Water Resources & Environmental Engineering Dept Business Plan

JIMMA UNIVERSITY

WATER RESOURCES & ENVIRONMENTAL

ENGINEERING DEPARTMENT

BUSINESS PLAN

JIFAR SOLID WASTE COLLECTION AND DISPOSAL ENTERPRISE

GROUP MEMBERS ID

SISSAY DECHASA 4441/00

SHEWIT KIDU 4435/00

SHIMELIS ALEMU 4412/00

SABIT ABO 4447/00

SAMSON AMDEBRHAN 4409/00

Submitted to: Ato Mesay A. (MSc)

May 25, 2012

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Contents pages

JIFAR SOLID WASTE COLLECTION AND DISPOSAL ENTERPRISE...............2

INTRODUCTION...............................................................................................................2

1.1 background................................................................................................................2

1.2 rationale of the project..............................................................................................6

1.3 description of the enterprise.....................................................................................7

employees........................................................................................................................8

1.4 significance of the project.........................................................................................8

2. POTENTIAL RISKS.....................................................................................................10

3. ENVIRONMENTAL ANALYSIS................................................................................10

The Economic Environment...........................................................................................10

The Legal and Political Environment............................................................................10

4. FORMS OF OWNERSHIP...........................................................................................12

5. MARKET ANALYSIS..................................................................................................13

6. ACTIVITY PLAN.........................................................................................................15

7. FINANCIAL PLAN......................................................................................................16

ENTERPRISE’S PROJECTED SALES AND COST ANALYSIS..................................16

REFERENCES..................................................................................................................18

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JIFAR SOLID WASTE COLLECTION AND DISPOSAL

ENTERPRISE

INTRODUCTION
1.1 BACKGROUND
Solid Waste is solid matters that are created by human or animal activities, and which are
disposed because they are hazardous or useless are known as solid waste. When they
accumulate, they pose a health threat to people, plus, decaying wastes also attract
household pests and result in urban areas becoming unhealthy, dirty, and unsightly places
to reside in. Moreover, it also causes Increase disease transmission or otherwise threatens
public health, contaminate ground and surface water, and create greenhouse gas emissions and
other air pollutants, damage ecosystems, and the like.

Solid Waste Management (SWM) involves the collection, storage, transportation,

processing, treatment, recycling and final disposal of waste. Systems need to be simple,
affordable, and sustainable (financially, environmentally and socially) and should be
equitable, providing collection services to poor as well as wealthy households. SWM
should aim to improve the environment, provide direct health benefits, support economic
productivity, and provide safe, dignified and secure employment (Jonathan Rouse, 2008)
Solid waste management is a polite term for garbage management. As long as humans
have been living in settled communities, solid waste, or garbage, has been an issue, and
modern societies generate far more solid waste than early humans ever did. Daily life in
industrialized nations can generate several pounds of solid waste per consumer, not only
directly in the home, but indirectly in factories that manufacture goods purchased by
consumers. Solid waste management is a system for handling all of this garbage;
municipal waste collection is solid waste management, as are recycling programs, dumps,
and incinerators (S.E. Smith, 2003).
For most industrialized nations today, solid waste management is a multibillion-dollar
business, which is also crucial to survival. Garbage collection agencies remove tons of
garbage yearly and sort it for recycling or ultimate disposal. Most cities require citizens
to pay for waste collection, while rural areas have dumps and recycling facilities for

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citizens to bring their garbage to. The end goal is a reduction of the amount of garbage
clogging the streets and polluting the environment, whether that garbage is disposed of or
recycled into something useful. Solid waste management also is focused on developing
environmentally sound methods of handling garbage; for example, solid waste is no
longer dumped into oceans or unlined pits (S.E. Smith, 2003).
However, Solid waste management (SWM) is one of the critical concerns facing the
developing countries including Ethiopia because of the social, economic and
environmental implications once not properly managed. Studies showed that only 30-
50% of the waste generated in developing countries is collected and managed properly
(Dawit and Alebel, 2003). The rest is either burned or left to decompose in open space or
dumped in unregulated landfills, which is damaging the environment.
As know that now a days the developing countries urban growth are run speedily. So,
Since solid waste generation and urban growth have positive relationship, these low and
middle income countries, such as Ethiopia (third world country), continuous and rapid
urban growth and lacking urban environmental management is seriously threatening the
health of citizens and the overall environmental quality. Solid waste is considered to be
one of the most immediate and serious challenges of urban environmental management
confronting urban authorities. Applying the traditional approach of "collect and dispose"
however, can hardly be considered an environmentally sustainable solution to the waste
problem.
Moreover, most cities in the developing world collect only part of the overall waste, and
only a tiny fraction of the collected waste is treated or properly disposed of in low-
income countries lacking waste collection, households tend to either dump their garbage
on open plots, in low-lying areas, public spaces and rivers, or simply burn it in their
backyards. Uncollected waste may also accumulate on streets, thus clogging the storm
water drainage system. In hilly, unpaved or densely populated areas, large collection
trucks tend to break down frequently or are often not capable of accessing the narrow and
winding roads. The urban poor in slums and squatter settlements are generally those who
suffer most from the lack of collection services. These areas are often totally neglected by
the authorities due to their illegal status and lack of political voice. (EAWAG, 2008)

