Feasibility Study Document

On the title Agricultural Machinery Importing and Manufacturing Industry

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1. Industry /Field Visit Report
The assigned feasibility study committee members have visited 7 organizations which are
engaged in either agricultural machinery manufacturing, assembly or import operations. The
detail visit report for each organization is described below:
1.1 Ethiopian Agricultural Business Corporation
Ethiopian Agricultural Business Corporation was established on 22th December 2015 at Addis
Ababa, Ethiopia. The corporation was established by merging five enterprises namely Ethiopian
seed enterprise, Agricultural equipment and technical service share company, Agricultural inputs
supply enterprise, Natural gum processing and marketing enterprise, and Agricultural
mechanization service enterprise in to aforementioned name. The purpose of merging these
enterprises were to purchase domestic and international agricultural inputs, cater agricultural
mechanization services, conduct agricultural land development studies, design and manufacture
agricultural machineries, and work with educational institutions. The corporation had been
launched with a capital of about 2.44 billion ETB, and this capital was estimated to be returned
after seven years span. Fortunately, the corporation had returned the invested money in five years
of operation time which indicates that the corporation has met its objectives.
Nowadays, the corporation is engaged in import and rent service activities. It imports agricultural
machines, implements and its accessories such as four-wheel tractor, Mold Board plough, disc
plough, Rotavator, heavy disc harrow, light disc harrow, chisel plough, ditcher, scraper,
mechanical leveler, automatic scraper, seed drill, planter, fertilizer applicator, disc rigger,
knapsack, motorized knapsack, Plane sprayer and baller. These machineries are imported in
either partial or complete assembled form. Partially assembled imported machines include tractor
and tillage whereas completely assembled imported machines include combine-harvester
machine. The corporation gives training on how to operate the machines, and maintenance
services to its customers/users. Furthermore, they do casual field visit to assess the performance
and usage of machineries they have sold so as to take relevant feedback thereby further
correction can be done on imported agricultural machines. Besides, they provide rental service
for all machines and implements mentioned above.
As per report of company’s official, the facts that motivate them to be engaged in this business
include to run the business in integrated manner with optimal number of manpower, modernize
the current traditional way of farming, and manage those dispersed company tasks into one
institution managerial system.
The customers of this corporation for imported agricultural machineries are investors who are
working in large scale farming in Benishangul, Arsi , Ballie, Hummera and Gambla;
Governmental organizations such as sugar factors and road construction companies; farmer
unions and individuals located at different location of the country. These customers get the
required agricultural machines either in purchase or rent services. As per report of the
corporation’s officials, tractors with 100-130 HP ,and 130 HP and above are ordered frequently
by farmers and sugar factors respectively. In addition, customers have shown tremendous interest
in Disc plough and light disc harrow with number of discs from three to five.

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The corporation imports the abovementioned agricultural machineries, for both import and rent
business operations of the corporation, from Italy, China, Brazil and South Africa.
Even though the corporation has been in the market for the last six years and able to generate
income of 9.77 billion ETB in the recent period , it has encountered challenges such as lack of
Agro-ecological selection, tractor and implement compatibility, unable to predict soil
compaction period, problem in selection of the right tractor for farm area, skill gap for the state
of the art farming technologies , lack of technicians, and unable to create awareness for end users
about additional functions of the provided machines.
Finally, officials of the corporation have given the following recommendation on how we can
work together with them. Accordingly, they have requested the feasibility study team’s help in
the following interventions; -
 Service life of the agricultural machines and replacement policy
 Frequency of soil compaction
 Technology selection
 Teaching curriculum of universities should be revised (practical oriented curriculum)
 Studying good brand name that will substitute the existing one.
 Basic skills and knowledge required for the driver(operator)
 Preparing standards for agricultural machineries.
 Dealing about how to use obsolete machines

Figu
re 1. Field Visit of Ethiopian Agricultural Business Corporation

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Figure 2. Discussion with official of Ethiopian Agricultural Business Corporation

Figure 3. Some of Imported and Assembled Tractors by Ethiopian Agricultural Business Corporation

