans. Arrears and penalty

interest accumulated on the unpaid principal which increased the size of the debt. However,

after negotiations by the Nigeria authorities, in October 2005 Nigeria and its Paris Club

creditors reached an agreement in which Nigeria repurchased its debt at a discount of

approximately 60%. Nigeria used part of its oil profits to pay the residual 40%, freeing up at

least $1.15 billion annually for poverty reduction programmes. Nigeria made history in April

2006 by becoming the first African Country to completely pay off its debt (estimated

$30 billion) owed to the Paris Club.

Key sectors: Nigeria is the 12th largest producer of petroleum in the world and the 8th largest

exporter, and has the 10th largest proven reserves. (Nigeria joined OPEC in 1971). Petroleum

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plays a large role in the Nigerian economy, accounting for 40% of GDP and 80% of

Government earnings. However, agitation for better resource control in the Niger Delta, its

main oil producing region, has led to disruptions in oil production and currently prevents the

country from exporting at 100% capacity.

Nigeria has one of the fastest growing telecommunications markets in the world, major

emerging market operators (like MTN, Etisalat, Zain and Globacom) basing their largest and

most profitable centers in the country. The government has recently begun expanding this

infrastructure to space based communications. Nigeria has a space satellite which is

monitored at the Nigerian National Space Research and Development Agency Headquarters

in Abuja.

The country has a highly developed financial services sector, with a mix of local and

international banks, asset management companies, brokerage houses, insurance companies

and brokers, private equity funds and investment banks.

Nigeria also has a wide array of underexploited mineral resources which include natural gas,

coal, bauxite, tantalite, gold, tin, iron ore, limestone, niobium, lead and zinc. Despite huge

deposits of these natural resources, the mining industry in Nigeria is still in it infancy.

Agriculture used to be the principal foreign exchange earner of Nigeria. At one time, Nigeria

was the world's largest exporter of groundnuts, cocoa, and palm oil and a significant producer

of coconuts, citrus fruits, maize, pearl millet, cassava, yams and sugar cane. About 60% of

Nigerians work in the agricultural sector, and Nigeria has vast areas of underutilized arable

land.

It also has a manufacturing industry which includes leather and textiles (cent red Kano,

Abeokuta, Onitsha, and Lagos), car manufacturing (for the French car manufacturer Peugeot

as well as for the English truck manufacturer Bedford, now a subsidiary of General Motors),

t-shirts, plastics and processed food.

The country has recently made considerable amount of revenue from home made Nigerian

Movies which are sold locally and internationally. These movies are popular in other African

countries and among African immigrants in Europe.

Demographics

Population density in Nigeria

Nigeria is the most populous country in Africa but exactly how populous is a subject of

speculation. The United Nations estimates that the population in 2009 was at 154,729,000,

distributed as 51.7% rural and 48.3% urban, and with a population density of 167.5 people

per square kilometer. National census results in the past few decades have been disputed. The

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results of the most recent census were released in December 2006 and gave a population of

140,003,542. The only breakdown available was by gender: males numbered 71,709,859,

females numbered 68,293, 08.

According to the United Nations, Nigeria has been undergoing explosive population growth

and one of the highest growth and fertility rates in the world. By their projections, Nigeria

will be one of the countries in the world that will account for most of the world's total

population increase by 2050.

Water resources in Nigeria

The rough estimate of Nigeria’s surface water is 224 billion m3, but the quantity of

groundwater remains unknown. The various demands are met partly from the approximately

224 billion cubic meter of water available annually from run-off of rivers in the eight

hydrological zones of the country and partly from the yet to be quantified groundwater

resources in aquifers. From these resources, it is estimated that by 1992, about 847 million

m3 will be required daily for use. Water for irrigation and fisheries development appears to

be the most abundant and crucial of the water uses because of their role in enhancing food

crop and fisheries production.

4.2.5 The profile of South Africa

South Africa is a nation of about 50 million people of diverse origins, cultures, languages,

and religions. The last census was held in 2001 and the next will be in 2011. Statistics South

Africa provided five racial categories by which people could classify themselves, the last of

which, "unspecified/other" drew negligible responses, and these results were omitted. The

2009 midyear estimated figures for the other categories were Black African at 79.3%, White

at 9.1%, Colored at 9.0%, and Indian or Asian at 2.6%.

By UN classification South Africa is a middle-income country with an abundant supply of

resources, well-developed financial, legal, communications, energy, and transport sectors, a

stock exchange that ranks among the top twenty in the world, and a modern infrastructure

supporting an efficient distribution of goods to major urban centers throughout the entire

region. South Africa is ranked 25th in the world in terms of GDP (PPP) as of 2008.

Advanced development is significantly localized around four areas: Cape Town, Port

Elizabeth, Durban, and Pretoria/Johannesburg. Beyond these four economic centers,

development is marginal and poverty is still prevalent despite government efforts.

Consequently the vast majority of South Africans are poor. However, key marginal areas have

experienced rapid growth recently. Such areas include Mossel Bay to Plettenberg Bay;

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Rustenburg area; Nelspruit area; Bloemfontein; Cape West Coast; and the KwaZulu-Natal

North Coast.

Unemployment is extremely high and income inequality is approximately equal to Brazil.

During 1995–2003, the number of formal jobs decreased and informal jobs increased; overall

unemployment worsened. The average South African household income decreased

considerably between 1995 and 2000. As for racial inequality, Statistics South Africa reported

that in 1995 the average white household earned four times as much as the average black

household. In 2000 the average white household was earning six times more than the average

black household. The affirmative action policies, called Black Economic Empowerment, have

seen a rise in black economic wealth and an emerging black middle class. Other problems are

crime, corruption, and HIV/AIDS. South Africa suffers from relatively heavy overall

regulation burden compared to developed countries. State ownership and interference impose

high barriers to entry in many areas. Restrictive labor regulations have contributed to the

unemployment malaise strong opposition from organized labor. From 2004 onward economic

growth picked up significantly; both employment and capital formation increased.

South Africa is the largest energy producer and consumer on the continent. South Africa is a

popular tourist destination, and a substantial amount of revenue comes from tourism. Among

the main attractions are the diverse and picturesque culture, the game reserves and the highly

regarded local wines.

The South African rand (ZAR) is the most actively traded emerging market currency in the

world. It has joined an elite club of fifteen currencies, the Continuous linked settlement

(CLS), where forex transactions are settled immediately, lowering the risks of transacting

across time zones. The rand was the best-performing currency against the United States dollar

(USD) between 2002 and 2005, according to the Bloomberg Currency Scorecard.

The volatility of the rand has affected economic activity, falling sharply during 2001 and

hitting a historic low of 13.85 ZAR to the USD, raising fears of inflation, and causing the

Reserve Bank to increase interest rates. The rand has since recovered, trading at 7.77 ZAR to

the dollar as of February 2010. However, as exporters are put under considerable pressure

from a stronger domestic currency, many calls for government intervention to help soften the

rand. [en.wikipedia.org]

Water resource in South Africa

Less than 20% of South Africa has a sub-humid climate with a mean annual rainfall higher

than 750 mm. The rest of the country has an arid to semi-arid climate with medium to high

water deficits relative to crop needs. The largest concentration of permanent irrigation in

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South Africa occurs in the 250-750 mm rainfall zones. The mean annual rainfall of South

Africa (497 mm) is well below world average. Surface water resources cover only 8.5% of

the low average annual rainfall of South Africa (497mm) finds its way to rivers as runoff. The

mean aggregate runoff is 53 000 m3. Some rivers are of joint interest to South Africa and

neighboring countries.

