Debabish - Fesibility Study Fainal

ORGANIC PINEAPPLE
FRAM AND PROCESSING INDUSTRY
FEASIBILITY STUDY
Owner: DEBABISH PLC
January, 2010
Hawssa, Ethiopia
REVOLT ENGINEERING PLC. BUSINESS ECONOMICS CONSULTANCY
P.O.Box. 4661 Hawssa , Tel. 251 011 63 72 35 / + 251 09 11 63 79 19
e-mail revolteng0888@ gmail.com

REBEC 15/02-PINEAPPLE PRODUCTION AND PROCESSING-DEBABISH PLC
Table of Contents
1. EXECUTIVE SUMMARY ................................................................................................................5
1.1 PURPOSE OF REPORT ..................................................................................................................................5
1.2 DESCRIPTION OF THE BUSINESS .................................................................................................................5
1.3 AMOUNT OF FINANCING REQUIRED ..........................................................................................................5
1.4 PROFILE OF PROMOTER ...........................................................................................................................5
1.5 MARKET PROSPECT.....................................................................................................................................6
1.6 FINANCIAL VIABILITY ..................................................................................................................................6
1.7 SOCIO-ECONOMIC JUSTIFICATIONS ............................................................................................................6
1.8 RATIONAL BEHIND THE PROJECT................................................................................................................7
1.9 RECOMMENDATIONS .................................................................................................................................7
2. PROJECT BACKGROUND INFORMATION ................................................................................8

2.1 COMPANY / APPLICANT ..............................................................................................................................8
2.2. THE PROJECT..............................................................................................................................................8
2.3 BUSINESS OBJECTIVES ................................................................................................................................9
2.4 PROJECT STRATEGY ....................................................................................................................................9
3. MARKET ASSESSMENT ............................................................................................................ 10

3.1 CURRENT INDUSTRY AND MARKETING OVERVIEW................................................................................. 10
3.2 EXPORT MARKET CURRENT MARKET PLAYERS........................................................................................ 11
3.3 EXPORT MARKET POTENTIALS ................................................................................................................. 11
3.4 DESCRIPTION OF THE PRODUCT AND APPLICATION ............................................................................... 12
3.5 LOCAL MARKET FORECAST ...................................................................................................................... 12
3.5.1 PAST SUPPLY ..................................................................................................................................... 12
3.5.2 PRESENT DEMAND............................................................................................................................ 13
3.5.3 DEMAND PROJECTIONS .................................................................................................................... 14
3.5.4 SUPPLY ANALYSIS.............................................................................................................................. 14
3.5.5 THE MARKET PROSPECT (DEMAND – SUPPLY GAP) ......................................................................... 15
3.5.6 CONCLUSION AND RECOMMENDATIONS......................................................................................... 16
3.6 MARKETING PLAN.................................................................................................................................... 17
3.6.1 ANNUAL PRODUCTION PLAN AND VARIETY .................................................................................. 17
3.6.2 MARKETING PROSPECT AND SHARE ................................................................................................. 17
3.6.3 SELLING PRICE STRATEGY ................................................................................................................. 17
2
3.6.4 SELLING PRICE PLAN .................................................................................................................. 18

3.6.5 MARKETING CHANEL ........................................................................................................................ 18
3.6.6 MARKETING BUDGET. .................................................................................................................... 19
4 . TECHNICAL STUDY .......................................................................................................................... 20

4.1 INTRODUCTION........................................................................................................................................ 20
4.1.1 PINEAPPLE PRODUCTION ................................................................................................................. 20
4.1.2 LOCATION ......................................................................................................................................... 20
4.1.3 PHYSICAL AND NATURAL CONDITIONS AND SUITABILITY ................................................................ 21
4.2 PRODUCTION PLAN ................................................................................................................................. 22
4.2.1 PRODUCTION TECHNOLOGY PROCESS FLOW ................................................................................... 22
4.2.2 LAND PREPARATIONS ........................................................................................................................... 23
4.2.3 FARMING OPERATIONS .................................................................................................................. 23
4.2.4 CROP MAINTENANCE ..................................................................................................................... 26
4.2.5 HARVESTING ................................................................................................................................... 27
4.2.6 IRRIGATION ..................................................................................................................................... 29
4.2.5 FARM PRODUCTION CAPACITY AND MARKETING PLAN .................................................................. 29
5. PROCESSING PLANT OPERATIONS .......................................................................................... 30

5.1 PROCESSING PLANT ................................................................................................................................. 30
5.1.1 PRODUCTS PROCESS AND DESCRIPTIONS ........................................................................................ 30
5.1.2 PROCESS FLOW OF DRIED PINEAPPLE FRUIT .................................................................................... 30
5.1.3 PROCESS FLOW OF PINEAPPLE JAM ................................................................................................. 31
5.1.4 PLANT CAPACITY AND PRODUCTION PLAN ...................................................................................... 32
5.1.5 MAIN RAW MATERIALS .................................................................................................................... 33
5.1.6 PACKAGING MATERIAL ..................................................................................................................... 33
5.2 PACKAGING HOUSE OPERATIONS ........................................................................................................... 35
5.2.1 PROCESS FLOW ................................................................................................................................. 35
5.2.2 PRE PACKAGING OPERATIONS ........................................................................................................ 36
5.2.3 PACKAGING HOUSE CAPACITY AND PRODUCTION PLAN ................................................................. 37
5.2.4 PACKAGING TYPES AND MATERIAL .................................................................................................. 38
5.2.5 QUALITY REQUIREMENTS ..................................................................................................... 39
6. PROJECT ENGINEERING AND OPERATION REQUIREMENTS ................................... 40

6.1 LAND UTILIZATION PLAN ....................................................................................................................... 40
6.2 COVERED AREA REQUIREMENT AND COST.......................................................................................... 40
6.3 IRRIGATION AND FARM STRUCTURE REQUIREMENTS ............................................................................ 41
3
6.4 MACHINERY AND EQUIPMENT .................................................................................................... 42

6.4.1 PROCESSING MACHINERY .................................................................................................. 42
6.4.2 AUXILIARY MACHINERY ....................................................................................................... 43
6.4.3 COMPANY VEHICLES ......................................................................................................................... 43
6.5 MAINTENANCE & REPAIRS ...................................................................................................................... 44
6.6 OFFICE FURNITURE & EQUIPMENT ........................................................................................... 44
6.7 UTILITIES............................................................................................................................................. 44
7. PROJECT ORGANIZATION AND MANPOWER REQUIREMENT .................................... 45

7.1 FORM OF BUSINESS ........................................................................................................................ 45
7.2 ORGANIZATIONAL STRUCTURE OF THE FARM ...................................................................... 45
8. PROJECT FINANCIAL STUDY .................................................................................................... 49

8.1 PROJECT ECONOMICS ................................................................................................................. 49
8.1.2 RETURN............................................................................................................................................. 49
8.1.2 FINANCIAL PLAN ............................................................................................................................... 49
8.2 FIXED AND OTHER INVESTMENT COST.................................................................................................... 50
8.2.1 FIXED INVESTMENT COSTS ............................................................................................................... 50
8.2.2 OPERATING EXPENSE................................................................................................................. 50
8.2.3 WORKING CAPITAL REQUIREMENTS ......................................................................................... 50
8.3 FINANCIAL ANALYSIS & KEY ASSUMPTIONS ............................................................................................ 50
8.3.1 GENERAL ASSUMPTION .................................................................................................................... 51
8.3.2 FINANCIAL ASSUMPTIONS ................................................................................................................ 51
8.3.3 ECONOMIC ASSUMPTIONS ............................................................................................................ 51
8.3.4 CASH FLOW ASSUMPTIONS .............................................................................................................. 51
8.3.5 FIXED CAPITAL INVESTMENT ASSUMPTIONS ................................................................................. 51
8.3 FARM PRODUCTION COST ....................................................................................................................... 53
8.4 PROCESSING AND PACKAGING HOUSE PRODUCTION COST ................................................................... 54
8.5 FINANCIAL PROJECTIONS......................................................................................................................... 55
8.5.1 REVENUE PROJECTIONS SHEET (Birr) .......................................................................... 55
8.5.3 PROJECTED INCOME STATEMENT (BIRR’000) .................................................................................. 56
8.5.4 PROJECTED BALANCE SHEET (Birr’000) ............................................................................................ 57
8.5.5 PROJECTED CASH FLOW STATEMENT (Birr ‘000) ........................................................................... 58
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1. EXECUTIVE SUMMARY
1.1 PURPOSE OF REPORT

The present feasibility study business plan is established with view to establish
new Medium Scale Commercial Pineapple Agro Industry Farm Industry anticipated
by Debabish Plc. Enterprise. Its objective is twofold to be used as a basis for
developing the envisaged commercial farm and to seek bank loans to financial
investment planned with in the foreseeable future. This summary highlights the key
points of feasibility business plan
1.2 DESCRIPTION OF THE BUSINESS
The proposed project is specialized in commercial pineapple fruit crop production

for domestic and export market at acquired farm land of 35 ha with planned full
capacity potential plan of 1120 tons /annum The establishment of the envisaged
commercial pineapple farm with a capacity of 1120 tons per annum will increase
the existing production capacity of the SNNPRG Pineapple fruit by 200%
The Commercial Farm Industry will be established at SNNPRG, Sidama

Zone, Loko Abaya Woreda, Burkito Bura Peasant Associations. The farm is located
85 away from Hawssa the capital city of SNPRGS.
1.3 AMOUNT OF FINANCING REQUIRED

The total capital investment cost of the project is estimated to be Br 10.51
million. The envisage investment requires a bank loan of 7.35 million birr for
financing the project on equity to debit ratio of 30: 70 the balance of the
investment cost will be financed by promoter
1.4 PROFILE OF PROMOTER
Debabsiah Plc Agro Industry Enterprise business is owned by a group of

reputable Ethiopia business man join by forming Debabaish Plc , is motivated and
interested to go into the Commercial Pineapple fruit crops Production and marketing
the product after gathering many information and attending various workshops and
seminars conducted by SNV-Ethiopia BOAM. The government strategies and policy
also motivated the prompter besides the high demand supply gap of this tropical
fruits at export market at large and as import substations at domestic markets
observed by the promoter. To fulfill the certification requirements and earn more
profits due to modern management systems, qualified manger with sufficient work
experience and qualification will lead the organization business.
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1.5 MARKET PROSPECT
This tropical fruit is a popular business in international trade and in some

developing countries like Ghana; it is an important foreign exchange earning
commodity. Pineapple is one of the tropical fruits which has the highest percentage
of export share of the all the tropical fruits followed by mango and it is one of
Ethiopia Government millennium goal strategy plan. The demand forecasted based
on the import statics of process pineapple and local consumption shows 2000 tones/
year for the year 2010. The demand and supply gaps even at domestic market are
promising for the commercial marketing of the envisage farm products. The imported
process pineapple used by canneries for juice processing statically data shows that
307% annual average growth rate.
1.6 FINANCIAL VIABILITY
To see the financial viability of the project its profit and/ or loss, cash flow
statements, was tested carefully. The financial Internal Rate of Return (FIRR) shows
30% & 25% before & after tax. The net present value of project capital investment
at 10 % discount rate is ET, Birr 13.00 and 19.39 million after and before tax. The
project payback period is five year in both cases.
1.7 SOCIO-ECONOMIC JUSTIFICATIONS
The project will employ 39 workers in permanent employment bases for more
than 2000 casual laborers every year. It aims to raise the quality standards of the
target market area by providing superior quality pineapple product at affordable
price and continuously through the year applying the horticulture science of
pineapple productions.. The envisage farm will contribute to the national economy
by,
by foreign exchange saving as its major objective is substituting the

