ADVANCED COFFEE PROCESSING FACILITY BENSA ,SIDAMA ,ETHIOPIA

ADVANCED COFFEE PROCESSING

FACILITY

PROJECT PROPOSAL COFFEE FARM

PROJECT PROPOSAL 10,000 m2 PLOT FOR

BENSA, SIDAMA, ETHIOPIA

DEC, 2022

PREPARED BY: JASPER CONSULTING

ARCHITECTS AND ENGINEERING PLC.

INVESTMENT, DESIGN, CONSTRUCTION AND TECHNOLOGY AND TECHNICAL CONSULTANT

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Contents
1. Abstract ................................................................................................................................................ 3
1.1 Mission Statement ....................................................................................................................... 6
1.2 Project Location ........................................................................................................................... 6
1.3 Description of the Project .......................................................................................................... 10
1.1 Project Duration ......................................................................................................................... 11
Step 1: Bean Growth .......................................................................................................................... 12
Step 2: Harvesting .............................................................................................................................. 12
Step 3: Separation .............................................................................................................................. 12
Step 4: Processing and Drying the Cherries ....................................................................................... 12
Step 6: Cleaning, Sorting, and Grading .............................................................................................. 13
Step 7: Roasting ................................................................................................................................. 14
Step 8: Brew and Enjoy! ..................................................................................................................... 14
2. Project Beneficiaries .............................................................................................................................. 16
3. Project Activities.................................................................................................................................... 17
4. Objective of the coffee farm Project ..................................................................................................... 22
4.1 The significance of the project ............................................................................................................. 22
A.Source of Revenue ................................................................................................................................. 22
B . Employment opportunity...................................................................................................................... 23
C .Sources of social service ....................................................................................................................... 23
D. Reasons for the expected success of the project: .................................................................................. 23
5. Strategic and Market Analysis ............................................................................................................... 24
5.1 Economic Outlook ............................................................................................................................ 24
5.3 Present Effective Demand .................................................................................................................. 25
5.3 Competitive Analysis ........................................................................................................................ 25
5.3 SWOT Analysis.................................................................................................................................. 26
5.4 Marketing Plan ................................................................................................................................. 27
5.5 Marketing Objectives ....................................................................................................................... 27
5.6 Marketing Strategies location for facility......................................................................................... 27
6. Capital Investment ................................................................................................................................. 36
This budget assumes that the construction of advanced coffee processing facility and other complimented
services is based on the cost estimated and detail cots breakdown per activities specified below. Total
capital investment cost is total project cost requirement which comprises design, construction,
construction supervision and operation costs............................................................................................. 36
6.1 Design and consultancy Costs .......................................................................................................... 36
6.2 Construction Costs ........................................................................................................................... 36
6.3 Summary .......................................................................................................................................... 37
6.4 Source of Investment costs .............................................................................................................. 37

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The total investment cost estimated at including vat will be birr 120,220,000.00 for initial capital invest
in design, consultancy .landscape ,farm , ware house , admin and canteen Building of advanced coffee
processing facility . From the total investment cost 50 % will be covered by the advanced coffee
processing facility Developer while the remaining 50% will be secured from commercial bank and other
lenders. ....................................................................................................................................................... 37
7. Monitoring and Evaluation .................................................................................................................... 38
There will be a continuous process of assessment to monitor the progress of the coffee facility ............. 38
(1) There will be a monthly reporting of all activities of the project. ...................................................... 38
(2) The project owner will organize consultant that will supervise the construction activities ............... 38
(3) The project owner, the contractor and the team will have regular meeting to discuss the progress of
construction, farm and total facility. .......................................................................................................... 38
The farm project will installs continuous evaluation System of monthly, quarterly and annual reports to
the relevant government and funding agencies will be carried out every year. This will facilitate ongoing
monitoring throughout the life of the project. Monitoring will verify if the project is being implemented
as planned and ensure that project targets and objectives are met. ............................................................ 38
COMMON CHALLENGES FOR COFFEE PROCESSIGN FACILITY INVESTMENT IN
SIDAMA ............................................................................................................................................... 39
8. Conclusion ............................................................................................................................................. 40

List of Tables

Table 1: Breakdown of Uses in the coffee processing plan and facility

Table2: Costs and types of design activities

Table3: Costs of construction
Table4: The sum of Design, consultancy and Construction costs

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1. Abstract

Quality is the most important parameter in the World coffee trade. The quality of coffee

is determined by 40% in the field, 40% at post-harvest primary processing, and 20% at

secondary processing. This underscores the importance of primary processing in

enhancing the quality and value of coffee. The purpose of this study was to examine coffee

processing methods, evaluate constraints to processing and assess socio-economic factors

determining the type of processing method used by small scale farmers. Four hundred

farmers were interviewed from the main coffee growing areas. The survey revealed that

the methods of coffee processing in Ethiopia are sun-drying of un pulped cherries and wet

processing, of which sun-drying is preferred by farmers. Washed coffee accounts for 29%

while sun-dried accounts for 71% of all processed coffee. Education level (p<0.01), area

under coffee (p=0.02), distance to the nearest coffee washing station (p=0.01) and age of

the farmer (p=0.04) significantly determine the type of processing method used. Farmers

with higher education level and large land area under coffee prefer wet processing.