4.2.6 The profile of Sudan

Sudan is the largest and one of the most geographically diverse countries in Africa. Mountain

ranges divide the deserts of the north from the swamps and rain forests of the south, and the

River Nile splits the country from east to west. The economic dividends of peace could be

great. Sudan has large areas of cultivatable land, as well as gold and cotton. Its oil reserves

are ripe for further exploitation.

Population: 42.2 million

U.S.-Sudan Trade Facts

Sudan is currently our 152nd largest goods

trading partner with $148 million in total

(two way) goods trade during 2008.

Goods exports totaled $143 million.

Goods imports totaled $5 million.

The U.S. goods trade surplus with Sudan

was $138 million in 2008.

Sudan is a member of the Common Market for Eastern and Southern Africa (COMESA), the

largest regional economic organization in Africa. COMESA has 19 member states and a

population of about 390 million.

Water resources in Sudan

Internally produced water resources in Sudan are rather limited. The erratic nature of the

rainfall and its concentration in a short season places Sudan in a vulnerable situation,

especially in rain-fed areas. Surface water in Sudan comprises the Nile river system (Nilotic

water) and other, non-meiotic streams. 64 percent of the Nile Basin lies within Sudan, while

80 percent of Sudan lies in the Nile Basin. Local rainfall is the main source of the non-nilotic

streams and of the Bahr El-Ghazal basin, whereas rainfall over the Central African Plateau

(Equatorial Lakes) and over the Ethiopian-Eritrean highlands is the main source of the Nile

River system and other trans-boundary seasonal streams (Gash and Baraka).

Sudan shares parts of the following basins with neighboring countries:

The Nile Basin, 1 978 506 km2 (79.0 percent of the area of the country);

The Northern Interior Basins, covering 313 365 km2 in the northwest part of the country (12.5

percent);

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The Lake Chad Basin, in the west of the country along the border with Chad and the Central

African Republic, covering 101 048 km2 (4.0 percent); The Northeast Coast Basins,

representing a strip along the Red Sea coast of the country, covering 96 450 km2 (3.8

percent); The Rift Valley Basin, in the southeast part of the country at the border with

Ethiopia and Kenya, covering 16 441 km2 (0.7 percent).

The Nile system within Sudan comprises:

The Blue Nile, Sobat and Atbara Rivers originating in the Ethiopian highlands; the Bahr El

Ghazal Basin, an internal basin in southwest Sudan.

The average annual yield of the non-nilotic streams is estimated at about 7 km3/yr, of which 5

km3/yr are internally produced. The major streams are the Gash and Baraka in the east of the

country, both of which are characterized by large variations in annual flow and heavy silt

loads.

The major groundwater formations and basins are the Nubian Sandstone Basin and the Umm

Rwaba Basins. The Chazal, Sudd and Sobat swamps in the south of the country represent

major wetlands, from which evaporation is exceptionally high. According to an estimate from

1980, the extent of the Sudd is over 16 200 km2, but the surface area fluctuates with rainfall.

Sudan’s total natural renewable water resources are estimated to be 149 km3/yr, of which 30

km3/yr are internally produced. In a 10th frequency dry year, the internal water resources are

reduced to about 22.3km3/yr. Of the internal water resources, 28 km3/yr are surface water and

7km3/yr are groundwater, while the overlap between surface water and groundwater is

estimated at 5 km3/yr. As a result of the Nile Waters Agreement with Egypt, total actual

renewable water resources of the country amount to 64.5 km3/yr. Non-conventional water

sources are limited in Sudan. However, the desalination of seawater was introduced recently

in Port Sudan town. Fossil groundwater resources are estimated to be 16 000 km3.

4.2.7Availability of raw materials

Raw material for meat plant

Cattle population of different African countries

This plant uses cattle, sheep, and goat as major raw material. Cattle today are the basis of a

multi-billion dollar industry worldwide. The international trade in beef for 2000 was over $30

billion and represented only 23 percent of world beef production. (Clay 2004). The

production of milk, which is also made into cheese, butter, yogurt, and other dairy products,

is comparable in economic size to beef production and provides an important part of the food

supply for many of the world's people. Cattle hides, used for leather to make shoes, couches

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and clothing, are another widespread product. Since ASHRAF engaged in meat processing,

milk processing, skin and hide processing the data we are going to consider must include

information about the cattle, goat, sheep, etc.(see appendix 1)

4.2.8 Availability of water resources

Competition among agriculture, industry and cities for limited water supplies is already

constraining development efforts in many countries. As populations expand and economies

grow, the competition for limited supplies will intensify and so will conflicts among water

users.

Despite water shortages, misuse of water is widespread. Small communities and large cities,

farmers and industries, developing countries and industrialized economies are all

mismanaging water resources. Surface water quality is deteriorating in key basins from urban

and industrial wastes.

4.3 Data for particular site selection

Oromia regional state

The State of Oromia sprawls over the largest part of the country and at present comprises of

12 administrative zones and 180 woredas. Of the 12 zones, Bale and Borena account for

45.7% of the State's total area but only about 14% of the state's population. The Council of

the State of Oromia is the highest body of its administration.

Capital city

The capital city of the State of Oromia is Finfine (Addis Ababa)

Location

The State of Oromia borders Afar, Amhara and the State of Benshangul/Gumuz in the north,

Kenya in the south, The State of Somali in the east, the Republic of the Sudan and the state of

Benishangul/gumuz in the west, the State of Southern Nations, Nationalities and Peoples' and

the state of Gambella in the south.

Area

Based on the political map (1994 Population and Housing Census Commission, CSA), the

estimated area of the State of Oromia is about 353,690 Km2, and accounts for almost 32% of

the country.

Population

According to the 1994 census result the total population was 18,732,525 of which 9,371,228

were males and 9,361,297 females. The rural resident of the region accounts about 89.5% of

the total population. The religious composition of the population of the State indicated that

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44.3% were Muslims, 41.3% Orthodox Christians, 8.6% Protestants, and 4.2% followers of

traditional religions. The remaining 1.6% constitutes other religious groups. In urban Oromia

Orthodox

Christians constitute 67.8% of the population, followed by Muslims 24.0% and Protestants

7%.

According to the 1994 census result, the major ethnic groups within the State include 85%

Oromo, 9.1% Amhara and 1.3% Gurage (some of Sebatbet Guragie, Sodo Gurage and Siltie).

The remaining 4.6% constitute other ethnic groups.Oromifa (Oromigna), presently inscribed

with Latin characters, and is the official language. It consitutes 83.5% of the spoken

language. Other major languages are Amharic 11%, Guragigna (Sebatbet, Sodogna, Siltigna

and Hadiyigna together), 0.98%, Gedeogna 0.98% and Tigrigna 0.25% people. The main

agricultural crops include maize, teff, wheat, barely, peas, bean and various types of oil seeds.

Coffee is the main cash crop in the region. Oromia accounts for 51.2% of the crop

production, 45.1% of the area under temporary crops and 44% of the total livestock

population of Ethiopia.

Topography and climate

Oromia is a region of great physiographic diversity. Its landscape includes high and rugged

mountain ranges, undulaling plateaus, panoramic gorges and deep incised river valleys, and

rolling plains. Rising from less than 500 meters above sea level to high ranges that culminate

into Mt. Batu (4607 m) the highest peak of the region. Oromia is endowed with varied relief

features which in turn accentuate varied and amiable climatic condition and other rich natural

resource bases. Oromia is a remnant part of the high and extensive Afro-Arabian plateau

formed from continued uplift, rifting and subsequent volcanic piles. High relief of over

1500m is dominant. The climatic types prevailing in the region may be grouped into 3 major

categories: the dry climate, tropical rainy climate and temperate rainy climate. The dry

climate is characterized by poor sparse vegetation with annual mean temperature of 270c to

390c, and mean annual rainfall of less than 450 mm. The hot semi-arid climate mean annual

temperature varies between 180c and 270c. It has a mean annual rainfall of 410-820 mm with

noticeable variability from year to year. Highlands of Oromia experience temperate climate

of moderate temperature, (mean temperature of the coolest month is less than 180c) and

ample precipitation (1200-2000mm).