quantity of imported pineapple fruit products
by earning of tax incomes
from establishment of new canaries of juice processing due to continues
supply of fruit by this farm
from the health benefit of society by eating fresh cut pineapple and other
benefits
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1.8 RATIONAL BEHIND THE PROJECT
The some of the rational for establishment of the envisage farm with processing and
export facility are,
Policy: Government five years strategic plan, which promotes new

investment in agro-industrial sector and specially encourages commercial farm
products of fruits which indirectly contributes to import substitution and
exportable ones.
Land: The Company has acquired a 150 ha of land suitable for
pineapple cultivation and only 600 m far from Perennial River for
supplementary irrigation purposes.
Labor: There is plenty of skilled and semi-skilled labor in Ethiopia. The
country has a good education system that churns out a number of graduates
in most key professions at all levels.
Availability of raw materials: The improved variety of smooth cayenne,
which has higher demand at domestic and international market planting
materials, are available at Mekele and Jimma tissue culture laboratory. The
product of the farm by planting the mother plant of smooth cayenne will create
market opportunity to product of the envisaged business in the future.
.
1.9 RECOMMENDATIONS
All the aforementioned facts discussed above and the feasibility study on
market, technical, financial, and social point of view proves the project is viable
business plan and one of the government's priorities, which contributes for the
government strategy on development worth deserving encouragement and support
from the pertinent government financial institution and banks.
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2. PROJECT BACKGROUND INFORMATION
2.1 COMPANY / APPLICANT
Name of Owner : Debabaish Plc.
Address : SNNPRGS, Hwassa
Tel : +251 09 16 82 26 92
2.2. THE PROJECT
Name of company : Debabaish Plc.
Date of Establishment : 24/8/2000 E.C
Registration : SNNPRG- Investment Office
Registered Capital : Et. Birr 10,000,000.00
Address : Sidama Zone, Loko Abaya Woreda,
Tel : +251 09 16 82 26 92
E-mail : ethiopinapplle888@ gmail.com
Project type : New
Project Implementation Period : One Year
Purpose of the project :
This profile envisages the establishment of a commercial farm production

of organic pineapple fruit by applying horticulture science and good agricultural
practices at the farm area of 35 ha with a maximum production capacity of 1200
tons per annum, and marketing the product by adding value, performing post
harvest management and packaging house operations to domestic and
international market.
Location of Project : SNNPRG , Sidama Zone, Loca Abaya Woreda,

Burkito Bura Peasant Associations
8
Credit Information : New

Proposed business legal status : Private Limited Company.
Production capacity
• Farm -1200 tons / annum of fruit.

• Jam : 219,000 pcs /year of glass gar 450 gm/unit
• Packed Fresh Fruit Export 31,500 carton of 10 kg/carton
• Dried pineapple :105,000 pcs /year of 250 gm/unit
2.3 BUSINESS OBJECTIVES
The business objectives of the envisaged farm are profitable production

of pineapple fruit crop and marketing the product for local market,
domestic market of Addis Ababa, regional towns markets, Juice
processing canneries, and exporters.
As a business firm one of objective of the Company is to earn reasonable
income from the demand supply gap exists in the sector at large and at
the SNNPRG regional markets.
2.4 PROJECT STRATEGY
• Constructing a project farm building as per EUREGAP / ISO 14001

regulations and commercial farm building standards
• Constructing Irrigation Systems for Supplementary irrigation, nursery,
washing purposes
Procures machineries and equipments.
Recruit and train workers
Setting up of the production, harvesting, packaging, and marketing
system.
Setting up processing and packaging house
Set up and a qualified and efficient management team recruited.
9
3. MARKET ASSESSMENT
3.1 CURRENT INDUSTRY AND MARKETING OVERVIEW
The ecological diverts of the country that is the reflection of range of altitude
,temperature, soil, and other topographic factors is beloved to position the nation as
one of a few countries in the world in preserving endemic farms and animals This has
also created apple opportunity for broad range of temperate and tropical fruits. The
agro ecologies factors also give a chance of all year round product capabilities.
According to government, export focused strategic plan to capitalize on the nations

fresh fruit production the part of the country chosen as major growth corridor for
pineapple productions is only Southern parts of Ethiopia.
FRUIT MAJOR GROWTH CORRIDOR

Eastern Central Southern North
Apple
Pineapple
Mango
Table 3-1 Export Strategy growth corridor vs. - fruited type
SSNPRS region has strong potential for tropical fruit productions, but out of 83,000 ha
of land only suitable for mango apple and pineapple productions only 24% of of the
land is utilized for the productions
Ethiopia has suitable agro ecology but the cultivation practice is limited in small
areas of south and south west of the country at SNNPRS regions only. Gojeb state
farm is limited to less than 50 ha of pineapple and do not contribute much in today’s
market. In SNNPR, there are farmers who are growing pineapple as main cash crop for
their livelihood. Teso fruit farmers’ cooperative is organized to work on pineapple. The
potential is already there and the primary cooperative at Teso has about 746 hectares
houses hold farm pineapple cultivation.
The tropical pineapple is recognized as among the most popular fruits and
flavors around the world. In Europe, the market for canned pineapple as well as for
NFC pineapple juice and concentrate is undoubtedly the largest tropical submarket.
Pineapple is the second harvest of importance after bananas, contributing to over 20 %
of the world production of tropical fruits (Coveca, 2002). Nearly 70% of the pineapple
is consumed as fresh fruit in producing countries.
Internationally, the European market is the leading market with 40% of total imports,
followed by United States of America and Japan. Global imports of fresh pineapples are
10
projected to increase by 35% during the next decade. However, the EU is expected to
remain the largest market taking in 500,000 MT followed by Japan.
3.2 EXPORT MARKET CURRENT MARKET PLAYERS
In the fruits and vegetable sector, exports are still dominated by the two state farm
operations, namely Upper Awash Agro-Industry Enterprise (UAAIE) and Horticulture
Development Enterprise (HDE), both established in 1979/80 and both currently in the
process of being privatized. Alongside the state companies, a number of private sector
companies and cooperatives are involved in relatively small-scale production,
processing and export of vegetable products.
The export of fresh fruit and vegetables began to develop in the early 1970s. However,
private sector efforts to export to Europe and Middle Eastern countries were thwarted
by the Derg regime, and exports fell drastically after the 1974 revolution. Under the
centrally planned economy of the Derg regime, exports were dominated by state-
owned farms. In the late 1980s exports began to grow again, but failed to achieve
levels reached prior to 1974. Since the collapse of the Derg regime in 1991, private
sector operations have slowly entered the market. However, horticultural exports are
still dominated by the state farms established in 1979/80
Etfruit was the first state company to market to countries of the E.U. The Ethiopian
Fruit and Vegetables Marketing Enterprise (Erfurt) was established in 1980 under the
former Ministry of State Farms Development. The scope of its services has since then
been extended to include private horticultural producers striving to enter export
market. Erfurt also renders other services such as market information, refrigerated
semi trailer truck transport rent, and supply of quality imported seeds and various
export-packing materials. Erfurt has developed its distribution centers and branches
and is today present in 10 major towns of the country. In the nation's capital, Addis
Ababa, Erfurt has three main branches, twenty-one retail-handling shops and thirty
mobile shops strategically placed to render efficient service. The types of fruits
delivered to domestic markets are oranges, mandarin, grapefruit, lemon, lime, mango,
avocado, guava, banana, processed horticulture products such as tomato juice, orange
marmalade, orange squash, and grapefruit squash and guava nectar. The major
suppliers of fresh fruits and processed products are the Upper Awash Agro-Industry
Enterprise the Horticulture Development Enterprise and Metehara Sugar Factory
3.3 EXPORT MARKET POTENTIALS
The main fruits produced and exported are bananas, citrus, grapefruit, mangoes,
papaya and avocadoes. The main export markets for these Ethiopian fruits are Djibouti,
Saudi Arabia, Yemen and Sudan. The export of fruits of from year 1998-2204 shows,
Ethiopia is practically only exporting to Djibouti
11
Country of Destinations Ethiopian export of fruits (1000 US$)
Year 1998 1999 2000 2001 2002 2003 2004

World 1323 1109 1237 1072 1429 2519 1615
Djibouti 1279 1105 1205 1059 1399 2471 1439
Share of Djibouti ( % ) 97% 100% 97% 99% 98% 98% 89%
Data source: ITC/WTO

Table 3-2 Exported fruit –share of Djibouti
Djibouti’s arid climate and rocky soil mean that it must import 90% of its fruit and
vegetable demand. Djibouti is the largest F&V export market for Ethiopia. With an
increased expatriate and military presence in Djibouti there appears to be opportunities
for supplying this community with higher-value (and higher quality) niche vegetables
and fruits. Djibouti imports up to 15 tons of fresh produce per week from Kenya,
which Ethiopian exporters can try to capture with consistent quality and competitively
priced produce
Sudan
Ethiopian exports to Sudan are increasing due to the economic development in the
Southern part of the country. However, very little trade data available on trends in
Sudanese horticulture product consumption and imports
European
Currently European export is restricted to beans. The green beans are mainly exported
to Europe by air. The exports are supplied by private sector operations located in the
highlands around Addis Ababa and the lowlands around Ziway and Meki, as well the
state farms in Upper Wash and the Rift valley.
3.4 DESCRIPTION OF THE PRODUCT AND APPLICATION

Pineapples are eaten fresh or processed into dried fruits, juice and as canned fruits.
Depending on the variety, pineapples weigh between 0.9-4 kg; Baby-pineapples are
mostly less than 500 g. The white-yellow fruit is contained in a hard, scaly, skin similar
in structure to pine-cones. Ripe fruits can be eaten fresh, or processed into juice, jams,
candied fruits, stored in cans or dried. Fruits intended for export should be harvested
half-ripe, just when the color begins to change on their base. Juice squeezed out of the
middle of the fruit should then have a “Brix”-value of at least 13%. After harvesting,
the fruits are then cleaned, the stalks cut to 2 cm, sorted, classified and packed.
3.5 LOCAL MARKET FORECAST

3.5.1 PAST SUPPLY
In the absence of data on production, consumption, and past supply of fresh fruits of
pineapple and processed locally , the imported quantities of processed pineapple to the
country report prepared by Customs Authority is used to study the past supply of the
products.
12
Year Import (Tones) CIF - Value Et. birr CIF Birr/kg

