11/30/2021 Mass Production of

Organic Fertilizer
For Healthier Environment
Table of Contents
1. Context..................................................................................................................................... 1
2. Introduction ............................................................................................................................. 2
3. Aim And Objectives ................................................................................................................ 4
3.1. Aim ................................................................................................................................... 4
3.2. Objectives ......................................................................................................................... 4
3.3. Scope ................................................................................................................................ 4
4. Methodology ............................................................................................................................ 5
5. Work Plan ................................................................................................................................ 6
6. Budget ...................................................................................................................................... 7
7. Feasibility Study ...................................................................................................................... 8
7.1. Technical Feasibility ........................................................................................................ 8
7.2. Financial Feasibility ......................................................................................................... 9
7.3. Market Feasibility .......................................................................................................... 11
7.4. Social Feasibility ............................................................................................................ 11
7.5. Ecological Feasibility ..................................................................................................... 11
8. References ............................................................................................................................. 12

Table of Figures
Figure 1-1 Compost Cycle .............................................................................................................. 1
Figure 2-1 Regional Growth of CKD ............................................................................................. 2
Figure 2-2 Cd Level in Drinking Water .......................................................................................... 3
Figure 7-1 Small-scale organic fertilizer production line ............................................................... 8

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1. Context

For the past 2600 years, farmers in the dry zone of Sri Lanka have been cultivating rice using
irrigated water and organic fertilizers. Other cultivations also used organic fertilizer. But in past
decades Sri Lanka prone to use of more chemical fertilizer to gain enhanced agricultural yield in
short term even though possible harmful effects to human health and environment. As a result of
this abnormal use of chemical fertilizers especially in rural communities started having health
issues. These chemical fertilizers also make a huge impact on ecosystem. Farmers need to
encourage use of organic fertilizers and entrepreneurs need to be facilitated to mass produce
organic fertilizers locally. the organic fertilizers in cultivation. Also producing fertilizers locally,
huge sum of money can be saved from flowing outside of country.

Figure 1-1 Compost Cycle

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2. Introduction

In 2020 Sri Lanka total cultivation extent both Yala and Maha season is 1.3 million hectares and
other field crops 97120 hectares[1]. Sri Lankan imports (both state and private sector) of foreign
fertilizers reached $259 million, representing 1.6 percent of the country’s total imports by value.
Sources indicate that these values may go higher to $300-400 million due to current world
situation. As this much of money flowing outside of country, there are huge issues raising over
decades with these imported chemical fertilizers. For enhanced harvesting farmers tend to use
these chemical fertilizers. With time, heavy metals in these fertilizers mixed in ecosystem which
causing huge health and environment issues. Chronic Kidney Disease (CKD) is an extremely
credible example of harmful effects of chemical fertilizer. Toxic nephropathy and arsenic play a
huge role with many other heavy metals causing this special type of CKD [2]. Also, the
environment is greatly threatened by these harmful chemicals especially aquatic animals and
plants. Figure 2.1 shows the percentage of households reporting at least one member diagnosed
with CKD who resides in the household between year 2009 and 2018[3].

Figure 2-1 Regional Growth of CKD

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Maximum permissible level of cadmium (Cd) of 3µg/L should be in drinking water according to
water quality SLS standards in Sri Lanka[4]. Following figure 2.2 shows Cd level in drinking water
of village in Anuradhapura district[5].

Figure 2-2 Cd Level in Drinking Water

In previous years there were huge discussions about this issue. Best solution is the use of organic
fertilizers instead of chemical fertilizers. In the long run organic fertilizers are the proper solution
that also addresses those issues. If Sri Lanka can mass produce organic fertilizer locally, it will
have a huge positive impact on human health and the environment. But currently Sri Lanka does
not have capacity to mass produce organic fertilizers to fulfil the entire demand with short period
of time. This conversion between organic and chemical fertilizers needs to be done long in long
term and patience with a proper plan.

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3. Aim And Objectives
3.1. Aim

Provide technological knowledge, encourage use of organic fertilizers, facilitate for mass
production of organic fertilizer to switch from chemical fertilizers in cultivation and reduce
imports bills.

3.2. Objectives

1. Conduct research to find the most sustainable technology and suitable machineries for mass
production of organic fertilizer.
2. Conduct awareness sessions on encouraging organic fertilizer and the technology which
can produce organic fertilizers locally.
3. Provide the necessary machinery for entrepreneurs to facilitate fertilizer production.
4. Build organic fertilizer stations using selected technology and machineries.