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As urbanization continues to take place, the management of solid waste is becoming a

major public health and environmental concern in urban areas of many developing
countries. The concern is serious, particularly in the capital and zone cities, which are
often gateways to the countries for foreign diplomats, businessmen, and tourists. Poor
visual appearance of these cities will have negative impacts on official and tourist visits
and foreign investment.
The quantity of solid waste generated depends on the size of the population and the level
of income of urban households. The higher the income, the larger the amount of solid
waste produces due to the fact that higher income entails higher consumption of goods
and services (Girma, 2004, cited by Solomon, 2006).

The increasing industrialization and fast growth does not only pose problems related to
the allocation of resources and powers, but also severely challenges the natural
environment. Environmental degradation such as contaminated water, sinking
groundwater levels, unhealthy soils, and polluted air has become a harsh reality in many
parts of Ethiopia

In Ethiopia, alike developing countries, the increase of solid waste generation is resulted
from rapid urbanization and population booming. According to Melaku, 2007, the
amount of solid waste in Addis Ababa and other fast growing areas in the country has
been increasing over time, largely attributed to rapid population growth rate. The same
authors indicated that from the total solid waste released by the population in the city,
about 50-60% was collected and the rest was unattended.

Similarly, within a certain years ago Jimma city municipality also tried its best to collect
wastes by involving cooperatives via contract. In this particular city, though the main
target of waste collection is for environmental soundness, beside of this objective, the
municipality of the city was developed additional objectives to use the waste for other
purpose.

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The objectives are:

 to compost the waste and use for agriculture activity
 to generate electric power
 to generate biogas
Therefore, to achieve the above objective our enterprise organizes the women and men
youths to collect the wastes adequately. However, still the collected amount of wastes
could not be enough to produce the above stated energy because of inadequacy of
collected wastes. From this we can understand that nowadays solid waste is demanded for
economical and other aspect of the countries.
Generally, as what can infer from the above facts, Dedo ber, which is our selected site,
needs even other additional cooperatives or private enterprises.

1.2 RATIONALE OF THE PROJECT

Increasing amount of solid waste is being generated as a result of rapid rate of
urbanization and economic growth. This in turn presents greater difficulties for disposal.
The problem is more acute in developing countries where the pace of urban population
growth as well as urbanization is faster. Efficient management of urban waste is required
though urban government in many developing countries is constrained by limited finance
and inadequate service (R. Gerlagh et al, 1999).

The main problems and issues encountered in most developing countries, related to
unsatisfactory SWM are:
a) Inadequate coverage of the population to be served;
b) Operational inefficiencies of municipal SW services and management;
c) limited utilization of the formal and informal sector in recycling activities;
d) problems related to the disposal of solid waste; and
e) Problems concerning the management of non industrial hazardous waste
(Schertenleib & Meyer, 1992).

All these problems have common social, institutional, financial and technical issues.

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Management of Municipal Solid Waste (MSW) is one of the major challenges

worldwide. Inadequate collection, recycling or treatment and uncontrolled disposal of
waste in dumps lead to severe hazards, such as health risks and environmental pollution.
This situation is especially serious in low and mid-income countries. Cities, which are
hubs of rapid economic development and population growth, generate thousands of tons
of MSW that must be managed daily. Low collection coverage, unavailable transport
services, and a lack of suitable treatment and disposal facilities are responsible for
unsatisfactory solid waste management, leading to water, land and air pollution, and for
putting people and the environment at risk (EAWAG, 2008).

The collection and disposal service is one of the most important services provided in
urban areas. Yet this type of service has been and continues to be the most serious
problem in Jimma town. The existing municipal service did not give concentration for
this problem. Inadequate municipal solid waste collection and disposal service creates a
range of environmental problems in Jimma. The lower coverage rate of solid waste
collection service result in the accumulation of waste on open lands, in drains and in the
living area of many people, causing a nuisance and stinking pools, environmental
pollution through leaches from piles (water and soil pollution) and burning of waste (air
pollution), clogging of drains, and the possible spread of diseases.