2005 42,699 423620 9.92
2006 423,088 3246070 7.67
2007 178,424 1485070 8.32
2008 339,629 2767826 8.15
2009 111,498 1068208 9.58
Average 245,960 1980646.5
Weighted Average Price 8.52
Table 3-3 Imported Processed Pineapple (kg), Customs Report
3.5.2 PRESENT DEMAND
Present demand is estimated based on assumptions, analysis, and projections,
• By projecting the past supply of processed pineapple import by average
growth rate of 200 % as shown table below
Year Import ( Kg )
2005 42,699
2006 85,398
2007 174,212
2008 355,392
2009 725,000
2010 1,479,001
Table 3-4 Projection of Supply of Processed Fruits (tones)
• Adding additional amount of fruit taking into consideration of juice farm

efficiency of 45%
• Adding local production of 270 tone/ year ( Hiber Le Lemate Report )
The present demand of fresh fruit supply is estimated as table shown below,
PRESENT DEMAND OF FRESH PINEAPPLES ESTIMATIONS

Assumption and data Data ( Tones )
Imported Juice 1,479
Fruit demand of manufacture ( Imported ) 2,440
Gojeb state farm productions ( Estimated) 1,750
SNNPRS Annual Production 270
Grand Total Estimated Supply Year 2010 4,460
Table 3-5 Present Demand Estimations (tones/ annum)
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3.5.3 DEMAND PROJECTIONS
The demand projections growth rate for forecast has been decided after review of
factor, which can affect the demand,
The European market for fresh and dried pineapple has grown on average by 19
percent between 2003 and 2007.
Remarkable rate of economic growth the country has achieved recently , which
was more than 11% for the past consecutive six years
The government new strategic plan to achieve more than 15 % in the coming
five years.
And a new strategy to increase the share of industry contribution higher the
than agriculture and service sector
the growing demand for tropical fruit at Djibouti, Sudan, and Europe Market
Average annual imported growth rate of more than 307%
Consumption growth rate of 659% between year 2005- 2008
Taking the above facts in to considerations the future demand of the product is
assumed to grow at the rate of 10%.
YEAR FRESH PINEAPPLE FRUIT ( IN TONES)

2012 5,397
2013 5,936
2014 6,530
2015 7,183
2016 7,901
2017 8,691
2018 9,560
2019 10,516
2020 11,568
2021 12,725
2022 13,997
Table 3-6 Demand Projections (tones/ year)
3.5.4 SUPPLY ANALYSIS

The following assumptions are used for projecting exiting supply of fresh pineapple
fruits production of the country and and project supply estimations
Assumptions to determine present supply
The average annual supply of farmers at SNNPRS reported by regional

offices and taken from “ Heber Le Lemat news” of 270 tons per annual
as region present supply
The production potential of Gojeb farm as commercial present supply
14
Additional 25 % consideration for others
Therefore, present supply is calculated as show at the table below,
SOURCE DATA ( TONES )

Gojeb state farm 1750
SNNPRS 270
2020
Others 25% of total 505
Grand Total 2010 2525
Assumptions to determine future supply,
• Since the progress of country fruit production doest have any increasing growth
rate, the existing supply is take as the same as present supply estimation above
through.
• The project supply is take from the envisage farm plan only
Year Existing Supply Project Total

Supply Supply
2010 2536.3 2,536
2011 2536.25 2,536
2012 2536.25 2,536
2013 2536.25 630 3,166
2014 2536.25 882 3,418
2015 2536.25 1,008 3,544
2016 2536.25 1,260 3,796
2017 2536.25 1,260 3,796
2018 2536.25 1,260 3,796
2019 2536.25 1,260 3,796
2020 2536.25 1,260 3,796
2021 2536.25 1,260 3,796
Table 3-7 Supply Projections (tones/ year)
3.5.5 THE MARKET PROSPECT (DEMAND – SUPPLY GAP)

The interaction of demand and supply of pineapple fruit market based on the supply
and demand forecast and analysis detailed at the graphs shown at fig-1 shows that
there exists a wide range of market that enables this upcoming project to sale its
produce without any problem at the domestic market and has additional opportunity at
the international market with better revenue
15
REBEC 15/02-PINEAPPLE
PINEAPPLE PRODUCTION AND PROCESSING-DEBABISH
PROCESSING DEBABISH PLC
18,000
16,000
14,000
12,000
10,000
Demand
8,000
Supply
6,000
4,000
2,000
0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Fig 3-1 Demand – supply gap (Tons)
3.5.6 CONCLUSION AND RECOMMENDATIONS
Taking maximum production capacity of 1200 tones / annum at 2016 and 630 tones at
2013 versus the market opportunities rational below
The demand supply gap of nearly 2370 tones / annum at 2011

The presence of juice processing industries imports raw materials of for
pineapple juice processing at 307% annual growth rate
The experience of SNNPRS –cooperatives at export of pineapple to Djibouti
The presence of exporters and export promoters
The support by ECX-Ethiopia
Ethiopia and other Exporter promoters
The demand supply gap of 8892 tones at year 2022
Export Marketing potentials to Djibouti
The Pineapple export experience of Erfurt to Sudan
Of all tropical fruits , Pineapple is well is well adopted and widely consumed at EU
The demand growth rate of over 100%
% at Europe market of Pineapple ( 2002-
2006 )
Establishment of this private pineapple production farm of 1200 tone/annum

capacity at full-scale production is viable business
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3.6 MARKETING PLAN

3.6.1 ANNUAL PRODUCTION PLAN AND VARIETY
The proposed project is assumed to produce pineapple fruit product by farming at

the envisaged farm. The project will have the following product
o Fresh Fruit Packed for Export Market
o Fresh Fruit for domestic canary
o Fresh Fruit Sales for retails and whole sealers
o Processed pineapple jam for local market
o Dried pineapple for export market
3.6.2 MARKETING PROSPECT AND SHARE

The proposed business can easily compete in the 80% market share of fresh fruits of
pineapple market as it is planned to produce and market better quality and different
Varity with attractive selling price.
3.6.3 SELLING PRICE STRATEGY

Pricing is a critical decision in marketing management. In most of the case, there
may be a general price range where above the upper limit it will be hard to get a buyer
and lower the limit an enterprise may not be willing to sell its products.
In the case of the proposed business the selling is fixed based on facts below,
LOCAL SUPPLY – TO CANNERY
• It has to introduce its products where the market is dominated by import of
similar products for the case of raw materials supply to juices cannery,
• To be competitive with price of concentrate imported by domestic canneries ,
the processing loss for converting from fresh fruit to concentrate stage at
manufacturing is considered at price strategy so that the canneries prefer the
fresh fruit for processing rather than the imported concentrate ( raw
materials of cannery )
LOCAL SUPPLY – WHOLE SELLERS
• Due to low level of consumptions by consumers
• Decreasing whole sealers margin
• Subtracting retailers margin
EXPORT MARKET SALES.
The exporter price was fixed based on pineapple organic faire trade minimum
price for smooth cayenne pineapple variety at farm gate of similar countries for this
feasibility point of view.
17
COUNTRY MINIMUM ( BIRR/ kg) PREMIUM ( BIRR/kg) TOTAL ( BIRR/ kg)

Cameron 10.25 1.00 11.25
Ghana 11.25 1.25 12.50
Togo 7.50 1.00 8.50
AVERAGE PRICE ( Birr/kg ) 10.75
Source: FLO (2009)
Table 3-8 Organic fair trade –pineapple Sales Price Plan (ET. Birr)
3.6.4 SELLING PRICE PLAN
The sales price plan for this feasibility study determined as shown at the table below
MARKET SALES PRICE

PRODUCT
PRICE PLAN
Type Quantity/unit unit Birr Birr
Pineapple Jam 450 gm/jar package 25 17.50
Pineapple fruit kg 6 4.20
Dried Pineapple 250 gm/pack package 31 31.00
Organic Pineapple kg 12 10.75
Table 3-9 Sales Price Plan (ET. Birr)
Based on sales price plan with recommended percentage decreases, the proposed
selling prices as shown in the Table 3-10. The difference between the proposed selling
price and the average market prices create the opportunity for increased market share
of the business taking into account the whole seller’s and the retailers profit margin as
well as the prices to the final consumer. As the proposed business is a new entrant to
the market, it should position its products at the lower end of the going rate prices,
which enable it to penetrate the market and thereby curve out a sizable market share.
3.6.5 MARKETING CHANEL
PRODUCER
WHOLE EXPORTER
SEALER RETAILERS /
INSTITUTIONS
CONSUMER
18
3.6.6 MARKETING BUDGET.

The marketing and promotional activities of new fruit production and marketing
industry are crucial in increasing the demand for farm product. These activities
include, but are not limited to,
Advertisement on radio and television

Signboards, posters, leaflets and cards
Contacts
Contact through correspondence with a buyer
Direct contact with a buyer
The package is one of the most important means of promoting a product.
Promotional gifts and free sample delivery
Special promotions at Trade fairs and exhibitions
Institutional sales delivery
The yearly marketing budget will be for the envisage project market promotion are
estimated as shown at Table
MARKETING PLAN
PROMOTION -ADVERTISING
Type of Details UNIT Qt Rate ( Costs ( Birr)

advertising Birr)
Sign posts Metal bill board NO 2 10000 20,000.00
stands
Promotional gift Product Ls 1 20000 20,000.00
Promotional Radio No 5 2000 10,000.00
Advertisement
Publication Flayers, Ls 1 10000 10,000.00
Brochures
TV Advertisements NO 2 15000 30,000.00
90,000.00
Table 3-10 Marketing Plan Budget
19
4 . TECHNICAL STUDY
4.1 INTRODUCTION
4.1.1 PINEAPPLE PRODUCTION
Pineapple is one of the tropical fruits in greatest demand on the international

market, with world production in 2004 of 16.1 million MT. Of this total, Asia
produces 51% (8.2 million mt), with Thailand (12%) and the Philippines (11%) the two
most productive countries. America and Africa contribute 32% and 16% of world
production, respectively, with Brazil (9%) and Nigeria (6%) also being major
producers (FAO, 2006). A major part of world production is processed as canned
products and juices, and about 25% goes to the fresh fruit market (Souza et al.,
1999). In Brazil, pineapple is grown in most states and there has been a significant
increase in production in recent years.
The pineapple (Ananas comosus) is one of the most popular tropical fruits. The origin
of the pineapple is the American continent, probably Brazil and Paraguay. It has
spread throughout tropical and subtropical regions as a commercial fruit crop. The
important pineapple going countries of the world are the Hawaiian Islands,
Philippines, Malaysia, Thailand, Brazil, Ghana, Kenya, Mexico, Taiwan, South
Africa, Australia, Puerto Rico and India. The juice has worldwide market. The fruit
and juice have good industrial demand also. The fruit is a good source of vitamin A
and B and rich in vitamin C and calcium. It also contains phosphorus and iron
VARIETIES
Cultivated types of pineapple are called “clones”, because they are vegetative
propagated. There are many named clones, classed in 4 – 5 groups including
‘Cayenne’, ‘Spanish’, ‘Queen’ and ‘Pernambuco’, which may represent botanical
varieties. Commercial production is based mainly on clones in the ‘Cayenne’ group,
also known as “Smooth Cayenne”
4.1.2 LOCATION
The project location is SNNPRG, Sidama Zone , Loca Abaya Woreda, Burkito Bura
Peasant. The envisage farm is 85 km away from Hawssa the capital city of
SNNPRS.
20
4.1.3 PHYSICAL AND NATURAL CONDITIONS AND SUITABILITY