3.3. Scope of the Project

The scope of this project is to research efficient organic fertilizer production technology,
encourage farmers to use organic fertilizer, provide training, facilitate machinery and build
manufacturing plants to fulfill fertilizer requirement only for paddy cultivation in Northwestern
province. Fertilizer providing for other cultivations are excluded from the project.

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4. Methodology
No Objectives
Conduct research to find the most
sustainable technology and suitable
1 institutes
machineries for mass production of
organic fertilizer
Conduct awareness sessions on
encouraging organic fertilizer and the
2
technology which can produce organic
fertilizers locally
Provide the necessary facilities for
3 •
entrepreneurs to fertilizer production
Build organic fertilizer stations using
4
selected technology and machineries
Methodology
• Literature review
• Interviewing and discussions with relative
• Reaching out to machine manufactures
• Perform regional awareness sessions and
training programs with farmers and
businessmen
• Media publications
• Publish advertisements to reach out
entrepreneurs
Support for financial requirements
• Provide suitable lands, machines and
trainings
• Select suitable lands in island wide to reduce
transport costs
• Build manufacturing plants island wide for
requirements
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5. Work Plan

2022
Task Description
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Research and Surveys

Technology selection

Awareness sessions and training programs

Media publications

Publish advertisements to reach entrepreneurs

Support for financial requirements

Provide suitable lands, machines, and trainings

Select suitable lands in island wide

Build manufacturing plants island wide

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6. Budget

Description Unit Price (USD) No of Units Price (LKR)

Walking type turner machine 5,000.00 1 1,015,000.00

belt conveyor 500.00 7 710,500.00
Biaxial efficient crusher 1,000.00 1 203,000.00
Bucket elevator 500.00 1 101,500.00
Efficient mixer 1,500.00 1 304,500.00
Machines
Disc Granulator 1,000.00 1 203,000.00
Drying machine 6,000.00 1 1,218,000.00
Cooling Machine 2,000.00 1 406,000.00
Grading Screen 1,500.00 1 304,500.00
Automatic Packing Scale 400.00 1 81,200.00
Installation 500,000.00
Salary 2,860,000.00
Other costs
Transportation 400,000.00
Awareness session and marketing 800,000.00

Total - LKR 9,107,200.00

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7. Feasibility Study

7.1. Technical Feasibility

The following factors are important in compost production.

• Carbon and Nitrogen ratio

• Temperature
• Humidity
• Pieces size
Decomposed leaves have higher carbon content and raw leaves have higher nitrogen content. The
temperature should be between 60 and 70 degrees Celsius There are several ways to produce
organic fertilizer.

• Pit method
• Heap method
• Barrel method
Most famous process is heap method. Commonly can be seen as compost tower that done by
individual farmers. But to fulfill fertilizer demand for entire cultivation is not enough. Following
process identified as common flow of small-scale organic fertilizer production line [6].

Figure 7-1 Small-scale organic fertilizer production line

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 7.2. Financial Feasibility
• Our normal production will be active from the year 2022

Estimated running expenditure in 2022,

Electricity - LKR 800,000

Water - LKR 50,000
Diesel - LKR 586,000
Salary - LKR 2,860,000
Awareness session and marketing - LKR 800,000
Above expenditures will increase 10% per year.

• Cash flow from 2022,

2022 2023 2024 2025 2026

29,515,200.00 36,466,720.00 44,313,392.00 53,154,731.20 63,100,704.32

• NPV Analysis

Capital LKR
HARTI fund 5,000,000.00
Bank Loan 10,000,000.00

Initial Investment = LKR 15,000000.00

Cost of capital/ Discount Rate = 0.01%

Year# 1 2 3 4 5 6

Year 2022 2023 2024 2025 2026 2027

Cash
Flow 29,515,200.00 36,466,720.00 44,313,392.00 53,154,731.20 63,100,704.32 74,272,799.75
(LKR)
FV (LKR) 0.99 0.97 0.96 0.95 0.94 0.92

PV (LKR) 29,126,842.11 35,513,382.96 42,587,094.17 50,411,847.14 59,057,160.55 68,598,689.94

14,126,842.11 20,513,382.96 27,587,094.17 35,411,847.14 44,057,160.55 53,598,689.94

- NPV at 2% interest rate = LKR 53,598,689.94

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Year# 1 2 3 4 5 6

Year 2022 2023 2024 2025 2026 2027

Cash
Flow 29,515,200.00 36,466,720.00 44,313,392.00 53,154,731.20 63,100,704.32 74,272,799.75
(LKR)
FV (LKR) 0.91 0.83 0.75 0.68 0.62 0.56