Relatively less educated, old and farmers located far away from the coffee washing

stations use sun-dried processing. The key constraints to coffee processing are lack of

coffee processing facilities, high costs of materials for constructing the raised drying beds,

limited technical know-how and long distance to the few processing facilities. Coffee

processing can be improved through investment by provision of financial resources to

purchase the requisite equipment and training so that the necessary technical, financial and

commercial capability would be created for the sustainable management of the coffee

processing facilities.

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Introduction
Coffee is an important export commodity for Ethiopia, contributing 41% of the country’s total

foreign exchange earnings (IMF, 2006) and about 10% of the gross domestic product. Over 25%

of the population of Ethiopia, representing 15 million people, are dependent on coffee for their

livelihoods (LMC, 2000). This includes 8 million people directly involved in coffee cultivation

and 7 million in the processing, trading, transport, and financial sectors (Charveriat, 2001; Oxfam,

2002).Almost 95% of the Ethiopian coffee is produced by about1 million small-scale farmers,

with an average farm size of 0.5ha, while state-owned plantations account for 4.4% and private

investor plantations 0.6% (FDRE, 2003). The quality of Ethiopian coffee is determined by two

main factors namely the geographic origin (Nicholas, 2007) and the post-harvest processing

techniques. It is estimated that 40% of the quality of coffee is determined in the field, 40% at post-

harvest primary processing, and 20% at secondary/export processing and handling including

storage. In order to enhance quality and market value of Ethiopian coffee, improved primary

processing by farmers at the village level is a prerequisite. An improvement in coffee quality, and

therefore income, has a direct impact on the livelihoods of a large number of resource-poor people

in the rural populations. This study was conducted to examine the coffee processing methods

And evaluate processing costs, identify problems of coffee processing and assess the factors.

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This document outlines the project proposal for advanced coffee processing plan which

focuses on building, shades, reservoir, ware house, canteen and toilet ….etc. of complex full

coffee processing plant in the bensa and around farm area of the one of effective coffee

processing company that aims to fulfill its mission and realize the vision that provides the

balance between socio-economic ,investment and the plant family benefits. The project is

proposed by coffee developer who has many years of work experiences in sidama in general and

bensa town in particular. Coffee developer, the proponent of the project, currently owns large coffee

investment, processing and exporting investment portfolios.

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1.1 Mission Statement

The coffee developer mission is to develop a leading advanced coffee processing plant center in

bensa; is dedicated to quality coffee in worldwide long-term relationships with customers through

well-organized and best quality coffee & advanced coffee processing plant to customer and own

coffee investment purpose; and wants to grow steadily and becoming profitable.

1.2 Project Location

The advanced coffee processing plant will be developed in bensa Town and its surrounding at

with 8000 meter square farm and facility area in the bensa area. Bensa is one of the woredas in

the Sidama Region of Ethiopia. Part of the bensa that extends into the Oromia Region like a

peninsula, Bensa is bordered on the south and north by the Oromia Region, with Bona Zuria on

the west, Arbegona on the northwest, Chere on the east, and Aroresa on the southeast.

Above and below picture shows, satellite map topography and land futures

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Some coffee pictures

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The major town in Bensa is Daye.

Fig. project Site Map station from country map

Sidama coffee: it’s a phrase associated with spices and citrus notes, crisp acidity, and a rich

body. Daye Bensa Coffee is one of best quality coffee in sidama sate. Along with Harrar

and Yirgacheffe, Sidama is one of Ethiopia’s three trade-marked coffee regions. It’s also the

source of most of the country’s grade one and grade two beans, which are its two highest

quality rankings.

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Sidama state admiration map

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1.3 Description of the Project

Nowadays, coffee processing plants were widely on expanding all over the world. Mostly, it is

the oldest industry in African countries than others. As many researchers presented, Ethiopia is

the origin center for coffee Arabica and other types are also widely produced. But still, the

misallocation challenges many coffee investors to operate their business as their wish. Even if

Ethiopia is the origin center for coffee Arabica and others vastly produced in different areas, it

cannot prepare huge numbers of first quality and specialty coffee per tons for international coffee

trade when compared with other world countries like Brazil, Vietnam, Colombia, and Indonesia

as reported.

Major coffee-producing countries. Production industry site selection is one of the key vital

decisions in the process of starting, expanding or changing the location of industrial systems of

all kinds. Structural complexity of the industrial system and the relationship with the environment,

changes in market demand, conditions providing inputs, the characteristics of the production

programs, economic conditions, and working conditions, environmental and other impacts

determine the new location. While changes in production programs, the characteristics of the work

process, the frequency of technological changes and the effect of disorder requires adjustment of

the existing site industrial systems .

Construction of a new industrial or processing plant is a major long-term investment. One of the

Main goals of industrial site selection is finding the most appropriate site with desired conditions

Defined by the selection criteria. In the process of industrial site selection, seeks to optimize the

Number of goals in determining the suitability of a specific location for a defined industrial

system.

The selection of an industrial site involves a complex array of critical factors involving economic,

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Social, technical, environmental issues.

Coffee harvesting and transporting to processing plan

Coffee harvesting and transporting to processing plant Coffee processing is the method of

converting the raw fruit of the coffee cherry into the green (dried) coffee beans. Coffee is either

processed by wet or dry methods. When the coffee is harvested before the beans are ripe or at an

immature stage, the end product will show the color defect and will because by uneven roasts.

The coffee picking and collection are the primary process that operates by coffee farmers and

daily collector workers. An available location is best to reduce labor effort and quality effect.