CLIMATE
This farm flourishes in a temperature range of 15oC to 30oC with 24°C being
optimum for growth. Sunburn is a problem above 35oC. Growth is retarded when
temperatures drop below 15oC, or exceed 30oC. Temperatures below 8oC induce
black heart, a physiological disorder. Farms are frost sensitive. A high humidity yet
low rainfall is preferred; the high humidity reduces the danger of sunburn.
SOILS
Suitable soils range from light sands, such as fern wood form, to heavy clay soils
within the short landform. Good drainage is essential, so farming on ridges is
practiced extensively. The project area has sandy loam soil with good drainage
property for pineapple farm. Best growth is achieved on well-drained, fertile, sandy
loam soils with a pH range of 4.5-5.5.
RAINFALL
Although the pineapple farm is fairly resistant to drought, it requires a medium to

high evenly distributed rainfall for good growth and the production of healthy fruits.
It will grow with an annual rainfall as high as 2,500 mm once adequate drainage is
provided
Despite these adaptations to dry conditions, the greatest yields and the best quality
fruits are obtained when the crop is well supplied with water. Well distributed
rainfall of 1,200 to 1,500 mm annually is adequate for the crop
The pineapple’s demand for water varies from 1.3 to 5.0 mm/day, depending on its
state of development and on soil moisture.
The project area climatic data , soil property, altitude, and availability of
perennial river only 600 m far from farm in case of water deficit for
supplementary shower irrigation and nursery development the
establishments of pineapple farm establishment idea of envisage farm is
viable business idea
21
4.2 PRODUCTION PLAN

4.2.1 PRODUCTION TECHNOLOGY PROCESS FLOW
PREPARING THE LAND
CLEARING AND
WEEDING PREPARING THE BED
FARMING
FARMING
FARMING STEAM FROM
TISSUE CULTURE
FARM
MULTIPLICATI
ON AT
FIELD NURSERY
NURSERY FARMING
FARMING
FARMING SUCKERS
ESTABLISHING A FARM COVERING

MULCHING PLASTIC
MAINTAINING
THE CROP
FERTILIZER
APPLICATIONS WEED CONTROL
CONTROLLING PLAGUES INDUCING

AND ILLNESS FLOWERING
REMOVE LEAVES
HARVEST
Figure 4- 1: Production flow of off- Pineapple farming
22
4.2.2 LAND PREPARATIONS

The lands should be thoroughly ploughed and pulverized to a good tilt. It
should be properly leveled to avoid water stagnation. Adequate drainage channels
should be provided. Preparation of the soil includes the stages of cleaning, leveling,
and preparation of farming beds, designing drainage systems and laying out
pathways. Most of this activates of land preparations will be done on farm
machineries that are include under this studies.
Every fourth year the first formation of mother farm will be ploughed back into
soil. Sub-soiling at 50 cm deep is done to improve drainage since good drainage is
very important in pineapple production. The land will be harrowed and ridged. The
recommended ridge height is 10 cm and the space between the centers of the ridges
is 112 cm
4.2.3 FARMING OPERATIONS
4.2.3.3 FARM DENSITY
Taking in to considerations the targeted market of exporting the fruit or supplying

fruit to the canary and the rainfall and other climatic conditions of the envisaged
farm locations , the farm density of 40000 farms per ha is recommended for
production plan.
Pineapple is farmed in double hedge system for convenient intercultural operations.

For a density of 40,000 farms per ha , the spacing should be120cm x 60cm x 40cm
i.e. 120cm between two rows of adjacent beds, 40cm between farms in a row and
60cm between two single rows.
4.2.3.1 PLANTING MATERIALS

The platelet purchased initially from the tissue culture laboratory will be farmed in the
field nursery for an average period of five months before transformation and farming at
the farm. The cost of nursery and purchase of tissue culture from purchasing to
becoming ready for transplanting is birr 128,100 birr/ ha and 3 birr/ plant.
Table 4-1 MOTHER PLANTING MATERIALS COST
DESCRIPTIONS UNIT QT/HA RATE COST
Seedling Seed/ha 44000 2.5 110,000
Polyethylene tube Kg/ha 240 65 15,600
Other Nursery Cost Birr/ ha 500 1 500
Bed / Compost / shade Man days /ha 100 20 2,000
preparation, nursery
management
Planting materials cost per hectare in et birr 128,100
Planting materials cost per plant in et birr 3
23
The field nursery will continue production of farming materials, plantlet by applying
different techniques of farming materials multiplications and will prepare farming
materials for the second year farming and after that in the form of Suckers and
slips. In addition, sucker, slip and crown can propagate the pineapple. Suckers
removed from mother farm, which gives the first crop, can be farmed after roots of
the first crop removed from the farm. The farming material should be selected from
healthy diseased free farm. The production cost of nursery bed multiplications per of
seedling at the farm nursery is estimated as 4100 birr/ ha (table 4-2)
Table 4-2 SUCKERS MULTIPLICATION COST

DESCRIPTIONS Demand / Assumptions Cost Estimate
Unit Qt Price ( Birr ) Cost ( Birr )
Bed materials m3 2 100 200
Dap Qt/ha 1 900 900
FYM Qt/ha 5 200 1,000
Bed and shade preparation, man days 100 20 2,000
management /ha
Cost of suckers preparation per hectare ( Birr /ha ) 4,100
4.2.3.2 TREATMENT OF FARMING MATERIAL
Before farming, the suckers and slips will be sun cured and dry leaf scales at the
base should be removed. Farming material should be dipped in ceresan solution (4g
in 1 lit. of water) or 0.2% Dithane M-45 before farming to protect the farms against
bud rot.
4.2.3.4 FARMING
. Suckers should be farmed at 10 - 15cm depth in 15-20cm deep hole. About 500g
FYM or cow dung is to be added to the soil of each hole. Farming may be done in
single or double row following triangular or rectangular system. Pineapple may be
farmed using black polythene film as soil cover. This ensures total weed control and
heavy crop. However, fertilizers may be applied by spraying or drip method.
24
Table 4-3 FARM PLANTING LAND PREPARATION AND PLANTING COST ESTIMATIONS
Demand / Assumptions Cost Estimate

DESCRIPTIONS
Unit Qt Price ( Birr ) Cost ( Birr )
INPUTS
Pre-plant fertilizer Qt/ha 0.75 659 494
Insecticide Lt/ha 2 250 500
Mulching tube ( 1m wide ) ml/ha 1200 5 6,000
6,994
LABOR
Land preparation, digging trenches man days /ha 20 20 400
Preparing suckers and planting man days /ha 115 20 2,300
Application of manures & man days /ha 10 20 200
fertilizers
Spraying of pesticides, micro- man days /ha 5 20 100
nutrients growth regulators,
2,600
MACHINERY AND ASSOCIATED COST
Machinery Rent Birr/ha 2000 1.5 3,000
Machinery, Fuel, Lt/ha 100.00 13 1,300
Oil and Lubricants 15% of Fuel Cost 195
Labor with machinery man days /ha 10 24 240
Machinery Cost 4,735
COST OF LAND PREPARATIONS AND PLANTING PER HECTARE ( Birr/ ha) 14,329
4.2.3.5 ANNUAL PLANTING PLAN
Pineapple farm plating time is restricted to wormer times of the year and in early
rainy seasons. The envisaged farm due to availability warmers months throughout
the year and irrigation water, farming can be done throughout the year. The climatic
conditions of the farm site will enable the farm to market its product almost year-
round marketing
Table 4-4 FARM ANNUAL PLANTING PLAN

Year 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Planting Area ( Hectare )
1st Planting 18
2nd Planting 7
3rd Planting 11
4th Planting * 18
5th Planting* 7
6th Planting* 11
th
7 Planting* 18
Total Acreage 18 7 11 0 18 7 11 0 18 7
Cumulative Acreage 18 25 36 36 18 25 36 36 18 25
** Replanted
25
4.2.4 CROP MAINTENANCE
4.2.4.1 APPLYING MANURES AND FERTILIZERS
Pineapple requires abundant supply of Nitrogen and Potash. Manu ring should be
done in 2 - 3 equal doses every year, once at the onset of monsoon (May-June) and
again at the end of the rainy season after the fruits is harvested and slips and
suckers are removed. The fertilizer dose was estimated in this feasibility by
conventional farm fertilizers requirements to be conservative by taking the highest
expenses but would be replaced by equivalent compost and other organic farm
recommendations at the operation time of the farm. The fertilizers doses
recommended for obtaining higher yield are 10g N, 5g P2O5 and 10g K2O per plant
per year in addition to 500 g FYM. Fertilization is followed by earthling up around
the stem.
The research done by Jimma university recommends 5 g Urea in three-split

application and 5 g DAP/plant is applied as a blanket application. However,
nitrogen fertilizer must be stopped about two months before flower induction.
Therefore the 5g Urea. 5g DAP, and 500g FYM per plant is take as fertilizer does for
this feasibility.
Table 4-3 FARM PLANTING LAND PREPARATION AND PLANTING COST

ESTIMATIONS
INPUTS Unit Qt Price ( Birr ) Cost ( Birr )
FYM Qt/ha 200 200 40,000
Urea ( N ) Qt/ha 2 750 1,500
DAP ( P2O5 Qt/ha 2 900 1,800
Fertilizers cost per hectare in Et. birr 43,300
4.2.4.2 WEED CONTROL AND MULCHING
Black polyethylene approximately 90 cm wide is recommended solutions as mulch

in commercial farming of pineapple farming. As the mulch is rolled out on the
farming bed, its edges are covered with soil. Farming holes are punched through the
plastic with a trowel. When nematicides are injected into the soil, plastic mulch
makes them more effective by slowing their dissipation.
The polytehele mulching,
increases soil temperature in the root zone,

helps to conserve soil moisture,
promotes rooting by concentrating moisture in the root zone,
And controls weeds.
26
Weeding should be done at least 3 to 4 times a year. Manual weeding is recommend

for such organic farming operations
4.2.4.3 AFTER CARE OF THE RATON CROP
De suckering immediately after fruit harvest is important. Keeping one or two

suckers on the mother farm near the ground level, all others are removed. Slips also
should be removed. After de suckering, farms should be fertilized and earthed up.
4.2.4.4 FARM PROTECTION
No serious pest or disease of pineapple is prevalent in Ethiopia. : They can be

controlled by dipping the basal portion of the farming material in 0.02 to 0.05 %
methyl parathion as a prophylactic measure. Application of carbofuran @ 15 to 17 kg
per ha in affected formation can effectively control the pest.
4.2.4.5 INDUCING FLOWER
Ripeness-to-flower stage is attained 11-12 months after farming and formation of at

least 40 leaves. Normally 70 to 80% of farms flower in a year. Sometimes flower
does not appear on time. Even after 15-18 months of growth under optimal
nutritional and environmental conditions, as low as only 50 to 60% farms may come
to flowering. In such cases application of flower inducing chemicals is helpful. Yield
may be increased by applying flower inducing chemicals. A pineapple farm
produces only one fruit during its life time.
Applying flower inducing chemicals at desired time helps to delayed or ripen the
fruit earlier as shown below,
To delay harvest by a few days (10 - 15 days), 300 ppm Planofix may be
sprayed on the fruit just 60 to 70 days ahead of harvest.
To ripen the fruit earlier by about 10 - 15 days, 500 ppm of ethrel may be
sprayed on the fruit about one month before normal harvest.
4.2.5 HARVESTING
4.2.5.1 HARVESTING OPERATIONS
The fruit is ready for harvest when the dark green color becomes lighter and the
deep-seated eyes become shallow.
Harvesting for local markets should be done at full maturity stage

and for distance markets at 75-80% maturity stage.
27
Harvesting should be done with a sharp knife severing the fruit stalk with a clean
cut and retaining 5-7 cm of the stalk. Slips and a part of the crown are removed.
Spray of parachlorop henoxyacetic acid 10 days before harvest reduces

physiological breakdown during transport and storage. Deeping the cut end in 10%
solution of benzoic acid in alcohol checks the fungal attack
Table 4-4 MAINTENANCE COST OF FARM

