TABLE OF CONTENTS

1. Summary………………………………………………………………………………………2

2. Introduction……………………………………………………………………………………3

3. Background …………………………………………………………………………………...3

4. Policy Environment & Incentives ……………………………………………………………5

5. Project Objectives ……………………………………………………………………………5

6. Project Rationale………………………………………………………………………………6

7. Project Area Description………………………………………………………………………7

7.1 Availability
Infrastructure…………………………………………………………………….. 7

7.2 Land Availability………………………………………………………………….. .8

7.3 Availability of Service Facilities ……………………8

8. Project Description……………………………………………………………………………8

9. General Market Description………………………………………………………………….11

10. Indicative Initial cost…………………………………………………………………………14

11. Conclusion …………………………………………………………………………………..15

12. Annex…………………………………………………………………………………….16

1. Executive Summary:

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This project profile envisages the establishment of a cold store in Dire Dawa City – a city that
has from its very birth in 1902 served as a gateway for the country’s ever growing import-export
trade.

Cold storage faculties enable people to prolong the shelf-life of perishable food items such as
fruits and vegetables, meat, poultry, etc. In a way, cold stores add value to the agricultural
products by keeping them fresh and suitable for consumption.

As the hot climatic condition of the Republic of Djibouti is not suitable for any kind of farming,
the Djiboutian people have always relied on the agricultural products especially fruit and
vegetables regularly imported from Ethiopia via Dire Dawa City.

The establishment of a cold storage facility in the city can play crucial role to the success of the
developmental endeavors of the nation by enabling it to increase its foreign exchange earnings
by enabling it to export increasing amount of good quality and fresh fruits and vegetables as
well as other new agricultural products. The cold store improves the quality of the exported items
by ensuring their freshness thus enhance the competitiveness of the products exported from
Ethiopia with those coming from other countries.

Ethiopia plans to expand its export of fruits, vegetables, and horticultural products to the
lucrative market in Saudi Arabia, and the Gulf States before long.

In view of these facts, the cold storage facility in Dire Dawa City could play an invaluable role to
the success of crucial undertaking intended to benefit the nation and its citizens.

The total land area needed for the construction of the cold storage facility is 3000 square meters,
out of which 1850 square meters covers the built-up area of the cold store proper, while the
remaining 1150 square meters is to be used for the building of the other pertinent structures
needed by the cold store.

All told, the implementation of this project; that is, the procurement of materials, the cost of
building and civil works, and the land lease cost, is estimated to be 24,086,000. The
implementation of this project will create employment opportunity for 30 people.

2. Introduction:

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This project profile is intended to provide prospective investors clear idea regarding cold stores
or refrigerated warehouses. In other words, the profile is prepared to show the potential of
investing in the field, and give some description of the relevant steps to be taken for establishing
of such an institution, etc.

According to the World English Dictionary, cold store is defined as the storage of things in an
artificially cool place for preservation. From the perspective of this project profile, the term
things, which refers to the objects to be preserved, signifies perishable food items such as meat,
mutton, poultry, and horticultural products intended for export. The term preservation as used in
the definition connotes the effort made to maintain the desirable qualities of these agricultural
products such as taste, aroma, color, and freshness intact; that is, undamaged, and thus, fit for
human consumption.

The storage of food items at low temperature slows many of the enzymatic reactions involved in
spoilage and reduces the growth rate of microorganisms (though it does not kill them). To
minimize microbial growth, refrigerators should be kept at 0° to 4° C (32° to 40° F).
Refrigeration is advantageous because it does not cause chemical or physical changes to food.

3. Background:

The Dire Dawa Administration is located between 9°27’N and 9°49’N Latitudes, and between
41°38’E and 42°19’E Longitudes. In the north, east, and west, the administration is bordered by
the Shinile Zone of the Somali National Regional State, and in the south and southeast by the by
the Eastern Hararghe Zone of the Oromia National Regional State.