Rivers and lakes

Awash, Wabe-Shebele, Genale, Gibe, Baro, Dedessa and Guder are major rivers in the region.

River Awash, which is the longest river inside Ethiopia, is a source of great agro industrial

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and hydroelectric power. The crater lakes Green Lake (true to its name), Bishoftu, Kuriftu,

Bishoftu-Gudo, Hora-Kilole, Hora Arsedi, and the rift-valley lakes Ziway, Abiyata, Shala,

and Langano are found in this region. They have immense potential for recreation and fishery

development.

Fauna

There are around 800 bird species and more than 100 wild animals in the region. Endemic

wild animals such as the mountain Nyala, the Semien Red Fox and Menelik Bushbuck

inhabit the Bale mountains national park. The Awash National Park, the oldest and most

developed game reserve of its kind in Ethiopia, consists most of the Eeast African plain

games except Giraffe and Buffalo. It is home to the Oryx, Kudu, Caracal, Aardavark, Colobus

Monkey, Green Monkeys, Baboons, Leopard, Klipspringer, Hippo, Seemering's Gazelle,

Grevy's Zebra and Cheetah.

The Awash National Park is also a natural sanctuary of numerous bird-species, some of which

include Limburger, Wattle Crane, Angur Buzzard, Verreaux Eagle and long eared owls. Water

Fowls, Shore Birds and the colorful Ruddy Shelled Duck as well as the endemic Blue-winged

Goose are common in the marshy areas of the park.

Minerals

The explored mineral deposits of the region include: gold, platinum, nickel, iron-ore, soda

ash, diatomite, limestone, Feldspar, silica sand, dolomite, kaolin, granite and other non-

metallic construction materials. Gold mines at Adola and Laga Dambi (Borena zone) Neon

and Birbir river Valley (Wollega), and platinum at Yubdo (Wallowa) are being exploited.

Mining activities that are already underway include: gold (Borena and West Wellega), soda

ash in the Rift Valley, limestone, gypsum and clay soil (Muger), tantalum (at Kenticha)

ornamental and construction minerals (in Hararghe and Wellega) and ceramic in Borena.

Oromia has high potential for hydropower development.Un touched energy in geothermal,

natural coal, and solar are found in the region. At present, the greatest percentage of the

hydroelectric power of Ethiopia comes form Koka, Fincha, Melka-Wakena and Sor power

stations of the region. The total installed capacity of Integrated Crucial System hydro

electricity generating stations in the region amounts to 367,120 KW of which 360,200

(98.1%) and 6920 (1.9%) are hydro and thermal respectively. On the other hand, the total

installed capacity of self contained system (SCS) in 1993/94 is 12,759 kW of which 5,510

(43.2%) and 7,249 (56.8%) are hydro and thermal respectively. Gilgel Gibe another

hydroelectric power source is under construction. Generally, most of the rivers in the state

have immense hydroelectric power potential.

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Tigray Regional state

It is the northernmost of the nine ethnic regions of Ethiopia containing the homeland of the

Tigray people. It was formerly known as Region 1. Its capital is Mek'ele.to the west, the Afar

Region to the east and the Amhara Region to the south. Besides Mek'ele, other major towns

and cities in Tigray include Abiy Addi, Adigrat, Adwa, Aksum, Humera, Inda Selassie,

Korem, Alamata, Maychew, Wukro, Qwiha, and Zalambessa, as well as the historically

significant village of Yeha.

Demographics

Based on the 2007 Census conducted by the Central Statistical Agency of Ethiopia (CSA),

the Tigray Region has an estimated total population of 4,314,456, of whom 2,124,853 are

men and 2,189,603 women; urban inhabitants number 842,723 or 19.53% of the population.

With an estimated area of 50,078.64 square kilometers, this region has an estimated density

of 86.15 people per square kilometer. For the entire region 985,654 households were counted,

which results in an average for the Region of 4.4 persons to a household, with urban

households having on average 3.4 and rural households 4.6 people. The Region is

predominantly Tigrayan, at 96.55% of the population; other ethnic groups include Amhara

(1.63%), Irob or Saho (0.71%), Afar (0.29%) Agaw/Kamyr (0.19%), Oromo (0.17%), and

Kunama (0.07%). 95.6% of the population were Orthodox Christians, 4.0% Muslim, 0.4%

Catholics, and 0.1% Protestant.

In the previous census, conducted in 1994, the Region's population was 3,136,267, of whom

1,542,165 were men and 1,594,102 women; urban inhabitants numbered 621,210 or 14% of

the population. Ethnic groups present at the time of the earlier census included Tigrayan

(94.98%), 2.6% Amhara (2.6%), Irob (0.7%), and Kunama (0.05%). 95.5% of the population

were Orthodox Christians, while 4.1% and 0.4% were Muslim and Catholics, respectively. Its

working language is Tigrinya.

According to the CSA, as of 2004, 53.99% of the total population had access to safe Tigray is

bordered by Eritrea to the north (independent from Ethiopia since 1993), Sudan drinking

water, of whom 42.68% were rural inhabitants and 97.28% were urban. Values for other

reported common indicators of the standard of living for Tigray as of 2005 include the

following: 31.6% of the inhabitants fall into the lowest wealth quintile; adult literacy for men

is 67.5% and for women 33.7%; and the Regional infant mortality rate is 67 infant deaths per

1,000 live births, which less than the nationwide average of 77; at least half of these deaths

occurred in the infants’ first month of life.

Agriculture

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The CSA estimated in 2005 that farmers in Tigray had a total of 2,713,750 cattle

(representing 7.0% of Ethiopia's total cattle), 72,640 sheep (0.42%), 208,970 goats (1.61%),

1,200 horses (less than 0.1%), 9,190 mules (6.24%), 386,600 asses (15.43%), 32,650 camels

(7.15%), 3,180,240 poultry of all species (10.3%), and 20,480 beehives (0.47%).

Amhara regional state

The State of Amhara consists of 10 administrative zones, one special zone, 105 woredas, and

78 urban centres. Amharic is the working language of the state.

Capital city: The capital city of the State of Amhara is Bahir-Dar

Location

The Sate of Amhara is located in the north western and north central part of Ethiopia. The

State shares common borders with the state of Tigray in the north, Afar in the east, Oromiya

in the south, Benishangul/Gumuz in the south west, and the Republic of Sudan in the west.

Area

The State of Amhara covers an estimated area of 170,752 square kilometres.

Population

According to the 1994 census, the region's population was 13,834,297 of which 6,947,546

were males and 6,886,751 females. The urban residents of the State number 1,265,315 while

its rural residents were 12,568,982 (90% of the total population.) Based on the 1994 census

result, of the total population of the State, 81.5% were Orthodox Christians, 18.1% Muslims,

and 0.1% Protestants.

Regarding ethnic composition, the majority of the population is Amhara, which is estimated

to be 91.2%. In addition, the ethnic composition includes Oromo (3%), Agew/Awi (2.7%),

Kimant (1.2%), and Agew/Kamyr (1%).

Major economic activities

About 85% of the people are engaged in agriculture. The State is one of the major Teff (staple

food) producing areas in the country. Barely, wheat, oil seeds, sorghum, maize, wheat, oats,

beans and peas are major crops produced in large quantities.

Cash crops such as cotton, sesame, sunflower, and sugarcane grow in the vast and virgin tract

of the region's lowlands. The water resources from Lake Tana and all the rivers found in the

region provide immense potential for irrigation development. About 450,000 hectares of

arable land is irrigable and suitable, especially for horticultural development.