DESCRIPTIONS Demand / Assumptions Cost Estimate
INPUTS Unit Qt Price ( Birr ) Cost ( Birr )
INPUTS
FYM Qt/ha 200 100 20,000.00
Urea ( N ) Qt/ha 2 609 1,218.00
DAP ( P2O5 Qt/ha 2 745 1,490.00
Insecticide Lt/ha 2 250 500.00
23,208.00
LABOR
Application of manures & man days /ha 60 20 1,200.00
fertilizers
Spraying of pesticides, micro- man days /ha 12 20 240.00
nutrients growth regulators, etc.
Weeding x 4 times man days /ha 40 20 800.00
Fruit shading man days /ha 5 20 100.00
Earthling up man days /ha 20 20 400.00
Irrigation man days /ha 20 20 400.00
Harvesting man days /ha 10 20 200.00
3,340.00
Management and maintenance cost of farm in Birr/ ha
4.2.5.2 YIELD
The yield from a farm population of 35000 - 40000 per ha is about 40-50 tons per
year. Only 30 -40 % of the total yield will be exportable quality the reaming balance
will be used for cannery and local market. Taking into consideration after hare vet
yield loss 20-30% reported by similar horticulture farms 35 t/ha 04 350 quintals
/ha was taken for this feasibility study.
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Production (In MTs)
1st Planting 630 630 630
2nd Planting 245 245 245
3rd Planting 385 385 385
4th Planting * 630 630 630
5th Planting* 245 245 245
6th Planting* 385 385 385
7th Planting* 630 630
Total Yield 630 875 1260 630 1015 875 1260 1260 1015
28
** Replanted
4.2.5.3 ECONOMIC LIFE
Economic life of a pineapple farm production is expected to be around 4 years. After

this the plot should be uprooted and re farmed
4.2.6 IRRIGATION
Pineapple is mostly grown as a rain fed crop, but supplementary irrigation give
higher production. Irrigation in summer and winter keeps the farms healthier. About
8 to 12 light irrigations during winter and summer months are beneficial. Irrigation
is essential after farming or after maturing if there is deficiency in soil moisture. The
envisaged farm irrigation water demand need will be covered with planed motorized
pump and perennial river water source after construction of the irrigation systems at
project implementation time.
4.2.5 FARM PRODUCTION CAPACITY AND MARKETING PLAN
The production program shown below is prepared based on the farm yield output,
processing plant capacity, and exportable production amount estimation from the
farm. Out of the total harvested average yield of 980 MT, 29% of fruit product
market planed to be exported, 33% planned to be processed to Jam and dried sliced,
and the reaming balance of 38% will be marketed at domestic market.
Year Harvest Fruit Processing Plant Domestic

Export Market
Ton Tone/year Tone/year Tone/year
2013 630 0 186 444
2014 875 176 223 476
2015 1,260 202 297 761
2016 630 259 371 0
2017 1,015 378 371 266
2018 875 378 371 126
2019 1,260 378 371 511
2020 1,260 378 371 511
2021 1,015 378 371 266
Average 980 281 326 373
Table 5-1 Production Capacity of Farm and Market Outlet
29
5. PROCESSING PLANT OPERATIONS

5.1 PROCESSING PLANT
5.1.1 PRODUCTS PROCESS AND DESCRIPTIONS
Jam is a fruit product prepared from fruit pulp by boiling with sufficient quantity of
sugar and pectin to a moderately thick consistency. The distinguishing characteristics
of the product are a substantial amount of fruit ingredient used in the formulation (450
g/kg of jam) and high soluble solid content of the final product.(TSS = 68° Brix). Jams
are widely used for bread dressing to sweeten cakes and flavor yogurt.
Pineapple jam is prepared from the pulp which is extracted from whole sound
pineapple fruits mixed with sugar and processed to suitable consistency. Pectin is
added to impart a texture to the jam that allows transportation without change which
gives a good flavor release and minimize syneresis. Citric acid is added to lower the pH
of the fruit for better consistency of the product.
Dried tropical fruits are mainly sold in health food shops as snack products and as
cooking ingredients. Dried tropical fruits are low in fat; contain natural sugars, vitamins
and natural antioxidants which are supposed to have properties prevent heart disease
and cancer.
There is very little value addition in the fruits industry as most fruits are exported fresh
and unprocessed. Dried fruits exported include apple bananas, pineapples, mangoes,
papaya and jack fruit. Fruit drying, which is widely practiced by exporters, is done
using locally made wooden solar driers would yield better results if companies scale up
to higher technology. The drying process begins with washing the fruit, cleaning, and
peeling, slicing, putting the slices on trays and drying. Most processors sun-dry the
fruit on trays (driers) covered with nets to ward off insects, though hybrid driers, which
are indoors are used during rainy periods. When dried using direct sunshine, the dry
fruit retains the flavor and test while losing the juice content. This is one way of
extending the shelf life of the fruits, which are highly perishable due to the high water
content. It takes one to two days to dry the fruit using solar driers and eight hours
only with a hybrid drier
5.1.2 PROCESS FLOW OF DRIED PINEAPPLE FRUIT

Before actual processing, pineapple fruits go through preliminary treatments to render
them more suitable for processing. These include sorting, grading, washing, removal of
unwanted parts, peeling, size reduction, slicing, dicing, and others. The specific unit
operations applied will depend on the type of product being made. After the pre
processing operations, the peeled pineapple and loss from slice and coring will transfer
to the pulping machine and blended at desired ratios. The sliced pineapple will be
transfer to drier after inspection and rejections of unfit slice for draying quality
requirements.
30
HARVESTED
FRUIT WASHING
SORTING
REJECTED FRUIT
SORT AND
GRADE
PEELING/ DE
CORING
SORTING SLICING
(4-6 MM)
DRAYING
(60-
(60- 70°
70°C)
PULPING
FILLING INTO
BAG AND
SEALING
TO JAM
PROCESSING
COOLING, LABELING AND STORAGE
Fig 5-1 Process Flow Chart of Pre- processing and dried fruit productions
5.1.3 PROCESS FLOW OF PINEAPPLE JAM

The pulp produced after extraction of juice is boiled along with sugar and citric acid at
a controlled temperature. Upon boiling required permitted colors, flavors and
preservatives are added. It is then cooled to required temperature forming a jelly like
31
consistency. The jam thus obtained is filled in bottles, sealed, labeled and packed in
cartons for dispatch.
PULP FROM JUICE EXTRACTOR
REJECTED SORTING
COLOR
SUGAR OTHERS
CITRIC ACID HEATING CITRIC ACID
PECTIN AND MIXING PECTIN
COOLING AND STORE
FILLING INTO JARS
, LABELING AND STORAGE
Fig 5-2 Process Flow Chart of Jam Processing
5.1.4 PLANT CAPACITY AND PRODUCTION PLAN

The processing plant capacity considerations for fixing capacity of plant was
determined by evaluating availability of raw materials , marketing assessment
results, skill requirements, cold storage requirements, investment cost capital
requirements of the plant, and others.
The production program shown below with the product mix shown above is
proposed for the envisaged plant feasibility study purposed based on
recommendation by machinery supplies and food technologist. The production plan
was done based on pre determined plant capacity utilization rate, the yearly
quantities produced by the plant in the years are 50%, 60 %,80%, 100% on the year
2013, 2014,2015 and 2015-2021 respectively. The production plan is set at
increasing at progressive rate from 2013 to 2016 and thereafter will remain constant
until the end of the project life period.
32
Year Annual Production ( Packaging Daily Production ( Packaging Unit )

Unit)
Jam Dried fruit Jam Dried fruit
450g /bottle 250 gm/bag 450g/bottle 250 gm/bag
2013 109,613 52,500 365 175
2014 131,535 63,000 438 210
2015 175,380 84,000 585 280
2016 219,225 105,000 731 350
2017 219,225 105,000 731 350
2018 219,225 105,000 731 350
2019 219,225 105,000 731 350
2020 219,225 105,000 731 350
2021 219,225 105,000 731 350
Table 5-1 Production Program –By Product Packing Unit
5.1.5 MAIN RAW MATERIALS
Raw material required for manufacturing pineapple jam and dried fruit are fruit,
citric acid, pectin, food color, sugar, preservatives and fruit flavors. The major
principal component of plant raw material. Fruit will be supplied from envisaged
project farm. All others raw materials are easily available in the local market.
Table 5-2 Materials Demand
year Annual Daily
Fruit Sugar Citric Acid Pectin Fruit Sugar Citric Acid Pectin
ton ton ton ton QT. Qt. gm gm
2013 191 31.6 0.25 0.25 6.37 1.05 8.33 8.33
2014 229 37.92 0.3 0.3 7.63 1.26 10.00 10.00
2015 306 50.56 0.4 0.4 10.20 1.69 13.33 13.33
2016 382 63.2 0.49 0.5 12.73 2.11 16.33 16.67
2017 382 63.2 0.49 0.5 12.73 2.11 16.33 16.67
2018 382 63.2 0.49 0.5 12.73 2.11 16.33 16.67
2019 382 63.2 0.49 0.5 12.73 2.11 16.33 16.67
2020 382 63.2 0.49 0.5 12.73 2.11 16.33 16.67
2021 382 63.2 0.49 0.5 12.73 2.11 16.33 16.67
5.1.6 PACKAGING MATERIAL

The packaging requirement of the processed jam and dried pineapple was made as
per expert requirement of packaging for dried pineapples and as per consumer
preference, shelf life of product, and local packaging raw materials availability and
with consultation of similar plant experts and international food and packaging
standards.
33
Fig-3 Proposed Types of Packaging for Dried pineapple (Export Quality)

Details given on packaging for expert market
• The name of the product, e.g.: Pineapple slices organically grown

• Name and address of the manufacturer, importer, exporter or trader within the
Country of origin, and which country.
• A list of ingredients and additions, beginning with the heaviest proportion of
total weight at the time of packaging.
• Details of the total packed weight in grams
• The ‘Best before ...’ details must include day, month and year; e.g.. best
before 30.11.2014
• Batch number
Table 5-3 Annual Packaging Demand of Processing Plant

Package
Year Jam jar Polypropylene bag
450 gm/unit 250 gm/unit
2013 111,805 55,125
2014 134,166 66,150
2015 178,888 88,200
2016 223,610 110,250
2017 223,610 110,250
2018 223,610 110,250
2019 223,610 110,250
2020 223,610 110,250
2021 223,610 110,250
34
5.2 PACKAGING HOUSE OPERATIONS