Dire Dawa Administration is found in Southeast Ethiopia, and Dire Dawa City, the seat (capital)
of the administration, is located 505 kilometers to the east of Addis Abeba, 55 kilometers to the
north of the historic city of Harrar, and 313 kilometers to the west of Port Djibouti.

The administration is a chartered city administration that consists of 9 urban and 38 rural
Kebeles. In all, the administration is estimated to have a total land size of 1288 square
kilometers, of which 97. 73% accounts for the size of the rural area, while the remaining 2. 27%
covers the land size of the urban areas found in the administration.

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The range of altitude of the land in the administration is between 960-2,500 meters above sea-
level (masl). Dire Dawa City is located at 1202 meters above sea-level. The annual maximum
and minimum air temperatures of the administration are 31.4° C and 18.2° C respectively. The
administration has an average annual rainfall of 604 millimeters.

According to the result of the House and Population Census of May, 2008, the administration is
said to have at present an estimated population of 342, 827 people, out of which 171, 930 (50. 2
%) are male, and the balance; that is, 170, 897 (49. 8 %) are female. Out of the total number of
the population of the administration 232, 854 or (67. 5 %) people live in urban areas, while the
remaining 109, 973 people or (32.5 % of the total) reside in the rural areas of the administration.

The livelihood of the people of the administration residing in urban areas is mostly based on
trade, manufacturing, and industry; while that of the rural population is based on farming and/or
animal husbandry.

Dire Dawa is a city that came into being in 1902 to serve as a midway terminal on the railway
line constructed to link Addis Abeba with Port Djibouti, and as the closest urban center to this
port handling most of the import-export trade of Ethiopia, it has played crucial role to the
development of the nation by serving as its gateway to the outside world since then. The station
thus established 111 years ago has grown to become the second most populated urban area in the
nation by serving, in the main, as a transshipment place for the country’s import-export trade.

The importance of the city as a transshipment place is growing by the year. Most importantly for
this project profile, the city continues to be a transshipment place for the fruits and vegetables,
and other horticultural products exported to the Djibouti Republic on weekly basis. Despite its
long service in this regard, the city does not have any cold storage facilities now. The exporting
of perishable food stuffs seek to be handled with care as they could easily sustain serious
damages which could render them useless easily.

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Though it is not easy to quantify the amount of wastages incurred by the exporters so far, it will
not be difficult to imagine how much they lose by putting into consideration the following facts:
1. The hot climatic condition of Dire Dawa City, and Port Djibouti, the final destination for
the exported agricultural products.
2. The way the agricultural products are packed in wooden crates.
3. The products are transported especially nowadays by ordinary trucks.(not refrigerated
trucks)
4. The 313-kilometer-long road between Dire Dawa City and Port Djibouti is an all weather
road with bumpy, potholed surface. What is more, the road passes through dry area that
is extremely hot.
These seem to be the favorable conditions for wastage resulting from enzymatic reactions by
microorganisms. It is clear that, apart from the wastage, the exported products will have incurred
additional physical damages by the time they reach their destination from the way they are
packed.
The implementation of the project envisaged by this profile will not only enhance the market
competitiveness of these agricultural produces in Djiboutian market with those brought from
Yemen and other countries but also enable Ethiopia to earn more foreign currency by reducing
the huge wastage resulting from the lack of cold storage facility.

4. Policy Environment and Incentives:

The rapid economic progress attained by the country in the last nine years is the outcome of the
favorable economic policy focusing on liberalization of prices and markets, removal of subsidies,
reduction of tariffs and liberalization of external current account convertibility. What is more,
these measures have also been supported by favorable fiscal and monitory policies adopted by
the government.

Similarly, the newly formulated trade policy, embracing measures like the devaluation of the
Birr, introduction of weekly foreign exchange auction, suspension of taxes and duties on most
exportable items, and liberalization of the trade, improved the competitiveness of the country’s
economy in the world market.