Topography and climate

The State of Amhara is topographically divided into two main parts, namely the highlands

and lowlands. The highlands are above 1500 meters above sea level and comprise the largest

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part of the northern and eastern parts of the region. The highlands are also characterized by

chains of mountains and plateaus. Ras Dejen (4620 m), the highest peak in the country, Guna

(4236 m), Choke (4184m) and Abune –Yousef (4190m) are among the mountain peaks that

are located in the highland parts of the region.

The lowland part covers mainly the western and eastern parts with an altitude between 500-

1500 meters above sea level. Areas beyond 2,300 meters above sea level fall within the

"Dega" climatic Zone, and areas between the 1,500-2,300 meter above sea level contour fall

within the "Woina Dega" climatic zone; and areas below 1,500 contour fall within the "Kolla"

or hot climatic zones. The Dega, Woina Dega and Kolla parts of the region constitute 25%,

44% and 31% of the total area of the region, respectively.

The annual mean temperature for most parts of the region lies between 15°C-21°C. The State

receives the highest percentage (80%) of the total rainfall in the country. The highest rainfall

occurs during the summer season, which starts in mid June and ends in early September.

Rivers and lakes

The State of Amhara is divided mainly by three river basins, namely the Abbay, Tekezze and

Awash drainage basins. The Blue Nile (Abbay) river is the largest of all covering

approximately 172,254 Km2. Its total length to its junction with the White Nile in Khartoum

is 1,450 Km, of which 800 km is within Ethiopia. The drainage-basin of the Tekeze River is

about 88,800 km2. In addition, Anghereb, Millie, Kessler and Jim are among the major

national rivers, which are found in this region.

Tana, the largest lake in Ethiopia is located at centre of the region. It covers an area of 3,

6000 km2. Besides, other crater lakes like Zengeni, Gudena Yetilba, Ardibo (75km2) and

Logia (35 km2) are small lakes that are found in the region.

The rivers and lakes of the region have immense potential for hydroelectric power generation,

irrigation and fishery development.

Livestock

The estimated livestock population of the region is 9.1 million cattle, 8.4 million sheep and

goats, 1.6 million equines, and 8.5 million poultry. About 40% of the livestock populations of

the country are found in this region. The huge livestock potential of this region gives ample

opportunity for meat and milk production, food processing as well as leather and wool

production.

Fauna

Walia ibex, Semien fox, Gelada-baboon, Grey Duiker, Klipspringer, Hyenas and Corocodile

are among the twenty-one species (three endemic) that are found in the region, especially at

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the Semien mountain national park. Wild fowls, Francolins, Pelicans, Cranes, Ibises, and

Stocks are among the birds that are found in the region.

Minerals

The Sate of Amhara has mineral resources such as coal, shell, limestone, lignite, gypsum,

gemstone, silica, sulfur and bentonite. Hot springs and mineral water are also found in the

region.

Tourism and heritage

The 12thcentury Rock-Hewn churches of Lalibela and the palaces in Gondar the world known

heritages of the country are found in this region. The traditional mural paintings and hand

craft, the preserved corpse of the royalty found in the ancient monasteries in Lake Tana, as

well as the Semien mountains national park, which shelters the endemic Walia ibex are

spectacular tourist attractions, three tourist attractions found in the region are registered in the

UNESCO list of world heritages. Besides these known heritages, the Blue Nile Falls, the

caves and unique stones in northern Showa, and the Merto Le Mariam church are special

tourist attractions.

Investment

Until May 1998, 362 investment projects have been licensed in the State of Amhara. The total

amount of capital invested is 2.8 billion Birr. These investment projects will provide

employment opportunity for 75,883 persons. Licenses were given in the areas of agriculture,

industry, hotel and tourism, real estate commerce and social services. Among the main

projects include the steel and brewery factory in Kombolcha.

Southern Nations, Nationalities, and People's Region (SNNPR)

It is one of the nine ethnic divisions of Ethiopia. It comprises the former Regions 7-11. Its

capital is Hawassa.

The SNNPR borders Kenya to the south, the Ilemi Triangle (a region claimed by Ethiopia,

Kenya, and Sudan) to the southwest, Sudan to the west, the Ethiopian region of Gambela to

the north, and the Ethiopian region of Oromia to the north and east. Besides Hawassa, the

region's major cities and towns include Arba Minch, Bonga, Chencha, Dila, Irgalem, Mizan

Teferi, Sodo, Wendo, and Worabe.

Demographics

Based on the 2007 Census conducted by the Central Statistical Agency of Ethiopia (CSA),

the SNNPR has an estimated total population of 15,042,531, of whom 7,482,051 were men

and 7,560,480 women. 13,496,821 or 89.72% of the population are estimated to be rural

inhabitants, while 1,545,710 or 10.28% are urban; this makes the SNNPR Ethiopia's most

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rural region. With an estimated area of 112,343.19 square kilometers, this region has an

estimated density of 133.9 people per square kilometer. For the entire region 3,087,567

households were counted, which results in an average for the Region of 4.9 persons to a

household, with urban households having on average 4.2 and rural households 4.9 people.

55.5% of inhabitants were Protestants, 19.9% Orthodox Christians, 14.1% Muslim, 6.6%

followers of traditional religions, 2.4% Roman Catholics and 1.5% all other religious

affiliations.

In the previous census, conducted in 1994, the region's population was reported to be

10,377,028 of whom 5,161,787 were men and 5,215,241 were women. At the time of the

census, the rural population of the Region accounted for 93.2% of the total population.

Semien Omo, Sidama, and Gurage were the three zones with the highest population. The

population is concentrated mostly in eastern, northern and central part of the SNNPR while

the western and southern part of the Region is sparsely populated. 34.8% of inhabitants were

Protestants, 27.6% Orthodox Christians, 16.7% Muslim, 15.4% followers of traditional

religions and 3% Roman Catholics.

The SNNPR Water Resources Bureau announced that as of the fiscal year ending in 2006,

they had increased the area of the Region that had access to drinkable water to 54% from 10-

15% 15 years ago. In August 2008, the head of public relations for the Bureau, Abdulkerim

Nesru, announced that 94 million Birr had been spent to further increase the availability of

drinkable water in the Region from 58% in the previous year to 63.6%. Priority was given to

certain Zones, such as Sidama, Welayta and Gurage, as well as the Alaba special woreda and

several resettlement areas.

Values for other reported common indicators of the standard of living for the SNNPR as of

2005 include the following: 10.7% of the inhabitants fall into the lowest wealth quintile; adult

literacy for men is 57% and for women 22.4%; and the Regional infant mortality rate is 85

infant deaths per 1,000 live births, which is greater than the nationwide average of 77; at least

half of these deaths occurred in the infants’ first month of life.

Availability of raw materials

Raw material for meat plant

It is known that this plant processes the meat of cattle, goat, and sheep. In addition the

company plans to process the meat of fish as well.

Trends and growth rates of livestock population by region, and share of regions

The cattle population of Ethiopia has been increasing during 1997–2005. During this period,

the cattle population increased from 35 million to about 39 million heads of cattle. In the

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same period, the sheep and goat population of the country increased from about 13 million to

about 18 million and from 10 million to nearly 15 million, respectively.

However, there have been fluctuations in the size of the livestock population in the Country.

Both positive and negative annual growth rates were recorded. Interestingly, the sign of

growth rates are consistent across cattle, sheep and goats. Negative growth rates were

observed for 1998/99, 1999/2000 and 2002/03. The highest growth rate was observed for

goats during 2001/02, which showed an annual growth rate of nearly 40%, followed by sheep

(25%) and cattle (15%). Rainfall was high during 2001/02. The average annual growth rates

for the period were 1.6, 5.75, and 7.54% for cattle, sheep and goats, respectively.