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1.2 MOENCO - Kality machinery branch
MOENCO Kality machinery was founded before 60 years ago during Emporer Haile Silassie.
Since this year the company has been importing and selling Toyota car to its customers. Besides,
the company’s shareholders had discussed and agreed to import Ford tractors to Ethiopia to
modernize the traditional farming practices especially in ploughing. MOENCO is making an
outstanding contribution to the Ethiopian Agricultural sector through the supply of heavy
machineries, equipment's and combines. In addition, the company has grown to be exclusive
dealer to the manufacturing companies. The main objectives of this company these days are sells,
maintenance services, and providing spare parts activities. The agricultural Machinery & service
they provide best align with their vision of “enabling the mobility of Ethiopia's Economy”. Their
also provide a 1-year warranty service after sell.
Currently, the company imports 4-wheel tractor, disc plough, baller, reversible mold board
plough, laser land leveling machine, sowing machine (pneumatic seed drill), combine harvester,
cultivators, and spray boom. These imported items are from Holland, England, Belgium and
Turkey. The imported 4-wheel tractor has a house power of 75 to 300 HP. The imported items
will be tested and checked according to company’s standard. Besides, the company tests the
functionality of the sold item/equipment/ before it’s delivered to customers. Furthermore, the
company provides operational trainings on tractor and combine harvesters for end users. The
trainer should have minimum professional certificate of diploma.
As per officials report, the main customers of the company are farmers’ unions, investors and
large scale farmers located in Balle and Arisi. They also added that it would be better if
compatible technology for small scale farming is selected, for instance TC- 530 tractor is
suitable for small scale farming.
The officials recommended us to collaborate on the following issues with them. These are:
 Students of agricultural mechanization and related fields should join one of the available
agricultural companies during their internship period.
 Adopting Brazil, Indian and Thailand agricultural practices and machineries.
 Studying the compatibility of plant science with machinery.
 To manufacture easily affordable machines for the farmer.
 Selecting the proper harvesting machines based on Ethiopian terrain.

Figure 4. Field Visit of MOENCO - Kality machinery branch

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Figure 5. Discussion with official of MOENCO - Kality machinery branch

Figure 6. Visiting Tractor maintenance work shop- MOENCO - Kality machinery branch

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 Figure 7. Combine - harvester ready for sales (MOENCO - Kality machinery branch)

1.3 AMIO Engineering PLC

AMIO engineering PLC was established in 2002 G.C. This company was established by two
engineering professionals who had experience in electromechanical works. The company had
been launched with initial capital of 100,000 birr. It has commenced by design and
manufacturing different types of plastic molds and die sets, then after two years it has changed
its role which was to import as well as manufacture irrigation technology, agricultural
equipment, implements, agro-processing and construction machineries. As per the company
official, it is the first private company which import, manufacture and export its products. Some
of the company’s products have been sold to Tanzania, Congo and South Sudan so far beside
local customers. The product quality and rate of production have been improved and so does the
number of customers. The company envisages to ensure sustainable development of rural areas
of the country so as to support existing economic development by manufacture and supply
irrigation equipment, construction machineries and agricultural equipment.

AMIO Engineering PLC import and export agricultural, industrial and construction machineries
include tractor, combine harvester, water pump, multi crop thresher, agro-processing equipment,
milk processing equipment, mold board plough, disc plough, disc harrow, planter, seed rill,
boom sprayer, reaper harvester, rotavator, chisel plough, trans-planter, sub-soiler, maize sheller,
baller, oil processing materials and honey processing equipment. Most of these agricultural
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machineries are being imported from India. Except combine harvester and tractor all imported
machineries are being assembled in the company’s workshop and final functional inspection and
testing would be done before it is delivered to end user. User training of a machine would be
given to the customers for few days to make sure the operator follows the right procedure to
manipulate it thereby the machine can serve for longer time. In addition, field visit to observe the
usage and performance of machines sold would be done to take important feedback for further
correction on imported machines.

The company designs and manufactures equipment such as mold board plough, disc plough, disc
harrow, planter, animal feed chopper, tomato chopper, seed drill, trans-planter, line seeder, wheat
thrasher, teff thrasher, barley thrasher, maize sheller, and baller. Apparently, among the
machineries the company provides corn sheller, reaper, seed drill, planter are the most wanted
types of machines by the customer. The customers of this company are governmental
institutions, NGOs, Agro-processing companies, farmers’ union and individual farmers.