PV (LKR) 26,832,000.00 30,137,785.12 33,293,307.29 36,305,396.63 39,180,572.81 41,925,059.17

11,832,000.00 15,137,785.12 18,293,307.29 21,305,396.63 24,180,572.81 26,925,059.17

- NPV at 10% interest rate = LKR 26,925,059.17

60,000,000.00
53,598,689.94 NPV vs r %
50,000,000.00

40,000,000.00

30,000,000.00 26,925,059.17
y = -3E+08x + 6E+07

20,000,000.00

10,000,000.00
NPV (LKR)

Discount rate (%)

0.00
0.00 0.02 0.04 0.06 0.08 0.10 0.12

IRR = 17%

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 7.3. Market Feasibility
Sri Lanka is an agricultural country. Even though fertilizers for most of the cultivations are
imported from foreign countries. This makes huge money flow to outside of Sri Lanka. Specially
with recent government import restrictions due to lack of foreign reserves made the situation
worse. Also, chemical fertilizers provide short time enhanced harvest, but organic fertilizers cannot
provide such fast reactions. But due to the long-term threats imposing by chemical fertilizers
people also thinking about use of organic fertilizer. This makes a huge opportunity for organic
fertilizer production and usage. With lack of organic fertilizers in Sri Lanka this is a great time to
start production facilities. With lack of imported fertilizers, these locally made organic fertilizers
has a positive market value.

7.4. Social Feasibility

Society shown significant interest in organic foods and vegetables. With high usage of chemical
fertilizers Vegetables and fruits made by using organic fertilizers has significant market values
than others. Encouraging farmers for use of organic fertilizers also make their harvest worthy. This
makes several new job opportunities locally. Some of them are production of organic fertilizers,
machine maintenance and transportations. Current fertilizer importers affected by locally
fertilizers production. They can be used and encouraged for local organic fertilizer production.

7.5. Ecological Feasibility

Environmental impact of using chemical fertilizers is famous in world. Underground water bodies
are contaminated with heavy metals arsenic and cadmium. 51% of nitrogen floes into surface water
done by human activities. Ammonia nitrogen and nitrate are main pollutant in local water
bodies[7]. Large scale usage of chemical fertilizers leads to soil acidification and crust. This makes
farming value lost in lands. Many inorganic fertilizers are highly acidic. Long term use of chemical
fertilizers can change the soil pH values, damage to beneficial microbial ecosystems, increase pests
and lead to greenhouse gas release. This heavy usage damages to the ecological balance. Using
organic fertilizers solve this huge environmental impact caused by chemical fertilizers.

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8. References

[1] M. of Agriculture, “Media breafing on fertilizer.”

https://www.agrimin.gov.lk/web/index.php/en/news-and-events/1492-2021-02-02
(accessed Nov. 29, 2021).
[2] C. Jayasumana et al., “Phosphate fertilizer is a main source of arsenic in areas affected
with chronic kidney disease of unknown etiology in Sri Lanka,” Springerplus, vol. 4, no.
1, pp. 1–8, 2015, doi: 10.1186/s40064-015-0868-z.
[3] K. Kafle, S. Balasubramanya, and T. Horbulyk, “Prevalence of chronic kidney disease in
Sri Lanka: A profile of affected districts reliant on groundwater,” Sci. Total Environ., vol.
694, p. 133767, Dec. 2019, doi: 10.1016/J.SCITOTENV.2019.133767.
[4] S. Lanka, V. Place, and E. Mawatha, “Sri lankan drinking water (portable water) quality,”
Int. Lab., vol. 150, no. December 2007, pp. 1–19, 2010.
[5] W. P. R. T. Perera, M. D. N. R. Dayananda, and J. A. Liyanage, “Exploring the root cause
for chronic kidney disease of unknown etiology (CKDU) via analysis of metal ion and
counterion contaminants in drinking water: A study in Sri Lanka,” J. Chem., vol. 2020,
2020, doi: 10.1155/2020/8670974.
[6] Whirlston, “800kg/h Small-scale Organic Fertilizer Plant,” 2018.
https://medium.com/@fertilizermachinemaria/800kg-h-small-scale-organic-fertilizer-
plant-1ff2fa5aadfa (accessed Nov. 29, 2021).
[7] F. F. Machinery, “Environmental Effect and Proper Use of Chemical Fertlizer.”
https://fertilizer-machinery.com/solution/environment-and-chemical-fertilizer.html
(accessed Nov. 28, 2021).

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