Research & Business Reporting

MBA - SMEs Track

Submitted on March 06,2023

Research on

Rice straw fractionation to valuable organic raw material recycling method

& Its potential revenue outcome on the Egyptian Framers & Investors

Submitted To:

Prof. Dr. Mona El Kadery

Presented By:

Group: SM 01 :

1- Serag Ahmed Mostafa - 21120847

2- Mahmoud Sami Sharaf - 19222147
3- Amany Mohamed Selim - 21120365
4- Sarah Gamal - 21120216
5- Ahmed Gamal Sakran - 20221616
6- Mahmoud Kamal - 21120884
Content:
1- Abstract
2- Keywords
3- Introduction
4- Research Statement
5- Experimental & Extraction curriculum
6- Theoretical Framework
7- Research Hypothesis
8- Research Objectives
9- Research Questions
10- Methodology of Research
11- Questionnaire Design
12- Survey and Sampling Methodologies
13- Analysis
13.1.- Qualitative Analysis
13.1.1 Direct Semi-structured interview (1) analysis
13.1.2 Direct Semi-structured interview (2) analysis
13.2- Quantitative Analysis
13.2.1- Demographic-multi data analysis
13.2.2- Land Lords and Farmer questionnaire analysis
13.2.3- Investors and Subject matter Expert questionnaire analysis
13.2.4- Ranking Factors affecting the investment in the new recycling Method

14- Results
15- Conclusion and Recommendations
16- References

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1- Abstract:

The study aims to maximize the utilization of rice straw and the economic return of rice straw
recycling, resulting in an increase in high economic return, which in turn leads to an increase in
the agricultural sector's added value on the one hand, and environmental preservation on the
other, resulting from the decrease of environmental awareness among the majority of farmers.
The research was carried out at the governorate level and through the geographical distribution
of rice straw at the Sharika government centres.
The study relied on preliminary data obtained from the questionnaire form, and from the
secondary data published by the research authorities in the process of recycling agricultural
waste.
2- Keywords

Rice straw, economic value, extraction, environmental, recycling, valuable raw material, Egypt.

3- Introduction
Amongst the different lignocellulosic crop residues, rice straw constitutes the largest proportion,
Only a small amount of straw is used to produce bio-fertilizers, cattle feed, and grow
mushrooms. The rice straw leftover in the field is burned on the field causing environmental
pollution and increasing CO2 in the air. Therefore, the use of straw resources to produce
primary components with zero wastes will have enormous impact in many aspects,
environmentally and economically.
Pollution is the contamination of the environment by the introduction of contaminants that can
cause damage to environment and harm or discomfort to humans or other living species. It is
the addition of another form of any substance or form of energy to the environment at a rate
faster than the environment can accommodate it by dispersion, breakdown, recycling, or
storage in some harmless form. Environmental pollution consists of five basic types of pollution,
namely, air, water, soil, noise, and light. [1]
In view of the actual raising of food prices, high population growth rate, and higher energy
prices in Egypt. An integrated approach is needed in order to make optimally efficient use of
agricultural product and by-products. Efficiency and increasing of the whole production chain
process become more important. In this context, the beneficial reuse of agricultural waste will
be economically profitable for both the farmer and the industry. Reducing the large-scale rice
straw burning will minimize air pollution particularly in Cairo city and other areas in the Nile
Delta consequently will reflect on human health. [1]

4- Research Statement

Rice straw constitutes the largest proportion among the different lignocellulosic crop residues
are produced annually in Egypt. .[1]
however, a vast proportion of this rice straw is subjected to open-field is burning as the current
recycling method is not feasible mainly to all stockholder contributed in the process due to the
below reasons;
• High recycling cost due to exported material used.
• Expensive chemical.
• High energy consuming in the processes.
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 • low income returns from recycling process.
• logistics difficulty in collecting & transport the rice straw to and from recycling plant.
• Generation of significant wastes and residuals banned by Environment ministry in Egypt.
Thus, a New Recycling Method was required to overcome the process difficulties & make the
Recycling feasible to the investors and the Frames as well and environmentally friendly.

5- Experimental & Extraction curriculum

Most of current industrial separation methods of the lignocellulosic crop into primary
components are based on expensive chemical and energy consuming processes, which entail
significant resource consumption (e.g. water) and generate significant wastes and residuals.
An integrated method is needed in order to make optimally efficient use of agricultural product
and by products. Efficiency and increase the whole production chain process, and to
economically profitable for both the farmers and the industry. [1]
In 2013 Dr, Nasr Abd El-Monaim -a well-known academic researcher- had successfully
developed a new experimentally extraction method for the main primary components of the
Rice straw.