The main export items of the company’s product are treadle pump type. The production quality
of its product is high as frontier manufacturing technology machines such as CNC machine,
plasma cutting, shearing machine and lathe machine are used in the process. Workers of this
company are of mechanical engineering, industrial engineering and agricultural engineering
graduate who have the intended skill and knowledge to design and manufacture different
agricultural equipment.

The company official whom we talked to, have identified some challenges they have faced at
which our engagement as university is required. The first thing officials suggest us to deal with is
to do proper promotions to products, imports and exports of AMIO engineering. The officials
feel that the company is less popular even though their equipment is of highest quality which suit
the requirements of specific terrain of the country. Secondly, annual meeting needs to be
arranged thereby the company can discuss the existing problems to the university as a result
teaching curriculum can be revised to better fit company’s requirement. The officials stressed
that the university has the responsibility to host this meeting and invite to company to have skill
and knowledge exchange among them. Finally, the officials depicted that the company’s door
will be opened for the university scholars if they what to do research together with AMIO
engineering PLC or need to order equipment for production.

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Figure 8. Discussion with official of AMIO Engineering PLC

Figure 9. Visiting manufactured products (Maize Sheller) of Amio Engineering PLC

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 Figure 10. Amio Engineering Machine shop

1.4 Kotebe Metal Tool Factory

Kotebe Metal Tool Factory was established in 1969 in Addis Ababa ,Yeka sub city, by Polish
and Ethiopian investors as privately limited company. It was owned and managed by the
founders for six consecutive years. Unfortunately, It couldn’t stay as private company for long
period. In 1975, the factory was confiscated by the Derg region and organized under the ex-
National Metal Works Corporation (NMWC). A sickle manufacturing plant was added to the
factory in 1984 by NMWC.

The Kotebe Metal Tool Factory was transferred to private company named as Nigat Mechanical
Engineering S.C. by current government in 2006. Nigat Mechanical Engineering S. C. (Nigat)
was legally formed in August 2004 under the laws of Ethiopia. Its founding members are all
professionals, the vast majority being practicing mechanical engineers. It is administered by a
board of directors elected from among the shareholders. The Board is primarily composed of
mechanical engineering professionals and businesspersons with long and distinguished careers in

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government and private industries. Nigat had 29 share holders on initial start-up and this has
currently increased to 156.

Nigat was established with a subscribed capital of Birr 1.04 million and this has been increased
to Birr 80 million with a current paid-up capital of Birr 44 million. Nigat was initially formed,
eyeing the government’s plan to privatize numerous establishments, especially factories it had
under its holding. It acquired Kotebe Metal Tools Factory (KMTF) from the government as of
March 1, 2006. Nigat has taken a number of measures to rehabilitate and expand the factory
since its acquisition.

Currently, Kotebe Metal Tool Factory is engaged in manufacturing of hand tools such as pick
axes, axes, pick axes, sickle,hammers and crow bars required by the construction and agriculture
sectors.

As per report of factory’s official, high level of inspiration to put figure print in leveraging
knowledge and technology transfer, improving economic contribution of manufacturing sector ,
and production cost reduction were some of the goals that encouraged owners to open the metal
tool factory and make it operational. However, the current status of the factory doesn’t allow it to
achieve these motivations due to lack of staff who are expert in running and maintaining
available machines. Besides, the factory is unable to get required raw materials from abroad due
to lack of hard currency.

Customers for the abovementioned manufactured products of the factory are farmers’ union,
individual farmer, governmental and non-governmental agencies, and investors who are
participating in large scale farming. Until recent period, the required raw materials are imported
from China particularly from Alibaba Company.

Finally, the official of the factory has listed down the current challenges of the factory that
require assistance from our university in general and from the feasibility study committee team
in particular. These are: -

 Knowledge and Technology transfer particularly with respect to state-of-the-art

technology.
 Unable to characterize metal scraps obtained from various Ethiopian steel industries.
 Strategies assist to encourage work culture of employees.

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  Strategies help to create industries which will be supplies of one another.