1.1 Project Duration

Advanced coffee processing farm and plant it takes their own time of investment and steps .such
us...

1- 2-

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Step 1: Bean Growth

Coffee plants flower three to four years after planting. Coffee cherries develop from the flowers.

The cherries ripen about eight months after flowering and change color from green to red.

Step 2: Harvesting

Coffee fruit is removed from the trees using one of two processes: strip picking or selective

picking. In strip picking, all of the coffee fruit is removed from the tree regardless of maturation.

In selective picking, the ripe, red cherries are harvested, and this is generally done by hand. This

process is more labor intensive than the strip picking and is generally used for finer arabica

beans.

Step 3: Separation

Whatever the harvesting method, green and overripe coffee cherries inevitably end up mixed

together with perfectly ripe coffee cherries. There are two main methods of separation: wet and

dry. In the wet method, overripe and underdeveloped coffee cherries, sticks, and leaves float in

water, while ripe coffee beans and green coffee cherries sink. The first step in wet coffee

processing is separation of "floaters" from "sinkers." In dry processing, harvested cherries are

separated by winnowing, which is commonly done by hand with a large sieve but can also be

done mechanically.

Step 4: Processing and Drying the Cherries

There are three main methods used to process and dry coffee cherries: the dry process, the wet

process, and the semidry process.

In the dry process, freshly picked cherries are spread out on the ground or on raised tables to dry

in the sun. They are raked and turned throughout the day and covered at night to keep them from

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getting wet. When done properly, dry-processed coffee results in a smooth and heavy-bodied

brew.

In the wet process, the freshly harvested cherries are passed through a pulping machine to

separate the skin and pulp from the bean. The pulp and the beans are then separated by

centrifugal force and a barrel screen system. After the pulp has been removed, the beans with

their parchment skin are dried in the sun and/or in a hot air dryer. The wet process results in a

clean, balanced flavor and a fruity acidity.

The semidry process is a hybrid process. In this relatively new process, the outer skin of the

cherries is removed mechanically by wet grinding, using pulping machines, and the wet beans

covered in mucilage are stored for one day. The mucilage is then washed off and the coffee

beans are dried. The semidry process produces coffees that are heavy-bodied, earthy, and mildly

acidic.

Step 5: Hulling and Polishing

Hullers are used to remove what is left of the fruit on the bean, whether it is the crumbly

parchment skin of wet-processed coffee or the parchment skin and dried mucilage of semidry-

processed coffee or the entire leather fruit in dry-processed coffee. Polishing is an optional

method that removes any remaining silver skin from the beans following hulling. It is done to

improve the appearance of the green beans. Care must be taken because the temperatures

experienced by the beans during polishing may be detrimental to final coffee flavor

Step 6: Cleaning, Sorting, and Grading

Fine coffee is sorted and cleaned through a multistep process. Air sorters, sieve shakers, and

gravity separators are used to separate based on density and size. Color sorting is performed

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using machines or by hand. Final grading is based on size, growing location and altitude,

harvesting, taste, and cup quality.

Step 7: Roasting

Beans are commonly roasted in large commercial roasters, placing beans in large metal

cylinders and blowing hot air on them. The older method roasted over an electric, gas, or

charcoal heater. Roasting gradually raises the temperature of the beans to between 180°C and

230°C. This triggers the release of steam, causing the beans to swell as well as darken in color

and develop roasted flavors.

Step 8: Brew and Enjoy!

Finally, the step you've been waiting for all morning...

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1 Background of processing plant

Nowadays, coffee processing plants were widely on expanding all over the world. Mostly, it is

the oldest industry in African countries than others. As many researchers presented, Ethiopia is

the origin center for coffee Arabica and other types are also widely produced (Weinberg &

Bonnie, 2001). But still, the misallocation challenges many coffee investors to operate their

business as their wish. Even if Ethiopia is the origin center for coffee Arabica and others vastly

produced in different areas, it cannot prepare huge numbers of first quality and specialty coffee

per tons for international coffee trade when compared with other world countries like Ethiopia,

Brazil, Vietnam, Colombia, and Indonesia.

Production industry site selection is one of the key vital decisions in the process of starting,

Expanding or changing the location of industrial systems of all kinds. Structural complexity of

the Industrial system and the relationship with the environment, changes in market demand,

conditions providing inputs, the characteristics of the production programs, economic conditions,

and working conditions, environmental and other impacts determine the new location. While

changes in production programs, the characteristics of the work process, the frequency of

technological changes and the effect of disorder requires adjustment of the existing site industrial

systems .Construction of a new industrial or processing plant is a major long-term investment.

One of the main goals of industrial site selection is finding the most appropriate site with desired

conditions defined by the selection criteria. In the process of industrial site selection, seeks to

optimize the number of goals in determining the suitability of a specific location for a defined

industrial system. The selection of an industrial site involves a complex array of critical factors

involving economic, social, technical, environmental issues.

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2. Project Beneficiaries

Ethiopia Sidama Bensa Grain Pro is sourced from 650 family-owned farms organized around the

Bensa washing station located in Bensa a woreda located in the Sidama State, Ethiopia. Producers

deliver ripe cherries to Bensa mill every day during the harvest season. At the washing station

coffee is carefully sorted, pulped, fermented, and then washed. The wet beans in parchment are

placed on raised drying beds in thin layers and turned every 2 to 3 hours during the first few days

of the drying process. Depending on weather, the beans are dried for 12 to 15 days until the

moisture in the coffee beans is reduced to 11.5 percent. Then the beans are transported to Addis

Ababa, the capital of Ethiopia, to be milled and bagged prior to export.