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The conducive environment created for the development of export, the various export incentives
offered by the government, and the fact that Ethiopia offers access to producers and
manufacturers to larger markets by virtue of its being a member of the Common Markets for
Eastern and Southern Africa (COMESA) – an economic bloc consisting of 23 member countries
with a total population of over 300 million people, and the fact that it is well placed to benefit
from “Everything But Arms” trade opportunity offered by European Union, and the fact that the
country is, moreover, a beneficiary of the ‘African Growth and Opportunity Act” (AGOA) -
which offers it a privileged access to the large U. S. market – all of these factors have contributed
to the country’s success in attracting more and more investors from different parts of the world.

The above-mentioned steps taken by the government to create the favorable investment
conditions, and the wide ranging adjustments and reforms it has made several times so far to the
existing laws, regulations, and directives so as to incorporate changes and timely improvements
deemed necessary, are outcomes of the conducive economic policy it has put into place from the
outset. Briefly speaking, the policy environment in Ethiopia for the project under consideration is
suitable and attractive. .

The Dire Dawa Administration has a suitable investment friendly environment by virtue of its
being the second chartered city after Addis Ababa, which has the mandate to legislate laws,
rules, and regulations. The administration has, therefore, got the legal and policy framework it
seeks for the implementation of this project..

As the cold storage facility envisaged by this profile is intended to add value to agricultural
products destined for export purpose, the project has the support of all the relevant policies. It is,
moreover, entitled to receive land related incentives, and of course, to import capital goods, and
equipment it seeks for setting up the cold store free of any customs duty.

5. Project Objectives and Rationale

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 A. General Objective:
To set up the means needed for ensuring not only the market competitiveness but also a
significant reduction in wastage of exported agricultural products.

B. Specific Objectives:
To increase foreign currency earning of the country by creating the conducive condition
for enhancing the export of agricultural products

To create the foundation for the establishment of agro-processing industries we envisage

To improve the quality of\ agricultural products exported to the Republic of Djibouti,
which, in the long run, we hope to use as a stepping stone to break into the lucrative
market in the Gulf countries.

To improve the financial earning of the citizens engaged in the export of agricultural
products

6. Project Rationale:
The project is justifiable on the grounds of the following reasons: -
 From the perspective of the country:
The implementation of the project can definitely enable the country to increase its
foreign currency earning. The ongoing Five Year Growth and Transformation Plan
envisages to increase the production of fruits, vegetables, and herbs (tea) from 58,400
ton per year it stood in 2009/10 to 979,600 ton in 2014/15. This is a huge increase,
which naturally seeks access to a reliable market. The improvement in the quality of
the agricultural products we export to the Republic of Djibouti is bound to have a
positive impression on the Djiboutian customers, and their friends just across the Red
Sea. Thus, the establishment of the cold store may create the condition for breaking into
the lucrative market in the Gulf Countries

 From the perspective of the DDA

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 The implementation of the project will create employment opportunity for the residents
of the administration.
The cold storage facility can serve as a foundation for the establishment of the agro-
processing industries the administration envisages.
The establishment of the cold storage facility will take Dire Dawa City one more step
closer to the realization of one of the crucial pillars of its vision: becoming the service
center of eastern Ethiopia.
It will reduce the wastage of agricultural produces
It will encourage busine3ss people to get evolved in the export sector, and this leads to
the diversification of the exported commodities

 From the perspective of the investor

Cold store is a profitable business as it involves the renting of space for a charge by the
day to the exporters.
It is a business field that will progressively grow
It is a business field that will definitely lead the investor to expand into other lucrative
pertinent business areas such as taking part in the exporting business, agro-processing,
expansion of the refrigerated truck service, or even the production of packing cases for
other producers, etc.
The setting up of the service in the city will make the investor a participant of the noble
effort being exerted by the Ethiopian people to extricate themselves from their age-old
enemy: poverty.

7. Project Area Description:

Dire Dawa Administration is one of the self-administrating entities in Ethiopia. It has a two-
tiered administrative structure; that is, at Kebele and at central administration level. In all, the
administration has 9 urban and 38 rural Kebele administrative units.