1. Cattle

The average cattle populations for the 1997/98–2004/05 period were about 17.0 million, 9.6

million, 7.9 million and 2.6 million, for Oromia, Amhara, SNNPR and Tigray regions,

respectively. Cattle population showed an increasing trend in all regions during the period

(Graph 1). In Tigray, cattle population rose from about 2.6 million in 1997/98 to 2.7 million

in 2004/05, while the population in Amhara rose from about 8.8 million in 1997/98 to 9.7

million in 2004/05. Similarly, in Oromia, the cattle population rose from about 15.5 million in

1997/98 to 17.2 million in 2004/05, and the population in SNNPR, rose from about 6.8

million in 1997/98 to 7.9 million in 2004/05.

Annual growth rate of cattle population

Cattle population grew by annual average rates of 1.33, 1.74, 1.80 and 2.45% in the regions

of Tigray, Amhara, Oromia and the SNNPR, respectively, during 1997/98–2004/05. However,

there were negative growth rates in cattle population in some years in the regions, notably in

Tigray during this period (Graph 2). More than 10% drop in cattle population was observed

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Graph 1Trends in cattle population of the four regions (1997/98-2004/05)

SNNP (21%)


in Tigray during the 1997/98 and 1999/2000, and 2002/03. All three years were years of low

rainfall. In Amhara, negative growth rates of 7 and 11% were recorded 1999/2000 and

2002/03, respectively. In Oromia, negative growth rates were recorded in 1999/2000 and

2002/03. The SNNPR recorded negative growth rate only in 2002/03.

Graph 2 growth rate of cattle population in the four regions 1998/99-2004/05

The share of the cattle population of the four regions

The average regional shares in cattle population in the total cattle population of the country

during the period were about 7, 26, 46 and 21%, for Tigray, Amhara, Oromia and the

SNNPR, respectively (diagram 1). The shares of the regions remained fairly constant during

the period. The average annual growth rates of the shares ranged only between –0.07 to

0.06%. TIGRAY (7%)

AMHARA (26%)

OROMIA (46%)

Diagram 1 share of four regions in cattle population

2. Sheep population

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The average sheep populations for the 1997/98–2004/05 period were about 5.0 million, 4.7

million, 2.5 million and 0.8 million, for Oromia, Amhara, SNNPR and Tigray regions,

respectively. Sheep population showed an increasing trend in all regions but Tigray (graph 3).

In Tigray sheep population dropped from about 1.1 million in 1997/98 to 0.73 million, in

2004/05, while in Amhara, the population rose from about 4.2 million in 1997/98 to 6.4

million in 2004/05. Similarly, sheep population rose from about 5.1 million in 1997/98 to 6.4

million in Oromia, and from 2.1 million to 3.3 million in SNNPR. Sheep population grew by

annual average rates of –5.05, 8.46, 5.33 and 9.14% in Tigray, Amhara, Oromia and SNNPR,

respectively. Although all regions recorded negative growth rates of sheep population in some

years during the period, very high negative growth rates were recorded in Tigray (Figure 9).

Growth rates of about –18% and –33% were recorded in Tigray in 1998/99, 1999/2000,

respectively, while positive growth rates of more than 11% were recorded in the years of

2000/01 and 2004/05, the years of high rainfall. The fluctuations in sheep population in

Tigray is indicative of the need to look very carefully at the reasons for the drop fall in

population.

Graph 3 trends in percentage of sheep population in four regions

The average regional shares in sheep population in the total sheep population of the country

during the period were about 6, 36, 39 and 19% for Tigray, Amhara, Oromia and the SNNPR,

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respectively (Figure 10). The share of Tigray in sheep population among the regions dropped

by an average annual growth rate of –9.11%, while the shares of Amhara, Oromia and the

SNNPR increased by annual average growth rates of 1.52, 0.13 and 2.74% (graph 3).

Meat and/or live animal exporters

Six export abattoirs are currently operational in Ethiopia, viz. Elfora Bishoftu (located in

Bishoftu, Oromia), Elfora Melge Wondo (located in Wondo, SNNPR), Elfora Metehara

(located in Metehara, Oromia); Helmex (located in Bishoftu, Oromia); Modjo Modern Export

Abattoir (located in Modjo, Oromia); and Luna Export Abattoir (located in Modjo, Oromia)

(Figure 21 ). Three new export abattoirs are under establishment, viz. Modjo Organic Export

Abattoir (located in Modjo, Oromia); Abergelle International Livestock Development PLC

(located in Mekelle, Tigray); and ASHRAF Industrial Group (located in Bahir Dar, Amhara).

The establishment of the Modjo Organic Export Abattoir is completed, and the plant is ready

for operation.

1. Bahir Dar ASHRAF industrial group

2. Bishoftu ELFORA

3. Mekele DEJANA ENDOWMENT

4. Melge Wondo ELFORA

5. Metehara ELFORA

6. Mojo MOJO MODERN ABATTOIR

7. Mojo LUNA EXPORT ABATTOIR

8. Bishoftu HELMEX

9. Mojo ORGANIC

Source: Berhanu Gebremedhin,* Dirk Hoekstra and Samson Jemaneh

Table 6 Regional oil seed production in 2005/06 (*1000 tons)

Regions Niger

seed

Linseed Groundnut safflower sesame Rapeseed Soybeans

Tigray 4 5 0 0 49 0 0

Amhara 60 19 1 5 49 18 0

Oromia 73 100 25 0 37 6 3

Beneshangul 7 0 6 0 13 0 0

Others 3 2 2 1 1 0 1

Ethiopia (Total) 147 126 34 6 149 24 4

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Source CSA Agricultural sample survey 2006

Table 7 Ethiopian production regions of sesame seed (2005/2006)

Farms in

Hectare (ha)

Area production Yield

(kg/ha)ton % ton %

Tigray 104,680 60,148 0.29 49,215 0.33 818

Amhara 210,344 62,279 0.30 48,970 0.33 786

Oromia 210,010 57,745 0.28 36,998 0.25 641

Beneshangul 64,446 23,280 0.1 13,131 0.09 564

Others 9,749 1,701 0.01 547 0.00 322

Ethiopia 601,229 205,153 100 148,861 100 726

Source CSA Agricultural sample survey 2006

Data about selected towns of four regions

Nekemte

The oil seeds production of Oromia region is concentrated in Wollega, so Nekemte is the

better among the listed towns by oil seeds, which is the main raw material of the company.

Borena (Yabello)

This area is dominant in cattle population as well as a well known test in export market. As a

result investing in Borena will be beneficiary to investors in meat processing and related

sectors.

Mojo

Mojo is a central place for both Borena and Wollega; these two areas are dominant in cattle

and oilseed respectively. It is also accessible to Bole international airport. As a result Mojo is

a better place among the above listed towns of Oromia region.

Areas (towns) under consideration in Amhara region

1. Bahir dear

2. Gonder

Bahir dar city

This city has an international airport called “Ginbot-20 international air port”.

The largest lake, Lake Tana is found in Bahir dar city. This helps the company to join fish

farming industry.

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The existence of Abay River and Lake Tana around the city encourages the establishment of

meat plant in the city.

Gondor

Around this city cattle is dominantly reared and it accounts 18% of its regional cattle

population.

Oil seed is grown around Metema and Quara they are near to Gonder.

Bahir dar is better than Gonder due to the following reasons:

Even though Gonder has enough raw materials, international air transportation is not

available in the city. Being in Bahir dar is good in such a way that raw materials from

humera, Metema, Wollega, Borena, etc. can be easily accessible.