This project has direct and indirect benefits. Direct benefit recipients are the immediate

frames of the bensa area such as: farmers, youth, commercial transporter, government

revenue authorities and other tenants of shops, NGO, visitors in the center and the union

office. Individuals that will be employed in these advanced coffee processing farm project

are other beneficiaries of the project.

In addition, contractors, engineers and daily laborers, those who get the opportunity to construct

the advanced coffee processing farm project also benefit from the project. The indirect

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beneficiaries are residents and guest of bensa town who will get the opportunity for modern and

advanced coffee processing farm model project. The project promoter will generate substantial

profit from exporting part of which will be paid as tax for the local government.

Besides, the citizen’s beneficiaries through getting job opportunity; it will provide temporary and

permanent work opportunity when the coffee processing farm plant starts operation.

3. Project Activities

At the beginning, the project will be implemented phase by phase. In the 1st phase, the design and

construction activity will be made. After farm construction contract agreement would be made

then the 2nd phase will be planned to coffee implementation and buying from outside farmers

.third phase processing best quality coffee , packing and transport to export center .

Therefore, after the above procedures full operation of the project would start and strategic

planning and annual planning of activities follows. In general the considered areas of operation

activities are

 Consulting the advanced farm processing plant by legal consulting firm

 Constructing the farm service building and site by legal contractor

 Finishing and furnishing the building and farm site

 Organizing management of the farm site and facility services

 Coffee making processes and buying from surrounding frames

 Best quality step for process and transport to center

 Revenue and frames benefit from profit

 Social responsibility and community help

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Air screen cleaner

To remove large and small impurity, dust, leaf, and small seed etc..
As the pre-cleaner in the Seed cleaning line & seed processing plant

De-stoner machine
TBDS-10 De-stoner type blowing style
Gravity destroyer can remove the stones from different seeds with high performance

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Gravity separator
Gravity separator can remove the blighted seed, budding seed, damaged seed, injured seed, and
rotten seed, and deteriorated seed, moldy seeds from sesame, Coffee Beans with high
performance.

Auto packing machine

Function: The auto packing machine used for packing the beans, grains, sesame seeds and maize
and so on, from 10kg-100kg per bag, electronic controlled automatic.

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4. Objective of the coffee farm Project

 To establish coffee roasting, grinding and packing plant for domestic and international

market.

 Provide an excellent service experience, anticipating the needs of the customers and

delivering the best service.

 Export of a value-added product coffee roasting, grinding and packing

 Processing & Exporting Of Ethiopian Arabica Specialty Coffee

 To Be One Of The Leading Coffee Processors And Exporters

 Create employment opportunity for a substantial number of persons

 Strategically position Ethiopian coffee processing industry to be

globally competitive; and

 Complement the national development agenda through export of a value-added

product.

4.1 The significance of the project

The envisaged project deemed to add to the economic development of the nation in general and

zone and town in specific with following ways:

A.Source of Revenue

As public policy of any nation, the government collects different forms of taxes from different business

organizations and individuals. Among the different forms of taxes, business income taxes, payroll income

tax and VAT are collected from undertaking business activities.

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B. Employment opportunity

One of the problems that our country faced is unemployment. Therefore, the current objective of the

government is working on tackling the problem of unemployment and fostering the development process

either through creating self-employment or employment in other organization. Hence, this project will

hire 1116 individuals temporary and permanent.

C .Sources of social service

The project will create backward linkages with the agricultural sector. The project will create a

conducive environment for the rapid growth of manufacturing sectors around the project site

which in turn create employment opportunity for a substantial number of persons.

D. Reasons for the expected success of the project:

• Unwavering commitment of the local investor and detailed understanding and planning of the

business; • High acceptance and recognition of our brand and products within a relatively short

period; • relatively high level of expertise in coffee, especially when compared with local

investors; and Significant demand for quality coffee products in the local market.

E.COFFEE PRODUCTION AND MARKETING VALUE CHAIN IN ETHIOPIA.

The producers under this stage in the coffee value chain of Ethiopia include small-scale farmers,

private owned farmers and state firms. The major portion inters of volume of products mobilized,

value adding functions, market share and capital owned in coffee value chain of the country is

under the hands of producers especially the large-scale private coffee plantations and state farms

of coffee plantations. After the coffee is grown and matured, the following value adding activities

in the value chain performed by those producers are collecting coffee chary and transporting to

processing areas.

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5. Strategic and Market Analysis

5.1 Economic Outlook

The consumers of processed coffee products are local coffee consumers (mainly the urban

dwellers), importers, and food and beverage industries operating in the country and abroad

(chocolate, candies, confectioneries).Ethiopian coffee is exported to over 50 countries every year.

The largest importer country of Ethiopian coffee is Germany (about 30 % of the total Ethiopian

coffee export) followed by Saudi Arabia (about 15 %), USA (6 - 10 %) and Belgium , Japan,

France, Italy, and Sudan (4-6 % each). Over 80 % of the total volume of coffee is exported to

these 8 countries.