Dire Dawa City, which is the seat of the Dire Dawa Administration, is the second most
populated urban center in Ethiopia at present. It is a beautiful city with a relaxing hot weather
condition. It has all the modern amenities one can think of – hospitals, schools, cinemas,

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hotels, communication, transportation facilities, water, electric power, banks, insurances, the
likes.

It is a city where adherents of different religions co-exist peacefully, sharing their happiness
and misfortunes together. In fact, in terms of its friendliness and hospitality, it is a city
unrivalled by any other urban center in the nation.

7.1 Availability of Infrastructure

The Administration has well-developed infrastructures. It has internally got local

road networks which links Dire Dawa City with every rural Kebele in the
administration. The city has also got road connection with the main urban centers in
the nation and with the neighboring countries Djibouti, and Somaliland.

On the whole, Dire Dawa City has access to an international airport, and railway. The
administration has reliable telecom, water, and electric power services.

7.2 Land Availability:

Based on the recommendation of the Land Development Plan (LDP) prepared for the city,
about 311ha of land has been earmarked for the service sector, and, therefore, there is no
shortage of land for the implementation of this project. As can be seen from Table 2 below,
the lease period for a commercial service rendering institution like cold storage facility is 70
years. With respect to the lease payment, it is mandatory that 20% of the lease payment be
paid initially. The payment of the remaining lease price has to be paid fully within 20 years’
time with the bank interest included.

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Table 1 : DIRE DAWA ADMINISTRATION LEASE PERIOD DESCRIPTION

Purpose Lease period

Housing 99

Manufacturing and industry 80

For education, health, science & technology, culture, sport, 99

research & study and nonprofit making philanthropist
institutions

For commercial purpose 70

For urban agriculture 15

For other purposes 70

Source: Dire Dawa Provisional Administration lease regulation No. 3/1996

7.3 Availability of Service Facilities

Dire Dawa City has a number service rendering institutions including the branch of the
National Bank, maritime transit office, customs office, quarantine service, branch office of the
Ministry of Foreign Trade, private and government banks and insurances. It has a post office,
and two private express mail and parcel delivering agencies.

The city has, moreover, already got an abattoir, and a new modern one is under construction at
present.
7.4 Availability of Manpower:
There is no shortage of both skilled and unskilled man power in Dire Dawa City. The two
government owned technical education and vocational training college, and the Dire Dawa
University of Technology in the city graduate hundreds of competent students every year.

8. Project Description
8.1 Project Name:

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The name of the project is Project for Establishing Cold Storage.

8.2 Description of the Project:

Cold stores or refrigerated warehouses play crucial roles by prolonging the shelf-life of
perishable food items intended for export purpose. In fact, cold stores could be used for
preserving seasonal agricultural products for use during the seasons that they are not in.

Cold stores, therefore, reduce post-harvest wastages considerably as well as improve the market
competitiveness of the agricultural products exported.

The project of cold store involves the construction of a large warehouse fitted with the
refrigerating mechanism which has the capacity to keep the perishable food items stored there
fresh by maintaining the temperature of the warehouse constant at the desirable level.

Cold stores are able to maintain the temperature of the warehouse by removing heat from the
materials stored by evaporating a liquid to absorb the heat. This, in other words, means that it is
able to slow many of the enzymatic reactions involved in spoilage and reduce the growth rate of
microorganisms.

The cold store, whose temperature is already below its surrounding temperature, is able to do
this by continuously extracting the heat from the items stored in it. Thus, refrigeration inevitably
is the only means of preserving food in its original freshness.

Briefly speaking, the establishment of a cold store facility requires the construction of the
building used for this purpose, installation of its various refrigeration units, and putting into place
the racks on which the stored items are to be placed.

Installation of any cold storage entails proper assembling of all refrigeration components in
accordance with the design specifications. Hence, it is recommended that these design
specifications should be followed appropriately, for failure to do as per the desired specifications
during installation leads to poor performance of the system.