The extraction method was so successful and efficient as the full integrated process have zero
waste, cheap and environmentally friendly.
The integrated extraction method was registered in the Egyptian Patent Office in 2009 and
acknowledged as a new green technology invention [2]
The new integrated developed method by Dr. Nasr advantage would be summarized as follow,
1. The extraction method is Chemical process no biological which allows the extraction in
short time.
2. All the cell components are successful separated and extracted.
3. No energy is required in the process.
4. Using common easy to find material in extraction.
5. feasible to the investor as well as the farmers.
6. Environment friendly process.
7. High purity of the extracted raw material.
8. Recycling the extracted material safely and economically in the industrial raw material
cycle.
9. Cheap process.
10. High return income.

Uses of the fractionized raw material

a) Cellulose (35 %) 350 Kg per ton:

Main component in many chemical industries such as:
1. Carboxyl methyl cellulose: ceramic, paints, dyes.
2. Cellulose nitrate: plastic, films, movies, crackers.
3. It is used in the diet as a fibre supplement.
4. It is used to produce paperboard and paper products.

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 b) Hemi-cellulose (30 %) 350 Kg per ton
1. used in pharmaceutical industry
2. xylose from hemicellulose (xylan) hydrolyzat
3. its conversion to furfaral (organic solvent)

c) Lignin (10 %)
1. Intervention in manufacture the batteries (body), printing ink.
2. Varnishes and paints.
3. Used in the fertilization of the soil.

d) Silica or silicon di oxide SiO2 amorphous (16 %)

Intervention in manufacture of eye lenses, solar cells and computer chip, functional
filler for paints, plastics, rubber.

e) Fats & Waxes ( 3 %)

It has extensive applications due to its relatively low cost Food applications include
fruit and vegetable coatings, confectionery and chewing gums. Other applications
include candles, textiles, lubricants, cosmetics, etc

6- Theoretical Framework
An economic study of Rice Straw waste development in Egypt:
Rice straw wastes are considered in the third rank of agriculture wastes. It represents maximum
quantity in 2008 is 2.92 million ton, and minimum quantity in 2010 is 2.32 million ton. Straw rice
wastes represent average 15.20% of total agricultural wastes.

Rice straw wastes quantities in Egypt:

Reference: Ministry of agriculture in Egypt

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 An economic study of Rice Straw Recycling in Egypt:

The maximum production quantity of rice straw in 2006 is 77.28 thousand ton with average
quantity 8.75% from total agriculture wastes.

An economic study of Rice Straw Recycling value in Egypt:

Rice straw recycling value represents the second rank 312.19 million L.E, with average 5.98%
from total agriculture waste recycling value.
Rice straw wastes value development in Egypt:

Reference: Ministry of agriculture in Egypt

The Economic Impact of Rice Straw Recycling Products in Egypt:

Rice straw recycling is essential to increase the rate of using its products and increase the
production especially as it is a clean energy resource. It contributes mainly in decrease the rate
of air pollution as it prevents its burning decrease CO2 gas in air. As it was mentioned before
there are many products can be extracted from rice straw and used in producing biogas,
mushrooms, petrol, fuel, ethanol, paper. Rice straw recycling is important to increase the GDP.

7- Research Hypothesis

Production H1
Rice Straw
dependent Fractionation
Variable
Independent
Variable
H2 H3

Wastes
Air Pollution
dependent
Variable dependent
Variable
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 Mapping for this figure:

line Indicator
Indicate for direct relationship
Indicate for inverse relationship

• H1: As Rice straw Fraction increases, the production increases.

• H2: As Rice straw Fraction increases, the wastes decrease.
• H3: As Rice straw Fraction increases, the air pollution decreases

8- Research Objectives

The main purpose of this paper is to:

1. To explore the latest findings for recycling rice straw and utilizing its by-products for the
production of various sustainable products.
2. To assess the effect of adopting such technology instead of open burning rice straw on the
Egyptian economy.
3. To assess the feasibility of recycling rise straw to different products.
4. To identify the barriers for adoption of rice straw recycling and upcycling to different products in
Egypt.