The rationales behind this solid waste disposal enterprise in Jimma town are the absence
of organized enterprises that are involved in solid waste collection and disposal activities
that can add value for the protection of the environment as well as generating revenue.
Thus, there is a need for improved waste management practice.

1.3 DESCRIPTION OF THE ENTERPRISE

Mission
Jifar solid waste collection and disposal enterprise is primarily established to collect and
dispose solid wastes in the most economically feasible and environmentally sound
manner.
Goal:

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The goal of the project is earning profit in addition to sustaining environmental

protection.
Objectives:
The overall objectives of the enterprise will be:
To protect human health and the environment—air, water, and land.
To extend the life of products and materials through maximizing, opportunities
for reuse
To encourage maximum recycling through user-friendly systems, an increased
disposal and helping development of markets for recycled materials
To provide an environmentally sound, cost-effective disposal strategy for all non-
recoverable waste

Location
Jifar solid waste disposal private enterprise will be set up on Dedo ber which is under the
administration of Jimma city.

Infrastructure
A piece of land in the outskirts of the residential areas and the site infrastructure, which is
already constructed, will be donated from the municipal. The land will be cleared of
potential trees, the ground will be flattened. Water and power connection will be
arranged, a fence will be build. Two class offices will be rented on the center of the city
(site location) and two vehicles will also be rented too. In addition to these, the other
necessary material including office equipment will be fulfilled by having adequate funds
from the identified financial sources (see from the financial analysis title).

Employees
The management team will be responsible for the overall planning and organizing of the
project during the first six months.
The Jifar enterprise will have the following Employees:
• One Supervisor, Two Drivers , Four Street sweepers (women), Six Site Workers ,
Eight solid waste loaders and pickers, One secretary, One office administrator.

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Duration of the project

This project is estimated to be accomplished within six months. The main reason that
shortens the duration of the project is that, the transfer station of the site is already
constructed and is read made by the municipality. The remaining activities, which are
expected to fulfill by the proposed enterprise, are not that much time taken even though
they are the most prominent and unable to start to perform the activity. Therefore, the
project will be hand over at the end of November, 2012.

1.4 SIGNIFICANCE OF THE PROJECT

The collection and disposal project attempts for maximum waste recovery through,
recycling, and reuse, and aims at zero waste to be disposed onto dump-yards and

landfills. The long-term objective is thus to reduce the environmental degradation caused
by solid waste.

By using collection and disposal methods of waste, we are able to:

 Minimize waste that needs to be disposed in centralized landfills, thus extending
existing landfill capacity;
 Reduce the environmental impact of disposal sites as the bio-degradable waste
fraction largely is to blame for the polluting leachate and the methane problems;
 Reduce the use of natural resources by promoting the opportunity to reuse and
recycling of used materials.
 Benefit the soil by using organic compost instead of chemical fertilizers.
 Enhance environmental awareness in the community;
 Create employment opportunity in the community;
 Ensures sustainability of the project at the local level;
 Are close to the residents, allowing close quality surveillance of the waste
processing services and products;
 Are mostly small-scale, based on labor-intensive technology, and better adapted to
the local socio-economic situation;

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 To increase the government revenue from taxation on employees and the enterprise
at large
 It is one means of ensuring quality and healthy life in the locality (biodiversity is
saved)
 Decrease the problems caused by malfunctioning municipal services when
decentralized collection and dispose is combined with primary collection services.
 A properly run decentralized SWM project will contribute to a cleaner local
environment maintaining pure surface and ground water, healthy soils, and clean air
 To empower women and other disadvantaged groups in the community.

Noteworthy, a clean local environment will immediately benefit the most vulnerable
groups of society whose livelihoods often depend on the natural resources available
locally.

2. POTENTIAL RISKS
The possible risks are:
 The collected wastes which are supplied to the recycling companies may not be
compatible with their (the companies) purpose. To manage this potential risk,
before transport all recyclable collected solid wastes we will have a clear
specification of each and every company of our potential customer.
 The municipal is also one potential problem in pick up the collected materials on
time. This exposes us to acquire additional costs. To manage this risk, we will
develop additional contingency plan which can be compromise the main objective
of the project. The contingency plan particularly emphasis on making additional
contract to pick up the collected waste from secondary collection /transfer station
to terminal point or land fill by ourselves.
 Electric power: since our customers, particularly the recycling companies,
activities are depending on power; their purchasing pattern and purchasing power
also rely on such kinds of infrastructure. Since this risk is the most serious and
make our enterprise stack somewhere, we will not be depending on a certain

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recycling company. Meaning, we will find potential manufacturing companies

which existing all over the country.