Figure 11. Kotebe Metal Tool Factory

Figure 12. Discussion with official of Kotebe Metal Tool Factory

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 Figure 13. Products and workshop of Kotebe Metal Tool Factory
1.5 Selam Tsehay Röschli Industrial & Agricultural Engineering (TRIAE)

Tsehay Roschli Industrial and Agricultural Engineering Enterprise (Selam children village) is a
non –governmental, faith-based organization with a vision of enabling orphans and destitute
children to improve their lives and holistically develop as self- sufficient citizen. To achieve this
vision, the enterprise has decided to be involved in income generating activities. Income
generation activities include transferring appropriate technologies in the area of building,
steelwork, renewable energy, hydropower equipment, transport, agro-equipment and wood work.
The enterprise has worked on the manufacturing of various products and machineries for the last
thirty years.

Nowadays, the enterprise is engaged in manufacturing of agricultural machineries such as rice

polisher, multi-crop mechanical thresher, pedal driven maize sheller, rope and washer pump, and
others. In addition, it involves in giving driving license for those who are interested to get vehicle
driving training and license certificate.

As per report of enterprise’s official, contributing invaluable role for the country in transferring
of technologies, and to be a center for technology incubation were agendas which inspired the
enterprise for its real existence.

Thus, customers for the abovementioned manufactured products of the enterprise are farmers’
union, individual farmer, governmental and non-governmental agencies, and investors who are
participating in large scale farming.

1.6 Ultimate Motors PLC

Ultimate Motors was established in 1997 as an importer for vehicles and later broadened its
activities onto construction machinery, agricultural equipment and energy products. Currently,
Ultimate Motors employs over 130 people and is well-known for its reputable service. The
company engages in import of agricultural machines, equipment and their spare parts. It imports
agricultural machines, implements and its accessories such as four-wheel tractor, Mold Board
plough, disc plough, sesame seed drill, combine harvester and thresher. Moreover, it imports

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completely assembled machineries, then they test and check with the pre-delivery manufacturer
checking format.

The company imports the brands of Case, Newland and Class combine harvesters. It provides 1-
year service after sell warranty. The company also imported 35- 230 HP different brands of 4-
wheel tractors. Besides, the company manufactures tractor trailer. Officials of the company
confirms that the demand of the tractor has been increasing since recent period across all regions
of the country. In addition, the officials told the committee member that the cost of tractors
which is assembled there in the company has no significant difference for customers with
completely assembled imported one.

Some of the less complex technologies such as seed drill, thresher and disk plough, have been
imported from abroad are expensive; fortunately, they can be manufactured locally by
considering agro-climatic conditions of the Amhara region in particular and the country in
general.

The customers of this PLC for imported agricultural machineries are farmers from Humera, Arsi
and Bale, and investors who are involved in large scale farming. These customers purchase their
required agricultural machines from this company. According to company representatives
(officials), farmers have shown interest in the Landni tractor due to its lower complexity for
users and availability of spare part and compatibility with the country’s agroecology which
results the tractor brand name “ Landni” to be well known to the farmers.

Finally, company officials made the following recommendation on how we can work with them.
Accordingly, they requested the feasibility study team’s help in the following activities:

 Service life and replacement policy for agricultural machinery

 Frequency of soil compaction
 Technology selection
 Need to review university curriculum (practical-oriented curriculum)
 Look for good brand to replace the existing one.
 Development of standards for agricultural machineries.
 Propose guidelines for the quality control of agricultural machines for the importation
agricultural machines

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  Government intervention on stabilize overvalued agricultural machineries
 Government intervention to stabilize overvalued cars.
 Development affordable machines for the farmers