The selected towns within Tigray region are:

Humera

This area is well known by its oil seed production .The whitish Humera type is known in the

World market for its` sweet taste. This is a mixed farming zone with crop and livestock

production. The economy is centered on the production of sesame. Sesame is a high-value

oil crop that is cultivated for export to Israel, Turkey, the Middle East, Japan and

China. Over 400 large-scale investors are each cultivating an average 600 hectares of sesame.

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CHAPTER FIVE

Data analysis

5.1 Introduction

At this stage the researchers are going to analyze the collected data in detail. The data will

be analyzed in two phases; the one which is helpful to analyze ASHRAF at general level will

be discussed in chapter. On the other hand, the data which is helpful for analyzing the site at

particular level will be discussed in the next chapter.

5.2. General Site selection suitability Analysis

By considering ASHRAF as global company, we are going to determine the optimum

location of ASHRAF. The evaluation could be taken quantitatively as well as qualitatively to

determine the optimum site to which ASHRAF should be located, by considering different

general site selection criteria.

Due to time constraint, and Shortage of reliable data we are enforced to study ASHRAF in

Africa level rather than world wide. It is also impossible to evaluate each African country

with a number of site selection criteria. Consequently, we decided to evaluate sample African

countries from each corner of the continent. The sample countries are selected based on their

richness in natural resource and manpower.

5.2.1 The selected evaluation criteria

Due to shortage of data we consider only the following major site selection criteria.

i. Availability of raw materials,

ii. Availability of water,

iii. Proximity to the market,

iv. Airport by fleet size,

v. Security of foreign investors, and

vi. Others

From the above site selection criteria the criterion others includes the number of factors,

which influences the selection of site. Such as:

Political stability

Availability of recreational center,

Availability of efficient and cheap labor,

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Availability of power and fuel

Weather and climatic condition

Availability of infrastructure etc.

We have given different weight for each evaluating criteria based on their relative importance

for the industry to be established.

The selected countries for this evaluation are:

Egypt

Ethiopia

Kenya

Nigeria

South Africa

Sudan

Evaluation of the above countries will be done based on the collected data and the selected

site selection criteria.

2.8.2 Evaluation technique

The technique chosen for the evaluation is semi-quantitative technique, which enables to

identify the best location by considering different factors having differed level of importance

against a diversified alternative locations.

While analyzing the general suitability of site for ASHRAF different scores for each country

have been given based on their relative capacity to satisfy the desirability. A country with a

better status in satisfying the criteria will get a score of 10 and countries which deviate from

the high scorer will get their value accordingly. One can get score of 10 whenever it satisfies

the criteria in every aspect better than the others. The appropriate country is the one that has

got a better average score.

Table 8 Priorities for the general site

Given priorities for each criteria Weight Availability of raw material 25%Availability of water resource 20%

Proximity to market 15%

Air transportation by fleet size 10%

Keeping the security of foreign investors 10%

Others 20%

5.2.3 Weighted average value method

The calculation for the weighted average can be determined in terms of the above given

priority for each site selection criteria as per their importance and the value scored for a

certain criteria.

The weighted average can calculated as follows:

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Weighted Average value=score*given weight

Y =∑i=1

n

C i∗¿

Where, Y=weighted average

Ci=is score for the ith criteria

Ni=weight for the ith criteria

n=number of evaluating criteria

Example 5.1: the calculation of weighted average for Ethiopia

By taking the data from the table below

Y Ethiopia =9.4*0.25+9*0.20+6.5*0.15+8*0.10+8.5*0.10+ 15.5*0.20

=9.875

Table 9 country against site selection criteria

Evaluating criteria Availability

of rawAvailability of Water

Proximity to market

Air transportation by fleet size

Keeping Security of investors

Others Weighted average

Material resource Value

Weight 25% 20% 15% 10% 10% 20% 100%Country ScoreEgypt 3.5 2 3 9.5 4 16 6.275Sudan 9 8 5.5 7 6 12 8.375Kenya 6 6.2 4 6.4 4.5 14.5 7.33Ethiopia 9.4 9 6.5 8 8.5 15.5 9.875South Africa

3.5 5.3 1.5 9.5 2 16.5 6.61

Nigeria 6.8 3 2 4.5 3 14 6.15

5.2.4 Results

Based on the data provided in the last chapter (data collection section) of this paper the

comparison of appointed countries is made as shown in the above table. As the result of this

comparison the following generalizations are derived:

1. Ethiopia has got first rank by cattle population in Africa. Ethiopia is one of the top

ranking countries in Africa and among the first ten in the world in terms of livestock

resource. The livestock resources of the country include 35.095 million cattle, 20

million sheep and 16.95 million goats (20003). Traditional methods of animal

husbandry render current output per unit of domestic breed of livestock too low.

Therefore, investment opportunities are potentially attractive for modern commercial

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livestock breeding, production and processing of meat, milk and eggs. Investment

opportunities of significance potential are also available in ostrich, civet cat and

crocodile farming.

2. Ethiopian oilseeds and pulses are known for their flavor and nutritional value as they

are mostly produced organically. Ethiopia produces large quantities of sesame seed,

Niger seed and linseed .Ethiopia is the fifth world producer in linseed and the sixth in

sesame seed and an important producer of Noug (Niger) seed so that Ethiopia is a

leading exporter of Noug. Ethiopia is the third world exporter of sesame seed after

India and Sudan. For instance, the Ethiopian white sesame seed is used as a reference

for grading in international markets.

3. Ethiopia is the second richest country in Africa by its water resource next to Congo.

Ethiopia has 12 river basins with an annual runoff volume of 122 billion m3 of water

and an estimated 2.6 - 6.5 billion m3 of ground water potential, which makes an

average of 1575 m3 of physically available water per person per year, a relatively

large volume. Even the life of the countries around Ethiopia like Egypt, Sudan etc

depends on the natural water resource of Ethiopia.

4. It gets 31st rank among 175 countries by keeping the security of foreign investors.

5. It gets the 4th rank by the fleet size of its airlines.

5.3 Data analysis for Particular site

In the last section the site selection suitability of ASHRAF at the general level has been

analyzed. Ethiopia was found as a reasonable site for the company to be located here. The

next task will be analyzing the suitability of ASHRAF at particular level. At this stage the

researchers are going to evaluate the suitability of the company to being in Bahir dar city by

comparing it with other regions in accordance with particular site selection criteria.

For the evaluation purpose the following regions are going to considered, which are relatively

developed:

Oromia

Amhara

Tigray

Southern nations, nationalities and peoples (SNNP)

The reasons why we consider only the above regions are explained as follows:

1. Lack of proper infrastructure in developing regions such as:

Standard concrete road

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Hospitals

Telecommunication network, etc

2. Scarcity of water resources for industrial use

3. poor professional employee attraction

4. Some regions are located at the border line of the country. This results in political unrest in

the area due to the movement of militant groups.

The following are decisive factors for particular site selection:

Availability of raw material

Availability of water

Proximity to the market

Transportation

Topography of land

5.3.1The preferred cities from each regions

In order to evaluate the particular site for ASHRAF we have taken two more towns from the

selected region and those towns compete with other to represent their region at the country

level.

The selected towns within Oromia region are:

1. Nekemte

2. Yabello

3. Mojo

4. Ziway

The company needs to have the following requirements:

I. The raw material should be near enough to the plant site

II. The town should be at reasonable location from the target market

III. The town better to have suitable Lake for fish farming, since the company wants

to process the meat of fish in the future.

IV. Since the product is perishable the town must be as close as possible to an

international airport

V. Since meat plant wants large amount of water the town must be rich by water

resources.

5.3.2 Evaluation technique

A similar technique is used here as that of general site selection suitability analysis.