For example, during the period 2009-2013, the average unit value of coffee exported by

Switzerland is higher by nearly 10 fold as compared to the average unit value of coffee exported

from Ethiopia. In fact, West European countries are not producers of coffee but they have

specialized in import of the green coffee from developing countries where the resource is available

and then processing the product (value adding) and re-exporting. Accordingly, in order to fully

exploit the country‘s coffee resource potential, developing local value addition capability is

indispensable.

5.2 Consumption

Ethiopians are heavy coffee drinkers, ranked as one of the largest coffee consumers in

Sub Saharan Africa. Nearly half of Ethiopia’s coffee produce have locally consumed.

Coffee in Ethiopia has both social and cultural value. It mainly consumed during social

events such as family gatherings, spiritual celebrations, and at times of mourning. Coffee

supplied and traded in the local market usually has a lower quality. Coffee on the local

market is mainly coffee destined for export through the Ethiopian Commodities

Exchange (ECX) market but rejected for failing to meet ECX’s quality standards. In spite

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of the fact that coffee supplied to the local market has low quality, the price of coffee in

the local market is usually higher than export prices. Because of this price disparity, some

coffee shops in most large cities have started mixing coffee with barley grain to get more

profit.

5.3 Present Effective Demand

Urbanization and income are found to be the major determinants of the future demand for value

added coffee products. Hence, a growth rate of 5%, which is slightly higher than the urban

population growth rate and much lower than income growth rate, is taken to forecast the future

demand. The domestic demand for roasted coffee depends on level of income and population

growth rates. Moreover, the product’s superior convenience will have a positive effect on the level

of demand. Since the product is high valued type, major consumers are expected to be urban

dwellers and those prosperous among the rural society. However, it has been assumed for this

purpose that the urban residents will be major target consumers of the product. According to CSA

(2011) the urban population is growing at more than 4% per annum. The country’s economy is

growing at 11%, the population and income effects are also similar. With such understanding 4%

is used to project demand growth. Domestic production is expected to remain at year 2012 level

(2,153 tons).Export is forecasted to grow by its average growth rate of the last four years .

5.A Competitive Analysis

Since construction of advanced coffee processing facility for export and local market purpose

is effectually one of the most free market oriented businesses in the country, competition

cannot be accurately categorized. This coffee processing farm project proposal anticipates that

there will be a sizable amount of competition from both single individual to large companies.

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5.B SWOT Analysis

The key issues and opportunities for the proposed advanced coffee processing facility based on

the market analysis are summarized in the following SWOT analysis:

Strengths

 Good location of the proposed project

 Friendly, welcoming, and relaxed atmosphere

 Good range of convenience good quality coffee product needs

 A farm community product and focus on good labor.

 Well-established administration and good coffee weather.

 Good landscape and soil for coffee

 Good product per hectare of coffee farming investment

Weaknesses

 Lack of takeaway transport and some facilities for employee.

 Lack of major financial aid for many bank or others...

 Poor condition of harvest good quality product of coffee

 Some lack awareness traders and group

Opportunities

 Ongoing improvements in investment activities in the bensa area.

 Expansion of the investment through attractive mechanism and policy

 Greater range of convenience land through this expansion

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 Spin-off growth as a result of the coffee farm investment sector.

 Extension of the marketing activities and farmers product.

 Stronger connections with other investors and community.

Threats

 Major competition from other coffee farm developers and facility

 Lack of engagement from or resistance to change by other enterprises

 Reluctance by farm property owners to invest in social sector and community

development.

5.4 Marketing Plan

The proposed advanced coffee processing facility intends to maintain an extensive marketing

campaign that will ensure maximum visibility for the constructed units in its targeted market.

Below is an overview of the marketing strategies and objectives of the center.

5.5 Marketing Objectives

 Establish relationships with other business owners and agents within the targeted market.

 Implement a local campaign with the center’s targeted market via the use of flyers,

advertisements, and word of mouth.

5.6 Marketing Strategies location for facility

Location of the envisaged Integrated advanced Coffee Processing Plant is selected based on a two

stage location and site selection procedures. The first stage involved identifying potential project

locations, and prioritizing and selection of appropriate one based on critical project selection

criteria. The project location determining factors considered are production of raw coffee and

inputs from farmers, access to market, and availability of skilled and unskilled labor, infrastructure

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such as road, electricity and telephone line, availabilities of social amenities. Project will be

implemented in Ethiopia, sidama Region, bensa Town in near kebele for establishment of the

integrated coffee processing plant project.

1.1. Utilities
A number of utilities world be put in place in order to ensure smooth functioning of the coffee
processing facility project. These utilities include:

 Water Supply, sanitary unit, gray water recycling and s.t.

 Supplementary Electricity supply. Security camera
 Telephone line Internet Broadband
 Fuel, Oil and lubricant
 Drainage Facility and landscape
 Some especial engineering equipment’s

1.2. Project implementation

The project’s implementation is expected to take less than 24 months. The major activities include
Bank loan processing construction of the building, cleaning the area around the site landscape,
building, and utilities, machines installation of equipment’s and start rendering services. The time
schedule for the above matured major activities is presented below:

Table: project Implementation schedule

SN Activities Date
1 Land request processing Dec-Jan, 2023
2 Land approval Feb-Mar, 2023
3 Bank loan processing Apr-May 2023
4 Site Development JUNE- NOV 2023
5 Building and construction work Nov, 2023-May 2023
6 Preparation for service June-Dec, 2023
7 Service starting zone Jan-May, 2025

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2. Organizational Structure

2.1. Organization and management

The organizational structure should be in a way that the company able to achieve its objectives as
well as the satisfaction of standard requirement. In addition to this, the structure should fit the
dynamics of all customers in the building ranging from small processing business to large tenants.