5.2.1 PROCESS FLOW
The process flow of pineapples post harvest and packaging house for preparing the
product for export market are shown at process flow diagram shown below. Process
includes includes washing, disinfection, sorting, waxing and manual or mechanical
packing, cooling and storage.
HAND STACK IN TO
CONTAINER
TRANSPORT TO PACKAGING HOUSE
FLOAT IN THE WATER
TRIM STEM TO 1- 3 MM
WASH AND DRY
SORT TO REMOVE DEFECT
APPLY WAX AND FUNGICIDE
HAND PACK IN A CARTON OR CRATE

ACCORDING TO SIZE AND COLOR
PRE-COOLING
SALES/ COLD TRANSPORTATION
Figure 5-3 : Production flow of off- Pineapple Packaging House
35
5.2.2 PRE PACKAGING OPERATIONS

A. Floating in the Water
On arrival of harvested fruits of pineapple at the packinghouse,

Fruits are unloaded by hand and submerged in water or allowed to slide out
of the container into the water.
The water in the dump tanks should be chlorinated and replaced frequently
to prevent a build-up of disease organisms.
Fruits with high flesh translucency are called “sinkers” and must be
separated at this stage. The “sinkers” are very fragile and have limited shelf
life.
High translucency is also associated with bacterial and yeast fermentation
and acetic acid souring during handling, shipping and marketing
B. Pre-cooling
The purpose of pre-cooling is to remove field heat. If Pineapples are to be exported to,
the destination within 2 – 3 days of harvesting, as with air-shipments, then pre-
cooling is advisable. Pineapples transported by sea should preferably be pre-cooled
prior to loading into containers. By submerging fruits in water as described
previously, hydro cooling is being achieved.
The fruits are sorted and fungicidal treatment is given. They are packed in full
telescoping perforated CFB cartoons.
C. Grading
Fruits are graded based upon certain characteristics: degree of skin coloration, size
(weight), absence of defects and diseases, and in keeping with other market
requirements.
D. Application of fungicides and waxing
Pineapple fruits are commercially treated with a fungicide such as Dowicide A

(Sodium 2-phenly phenoloate) at a concentration of 7g per liter of water in either a
dip or a spray application to control postharvest fruit rot. A wax, which may contain
polyethylene/paraffin or carnauba/paraffin-based, could also be applied to the fruit
with the fungicide (Plate 12). Waxing could reduce internal browning, a symptom of
chilling injury. Waxing also reduces postharvest water loss and improves fruit
appearance.
36
Fig- 5-4 How to apply wax and washing)
E. Degreasing of fruit shell
Postharvest use of ethephon could result in uniform skin de greening but this could
also lead to a shortened shelf-life. The need to degreasing is related to the
consumer’s perception that a ripe pineapple must have a yellow skin. Ethylene
treatment has no significant effect on flesh TSS or acidity.
5.2.3 PACKAGING HOUSE CAPACITY AND PRODUCTION PLAN

The packaging plant capacity considerations was determined based on,
• the farm production plan
• the quality requirement of fresh fruit export market
• the experience of expert market
• The ratios of similar African country like Ghana has achieved, exportable
pineapple crop is 30% of the total farm harvest.
• Certification requirements
Therefore the export of fresh fruit will start at third year of envisage farm t project
period or at the second harvest with capacity and program shown at the table
below.
Table 5-4 Packaging House Annul plan

Year Capacity Fruit Export
In % Tone/year
2013 0 0
2014 20% 881
2015 20% 1007
2016 30% 1259
2017 30% 1259
2018 30% 1259
2019 30% 1259
2020 30% 1259
2021 30% 1259
37
5.2.4 PACKAGING TYPES AND MATERIAL

The pineapples are sorted according to weight. The fruits must weigh at least 700
grams, with the exception of baby pineapples, which must weigh a minimum of 400
grams.
The contents of a carton must be uniform, and may only contain pineapples of
identical origin, variety and/or trade type, and quality. The visible part of the carton
must be representative of the entire contents.
The pineapples must be packed in a way that ensures they are sufficiently protected
.
Carton labeling regulations
Each carton must display the following details in unbroken, legible, and permanent
Letters visible from the outside:
a. Identification-Name and address of the exporter and packer

b. Type of product-”Pineapples”, when the contents are not visible ¨
Name of the variety
c. Origin of product ¨ Country of origin, and optionally, national, regional
or local description
d. Commercial characteristics
¨ Class
¨ Size (reference letter or weight class)
¨ Number of fruits (optional)
¨ Net weight (optional)
Pineapple fruits could be packed into cartoons of two different sizes. A large carton
(20 kg) containing 10 – 16 fruits for surface or air shipment and a smaller carton (10
kg) for air shipment with 5 – 6 fruits. Whichever type of package is used, certain
precautions must be followed:
Fig-5-5 Proposed Types of Fresh Cut Packaging (Export Quality)

Fig
38
5.2.5 QUALITY REQUIREMENTS
As per ‘Codex Alimentations Standard for Pineapples’, (Codex Stan 182-1993) the
minimum requirements for trading with fresh pineapples must be as follows:
¨ Fresh and healthy

¨ Clean, practically free of visible foreign substances
¨ Practically free of pests and damage caused by them
¨ Free of fungus
¨ Free of bruising and frost-damage
¨ Free of strange taste of smell
¨ well developed, ripe
39
6. PROJECT ENGINEERING AND OPERATION REQUIREMENTS

6.1 LAND UTILIZATION PLAN
Based on the previous horticulture farm industrial standard for small and medium
scale sector and on farm lay out study which bases operational requirement of farm
and machinery size the following land use arrangement is recommend ,
Table 6-1 Land Utilization Plan

Total Project Area 150 Ha
Optimum Cultivable 70%
Cultivable Area 100 Ha
Office Building and Compound 2 Ha
Staff Camp 1 Ha
Road, Access, Boundary and Others 5 Ha
Tree and Shade Planting Area to protect Environment 39 Ha
Irrigation Structures and Access 3 Ha
6.2 COVERED AREA REQUIREMENT AND COST

To determine the building and other infrastructure requirement of the envisage farm
projects,
Standards and Regulation of Commercial Farms Set up
Standard and Regulation of Organic Certifications Requirements
Assessment on the existing building and other infrastructure was conducted
Based on the above findings the area requirement for new building construction, ,
and other civil works construction works are determined with associated cost
estimate as shown at table 6-2 and 6-3 below.
Table 6-2 Covered Area of Farm Buildings and Cost Estimates ( Birr )
Cost item Unit Qan. Unit cost Cost
Farm Buildings
Office and Staff Camp M2 140.06 4,500 630,270
Store Block M2 162.00 3,000 486,000
Store office M2 25.65 3,000 76,956
1,193,226
Cost item Unit Qan. Unit cost Total cost (Birr)
Auxiliary Buildings
Work shop and Shade M2 100 900 90,000
Guard Post No 4 10,000 40,000
Diesel Store and dispensary Ls 1 25,000 25,000
Toilet and shower No 1 115,000 115,000
Sub total 106 155,000
Cost item Unit Qan. Unit cost Total cost (Birr)

Building
40
Site work M2 2000 10 20,000

Perimeter fencing farm Ml 240 200 48,000
office
Main gate and access Ls 1 10,000 10,000
Sub total 78,000
Table 6-2 Covered Area of Processing Plant and cost estimates ( Birr )
Cost item Unit Qan. Unit cost Cost
Farm Buildings
Processing Rooms M2 108.00 4,500 486,000
Quality Control and Production Head M2 20.00 3,000 60,000
Office
Draying Room m2 20.00 5,000 100,000
646,000
Auxiliary Buildings
Guard Post No 1 20,000 20,000
Water Tanker with pipe 10 m3 Birr 1 50,000 50,000
Toilet and shower No 1 135,000 135,000
Sub total 205,000
Building
Site work M2 2000 10 20,000
Perimeter fencing farm office Ml 240 500 120,000
Main gate and access Ls 1 10,000 10,000
6.3 IRRIGATION AND FARM STRUCTURE REQUIREMENTS

A total of Local of Birr 2,147,190 with the works described at the table below is
recommend and the cost also estimated as shown at the table below on water for
supplementary irrigation and nursery development works. Small farm structures like
culverts and crossings also included at the cost estimates.
COST ITEM UNIT QAN. UNIT TOTAL COST

COST (BIRR)
IRRIGATION COST AND FARM WORK

Solar Pump 15 Kw, 300 m3/day, H=30m Set 1 165,000 165,000
50 M3 Masonry Reservoir Ls 1 250000 250,000
10 m3 Collection Chamber No 3 80000 240,000
uPVC 120 mm pipe line, riser main Ml 859 350 300,650
uPVC 120 mm pipe line, distribution M3 1598 300 479,400
uPVC 100 mm pipe line , distribution Ml 1063 280 297,640
41
uPVC 80 mm pipe line , distributions Ml 1058 250 264,500

Sprinkler Gun with motor 3 HP. 30 m3/h, 50 m Set 3 50000 150,000
hose
Total Cost of Supplementary Irrigations 2,147,190
Table 6 -3 Summary of Irrigation and farm structures Requirement with
6.4 MACHINERY AND EQUIPMENT

6.4.1 PROCESSING MACHINERY
A total of Processing machinery purchase with tax exemption cost of as per the price
study survey done by consultant is Birr 627,000. The cots breakdowns are shown
at the table below.
PROCESSING MACHINERY
Equipment Quantity LC
Capacity Rate Cost
PROCESSING AND MAIN MACHINERY

Pineapple core seizers 30 1 550,000
fruit/minute
Multi fruit slicer capable of slicing 20 kg/hr
Stainless steel multi fruit pulpler 100 kg/hr 1
with capacity
A small boiler producing 250 kilos/hr 2
Hand refractometer 0 - 90° Brix 1
Stainless steel thermometer 0 - 150°C 2
Refractometer 0 - 30° Brix 2
A vertical autoclave 200-500 g 1
jars.
aluminum pots with lid 50 Lt 2
Two double-wall kettles. 50 Lt 1
Stainless steel vessel 10 Lt 2
A pressure bottles closer’ 200 Jars/ hr 1
Fuel fired tray dryer 600 1
kg/batch
Manually operated heat sealer 200 packs/ 1
hr
550,000 550,000
AUXILIARY EQUIPMENTS
Platform weighting scale 2 55,000
Enamel coated wooden sorting 2
table
Plastic crate 50
25 liter polyethylene washing tank 6
Water storage tank 1500 liter 2
42
Scale 50 to 100 kg 2
Scale 3 to 5 kg 2
Scale 100 to 500 gr 2
Other Local accessories and 22000
machineries
77,000 77,000
627,000
6.4.2 AUXILIARY MACHINERY
The auxiliary machinery and equipments which fulfills the following tasks are
estimated with associated cost and the total cost of the facilities at local purchase
are Birr 170,000
power supply
quality control and testing’s
supplementary equipment for main machineries
Table 6-5 AUXILIARY MACHINERY TOTAL