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During installation, the cold room, and its component parts should be properly leveled and
aligned on the concrete platform to avoid any imbalance that might cause unwanted sound and
vibration. Also, a cold room should not be installed close to any power generators, boilers,
radiators, or any other heat generating machinery. The evaporator should be installed inside the
room on the wall at the width end, directly opposite the door end, whereas the condensing unit is
to be installed on the base at the outside end, behind the evaporator wall. Moreover, vibration of
the compressor should be avoided by mounting it on vibrating dampers.

In relation with maintenance and operation, reliability and durability, adequate maintenance
practice should be carried out on the cold room regularly to enhance its efficient performance. In
this regard, preventive and predictive maintenance seem to be more adequate and suitable for the
cold storage system. Operators and the other personnel of the cold store should be given proper
training on the job so as to have knowledge of some repairs; and they should be familiar with
important equipments such as the compressor and expansion valves.

On the other hand, it seems necessary that the following precaution are made in order to ensure
efficient performance by the cold store. It has been observed that direct heat from the sun’s
radiation increases the rate of heat infiltration into the room. To reduce this, an open shade
(roofed only) should be built over the roof of the cold store. Furthermore, the liquid line, running
from the condenser to the expansion valves should be properly installed to prevent the liquid
from being heated by the heat from outside. Finally, the cold room should be mounted on a
concrete platform that is at least 30cm high from the ground level.

It is said that operating a cold store is one of the most demanding of material handling tasks. All
of the normal efficiency factors apply, with the need to move and store goods accurately and
safely.

Operating a cold store cost effectively requires meticulous planning and through considerations
of all the available options from the very beginning. The service delivered to customers by the
cold storage facility is rent the vacant space found in its refrigerated warehouse. The importance

12
of the appropriate utilization of all the available space in the refrigerated warehouse cannot be
overemphasized.

8.3 Project component:

8.3.1 Materials, Machinery, Tools, and Equipment

The list of materials, machinery, equipment, tools, etc., is given in Appendix 1 attached.
Table 2 below shows the estimated price of the materials to be procured for the
implementation of this project.

Table 2: Summery of the Estimated Price of Materials, Machinery, and Equipment

Sr. No. Description Estimated Price (Birr)

1 Complete Refrigeration Unit 4,000,000

2. Rack, Shelf, boxes 2,000,000

3. Office Tools, and equipments 750,000

4. Refrigerated trucks 4,000,000

5. Fork Lift 1,250,000

6. Sub-Total 12,000,000

8.3.2 Building and Civil Works

The land required for the implementation of this project is estimated to be 3000 m 2. The floor
area of the cold store covers 1200 m2 and 487 m2 is used for construction of offices, generator
house, guard house, garage, control room, store, toilet, receiving hall, workshop etc. The
remaining 1013 m2 is to be used as a parking area for the trucks bringing fruits and vegetables to
the cold store as well as by the two refrigerated trucks and other vehicles used by cold store. See
Appendix 2 attached.

This is a project which is directly related to the export trade sector, and as such it has to be
located near the new railway terminal under construction for the new fast train. The total land
needed for the implementation of this project is 3000² meters. The land lease price for the land

13
found near the new railway terminal is 99.40 birr per m², and thus the total lease price of the land
comes to 298, 200 birr.

The amount of down payment required for the project is 20% of the total lease price of the land,
and so the down payment for the land will be 14,910 birr.

Table 3: TYPE OF CONSTRUCTION AND ITS RATE (BIRR/m2)

Sr. Type of construction Built-up Area m2) Unit price Total cost (‘000
No (Birr/m2) Birr)

1 Cold store 1200 6000 7,200,000

2. Offices, store, workshop, 697 4000 2,788,000

rest room, reception, etc.

3. Canopy/ shade over the 1200 1500 1,800,000

roof of cold storage
facility

4. Land Lease Cost 3000 99.40 298, 200

Sub-total 12,086,000

9. Total Indicative Cost of the Project:

Table 4 below gives the summary of the cost estimations indicated above for each of the
components of the project.

Table 4: Indicative Total Cost of the Project

S. No Component of the Project Estimated Cost Indicative Total Cost Remark

1. Procurement of tools, 12,000,000
equipment, materials, etc.
2. Civil works and engineering 11,788,000
3. Land lease payment 298, 200
Grand Total 24,084,000

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The implementation of this project has an estimated cost of Birr 24,084,000.