9- Research Questions
In this paper, we will seek to answer the following questions:

• What products can we produce from rice straw using the latest technology & discoveries by
recycling and/or upcycling rice by-products?
• What are the financial/economic benefits of adopting such behaviour instead of open burning
rice straw?
• How feasible and practical is it to adopt such technology?
• What are the barriers and facilitators for such technology to be widely applied in Egypt?

10- Methodology of Research

The Research Methodology was based on both Quantitative & Qualitative methods

• Qualitative: was by conducting a direct interview with the Subject matter experts & potential
Investors.

• Quantitative:
• Primary: are carried out using systematic sampling. It is extremely rare to conduct
complete population surveys. For speed and efficiency, statistical sampling principles
are used, which ensure a sufficient sample size. For sampling, questionnaires were
used.

• Secondary: by using the publishes statistics (CAPMAS)

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11- Questionnaire Design

Firstly, A pilot survey questionnaire was sends out to a smaller sample size, a group of 6
Investors & Subject matter experts, working in a recycling & investment field, for assisting in
planning and modification of the main Questionnaire Design.

After then and upon collecting the findings from the pilot survey, the final questionnaire was
released for the audience.

the respondent general information was collected, such as name, company, and job title.
Following the respondent general information were collected, the research questionnaire was
divided into three parts.
The first part inquired about response of the farmers & rice fields land lords- Multiple choice
questions

The second part inquired about response of the Investors and SME - Multiple choice questions

The Third part inquired about response of the Investors on Factors affecting the investment in
the new recycling Method was rated on a five-point Likert scale from one to five

12- Survey and Sampling Methodologies:

Due to low response, a non-random snowballing technique was used, in which the researcher
obtains prospective subjects from existing participants, gradually building up the sample. The
study is a specimen or subset of the overall population that is used to show how the rest of the
population is like. [3] [4] [5]
A survey of a smaller proportion of the population is used as a norm by scientific researchers.
The following Sample Size Formula for Infinite and Finite Population (1) was used to calculate
the sample size of an infinite population, Innovative Testing Technique) [3] [4] [5]

𝑍 2 ∗ 𝑃 ∗ (1 − 𝑃) 1.962 ∗ 0.5 ∗ (1 − 0.5)

𝑆𝑆 = = = 96.4 ≈ 97
𝐶2 0.12

Where,

SS = Size of Sample.
Z = Z Value (e.g. 1.96 for 95% confidence level).
P = Percentage of people who make a choice, given as a decimal (0.50 for sample size
needed).
C = Confidence interval (0.1) [3] [4] [5]

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13- Analysis

13.1.- Qualitative - Economic return from the extracted material.

13.1.1 Direct Semi-structured interview (1)

was conducted with “Professor Dr. Nasr Abd El Moneem “, The Interview aim to clarify
the following,

1- amount of Pure raw material extraction per 1 ton.

2- Confirming on the advantage of New recycling method as mentioned in the
registered Patent.
The conclusion was as follows,
1- point #1 was illustrated on the fig1 with the Pure raw material extraction.
2- The advantage of New recycling method as mentioned in the registered Patent was
confirmed by:
1- official documents presented from the Egyptian Patent Office.
2- one independent lab.

Fractionation of Rice Straw to High Economic Value Materials

3%
Rice Straw
Fats & Waxs
1000 Kg 25 Kg

10 %
Holocellulose 850 Kg Lignin
40 Kg

30 %

Hemicellulose Cellulose 350 Kg

100 Kg

16 %

Silica 50 Kg

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 13.1.2 Direct Semi-structured interview (2)

Direct Semi-structured interview (2) was conducted with A well know investor Expert in
raw material market and a group of 6 investors investing in the same field to stand on
the Real market value of the extracted material and the conclusion was as illustrated on
table (1)

Extracted
Material Extracted Total
Wt. Avg. value
Per one ton of rice straw USD
Kg USD/Kg
Cellulose 350 100 35,000
Hemi-cellulose 100 500 50,000
Lignin 40 575 23,000
Silica & silicon di oxide SiO2
50 500 25,000
amorphous
Fats & Waxes ( 3 %) 25 15 375
Total revenue expected ($) Per one ton of rice straw
$ 133,375.00
extraction
Table (1)

13.2. Quantitative

The survey was divided into three parts.