2.2. Man Power

The total manpower required for the building will be 1126 persons.

2.3. organizational Structure

The organizational structure of the project is designed by including all the necessary personnel
under the right division. At the top of the organizational structure, there will be manager with the
responsibility of supervising the overall activity of the building. Depending up on the nature of
the center and the amount of work to be performs; there exist auxiliary units under the general
manager.

Employees under each unit will be supervised by the department head that is accountable for the
general manager. General Manager is appointed by owner.

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Owner

General
Manager

Farm facility and Marketing and Quality, Technical

Building Admin export unit and maintenance
manager

HRM and Employee and social

IT, Electricity,
finance service director,
Machine and
plumper and
water system

Cashier Purchaser and Labor and daily and professional export on

partners site and office also international level unit
and

Fig: organization structure of the coffee farm facility project

As clearly shown in the organizational structure, the center organization has one general manager
and three main sections. Under the general manager there are the, marketing Department,
maintenance and building administration department. Under building admin dept. there exist two
sections i.e., HRM & finance and general service. Further sub sections are also organized under

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technical and maintenance manager. The following section deals with the duties and
responsibilities of each department.

A. The General Manager’s Duties and Responsibilities

 He/she will plan, organize, direct and control the overall activities of the building.
 He/she will devise policies and strategies that will enable the center to be profitable.
 He/she will incorporate modern technological innovation that will facilitate the service
delivery of the building to increase customer’s satisfaction.
 He/she will plan, organize, direct and control the human and non-human resources of the
building so as to achieve the short and long run objectives of the organization.

B. Coffee farm facility Administration Department

The building Administration Department of the multipurpose building has two main sections
(HRM and Finance and General Service section). It has responsible for undertaking the following
activities;

 Manage the human resources and control employee’s activity

 Well non-human resources of the project, which include; effective handling of the
different resources of the building, and devise strategies of controlling against fraud and
damage.
 Will provide the right material or inventory to the center with right price at the right time.
 Will plan, organize direct and control the financial transaction of the building by using all
the necessary documents.
 Accountant and casher that will collect money from the customers.
 Will develop sound financial control system by developing modern financial control
systems.
 Will prepare the annual financial statements and prepare condensed reports for both the
General Manager and other concerned government body.
 Follow the overall status of the business and provide maintenance and repair services
C. The marketing Department
 Will handle the overall marketing activities of the organization which include planning,
organizing, directing, and controlling.
 Will develop the marketing strategies for future multipurpose building development

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 Will develop effective customer handling strategies.

 Execute the promotion methods.
D. Technical and maintenance manager
 Will handle the overall physical maintenance and related issues
 Will make sure electricity and back up is organized.
 Follow up security issues and educate tenants
 Works in collaboration with general service to make sure tenants are well served

3. Financial Requirement and Analysis

The financial resource is a prime resource for undertaking any activities. Hence for implementing

this commercial and mixed use building a total of 120,000,000.00 ETB is required. From
this 50% 60,000,000.00 birr will be covered by the promoter of the project while the rest
50% will be covered through loan from bank at the prevailing interest rate.

Therefore the said amount of finance is needed for undertaking the following.

5.1 FIXED INVESTMENT

A. Land, Building & Construction
S.N Description of works Total Cost in birr
1 Site and farm facility Development, Building 56, 500,000.00
construction and design and supervision …others
related cost.
2 Some facility Equipment like processing machine and 46,000,000.00
dryer, utilities and vehicles and others cost mechanical
machine...etc.
3 Working capital and facility system service 14,500,000.00
4 Land lease & down payment for gov’t. 3,000,000.00
Total 120,000,000.00

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B. Building Machineries and Equipment’s

SN Description Measure Qty Unit cost in Total cost in
ment Birr Birr.
1 Generator Unit 1 2,200,000.00 2,200,000.00
2 Carpentry tool box Set 1 117,000.00 117,000.00
3 Electrician tools box Set 1 118,500.00 118,500.00
4 Plumber tools kit Set 1 112,300.00 112,300.00
5 Fire extinguisher Unit 10 806,000.00 806,000.00
(Security Equipment)
6 Total 3,353,800.00

C. Vehicle
SN Description UOM Qty Unit Cost in Total cost in Remark
Fr. Birr
1 Mini-Bus Unit 1 2,500,000.00 2,500,000.00 Duty Free
2 Pick up 1 4,500,000.00 4,500,000.00 Duty Free
3 Heavy loading truck 1 6,000,000.00 6,000,000.00 Duty Free
Total 4 13,000,000.00

D. Office Equipment’s
SN Description Measurement Qty Unit cost in Total cost in
birr Birr
1 Managerial tables Unit 5.00 82,600.00 82,600.00
2 Managerial chairs Unit 5.00 71,950.00 71,950.00
3 Office table with chair Unit 7.00 66,350.00 66,350.00
4 Secretarial table with chairs Unit 1.00 17,450.00 17,450.00
5 Computer with chairs Unit 3.00 187,000.00 187,000.00
6 Shelf Unit 213,500.00 213,500.00
7 Filing cabinets Unit 1.00 56,500.00 56,500.00
8 Guest chairs Unit 1.00 29,900.00 29,900.00
9 Fax & Telephone machine Unit 5.00 41,300.00 41,300.00