Equipment Capacity Unit Qt. Rate Cost
Birr Birr
Washing , Sorting, and Sinking Set 1 45,000.00 45,000.00
facility
Generator Set 1 95,000 95,000.00
Welding machine Set 1 5,000 5,000.00
Blower Set 1 5,000 5,000.00
Moisture Tester and Other Lab. set 1 20,000 20,000.00
Tools
Others Ls 1 10,000 10,000.00
AUXILIARY MACHINERY TOTAL 170,000.00
6.4.3 COMPANY VEHICLES
A loading vehicle would be required for providing services for transportation of raw
material(s), small amount of inputs, facilitating farm programmed, transporting
locale raw materials from far places other than, conducting marketing activates,
transporting product sales to various market, mobilizing casual laborers and other
works ,
Insulated Fruit Transport Min Truck for product sales
For this purpose a transportation vehicle has been proposed which will cost around
Et.Bir 380,0000 birr without tax purchase for local suppliers , the cost breaks down
as show at Table 6-6 below,
43
TABLE 6-6 MOTOR TRUCK REQUIREMENTS

Equipment Capacity Unit Qt. Rate Cost
Birr Birr
Mini Truck 35 Qt Set 1 380,000 380,000
TOTAL 380,000.00
6.5 MAINTENANCE & REPAIRS

Spare parts for machinery and equipment of major farm production lines and
auxiliaries systems will be procured and stored. It is planned to hold a spare part
for one production year. A total of price of Birr 49,240 is allocated for the purchase of
spare parts. Maintenance costs are estimated at a level to adequately maintain
machinery and equipment in good working order over the project’s life.
6.6 OFFICE FURNITURE & EQUIPMENT

A total of ET. Birr 37,000.00 is required for purchase of office furniture and related
equipment. The following table gives an assumed breakup:
Table 6-8 Cost Break Down of Furniture Purchase (Birr)

Description of Work Unit Qty
FURNITURE
Table and chair (owner ) Set 1 5,000.00
Table and chair ( Farm Manger) Set 1 5,000.00
Table and chair ( Staffs ) Set 2 8,000.00
Waiting Chair Pcs 4 4,000.00
Shelf and Other Drawers Ls 1 5,000.00
Other Office Accessories Ls 10,000.00
37,000.00
6.7 UTILITIES
The envisage farm requires the utilities including diesel/fuel, water, postage and
telephone. The plant demand 87 kwh of electric and 8 M3 water demand per
day. Stand bay generator for electric power interruptions of 30 KVA is
recommended.
44
7. PROJECT ORGANIZATION AND MANPOWER REQUIREMENT
7.1 FORM OF BUSINESS
The business will is categorized Medium Scale Commercial Agro Processing Farm
Industry and is registered under the name “Debabaish Plc- Pineapple farm and
processing Enterprise” as a proprietorship and owned by the Debbish PLC.
7.2 ORGANIZATIONAL STRUCTURE OF THE FARM
After a thorough assessment of the organizational structures of the existing similar

commercial horticulture with their past performance and the advice given by the
selected expertise, machine supplier, the consultant has proposed the following
organizational structure.
Accordingly, the recommended organizational structure to be created within the

envisaged farm and processing plant for the smooth running of the operations may
be divided into the following departments and office.
Farm Manger Office

Finance and Administration Department
Technical and Production Department
In this context, the organization bloc diagram is shown in figure 8 and the role of
each section is described as follows:
45
REBEC 15/02
15/02-PINEAPPLE PRODUCTION AND PROCESSING-DEBABISH PLC
Fig. 7-1
1 ORGANIZATIONAL STRUCTURE OF THE FARM
PLANT MANGER
OFFICE
TECHNICAL ADMINSTRATION
PRODUCTION DEP. AND ACCOUNT
FARM PRODUCTION PROCESSING

UNIT &PAKAGING UNIT
46
Table 7-1 Manpower Requirements and Cost Estimate
Educational level No of SALARY

Title/Designation
Experience Persons Monthly Annual
MANAGEMENT STAFF REQUIREMENT
Farm manager BSc. in agronomy / Experience years 1 4,500 54,000
Accountant Dip. In accounting / Experience 6 Years 1 2,000 24,000
Store keeper 10+3 in property management 1 1,200 14,400
Sales and Purchaser Dip. In office management. 1 1,500 18,000
Messenger and cleaner Reading and writing 1 400 4,800
Sub-Total 5 115,200
FARM PRODUCTION STAFF
Production supervisor Bs in Agronomy 1 3,000 36,000
Irrigation Mechanization Diploma in Irrigation or Equivalent 1 1,500 18,000
Forman 10+3 in Agriculture 2 800 19,200
Tractor Operator Operator-2 2 1,000 24,000
Fuel and Lubricant Experience 2 500 12,000
Assistant
Farm Guards Reading and writing 4 400 19,200
Sub-Total 12 128,400
47
Educational level No of SALARY

Title/Designation
Experience Persons Monthly Annual
PROCESSING PLANT - PRODUCTION STAFF

Plant manager Bs in Food Science 1 2,000 24,000
Production Assistant Diploma 1 1,200 14,400
Forman 10+3 in Food Prep 1 1,000 12,000
Assistance 10+ Food Prep 2 800 19,200
Marketing officer Diploma 1 1,700 20,400
Vehicle Driver 1 1,000 12,000
Unskilled Reading and writing 6 600 43,200
Sub-Total 13 145,200
Grand Total 30 388,800
48
8. PROJECT FINANCIAL STUDY

8.1 PROJECT ECONOMICS
8.1.1 CAPITAL INVESTMENTS
CAPITAL COSTS (Et. Birr )

Civil works & Buildings 2,548,587.30
Irrigation and Farm Works 2,147,190
Processing Machinery 627,000
Auxiliary Machinery and Equipment 170,000.00
Tools and Accessories 157,000.00
Furniture & Fixture 37,000.00
Motor Vehicles 380,000.00
Pre-production costs 119,257.27
6,186,034.57
Operating Expense 2,791,051

Working Capital 1,533,448
4,324,499
CAPITAL INVESTMENT + WC 10,510,534
8.1.2 RETURN
PROJECT RETURN BEFORE TAX AFTER TAX
NPV ( Birr) 16,581 10,595
IRR 30% 25%
PAYBACK PERIOD 5 5
8.1.2 FINANCIAL PLAN
FINANCING PLAN
DESCRIPTION EQUITY BANK LOAN BANK LOAN
Civil works & Buildings 764,576.19 1,784,011.11 2,548,587.30
Irrigation and Farm Works 644,157.00 1,503,033.00 2,147,190.00
Processing Machinery 188,100.00 438,900.00 627,000.00
Auxiliary Machinery and 51,000.00 119,000.00 170,000.00
Equipment
Tools and Accessories 47,100.00 109,900.00 157,000.00
Furniture & Fixture 11,100.00 25,900.00 37,000.00
Motor Vehicles 114,000.00 266,000.00 380,000.00
Pre-production costs 35,777.18 83,480.09 119,257.27
Operating Expense 1,297,349.77 3,027,149.47 4,324,499.24
3,153,160 7,357,374 10,510,534
Percentage Share 30% 70% 100%
49
8.2 FIXED AND OTHER INVESTMENT COST

8.2.1 FIXED INVESTMENT COSTS
Table 13 Break down of fixed assets
Item Et Birr
Civil works & Buildings 2,548,587
Irrigation and farm Infrastructure 2,147,190
Processing Machinery 627,000
Auxiliary Machinery and Equipment 170,000
Tools and Accessories 157,000
Furniture & Fixture 37,000
Motor Vehicles 380,000
6,066,777
8.2.2 OPERATING EXPENSE
It is estimated that an additional amount of 2,791,051.03 birr will be required in

cash for pre-production investment expense before starting production and generate
revenue. The table shoe below describes the assumption and estimated pre
production operational cost estimate of the envisaged farm.
TYPE OF EXPENSES
Year Administrative Production
Year-1 226,810.00 2,564,241.03 2,791,051.03
2,791,051.03
8.2.3 WORKING CAPITAL REQUIREMENTS
It is estimated that the additional amount of Birr 1,193,248 will be required two months
before commencing of project operation as a starting working capital cash requirement which
covers the required amount of cash need. The working capital has been determined as per
the table shown below
WORKING CAPITAL ESTIMATIONS

Account Percentages Production
Inventory (% of COGS) 20% 512,848
Accounts receivable (% of sales) 15% 1,020,600
1,533,448
8.3 FINANCIAL ANALYSIS & KEY ASSUMPTIONS
50
The project cost estimates for the proposed ‘Pineapple Fresh Fruit Production Farm”
industry have been formulated on the basis of discussions with industry stakeholders
and experts. The projections cover the cost of building and civil works
construction, other civil works , machinery and equipment purchase, office furniture
and fixtures, tools and accessories ,pre-operating expense and working capital for
start up of the project. Assumptions regarding machinery have been provided,
however, specific assumptions relating to individual cost components, technical
parameters, rate, calculations and others are given as under
.
8.3.1 GENERAL ASSUMPTION
GENERAL ASSUMPTION
DATE OF ESTIMATIONS 3/ /12/2010
CURRENCY Ethiopia Birr
Exchange rate 16.77 Birr for 1 USD
8.3.2 FINANCIAL ASSUMPTIONS
Project Life (years) 10
FOR CAPITAL INVESTMENTS
Debt Ratio 70%
Equity Ratio 340%
FOR OPERATING EXPENSE AND
WORKING CAPITALS
Debt Ratio 70%
Equity Ratio 30%
Debt Tenure (Years) 10
Payments in a Year 4
8.3.3 ECONOMIC ASSUMPTIONS

Utilities price growth 10%
Material price growth rate 5%
Wage Growth Rate 5%
Tax rate 35%
8.3.4 CASH FLOW ASSUMPTIONS
Inventory (% of COGS) 5%
Minimum cash balance (% of sales) 4%
Accounts receivable (% of sales) 10%
Accounts payable (% of COGS) 10%
8.3.5 FIXED CAPITAL INVESTMENT ASSUMPTIONS