Figure 13. Discussion with official of Ultimate Motors PLC

1.7 Adama Agricultural Machinery Industry ( Ethio-Engineering group)

Adama agricultural machinery industry is part of the Ethiopian engineering group which is
located 90 km East from Addis Ababa in the city of Adama in the Oromiya regional state. It was
first established as the Nazareth tractor assembly plant in 1984 through a technical and economic
cooperation agreement between the Government of Ethiopia and the former Union of Soviet
Socialist Republics. The company renamed the Adama Agricultural Machinery Industry in
1992. It was transferred to the Metal and Engineering Corporation (METEC) in 2010 and its
name was changed to Ethio-Engineering group in 2018. The Ethiopian engineering group
consists nine factors named as Adama agriculture machinery industry, Akaki basic metal
industry, Hivrey manufacturing, and machine-building industry, Metals and fabrication industry,
Bishoftu automotive industry, Ethiopia power engineering industry, High tech engineering
industry, Infrastructure machinery engineering industry, and Ethiopia plastic industry. These
Engineering group families have a great role and responsibility in importing and assembling
agricultural machineries and equipment that are helpful to transform the traditional farming
system into modern and industrialized agriculture.

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As per discussion with the general manager of the company, the company is engaged in import,
assembly (fully and semi-assembly), maintenance activities, and trainings. The company
provides maintenance services both in company’s work shop and in the field (farming area). The
import and assembly (fully and semi-assembly) agro-mechanization machineries include walking
tractor (from 8-35 hp for low level, from 60-80 hp medium level and above 80 hp high level), 4-
wheel tractor (, disc harrow for different patches, disc plough for different Hp), water pumps and
thresher.

As per general manager report, customers for abovementioned machines and equipment are
regional government institutions, farms’ union, and state-owned enterprises for agricultural
purposes, water irrigation, construction enterprises, investors who are engaged in large scale
farming, road construction enterprises, sugar factors and individuals farming.

From the company profile, the imported and assembly (fully and semi-assembly) agro-
mechanization types of equipment are walking tractor (from 8-35 hp for low level, from 60-80
hp medium level and above 80 hp high level), deferent models of the tractor, disc harrow for
different patches, disc plough for different Hp and water pump types of equipment. As per report
by the official, the sold products to customers are transported either by the company’s
transportation system or by the customers.

Nowadays, the company is attempting to promote its products mentioned above using electronic
media, banners, and dealers at large. They have different dealers at different locations and they
promote based on agreements of 2% commission from each sold product.

At the end, officials of the company have given important recommendations and requested us on
how we as university members, can work together with them in the area of preparing a manual
for their designed and prototyped products. They said that, “we are mechanics, not researchers,
and then we can make things based on design but not on work paperwork”. The second is, “we
have no standards, procedures, documentation works to be approved by the quality associations
for mass production”.

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Figure 14. Field visit of Adama agricultural machinery manufacturing industry

2. Existing Situation Analysis

The feasibility study team has conducted existing situation analysis in terms of two perspectives
namely Amhara region and company’s perspectives. To conduct this analysis the team has
visited Amhara regional state agricultural office and companies which are engaged in importing,
assembling, manufacturing and servicing agricultural machineries and equipment. The detail
situation analysis for both perspectives is written down below:

2.1 Amhara region perspective

As per Central Statistical Authority (CSA, 2003) data report, the region has a total of 3.58
million hectares of land which is suitable for ploughing. Of 3.58 million hectares of land,
…….% of land is suitable for agricultural mechanization. However, the number of agricultural
machines and equipment available for agricultural mechanization are not sufficiently provided to
stakeholders. Even though the interest of using agricultural machines and equipment has grown,
the supply of these equipment is incredibly poor because of unavailability of agricultural
machines and equipment manufacturing, assembling and importing companies across the region.
In addition, the focus and initiatives for modernization of agriculture sector by agriculture office
of the region have been significantly low in practice. Fortunately, these days, the office is giving

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emphasis to establish agricultural machines and equipment manufacturing companies in the
region particularly at Woreta, Debre Birhan, D/markos and Kombolcha in the future. The reasons
for limitation in use of agricultural machines and equipment by farmers are unaffordable price
these machines, and absence of skilled manpower for maintenance services. Apparently, there
are a few companies importing agricultural machines and equipment for aforementioned
purposes. Nevertheless, these machineries being imported are not fit to the requirements of
Ethiopian agro-ecologies and lack standards for agricultural machines and equipment at country
level. Because of these reasons, the imported machines are not that much effective for their
intended functions and service time. As a result, the end users (customers) are not willing to
purchase these imported machines with high price, and thereby the distribution and use of
agricultural mechanization machines are limited across the region.