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10 Carpet and Curtain LS 1.00 120,000.00 120,000.00

Total 886,550.00

Working Capital Building administration employ Operating Expense at full

Capacity

a. salary Expense
SN Position No Qualification Monthly birr
salary in
Birr
1 General manager 1 BA in management 6000
2 Facility admin 1 BA in Acct/Mgt 5000
3 Secretary 1 10+2 in secretariat science 4000
4 HRM Officer 1 10+2 in HRM/Management 3950
5 Technical and maintenance 1 Diploma in building maintenance 3500
manager
6 Finance head 1 BA in Accounting 5500
7 IT Technician 1 Diploma in computer science/IT 3150
8 Marketer 1 Diploma in marketing 3150
9 Accountant 1 Diploma in accounting 3150
10 Guards/Security 10 Basic 25000
11 General Service head 1 Diploma in Management 3500
12 Purchaser 2 Diploma in purchasing &Sup Mgt 6300
13 Electrician 1 10+2 in general electricity 3000
14 Plumber 1 10+2 in general mechanic 3000
15 Casher 2 10+1 in bookkeeping 7700
16 Cleaner 12 Unskilled 29400
17 Maintenance officer 3 10+2 in General mechanic 7500
18 Driver 4 10 completed 15400
Total 45
Labor force (30%) 15 Labor 60,000
Grand Total 60 198,200 birr

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5.1.1 Operating Expenses

SN List of Items Annual cost in birr Assumptions Used
1 Audit and legal fee 24,000.00 2000 br/per ,month
2 Stationery supplies 6,000.00 500 br/month
3 Promotional Cost 40,000.00 Lump sum annual cost
4 Property Insurance 84,009.00 1% of the building
5 Cleaning Supplies 10,800.00 3900 br. Per month
6 Uniforms 1,670.00 1180 per pes for 16 people
7 Water consumption 5,000.00 2500 m3 by 3.15 br
8 Electric consumption 6,000.00 10000KWH By Br.0.4736
9 Fuel 42,672.00 2032 lit per year by Br. 21
10 Oil & Lubricants 4,267.20 10% of fuel cost
11 Telephone & fax 18,000.00 1500 per month
12 Repair expense 72,018.00 2% of building cost
13 Miscellaneous costs 20,000.00 3000 per month
Total 334,436.20

5.1.2 Pre-service Expenses

SN Description Cost in birr
1 Project proposal 180,000.00 birr.
2 Licensing fee and others Including others fees
Total 180,000.00 Etb.

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6. Capital Investment

This budget assumes that the construction of advanced coffee processing facility and other

complimented services is based on the cost estimated and detail cots breakdown per activities

specified below. Total capital investment cost is total project cost requirement which comprises

design, construction, construction supervision and operation costs.

6.1 Design and consultancy Costs

Table2: Costs and types of design activities

Remark
Item No. Description Price (Birr)

1 Design and Consultancy cost

180,000.00
It depends on
2 Construction Supervision 45,000.00 birr/month construction period

Only design and

Total 160,000.00 consultancy fee

6.2 Construction Costs

Table3: Costs of construction

Item No. Description Price (Birr)

Advanced Coffee Processing Facility

1 construction and machine, utilities’, working 120,000,000.00
capital, administration and land lease.

2 Including Contingency and vat 15%

Total 120,000,000.00

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6.3 Summary

Table4: The sum of Design, consultancy and Construction costs

Item No. Description Price (Birr)

1 Total Design and consultancy cost 220,000.00

Total Construction and coffee

2 120,000,000.00
processing facility cost

Total 120,220,000.00

Including Contingency and Vat 15%

Total investment capital 120,220,000.00

6.4 Source of Investment costs

The total investment cost estimated at including vat will be birr 120,220,000.00 for initial

capital invest in design, consultancy .landscape ,farm , ware house , admin and canteen Building

of advanced coffee processing facility . From the total investment cost 50 % will be covered by

the advanced coffee processing facility Developer while the remaining 50% will be secured from

commercial bank and other lenders.

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7. Monitoring and Evaluation

There will be a continuous process of assessment to monitor the progress of the coffee facility

(1) There will be a monthly reporting of all activities of the project.

(2) The project owner will organize consultant that will supervise the construction activities

(3) The project owner, the contractor and the team will have regular meeting to discuss the

progress of construction, farm and total facility.

The farm project will installs continuous evaluation System of monthly, quarterly and annual

reports to the relevant government and funding agencies will be carried out every year. This will

facilitate ongoing monitoring throughout the life of the project. Monitoring will verify if the

project is being implemented as planned and ensure that project targets and objectives are met.

8. Environmental impact of the project

The EIA of the project activities was determined by identifying the environmental aspects and
then undertaking an environmental risk assessment to determine the significant environmental
aspects. The environmental impact assessment has included all phases of the project namely
construction phase and operational phase.

The farm facility and building has both positive and negative impact

Positive impact of the project

The positive impact of the advanced coffee processing facility project is:-

 Generation of employment opportunity

 Source income for the government through business income tax
 Income generation for the promoter
 Being exemplary for other investors who want to engage in the same business line.

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9. Problem on workers on construction

During construction coffee processing facility there are some problems that will materialize on
workers. These are: damage on operation by using machines, construction materials and others.
To mitigate such impact the company will provide safety insurance and safety equipment’s.