3. ENVIRONMENTAL ANALYSIS

The Economic Environment

Inflation interest rate and others are the most critical economic factors that affect the
enterprises. Though change is constant and difficult to predict about future, the enterprise
will revise its plan with the environment so as to cope up with it.

The Legal and Political Environment

The government policy currently is attracting potential investors and small enterprises to
utilize different opportunities. The government is encouraging by offering subsides for
development business through tax exemption, facilitating credit with less interest rate
and providing infrastructural facilities. Particularly, now a day’s the government is
coming to understand the severity of pollution because of in appropriate treatment of
solid waste materials. That is why the concerning bodies prepared a legal article on
Negarit Gazette.

Competition
There are few micro enterprises at Jimma town that practices solid waste collection and
disposal activities as that of our enterprise but their capacity to do so is so small.
However, it does not mean that there is no competition from such enterprises. As our
enterprise tries to cover most areas of the city, we could dominate those enterprises.

Sourcing
The post consumer wastes are collected on daily door-to-door and available as an input
for our enterprise. The enterprise needs to have good relation with the city municipality,
and the community at large. So, the households will be aware about the importance of our
activity and store the wastes appropriately. Even after a period of time at least some
percent of sort might be conducted at sources by the households.
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Opportunities
 Conducive government policies
 Readily available infrastructure facilities
 Absence of local enterprise that exercise the same activities in the area
Threats
 Inflation which affects miscellaneous activities
 Taxes which are imposed by the government
 The possibility of obtaining educated peoples might be difficult.

4. FORMS OF OWNERSHIP

Stakeholder Analysis
The direct or indirect organizations that has stake to the enterprise are:

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 Oromia Region Environmental Protection Bureau

 Jimma town municipality
 Academic institution-in R&D areas
 the informal waste collector like scavengers or “Quralle”
 The community at large

5. MARKET ANALYSIS

. Demand
It is known that currently solid waste issue is a serious one which is exists on the agenda
of the globe or every country/nation leaders. Even the recent environmental conference -
the so called Copenhagen summit was took it as the most important debatable issue or the
serious cause of global warming.
Because of this, the thing that believed by the professionals is a single responsible
government sector alone cannot be treat the wastes in good way. Rather the private
enterprises should be involved in this activity for the purpose of environmental soundness
and then the sector should pay for their service.

Since this the above statement is fact and currently existing in practice on both developed
and developing countries (including Ethiopia), the demand on the collection of solid
waste is secured or well known and easily identified.

MSEs (medium and small enterprises) who plan without adequate information or with
redundant data can find themselves in a situation of danger that cannot be easily
remedied!

Similarly on our proposed service-based business, though the service which is given to
municipality is already known or specified in standard form and via contract, we tried to
make market analysis through situational analysis or conducted exploratory research for
additional information on current market and other recycling manufacturing companies
market. Even we tried to interview the informal collector – like scavengers and “qurale”
about their average collection capacity and amount of payment per day.

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As far as our observation concerned, there is a potential demand for our

products/collected wastes, particularly the recycling manufacturing companies are
actively seeking the supply of sorted hard plastic, used cone and other metal – related
wastes which is collected from the households. In addition, not alone our selected site
location – “Dedo-ber”, even in Jimma city, which is already hold by other enterprises, the
wastes are not collecting adequately. This indicates that the consumptions of recyclable
product are large in number. Therefore, this demand and supply related information may
help for our activity.

. Competitors:
Yet in our selected site location – Dedo ber – there is no any competitor who involved on
the waste collection activity at small scale. Instead, according to the manager’s of
environmental health protection sector from Jimma municipality, the sector is looking to
the cooperatives or micro and small enterprises to make a contract on waste collection
from households and transport to the read made transfer station. So, it will not be that
much difficult to succeed in the market.