Currently, large scale farmers /investors/ are using rice trans-planter, combine harvester, tractor
and implements. However, these machineries are inaccessible to all medium and small-scale
farmers, as per report of Amhara regional state agriculture office. Besides, the intensity of usage
of agricultural machineries has been increased from year to year, for instance, in 2013 E.c.
234,205 hectare of land has been tilled using tractors. Likewise, the demand for harvester
machines has been rising in recent period. Because of unavailability of enough combine-
harvester in the region, farmers have attempted to get them via rent from Oromia region.

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Figure 15. Discussion with official of Amhara regional state agricultural office

2.2 From company’s perspective

As per information provided in website of Ethiopian agriculture mechanization, the practice of

agricultural mechanization in Ethiopia was less than 1% of the total agricultural land ploughed
using traditional farming practices. However, in recent years the interest of using agricultural
machinery has changed relatively. The feasibility study committee members have visited seven
agro mechanization companies during the field visit. Generally, the existing situation analyses
with respect to the selected companies are described as follows.

Most of visited companies import the final assembled products from different countries around
the world. A few of them are also involved in semi-assembly works. The parts/components/
required for semi-assembly operations are imported from manufacturing companies abroad. On
the other hand, few of them are engaged in manufacturing of agricultural machines and
equipment. The existing analysis is done under three categories. These are manufacturing,
assembling, and importing and selling companies.

I. Companies engaged in manufacturing of agricultural machines and equipment

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 Among the visited companies by the feasibility study team two of them namely Amio agriculture
mechanization and equipment manufacturing company and Selam Tsehay Röschli industrial &
agricultural engineering are engaged in manufacturing of selected agricultural machines and
equipment important for farming practices. The committee has observed that the first company
(Amio) is well organized and structured manufacturing company. It manufactures different
agriculture mechanization machinery and equipment with relatively low Hp such as mold board
plough, disc plough, disc harrow, planter, animal feed chopper, tomato chopper, seed drill, trans-
planter, line seeder, wheat thrasher, teff thrasher, barley thrasher, maize sheller, and baller. Most
of the raw material used is from local products. CNC machines, different welding machine,
molding machine and guided vehicle are the main machines this company is using now for
manufacturing purpose. Besides, like Amio Engineering PLC, Selam Tsehay Röschli industrial
& agricultural engineering Company manufactures different types of agricultural machinery for
local markets. Among these two companies Amio manufacturing industry is suggested to be our
best beach mark for the feasibility study. Because it manufactures agricultural machines that
required relatively lower Hp and portable agricultural machines
II. Companies engaged in Semi-Assembling agricultural machinery
Among the visited companies by the feasibility study team two of them namely Ethiopian
Agricultural Business Corporation and Adama Agricultural Machinery Industry are engaged in
semi- assembling of selected agricultural machines and equipment important for farming
practices. These companies import different parts of agricultural machines that are required for
semi- assembly operations from abroad. As per our observation, both companies deliver their
products to local markets. In addition, they provide maintenance services for their customers.

III. Companies engaged in importing of agricultural machines and equipment

Out of the visited companies by the feasibility study team two of them namely MOENCO and
Ultimate motors PLC are engaged in importing of selected agricultural machines and equipment
important for farming practice. Unlike to Ultimate motors PLC, MOENCO imports highly
sophisticated mechanization machinery and equipment with expensive cost.

3. Challenges observed during our visit

The following challenges have been encountered in the abovementioned companies. These are:
 Machineries have high price which are not affordable for individual farmers.

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  Almost all of the farmers have small scale farm land which is not suitable for those
machineries either imported, semi- assembled or manufactured machines which needs
large scale farm land (cluster farming).
 The transition of agro-mechanization has changed from animal driven plough to
automated tractors, and operation of these machines has become challenge for the
farmers.
 Lack of skilled maintenance operator
 Deficiency of spare parts during maintenance and service.
 Due to the companies are found in Addis Ababa they cannot address the need of the
regional farming practice.
4. Identified Gaps

After conducting assessment of existing situations in terms of Amhara region and visited
company perspectives, basic limitations (gaps) are identified. Shortage of agricultural
machineries and equipment across the region, unable to design and manufacture agriculture
machines that best fit with the agro-ecology of the region, and unfordable price, particularly for
ordinary farmers who are engaged in small scale farming, is set to the imported agricultural
machineries and equipment are the main gaps identified by the assigned feasibility study
committee.