COMMON CHALLENGES FOR COFFEE PROCESSIGN FACILITY INVESTMENT IN SIDAMA

Labor is one of the main challenges facing Sidama’s coffee industry. Like many producing

countries, the rate of rural-urban migration in Ethiopia is increasing, mostly due to poverty

or lack of opportunities. Some data and research show us there is not enough labor now that

more people are going to the city to work. For those who stay and work in coffee, there are

few training opportunities. “There is no school for coffee, so people learn about it from

experience. “Having a lack of professionals that are very experienced in coffee makes it

hard.” some speakers.

Infrastructure, in general, is also poor. “There are some areas where there is no internet,

sometimes phones don’t work, so it is really hard to do business…” some speakers. “You’ll

always need to use cash for the coffee, so that’s a risk as well.”

Sidama’s mountainous landscape, while improving coffee quality, also poses a challenge.

Roads are long and winding, and sometimes in poor condition.

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8. Conclusion

Ethiopia’s future depends on coffee. One of Ethiopia’s most important commodities, coffee

accounts for about 30 percent of Ethiopia’s exports and employs nearly 15 percent of the

population. Bensa a good coffee place and region in the sidama state part of the country that is

known as the first grade quality coffee. People have been farming coffee for over hundreds years

in sidama. It’s common to hear a farmer say that a coffee plant on their farm was planted by their

grandparents or parents. Coffee impacts every part of life in this area; it is their past, present,

and future.

Nearly 95 percent of the coffee produced in Ethiopia is grown on small-scale rained farms.

Ethiopia farmers are facing challenges, including increasingly erratic rainfall, rising temperatures,

poor management of coffee trees, fluctuation of coffee prices and degradation of soil, that are

adversely affecting their income opportunities the country’s coffee production. However,

Horizontal collaboration among farmers can

take a number of forms. It can involve a large group of farmers or just two or three. It can be either

formal or informal. Horizontal cooperation can facilitate upgrading in several ways. It can

increase bargaining power, reduce buyers’ transaction costs of dealing with large numbers of

farmers, and provide a platform for sharing information and demonstrating new products,

processes or technologies. Producer groups and other structures that promote horizontal

cooperation among farmers can help to bridge the physical and social distance among individual

producers and between groups of farmers and buyers. Horizontal collaboration with farmers can

facilitate access to support services such as training, extension or finance; it can provide a platform

for coffee processing facility to provide embedded services to larger numbers of farmers.

Genetic diversity and favorable Environments, Agro-forestry based production system,

already known brands in the world market, trademarked and licensed benefit to all, Modern

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Marketing System (ECX), Encouraging policy and coffee price are among major opportunities of

coffee production in Ethiopia .The Ethiopian coffee sector has bright prospects. The country has

suitable altitude, optimum temperature, low labor costs and fertile soil. It can sustainably produce

and supply fine specialty coffee with potential of producing all coffee types of the various world

coffee growing origins (Jose, 2012). Another opportunities of coffee production in Ethiopia are;

high national and international demand for the product, increasing interest of private sector with

high investment potential, high support by both regional and federal governments .

Ethiopia is famous as coffee’s birthplace, today it remains a specialty coffee industry darling

for its incredible variety of flavors. While full traceability has been difficult in recent history,

new regulations have made direct purchasing possible. We’re partnering directly with farmers to

help them produce top quality specialty lots that are now completely traceable, adding value for

farmers and roasters, alike.

The exceptional quality of Ethiopian coffee is due to a combination of factors. The genetic

diversity of coffee varieties means that we find a diversity of flavor, even between (or within)

farms with similar growing conditions and processing. In addition to varieties, processing

methods also contribute to end quality. The final key ingredients for excellent coffee in Ethiopia

are the producing traditions that have created the genetic diversity, processing infrastructure and

great coffee we enjoy today.

Thus, this investment project can be “economically viable” according to the estimated and

good potentials coffee processing facility area bensa, sidama. The invested funds are

refundable; this goes to prove that the project has investment potential and all the invested

funds refundable.

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Executive Summary

1. Project name: ADVANCED COFFEE PROCESSING FACILITY

2. project Type : WET COFFEE PROCESSING AND FARM FACILITY
3. Nationality: Ethiopian
4. Project Owner: ATO AHENAFI ARGAW ,ARDENT COFFEE
5. Project location: Sidama Regional state, BENSA
6. Project composition: Green Rooms (washed coffee draying units
).Conveyor (from fermentation unit ),Coffee Pulpier ,Fermentation
unit , water Treatment ,Rain water Harvesting ,Compost pit , water
Reservoir ,Dry mill ,Coffee ware House ,office and Administration
,Guard House C ,garage ,Reservoir Pump House ,Cherry inspection
…etc. .
7. Premises Required: 10,000 m2
8. Total investment Cost: 120,220,000 ETB is required from this amount
50% or 60,110,000.00 ETB from owner equity and the rest 50% from
Bank loan.
9. Employment opportunity: 1126 individuals on permanent 160 on casual
basis
10. Social and Economic Benefit: Provide Better Coffee Processing Facility
service, Employment opportunities, Generation of income and Benefits
for the local people , new social, economic structure , Modern
Technology ideas, Training ,Development and investment attraction
center and service .

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SOME WARE HOUSE PLAN

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ADVANCED COFFEE PROCESSING FACILITY BENSA ,SIDAMA ,ETHIOPIA

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Machine lay out

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51