The first part consists of 4 questions of personal nature to help position the respondents‟
profile.
The second part consists of 7 questions aiming at exploring the readiness of the land lord and
the farmers to adopt the new recycling method
The third part consists of 6 questions aiming at exploring the readiness of the potnial investors
to invest in the new recycling method
The questionnaires were distributed directly to potential Investors, Subject matter experts, and
rice farmers land lords to clarify the study's objectives.
The researchers handed out 390 questionnaires to the target audience. From these targets, the
researcher obtained 197 questionnaires.
This study included demographic-multi data as follows

13.2.1- Demographic-multi data analysis

This study included demographic-multi data Figure 1. 26 % form 10-15 years of experience,
51% from 16-20 years of experience, 12% from 21-25 and 11% more than 25 years of
experience.
Job Role of the respondent Demographics data Figure 2. 19% form Land Lords, 31% form
Rice farmers, 44% form potential Investor and 6% form SME in rice straw.
Education Level Demographics Data Figure 3. 19% form Post graduate, 32% from BSC
holders, 32% from high school graduates and others 16. %.
Job Type of the respondent Demographics data Figure 4. 50% form Framing, 44% form
Investing and 6% form Research

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 Fig 1- Years of Experience Fig2 - Job Role
60% 51% 50% 44%
50% 40%
31%
40%
30%
30% 26%
19%
20%
20% 12% 11%
10% 6%
10%
0% 0%
10- 15 16-20 21-25 years More than Land lord Rice Farmer Potential SME -rice
years years 25 years Investor straw

Fig 4-Job Type Fig 3-Education Level

60% 35% 32% 32%
50%
30%
50% 44%
25% 19%
40% 20% 16%
15%
30%
10%
20% 5%
6% 0%
10%
Post BSC High school others
0% graduate
Farming investing research studies

13.2.2- Results of the Land Lords and Farmer questionnaire:

From the below table it can be concluded that most of the respondent are full aware of the rice
straw recycling as 85% responded yes on the first question.
About 89% were using different method of recycling other than burning the straw but with low
revenue income
Most of the respondent with a percent of 84% didn’t know the new recycling method, and after
presenting all data related to the new method most of the responded 77% think it’s worth to
recycle their rice straw using the new method.
But the major of the respondent disagree to sell their straw to the potential investor, as they
want to be a part of the process itself, for its potential great return outcome.

Land Lords and Farmer questionnaire (Table 2)

1 Have you ever heard about rice straw recycling? Respond %

Yes 84 85%
No 15 15%

2 What are you doing with rice straw? Respond %

Burning 11 11%
Used in in mushroom production 38 38%
Recycling (Paper -carton -pressed fabric -----etc) 32 32%
other 18 18%

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3 Have you heard about the rice straw recycling (New Method)? Respond %
Yes 18 18%
No 81 82%

After discussing all the presented data, do you think is it worth to

Respond %
4 use the (New Method) instead of the old uses of Rice straw?
Yes 76 77%
No 23 23%

What do you think the impact of rice straw recycling (New Method)
Respond %
5 on environment?
Decrease environment pollution 79 80%
Increase environment pollution 20 20%

Do you think that the rice straw recycling (New Method) will have a
Respond %
6 positive impact Farmers economy?
Yes 65 66%
No 34 34%

Do you agree to sell your rice straw to investors or suppliers- if

Respond %
7 offered a fair price?
Yes 43 43%
No 56 57%

13.2.3- Results of the Investors and Subject matter Expert questionnaire

From the below table it can be concluded that the majority of the respondent with a percent of
67% did know about the new recycling method, and after presenting all data related to the new
method most of the responded 68% think it’s is a promising investing start up ,
Moreover, most of the respondent with percent of 62% think that the new method will have a
positive impact on economy.
Most of the respondent with percent of 57% would invests in the new method.

Investors and Subject matter Expert questionnaire (Table 3)

1 Have you heard about the rice straw recycling (New Method)? Respond %
Yes 32 33%
No 66 67%

After discussing all the presented data, Do you think that the
2 Respond %
(New Method) is a promising investing startup?
Yes 67 68%
No 31 32%

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 What do you think the impact of rice straw recycling (New
3 Respond %
Method) on environment?
Decrease environment pollution 64 65%
Increase environment pollution 34 35%

Do you think that the rice straw recycling ( New Method) will
4 Respond %
have a positive impact on economic ?
Yes 61 62%
No 37 38%

After studying all the presented data, are you enthusiastic to

5 Respond %
start a rice straw recycling project?
Yes 56 57%
No 42 43%

13.2.4- Ranking the Factors affecting the investment in the new recycling Method

The study's descriptive statistics show the relative rank of factors affecting the investment in the
new recycling Method in Egypt, Likert scale was used to determine the ranking. The following
steps show a summary of factors ranking: [6]