Even though the Amhara regional state agricultural office has been trying to distribute
agricultural machineries and equipment such as 4- wheel tractor across the region, it couldn’t
address all farming areas that are suitable for agricultural mechanization activity. As described
above, a few numbers of agricultural machines are in the hand of the office. As a result, the
office couldn’t deliver the required machines to its customers (individual farmers, farmers’
union, NGOs , Government organizations and large scale farmers) at the right quantity and time
across all Zones of the region. Besides, the imported agricultural machines and equipment are
not designed by considering topography of the region, and the machines are giving service for
short period of time. In addition, the price of these imported machines is not affordable for most
farmers of the region.

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Thus, the abovementioned gaps of the region related with agricultural machineries and
equipment would be potential business opportunity for those who are inspired to address these
gaps.

5. Selected agricultural machines and equipment for the intended business

Agriculture sector is the back bone of the national development in developing countries like
Ethiopia as the sector feeds hundred million people every day. However, agricultural technology
development of Ethiopia is far behind which needs a lot effort to emulate with developed
countries agricultural industry. Agricultural mechanization is just at its embryonic stage in our
country. Currently, the agricultural policy of Ethiopia has shown great initiatives to modernize
traditional way of farming particularly ploughing, planting and harvesting by developing and
adapting agricultural technologies that focus on the development of agriculture and needs of the
beneficiaries as result the productivity, food security and sustainable economic development
would be enhanced.

The faculty of mechanical and industrial engineering planned to take part in agribusiness to
contribute to the national agriculture development plan. This business will be involved in
manufacturing, importing and distribution of agricultural products such as machines,
implements, tractors, combine harvester and farm related equipment.

The existing agricultural mechanization level has been assessed by conducting interviews to
Amhara regional agricultural office officials and agricultural machines and equipment company
officials. Both the company and regional agricultural office have introduced that there are no
sufficient supply and distribution of these machines to the beneficiaries even though the interest
of usage increase. The reasons to limited distribution are high cost of machines and few number
of companies in the business and unworthy machines which exacerbate the misunderstanding of
the technology usage in the sector. Therefore, they are certain that these problems can be
mitigated to larger extent if there are many more companies involved in manufacturing and
importing agricultural machines by putting the topography in to consideration.

Based on the analysis result of existing situation, the committee agreed to focus on agricultural
machines and equipment that require small amount of initial capital at large as well as machines
of high initial cost but that can generate high amount of income in the process. To make best

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choice, the committee have visited a total of 7 governmental and private companies engaged in
importing, manufacturing, and exporting agricultural machines and equipment. The team have
identified and categorized items which needs to be imported as well as items to be developed in
our capacity by conducting rigorous visit to the existing agricultural machines available in the
market. The directive/advice/ given from each official of company has been taken it to
consideration while selecting these items. Moreover, the identified gaps have been considered as
critical factors to decide which item /agricultural machine/ is going to be selected to our
business.

Based on the existing situation analysis result and critical gaps identified above, the following
potential business ideas are selected for conducting detail feasibility study in terms of market,
technical and financial feasibility study components. These are: -

a. Importing Agriculture machines and equipment

The following agricultural machines and equipment are selected to be imported. These are:
Tractor: tractors with 15-45 HP are highly required by the users as per the company’s report,
therefore, it would be good if this business incorporate this item as one of its imports. Enough
decisive point has been collected which influence the team to select a tractor with brand name
called Landni. As the analysis depicted, this tractor is easy to operate as most of its system
function mechanically resulting high compatibility to different environments and operating
condition with long lasting services compared to counter brands.

To encourage farmers to purchase a tractor, development bank of Ethiopia offers 70% share of
the total price of a tractor. In addition, the government has also permit to import all agriculture
related machines and equipment duty free for the importers to reduce associated cost and
promote use of technologies in agricultural practice. These cooperation from the government
seems a great opportunity for the importer as well as the beneficiaries. According to the
assessment made, there are many customers in Benishangul, Arsi , Ballie, Hummera and
Gambla. Besides, there will be a tendency of buying a tractor in individual level in the near
future.