. Market and Sales Strategy

As tried to explain before, the main objective of our propose business is giving or
rendering service for environmental protection from pollution. To do this, the
municipality of Jimma city has its own standard regarding to solid waste collection,
particularly on the payment system and the way how the involved cooperatives perform
the given activity and the like. Therefore, we will make contract with this specific sector
of the city.
In addition, according to marketing concept/orientation, any activity of the business
should be based on the way of mutual benefit: profit for the producer or service provider
and satisfaction for customer. Likewise, beside of treating the waste and conserving the
environment, we have to obtain adequate return at least to survive on the existing
business or market environment.
Moreover, according to the concept of sustainable use of natural resources, there are
“3Rs”: reduce, reuse and recycle of the waste or already used materials. That is why

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currently there are factories who are involved on recycling of used materials. Therefore,
our targets is not simply collecting the wastes from primary collection and dispose to the
transfer station or submit to municipality, like what the existing cooperatives doing.
Rather, after collection stage, we will sort materials like organic and inorganic wastes and
then supply this organic wastes including soft plastic to municipality according to our
contract. And the remaining inorganic wastes, particularly hard plastic and other metal
related wastes, which can be recycled, provides for recycling purpose by identified
customers (manufacturers).

6. ACTIVITY PLAN
Before, start to do any service all necessary facilities and equipments will be purchased
and rented.

Training
since the employees and the community at large are the success area of our project,
before exposing them to the real activity we will provide at least some days of initial
training for the employees and create community awareness regarding to the importance
of solid waste to economical and environmental aspect of the country.

The processes of our particular activities are:

i. Primary collection
This is the major activity of our business. By using the would be rented two vehicles
(ISSUZU) and employing four Waste handlers and waste pickers per vehicles collecting the
solid wastes, which is a day to day activity, from households like door–to–door collection
system. And then transport it to the secondary collection place or transfer station.

ii. Sorting of wastes

After collecting and dispose the wastes to the transfer station, it should be sorted
accordingly: organic wastes - which used to compost and other municipality objectives -
and inorganic wastes.

iii. Supply the sorted wastes

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After sorted the wastes, it should be supply to the concerning bodies accordingly. That
means the organic wastes and soft plastic are submitting to the municipality of our
specific city as per the contract and the remaining sorted hard plastic, cones and other
metal related wastes are transporting to the identified potential customers/manufacturer of
recyclable waste materials.
Generally speaking, all of the marketing and sales activity of this enterprise will be
conducted via contract with the potential servants/customers.

7. FINANCIAL PLAN
The other major component that should be considered in project planning is financial
analysis. The feasibility of the project regarding to finance is shown below.
The assumptions for the financial feasibility analysis are:
The capacity utilization of the enterprise for the year is to be 50%. The price of our
service is estimated based on the current prevailing market price The cost of the required
material is estimated based on the current market   environment The whole collected
wastes are assumed to be sold 5% of the total capital is for contingency.

Sources of Finance
Aba Jifar saving and credit institution (200,000 with 18% interest)
Income from Jimma municipality (it is not the price of the collected wastes)
The contribution of the enterprise share holders

ENTERPRISE’S PROJECTED SALES AND COST ANALYSIS

Sales Forecast Per Month And Year Averagely

S.No ITEMS Collection Amount Unit Of Unit Sales volume (in Birr)
Measurement price
month year month Year
3
1 Organic wastes and 300 3600 m 25 7,500 90,000
soft plastics
2 Hard plastic wastes 1000 12,000 Kg 6 6,000 72,000

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3 Cone and other metal - 800 9600 Kg 4 3200 38,400

related wastes
TOTAL 2100 25,200 16,700 200,400
Other income from municipality
1 For transfer station administration 2,700 32,400
2 For street sweepers 1,800 21,600
3 20% of their total paid 4,400 52,800
Subtotal of other incomes 8,900 106,800
TOTAL REVENUE 54,900 658,800

Projected Necessary Costs For The Project

1 Rent expenses:
Office 2,000 24,000
Vehicles (two in number) 18,000 216,000
2 Gasoline (kerosene) 10,000 120,000
3 Worker salary/wages 10,000 120,000
4 Interest expenses 3,000 36,000
Sub total cost 43,000 516,000
Other main costs
1 Office equipment costs 30,000
2 Supplies expanses 5,000
3 Miscellaneous expenses 10,000
Subtotal of other main costs 45,000
Total necessary costs for this project (561,000)
Net income /profit before tax 97,800

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REFERENCES

Eawag (2008) Global Waste Challenge: Situation in Developing Countries. A booklet

developed by Sandec’s Municipal Solid Waste Group

ABEBE TEGEGNE (2006), the Involvement of Micro and Small Enterprises in Solid
Waste Management Services in Addis Ababa

Alebel B. & Dawit W. (2003) Integrated Solid Waste Management in Addis Ababa
Social Study (ISS) at Ghion Hotel, Addis Ababa (Ethiopia)

Hazardous and Solid waste management course, thought for us at Jimma University in
2012

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