Vegetable seeds business in Ethiopia

This project is going to produce vegetable seed that the country mostly imports from European countries.  Currently, vegetable seed has a high demand in Addis Ababa and its surroundings although its quality is sometimes questionable.

Vegetable seed like tomato, lettuce, swisshard and cauliflower are expected to be produced from the envisaged plant. These vegetable have a high demand since consumers have better preference and do not need much additional expense to prepare them. It can be processed in factory or taken as a salad mixed with lettuce or prepared as paste. Similarly lettuce can be taken as a salad and no cooking is necessary in its preparation. Swiss chard is also much liked and it is served cooked. Seemingly cauliflower is more expensive than the other three and foreigners like it. Above all these facts these vegetables are the major sources of vitamins and minerals.

During the period 1997-2006 , imports varied from 22.06 tons in 1997 to 98.97  tons in 2006. Imports averaged 57.65 tons during the period.

The Ethiopian Government’s strategy for poverty reduction as stipulated in the “A plan for Accelerated and Sustained Development to End Poverty, PASDEP” includes production diversification in to more marketed oriented production from the traditional grain based agricultural production.The agricultural strategy will revolve around a major effort to support the intensification of marketable farm products -both for domestic and export markets, and by both small and large farmers. Accordingly, one of the market oriented products selected are vegetables. Therefore, due to the priority given by the government it can be concluded that demand for vegetable seeds will grow in the future.

Based on the CIF price of the external trade statistics for 2006 (the latest data available), and allowing 30% for import duty and other clearing expenses, the factory-gate price for a capacity of 100 tons per annum. plant is estimated at Birr 92,445.90 per tonne.

The basic improved seed will be procured from Ethiopian and Regional Agricultural Research Institutes and distributed to farmers for multiplication by contractual agreement to be made between the two parties, the project and the farmers. After procuring from farmers, the seeds will be collected for processing.

The seed processing plant comprises 3 steps via pre-cleaning, seed processing and seed treating series.Weighing of the collected seeds will be the first step in seed processing.  Then the seeds being cleaned and pass through a distribution system, a self regulating, feeding flap, being equipped with weights, and finally reaches the screening drum.  Because of the rotary motion, coarse and foreign matters and dusts, including lighter pieces of shells are sorted out.  Thereafter, the pre-cleaned product is falling into a collection hopper with out let socket.  During pre-cleaning three kinds of impurities: coarse, foreign matters and dusts, including higher pieces of shells are sorted out.  In the seed processing, drying and cooling will be employed for conservation purposes before storage.  Seed drying and cooling will be followed by seed treatment which includes dressing of seeds with powder or liquid chemicals against seed born pests.  Finally, the seed is bagged with a bag with a 100 kg capacity and stored in a ware house with controlled temperature and humidity.

The total investment cost of the project including working capital is estimated at Birr 5.21 million, of which 28 percent will be required in foreign currency.  The total investment cost of the project including working capital is estimated at Birr 5.21 million, of which 28 percent will be required in foreign currency.  Accordingly, the IRR of this project  is  computed to be  21.72 % indicating the viability of the project.

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