BDU, 2010,IED


Table 10 given priorities for particular site selection criterion

Weighted average value

The calculation for the weighted average can be determined in terms of the above given

priority for each site selection criteria as per their importance and the value scored for a

certain criteria.

The weighted average can calculated as follows:

Weighted Average value=score*given weight

Y =∑i=1

n

C i∗¿

Where, Y=weighted average

Ci=is score for the ith criteria

Ni=weight for the ith criteria

n=number of evaluating criteria

Example5.2: The calculation of weighted average of Bahir dar.

By considering the values from the table given below

YBahirdar=7*.25+10*.20+9*.15+10*.10+8*.15+9*.15

=8.65

BDU, 2010,IED

Given priorities for each criteria Weight


Availability of water resource

Proximity to market

Proximity to Airport

Labor availability

Others

25%

20%

15%

10%

10%

15%


Table 11 Evaluation of particular site selection

Criteria

weight in %

Towns/Cities Mojo Yabello Ziwa

y Nekemte

Bahir dare

Gonder Humera

Allamata

Hawassa


25 7 7 6 8 7 8 6 7 5

water availability

20 8 5 9 7 10 6 5 6 8

proximity to market

15 7 3 5.5 6.5 9 8 6.5 3.5 6

Proximity to airport

10 9 4 8 6 10 7 6 4 6

Labor availability

15

9 5 7 8 8 6.5 5.5 6 10

Others 15 7 4.5 9.5 7 9 5.5 4.5 6 9.5 Weightedaverage

100 7.70 5.025 7.40 7.225 8.65 6.90 5.575 5.675 7.275

5.3.3 Results

As it has been calculated in the above table and the qualitative data collected so far showed

that Bahir dar is the suitable site for this company due to the following facts:

1. Being in Bahir dar it is possible to access the raw materials that found in Gonder,

Humera, Wollega and other parts of the country in addition to the raw materials found

around this city.

2. The Ginbot 20 international airport of Bahir dar is the other main factors why

researchers deduce Bahir dar city as a suitable for the company. This encourages the

establishment of the company in Bahir dar. Because this airport helps to transport the

finished products of the company to Asian Arab countries, and African Arab countries

as well as to transport the raw material for PVC plant from out side of the country and

different spare parts for maintenance or replacement of worn out parts.

3. This city is rich in water resources so that it enables the company to get water easily

for their industry to process the raw materials like cattle, sheep, goat, etc. since Lake

Tana, the largest Lake of the country is found here. The presence of Lake Tana

encourages the establishment of fish farming industry. As a result the city is found to

be suitable for ASHRAF.

BDU, 2010,IED


4. The presence of state owned oil crushing company, which is ready for privatization, is

the other important factor for the plant to be located in this city.

5. Topography of land in Bahir dar is equally leveled, this minimizes the cost of land

preparation and it is comfortable for the civil work as well as for the installation of

machineries and equipment.

6. Bahir dar is located at a place, which is at optimal distance from Sudan through which

the other potential market for meat products will be easily accessed by truck

transportation.

Conclusion and recommendation

BDU, 2010,IED


REFERENCE AND BIBILIOGRAPHY

Reference

1. Plant layout and material handling/S.C.Sharma Delhi: Khanna, 2003.

2. Plant layout and material handling/R.B Chudary A.R.N Tagore 2001.

3. http://www.businessweek.com/smallbiz/content/dec2008/sb20081229_004920.htm

4. http://images.businessweek.com/ss/08/12/1230_state_tax/index.htm

5. http://en.wikipedia.org/wiki/Category:Airlines_of_Africa

6. Water resource planning by Martin Hvidt Odense University, Denmark

7. http://www.fao.org/nr/water/aquastat/data/factsheets/aquastat_fact_sheet_dza.pdf

8. http://geography.about.com/od/urbaneconomicgeography/a/sectorseconomy.htm

9. Heading towards commercialization? The case of live animal marketing in Ethiopia

10. www.fao.org/nr/water/aquastat

11. www.country-data.com

http://example.com/

http://example.com/

http://images.businessweek.com/ss/08/12/1230_state_tax/index.htm


Appendix-A

Detailed site selection guide line

In order to select particular site the questions that must be addressed are as follows;

1. Labor availability

Have you made labor availability survey?

Unemployed available workers Country wide potential

employment Total employed in manufacturing

Can you complement rather than compete with existing industry

Does adequate labor pool exist within reasonable radius?

2. Influence of local industry on labor

Have you considered the principal community factors which will affect your proposed?

Wage rate and working condition?

Wage rates, by skills. Working hours. Shift patterns. Degree of competition

3. Maturity of citizens

Do local civic and religious leaders have enlightened and progressive attitude toward business and industry?

Do local citizen really encourage new industry? Are there community educational programs directed at young people?

4. Management potential

Are specialized skills available, such as scientific and technical man power? Have local people responded well to in-plant training? Can prospective workers be expected to grow into added responsibilities?

5. Electric power

Can power system fill your needs? Can distribution lines handle a plant expansion program? Is history of stoppages favorable? Are you planning to manufacture part of or all of your own electric power?

6. Fuel oil and natural gas

Which source of fuel available in the area? Is oil or natural gas a competitive fuel in the area?

7. Water supply

Are water requirements compatible with water sources? Is there an adequate public water supply? If you must exploit a private source; is the quantity adequate? If steams are the logical source will the flow be adequate during dry months?


If ground water is the source, are there legal restrictions on withdrawal and recharging rates of flow?

8. Water pollution

Do you have problem with waste disposal? Can streams nearby accommodate waste water?

9. Transportation

9.1. Rail transportation

Is your location near the route of new crack merchandise trains?

9.2. Truck transportation

Is the site at or near a trucking gateway to reduce in-transit times? Are state loss as to truck size and weight restrictive? Will minimum weight restrictions by truckers affect you adversely? Are there good access roads, bridges and culverts or trucks?

9.3. Air transportation

If your products consist of high-grade commodities or expeditable merchandise, can you ship by air?

Is site near a good airport? Are rates and schedules of scheduled air lines satisfactory for air shipment? Are there good air-freight forwarders nearby? Do you needed air feeder lines exist, or promise to exist?

10. Raw material supply

Do you need raw materials close enough? (Especially if perishable, bulky, or low in value)

Are raw material sources reliable? Will they be available, or are they

committed to others? Are the prices satisfactory? Are terms of sale and delivery

right? Is cost of transport to site

reasonable? Do you see evidence of depletion

or shortage of resources (minerals, timber, soil, water, others)?

Is rapid transportation from suppliers by truck or other means available?

Have you attempted to forecast new sources of raw materials?

Are multiple supply areas available in case of short supply from one?

Are you close enough to key suppliers for easy consultation?

Are raw materials so remote that you must consider building homes and facilities for workers to attract them?

Are your raw materials from outside or within the country? If it is within

the country in which region or Woreda it is

Specifically found?


11. Residential housing

Are there enough rental properties for new employees? Are there plenty of houses available in the several cost brackets that will appeal to

new salaried employees? Are community housing starts keeping up with expected growth? Does extent of home ownership among hourly type of employees indicate establish

community pride?12. Education

Are there sufficient schools, and adequately staffed? What about vocational, trade, apprentice training opportunities? Are they oriented

toward your requirements? Are college facilities near enough for offering special courses to key personnel?

13. Health and welfare

Are there satisfactory medical and health services? Hospital? General practitioner? Is there an adequate public health program?

14. Culture and recreation

Are there sufficient numbers of mosques, churches of varying denominations? Are there quality and variety of fraternal organizations attractive to potential new

comers? Is community near to resort areas?

15. General community aspects

Are there good hotels, motels, and restaurants? Are shopping and commercial districts well laid out for packing facilities and easy

flow of traffic? Are there adequate local banking facilities?