Strongly Strongly
What are the most critical Factors affecting Disagree Natural Agree
Disagree Agree
starting the project?
1 2 3 4 5
1 patent agreement 9 16 13 29 31
2 Finding suppliers /Framers land lord 20 29 18 15 16
3 Production process 5 14 15 25 39
Exporting the extracted material from rice
4 15 14 15 25 29
straw recycling outside Egypt
5 Getting the certificate 19 12 9 30 28
6 Finding the required client or customer 21 26 14 19 18
7 Afraid of entering the market 10 29 9 22 28
8 Environmental regulation 11 11 20 25 31
9 Political 16 21 9 23 29

(Table 4)
RII = ΣW / (A*N)
Where:
W: is the weight given to each item by the respondents, range from 1 to 5
A: is the highest weight (5 in 5-point Likert scale)
N: is the total number

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 Strongly Strongly Total
Disagree Neutral Agree
Question Disagree Agree Total Number A*N RII Rank
1 2 3 4 5 (N)
1 8 22 24 116 210 380 98 490 0.78 1
2 20 58 54 60 80 272 98 490 0.56 9
3 5 28 45 100 195 373 98 490 0.76 2
4 15 28 45 100 145 333 98 490 0.68 4
5 19 24 27 120 140 330 98 490 0.67 5
6 21 52 42 76 90 281 98 490 0.57 8
7 10 58 27 88 140 323 98 490 0.66 6
8 11 22 60 100 155 348 98 490 0.71 3
9 21 32 27 92 145 317 98 490 0.65 7
(Table 5)

The Investors ranked “patent agreement “in top with a RII of 0.78, while in the second place was
“Production process” with a RII of 0.76 and the third place was “Environmental regulation” with
RII of 0.71

Rank Factors affecting the investment RII

1 patent agreement 0.78
2 Production process 0.76
3 Environmental regulation 0.71
4 Exporting the extracted material from rice straw recycling outside Egypt 0.68
5 Getting the certificate 0.67
6 Afraid of entering the market 0.66
7 Political 0.65
8 Finding the required client or customer 0.57
9 Finding suppliers /Framers land lord 0.56
(Table 6)
14- Results:
Gross Potential of Rice Straws

From table (1) and the Direct Semi-structured interview conducted with “Mr. Abd El Shakoor
Mooaz “the well know investor and a group of 6 investors investing in the same field the
estimated gross revenue value per one ton of rice straw is 133,375.00 USD.

While El Qalubia City produce Rice straw in average is 40,000.0 ton per year (CAPMAS 2015).

Which makes the expected Gross Potential revenue for El Qalubia city only is 5.33 billion USD
per year, which will be a great contribute to the Egyptian Economy on General and to Sharika
city in particular and will affect consequently on the resident life quality .

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 The farmers & land lord readiness to contribute in the Process.

From the questionnaire answers in table (2) , The farmers & land lord showed a high level of
readiness to contribute in the recycling Process for its potential high revenue .

The Investors and Subject matter Expert readiness to contribute in the Process.

From the questionnaire answers in table (3), The Investors and Subject matter Expert
showed a good level of readiness to contribute in the recycling Process for its potential high
revenue, with some concerns.

The Factors affecting the investment in the new recycling method.

From table (6) The Investors have ranked their concerns toward the new recycling Process, as
they ranked in the first place “patent agreement “, in the second place was “Production process”
and the third place was “Environmental regulation”.

15- Conclusion and Recommendations

The Rice straw fractionation is so promising to investment. the stakeholders also saw potential in
the process as a future opportunity, and showed a good level of readiness to contribute in the
recycling Process for its potential high revenue, with some concerns.
Investment in upgrading the rice straw value chain should be preceded by a thorough end-
market analysis to determine consumer acceptance of new rice straw-derived products.
the Egyptian government should support the process as it will be benefitable to the Egyptian
GDP as well to the environment.
The rich data obtained through the stakeholder interviews with the investors & the SME
indicated that many market opportunities for rice straw are still untapped and more R&D will be
needed to develop these opportunities.
The more these markets are developed, the more rice straw will evolve into a commodity with
increasing market value, and the more farmers will receive monetary (and nonmonetary)
incentives to move away from straw burning and other non-profitable uses towards more
sustainable uses of rice straw.
References
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