Implements: disc and mold board ploughs are few of the most wanted agricultural implement
used to till the soil. It can plough in dry and hard soil as a result customers show a great interest
to use it.

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Cultivator/rotavator: it is agricultural equipment used to till the soil or cultivate the plant as it
is dragged or pushed. This equipment is important to till land that needs small shear forces. Most
of visited company officials suggested that cultivators are the right equipment for small scale
farmers to till the soil of hummera. Moreover, it will also be used to cultivate chill and maize
which is planted in row. Consequently, use of cultivator can reduce the workload of worker, time
and back pain as it is operated without bending.

Reaper harvester: this machine is used to harvest wheat, rice, barley and sorghum. It is
available in different varieties such as self-propelled or wheel tire and two or three rows type.
The machine can be used in different land forms, small field and areas where combine harvester
cannot reach. Obviously, this machine will be popular among farmers soon and take huge market
share in the near future.

Multi-crop thrasher: is power driven machine which can separate rice, wheat, sorghum and
peas from its chaff and straws. This machine combines threshing operations of abovementioned
crops in one thereby save a great amount of money which would be used to buy thresher for each
crop type. In addition, use of this machine will diminish traditional way of threshing crops as
result time, human power and health issue associated with it will be eliminated. As per
company’s report, this machine was among the machines which have frequent request by the
customer. Therefore, importing and suppling good quality of this machine would definitely be
profitable.

Rice transplanter: it will be imported in the beginning of the business, and then some period
latter the machine will be manufactured here in our workshop.

b. Manufacturing selected agriculture machines and equipment

The following agricultural machines and equipment are selected to be manufactured. The detail
feasibility study for each product will be done in the following sections. The selected machines
are: -
1. Maize sheller: this machine is used to shell harvested maize from farm land. It will be
distributed to individual farmers, farmers’ union and large scale farmers. Engine driven
maize sheller with moderate hp will be used as source of energy. The machine will be
easy to use and move it from one place to another. Moreover, it’ll have affordable price.

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 2. Sesame Seed drill and Soyabean seed drill: These machines will help farmers to
sowing the various seeds from Sesame seeds to garlic seeds, which is also useful for the
fertilisation. The machines will be operated mechanically.
3. Cereal harvester operated by Tractor PTO:
4. Thresher (Wheat, rice, soyabean and rice): two types engine or tractor operated)
5. Trailer (to be attached to tractor):

6. SWOT analysis of our business

Since involving in the business of both importing and manufacturing agricultural machineries is
new particularly to the Amhara region it may encountered internal factors which are strength,
weakness and external factors which are opportunity and threats. The target of a SWOT analysis
of the manufacturing industry is to identify the key factors that affect the success of the business
to be launched soon. SWOT analysis helps us to make a business verdict on its functionality by
showing useful recommendation and strategy that overcome weakness and threats in future. Here
the general SWOT analysis of importing and manufacturing of agricultural machinery business is
described as follow.

1. Strength
 Presence of skilled man power that includes designer, manufacturer,
consultancies
 The existence of workshops and machines /if they well maintained/
 When is has been seen as amhara region there is no local competitor who engaged
in agricultural machinery manufacturing business
 Good motivation of leaders (faculty dean and other officials)
2. Weakness
 Initial capital, the business requires high investment cost
 Lack of institutional linkage
3. Opportunity
 Government policies highly encourage agro- mechanization activities.
 High demand of agro machineries
 Availability of developed and tested technologies

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  Availability of large unused arable land
 Good image of our university and our institute as well will assist us ( business by
itself) trustworthy by the customer and government.
 Shortage of agro machinery manufacturing and importing sector in Amhara region.


4. Threats
 Farmers are not well aware of farm technology opportunities
 Supply chain problem may face to import spare parts
 Since the owner of the business are all the faculty members, there may be loosen
managerial system.
 Competitors who will be emerged soon
 Stability of political situation of our country

 No import taxes for agricultural machines

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