16. Commercial services

Are there the following commercial services?

industrial repair shops electric motor maintenance

industrial distributors lubricants engineering department supplies postal services,etc

17. Specific site considerations

Has character of site been thoroughly explored? Typical factors;

Topography Size of area available for purchase Layout and orientation

Drainage Freedom from flooding Any utilities already in place Subsoil, excavation, and

foundation considerations Any pipelines or other


utilities to be relocated

18. Police aspects 19. Fire aspects

Does police department have high standards of personnel, equipment, training, morale?

Are there satisfactory policing arrangements outside city limits?

Is incidence of crime as low as or lower than in surrounding area?

Is judiciary system well organized?

In case of serious fire, are adjacent communities near enough to send apparatus?

Is site within fire hydrant limits? If so are mains sized adequately?

Is water pressure and reserve capacity sufficient for your needs?

20. Roads and highways

Does local highway system, have adequate inter connections with national network? Are roads kept free of ice snow?

21. Sewage

Is potential site within pickup limits? Does community have an active and forward-looking city planning commission? Have zoning sights been properly set in connection with new federal highway

program? Can you expect protection against undesirable neighbors? Is expected training likely to keep in line with desired increased quality of services? Do state corporate taxes compare favorably with those of your competitors

elsewhere? Does state has income taxes on individuals? Does state grant permission to deduct federal income tax? 22. State business climate Does state have a good reputation regarding attitudes towards industry? Are state salaries attractive enough to get and keep good people? Do state courts have a progressive viewpoint towards illegal strikes and picketing? Has history been satisfactory regarding state protection in law enforcement when

required locally? Have you checked with other industries to determine presence of hidden restrictive

state laws? Does state have an active and progressive development commission?


APPENDIX-B

Table 12population of cattle, sheep, goat, pig and chicken (000)

Region/country Cattle Sheep Goats Pigs Chickens Total

TLUs

Central Africa

Cameroon 5 900 3 880 3 850 1 430 31 000 5 499

Central African

Republic

2 951 211 2 473 649 4 040 2 504

Congo, Dem.

Republic

900 930 4 400 1 100 21 000 1 593

Dem. Republic of

Congo,

75 115 285 45 1 900 121

Gabon 35 195 90 212 3 100 126

Sub total 9 861 5 331 11 098 3 436 65 840 9 843

East Africa

Burundi 329 165 594 61 4 400 362

Djibouti 269 463 511 286

Eritrea 1 550 1 570 1 700 4 600 1 458

Ethiopia 35 095 22 000 16 950 25 55 400 29 021

Kenya 13 392 5 800 7 600 110 30 000 11 036

Rwanda 726 290 634 160 1 400 646

Somalia 5 000 13 000 12 000 4 3 100 6 032

Sudan 35 000 42 500 37 500 41 000 32 910

Tanzania, United

Rep. of

14 350 4 150 9 900 345 28 000 11 799

Uganda 5 700 1 970 3 650 960 23 000 4 974

Subtotal 111 411 91 908 91 039 1 664 190 900 98 524


Southern Africa

Angola 3 900 336 2 000 800 6 650 3 190

Region/country Cattle Sheep Goats Pigs Chickens Total

TLUs

Botswana 2 380 250 1 835 7 3 500 1 911

Lesotho 510 720 560 63 1 700 515

Malawi 750 110 1 260 230 14 700 855

Mozambique 1 310 124 390 178 27 000 1 274

Namibia 2 294 2 174 1 732 19 2 250 2 023

Swaziland 660 26 438 31 1 000 525

Zambia 2 273 120 1 069 324 28 000 2 055

Zimbabwe 5 500 525 2 770 272 15 000 4 384

Subtotal 19 577 4 385 12 054 1 924 99 800 16 731

West Africa

Benin 1 438 645 1 183 470 29 000 1 573

Burkina Faso 4 550 6 350 7 950 590 21 000 4 943

Chad 1 330 1 370 1 070 275 29 000 1 520

Côte d’Ivoire 5 582 2 432 4 968 23 4 800 4 700

Gambia 360 190 265 14 680 307

Ghana 1 273 2 516 2 739 352 17 467 1 662

Guinea 2 368 687 864 54 8 900 1 913

Guinea-Bissau 520 280 315 340 850 500

Liberia 36 210 220 120 3 500 127

Mali 6 058 5 975 8 525 65 24 500 5 949

Mauritania 1 395 6 200 4 133 20 4 100 2 055

Niger 2 174 4 312 6 469 39 20 000 2 808

Nigeria 19 830 20 500 24 300 4 855 126 000 20 592

Senegal 2 960 4 300 3 595 330 45 000 3 378

Sierra Leone 400 350 190 52 6 000 404

Togo 223 740 1 110 850 7 500 586


Subtotal 50 497 57 057 67 896 8 449 343 497 53 016

Sub-Saharan Africa 191 346 158 682 182 086 15 474 700 037 178

114

APPENDIX-C

Ease of doing business in few African countries

The following table provides some information on doing business in some African countries. These countries are Ethiopia, Kenya, Sudan, and Egypt. The comparison is based on overall ease of business, starting-business, dealing-with licenses, employing workers, registering property, getting credit, protecting investors, and trading across borders in the above countries. Kenya performs slightly better, but Ethiopia performs better than Sudan and Egypt

Table 13 selected business indicators in 2006: ranking out of 175 countries

Source: World Bank. Doing business in 2006

Criteria Ethiopia Kenya Sudan Egypt Overall ease of business

97 83 154 164

Starting a business 59 24 92 169Dealing with licenses 79 68 164 144 employing workers 146 115 29 141

Registering property 83 33 143 159Getting credit 118 60 142 118Protecting investors 31 127 93 144Trading across borders 79 67 158 157


APPENDIX-D African air lines ranking by fleet size

Rank Internal renewable water resources

Water resources including river flows from other countries

(millions) (....m3 per caput....)Egypt 29 934Saudi Arabia 21.3 103 103Libyan Arab Jamahiriya 6.5 108 108United Arab Emirates 2 152 152Jordan 4.6 153 240Mauritania 2.6 154 2843Yemen 16.2 155 155Israel 6.4 260 335Tunisia 9.8 384 445Syrian Arab Republic 17.7 430 2008Kenya 34 436 436Burundi 7.4 487 487Algeria 33.1 570 576

Ranking Country Airline Fleet size 17 Morocco Atlas Blue 1017 Nigeria Aero Contractors 1017 Tanzania ZanAir 1017 Kenya African Safari Airways 1016 Kenya 748 Air Services 1116 Angola TAAG Angola Airlines 1115 Madagascar Air Madagascar 1315 Sudan Air West 1315 Tunisia Nouvelair 1314 Libya Libyan Airlines 1514 Mauritius Air Mauritius 1514 Nigeria Arik Air 15

14 NigeriaDornier Aviation Nigeria 15

14 South Africa Comair 1513 Libya Buraq Air 1713 South Africa Nationwide Airlines 1713 South Africa Global Aviation 17

12Democratic Republic of Congo Hewa Bora Airways 18

11 Algeria Tassili Airlines 1911 Kenya Blue Bird Aviation 1911 South Africa South African Express 1910 South Africa Naturelink 219 South Africa National Airways 228 South Africa Rossair 237 Kenya Kenya Airways 246 Sudan Badr Airlines 296 Angola Sonair 295 Tunisia Tunisair 315 Libya Libyan Arab Air Cargo 314 Ethiopia Ethiopian Airlines 323 Algeria Air Algérie 342 Morocco Royal Air Maroc 431 South Africa South Africa Airways 491 Egypt Egypt Air Airlines 49

Final Final

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