TYPE OF EXPENSES ASSUMPTIONS
51
Land lease rent 71 Birr/ ha/ annum

Farm and machinery cost Local Importer Price , Nov 2010
Engineering cost Surveying & 1% of Building cost
Designs
Premium Insurance cost 5% Fixed assets cost
Training and skill transfer 2% Of FOB machinery price
Spare Part 5% Of machinery price
52
8.3 FARM PRODUCTION COST
TYPE OF EXPENSE FARM PRODUCTION COST (ET. BIRR )
1 2 3 4 5 6 7 8 9 10
Plantain Cost 2,383,727 135,455 223,501 0 403,216 164,646 271,667 0 490,111 200,129
Maintence and 0 501,757 731,729 1,106,375 1,161,693 1,219,778 1,280,767 1,344,805 1,412,046 1,482,648
management cost
Sub-Totals 2,383,727 637,212 955,230 1,106,375 1,564,909 1,384,424 1,552,433 1,344,805 1,902,157 1,682,777
FARM OVERHEAD
Salary and Wage 108,000 113,400 119,070 125,024 131,275 137,838 144,730 151,967 159,565 167,543
Employee Benefit 24,840 26,082 27,386 28,755 30,193 31,703 33,288 34,952 36,700 38,535
and Protective's
Other and 47,675 50,058 52,561 55,189 57,949 60,846 63,888 67,083 70,437 73,959
miscellaneous
Marketing Cost 93,329 106,477 117,953 124,181 130,390 136,910 143,755 150,943 158,490
Sub-Totals 180,515 282,870 305,495 326,921 343,598 360,777 378,816 397,757 417,645 438,527
Sub-Totals 2,564,241 920,082 1,260,724 1,433,295 1,908,507 1,745,202 1,931,250 1,742,562 2,319,802 2,121,304
8.4 PROCESSING AND PACKAGING HOUSE PRODUCTION COST
TYPE OF EXPENSE PROCESSING AND PACKAGING HOUSE COST
1 2 3 4 5 6 7 8 9 10
Processing Plant 873,114 1,099,872 1,540,967 2,017,947 2,118,844 2,224,787 2,336,026 2,452,827 2,575,469
Materials Cost
Export Packaging Cost 0 0 94,462 113,355 223,167 234,325 246,042 258,344 271,261 284,824
Sub-Totals 0 873,114 1,194,334 1,654,322 2,241,114 2,353,170 2,470,828 2,594,370 2,724,088 2,860,292
PLANT OVER AHEAD
Salary and Wage 130,800 137,340 144,207 151,417 158,988 166,938 175,285 184,049 193,251
Employee Benefit and 0 30,084 31,588 33,168 34,826 36,567 38,396 40,315 42,331 44,448
Protective's
Other and 35,000 36,750 38,588 40,517 42,543 44,670 46,903 49,249 51,711
miscellaneous
Utilities 95,000 99,750 104,738 109,974 115,473 121,247 127,309 133,675 140,358
Marketing Cost 165,080 208,000 291,201 382,201 401,311 421,376 442,445 464,567 487,796
Sub-Totals 455,964 513,429 611,900 718,935 754,882 792,626 832,258 873,870 917,564
Sub-Totals 0 1,329,078 1,707,763 2,266,222 2,960,049 3,108,052 3,263,454 3,426,627 3,597,958 3,777,856
8.5 FINANCIAL PROJECTIONS

8.5.1 REVENUE PROJECTIONS SHEET (Birr)
2013 2,014 2,015 2,016 2,017 2,018 2,019 2,020 2,021
PLANT
Jam 1,918,219 2,416,956 3,383,738 4,441,156 4,663,214 4,896,374 5,141,193 5,398,253 5,668,165
Dried Fruit 1,383,375 1,743,053 2,440,274 3,202,859 3,363,002 3,531,152 3,707,710 3,893,095 4,087,750
Fresh Fruits 0 1,889,244 2,267,093 4,463,339 4,686,506 4,920,831 5,166,873 5,425,216 5,696,477
3,301,594 6,049,252 8,091,104 12,107,354 12,712,722 13,348,358 14,015,776 14,716,564 15,452,393
Farm
Fresh Fruit 1,866,585 2,129,545 2,359,055 2,483,620 2,607,801 2,738,191 2,875,100 3,018,855 3,169,798
3,301,594 6,049,252 8,091,104 12,107,354 12,712,722 13,348,358 14,015,776 14,716,564 15,452,393
8.5.3 PROJECTED INCOME STATEMENT (BIRR’000)

Year 1 2 3 4 5 6 7 8 9 10
Sales 0 3,302 6,049 8,091 12,107 12,713 13,348 14,016 14,717 15,452
Less COGS 2,564 2,249 2,968 3,700 4,869 4,853 5,195 5,169 5,918 5,899
Gross profit (2,564) 1,052 3,081 4,392 7,239 7,859 8,154 8,847 8,799 9,553
Less SG&A expenses (227) (238) (371) (383) (396) (410) (424) (439) (455) (472)
Less depreciation (671) (671) (671) (671) (671) (647) (647) (647) (647) (647)
Earnings before interest (3,462) 144 2,039 3,338 6,172 6,803 7,082 7,760 7,696 8,434
and taxes
Less interest expense (570) (530) (486) (440) (390) (336) (278) (216) (149) (77)
Pre-tax income (4,032) (386) 1,553 2,898 5,782 6,467 6,804 7,544 7,547 8,357
Cumulative pre-tax (4,032) (4,418) (2,865) 32 5,814 12,281 19,085 26,629 34,177 42,533
income (NOL)
Taxes - - - - - 2,263 2,381 2,640 2,642 2,925
Pre-tax income (4,032) (386) 1,553 2,898 5,782 6,467 6,804 7,544 7,547 8,357
Less taxes - - - - - (2,263) (2,381) (2,640) (2,642) (2,925)
Net income (4,032) (386) 1,553 2,898 5,782 4,203 4,423 4,904 4,906 5,432
8.5.4 PROJECTED BALANCE SHEET (Birr’000)

Year 0 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Cash 4,672 646 39 1,330 3,991 9,266 13,285 17,445 22,039 26,526 31,502
Inventory - 128 112 148 185 243 243 260 258 296 295
Accounts receivable - - 330 605 809 1,211 1,271 1,335 1,402 1,472 1,545
Total current assets 4,672 774 481 2,084 4,985 10,720 14,799 19,039 23,699 28,293 33,342
Gross property, farm & equipment 6,186 6,186 6,186 6,186 6,186 6,186 6,186 6,186 6,186 6,186 6,186
Less accumulated depreciation - (671) (1,342) (2,012) (2,683) (3,354) (4,001) (4,648) (5,295) (5,942) (6,589)
Net property, farm & equipment 6,186 5,515 4,844 4,174 3,503 2,832 2,185 1,538 891 244 (403)
Total assets 10,858 6,289 5,326 6,257 8,487 13,552 16,984 20,577 24,590 28,537 32,939
Accounts payable - - - - - - - - - - -
Bank notes payable - - - - - - - - - - -
Total current liabilities - - - - - - - - - - -
Long-term debt 7,601 7,064 6,486 5,865 5,198 4,480 3,709 2,880 1,988 1,030 (0)
Shareholders’ equity 3,258 (774) (1,160) 392 3,290 9,072 13,275 17,698 22,601 27,507 32,939
Total long-term debt and 10,858 6,289 5,326 6,257 8,487 13,552 16,984 20,577 24,590 28,537 32,939
shareholders’ equity
Total liabilities 10,858 6,289 5,326 6,257 8,487 13,552 16,984 20,577 24,590 28,537 32,939
8.5.5 PROJECTED CASH FLOW STATEMENT (Birr ‘000)
Year 0 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Net income (4,032) (386) 1,553 2,898 5,782 4,203 4,423 4,904 4,906 5,432
Plus depreciation 671 671 671 671 671 647 647 647 647 647
Less increase in inventory - (128) 16 (36) (37) (58) 1 (17) 1 (37) 1
Less increase in accounts - - (330) (275) (204) (402) (61) (64) (67) (70) (74)
receivable
Cash flow from operations - (3,489) (30) 1,913 3,328 5,993 4,790 4,989 5,485 5,445 6,006
Less investment (6,186) - - - - - - - - - -
Cash flow from operations and (6,186) (3,489) (30) 1,913 3,328 5,993 4,790 4,989 5,485 5,445 6,006
invests
Plus net new equity capital raised 3,258 - - - - - - - - - -
Plus net new long-term debt 7,601 (537) (578) (621) (667) (718) (771) (829) (891) (958) (1,030)
Plus net new bank borrowings - - - - - - - - - - -
Cash flow from ops, invests, and fin 4,672 (4,027) (607) 1,292 2,660 5,275 4,019 4,160 4,594 4,487 4,976
Beginning cash balance - 4,672 646 39 1,330 3,991 9,266 13,285 17,445 22,039 26,526
Ending cash balance 4,672 646 39 1,330 3,991 9,266 13,285 17,445 22,039 26,526 31,502

Debabish - Fesibility Study Fainal

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Debabish - Fesibility Study Fainal

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ORGANIC PINEAPPLE

FRAM AND PROCESSING INDUSTRY

Owner: DEBABISH PLC

e-mail revolteng0888@ gmail.com

2. PROJECT BACKGROUND INFORMATION ................................................................................8

3. MARKET ASSESSMENT ............................................................................................................ 10

3.6.4 SELLING PRICE PLAN .................................................................................................................. 18

4 . TECHNICAL STUDY .......................................................................................................................... 20

5. PROCESSING PLANT OPERATIONS .......................................................................................... 30

6. PROJECT ENGINEERING AND OPERATION REQUIREMENTS ................................... 40

6.4 MACHINERY AND EQUIPMENT .................................................................................................... 42

7. PROJECT ORGANIZATION AND MANPOWER REQUIREMENT .................................... 45

8. PROJECT FINANCIAL STUDY .................................................................................................... 49

1.1 PURPOSE OF REPORT

1.2 DESCRIPTION OF THE BUSINESS

The proposed project is specialized in commercial pineapple fruit crop production

The Commercial Farm Industry will be established at SNNPRG, Sidama

1.3 AMOUNT OF FINANCING REQUIRED

1.4 PROFILE OF PROMOTER

Debabsiah Plc Agro Industry Enterprise business is owned by a group of

1.5 MARKET PROSPECT

This tropical fruit is a popular business in international trade and in some

1.6 FINANCIAL VIABILITY

1.7 SOCIO-ECONOMIC JUSTIFICATIONS

by foreign exchange saving as its major objective is substituting the

1.8 RATIONAL BEHIND THE PROJECT

Policy: Government five years strategic plan, which promotes new

2. PROJECT BACKGROUND INFORMATION

2.1 COMPANY / APPLICANT

Name of Owner : Debabaish Plc.

Address : SNNPRGS, Hwassa

Name of company : Debabaish Plc.

Date of Establishment : 24/8/2000 E.C

Registration : SNNPRG- Investment Office

Registered Capital : Et. Birr 10,000,000.00

Address : Sidama Zone, Loko Abaya Woreda,

E-mail : ethiopinapplle888@ gmail.com

Project type : New

Project Implementation Period : One Year

Purpose of the project :

This profile envisages the establishment of a commercial farm production

Location of Project : SNNPRG , Sidama Zone, Loca Abaya Woreda,

Credit Information : New

• Farm -1200 tons / annum of fruit.

The business objectives of the envisaged farm are profitable production

2.4 PROJECT STRATEGY

• Constructing a project farm building as per EUREGAP / ISO 14001

3.1 CURRENT INDUSTRY AND MARKETING OVERVIEW

According to government, export focused strategic plan to capitalize on the nations

FRUIT MAJOR GROWTH CORRIDOR

Table 3-1 Export Strategy growth corridor vs. - fruited type

3.2 EXPORT MARKET CURRENT MARKET PLAYERS

3.3 EXPORT MARKET POTENTIALS

Country of Destinations Ethiopian export of fruits (1000 US$)

Year 1998 1999 2000 2001 2002 2003 2004

Data source: ITC/WTO

3.4 DESCRIPTION OF THE PRODUCT AND APPLICATION

3.5 LOCAL MARKET FORECAST

Year Import (Tones) CIF - Value Et. birr CIF Birr/kg

Table 3-4 Projection of Supply of Processed Fruits (tones)

• Adding additional amount of fruit taking into consideration of juice farm

PRESENT DEMAND OF FRESH PINEAPPLES ESTIMATIONS

Table 3-5 Present Demand Estimations (tones/ annum)