10.General Market Description:

With its favorable climate, abundant labor, huge land and water resources, most regions in
Ethiopia are suitable for the production of wide ranging types of tropical and sub-tropical fruits
and vegetables. Horticulture has a vast potential to diversify the commodities exported by the
country, to increase its foreign currency earning, and to enhance its opportunity for job creation.

Ethiopia exports huge quantities of fruits and vegetables to Djibouti, besides exporting of some
processed fruits and vegetables to Yemen, Saudi Arabia, and other Middle East countries.

The growth of export trade in horticultural products earns more foreign currency and has
immense economic advantage to the country. Taking this fact into consideration, the government
of Ethiopia has given due attention for the growth of the horticulture industry.

Last Ethiopian budget year (2011/2012), the country generated 250 million USD form the export
of flower, fruit, vegetable and herbs. Of the total export, 40 million USD was obtained from the
export of 93 thousand tons of fruits and vegetables.  This is, in fact, a huge amount of foreign
currency that the country ever secured from the sector.

Ethiopia exported 25,300 tons of fruit and vegetable in 2003, and 28,452 tons in 2004. While the
country’s earning in 2003, was 6.87 million USD, and in 2004, its earning grew to 9.6 million
USD.
The major vegetable export items include red and white onions, potatoes, tomatoes and lettuce,
shallots, cabbage, leeks, beetroot, green Chile, bobby beans, and carrot, while the main fruits
exported are orange, lemon, mandarin, mango, banana, guava, grape fruit, lime and several
others.

The following tables illustrates the constant growth in both the quantity of the fruit and
vegetables exported and the revenue generated from the sector during the seven years (2004/05 -
2010/11).

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Table5: Value of Fruit and Vegetable Export (in thousands of Birr)

2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11

139,053 114,541 142,208 118,398 124,029 412,605 512,635

Source: National Bank of Ethiopia

Table 6: Quantity of Fruit and Vegetable Exported ( In Metric Tons )

2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11

37,906 34,797 40,921 39,918 38,478 66,337 91,587

Sources: Ethiopian Customs Authority

Table 7: Unit Value of Export Items (Birr/Kg)

2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11
3.67 3.29 3.48 2.97 3.22 6.22 5.60

Sources: Ethiopian Customs Authority

Since the government is committed to develop the horticulture industry, various incentives and
necessary supports have been provided to local and foreign investors engage in the sector. As a
result, every year remarkable growths have been registered in the sector. For instance, in the
current budget year, the country secured 112 million USD with in only a period of six months
and the secured amount has exceeded by 25 million USD compared to the same period last year.

In 2012, Ethiopia started to export organic banana to the international market.  The country, for
the first time, has exported 40 tons of organic bananas by sea to Saudi Arabia. Since the product
has a high demand in the international market, foreign companies have shown interest to market
the product. Hence, agreement has recently been made with a foreign company and preparations
are well underway to export 200 tons of organic bananas to Jidda market on weekly basis.

The rise in the foreign currency earning of the country signifies, among others, the growth in the
quantity of fruit and vegetable exported, and the increase in the agricultural land size allocated
for growing these commodities. The ongoing Five Year Growth and Transformation Plan of the

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country envisages increasing the revenue from the export of fruit and vegetables from the 31.7
million USD it earned in the base year (2009/10) to 948 million USD at the end of the plan
period (2014/15). The GTP also stipulates that the agricultural land size used for growing fruit
and vegetables will be increased from 2,472 ha it stood in 2009/10 to 33,000ha in 2014/15.

In view of the crucial importance attached to the further development of the sector by the
government, and the increase in the demand for Ethiopian horticultural products, the essential
role to be played by the cold store could not be over emphasized. It is also indicative of the
existence of an ever-growing market for the service provided by the cold storage facility.

What is more, in terms of its livestock resources, Ethiopia is one of the leading nations in Africa
and the world. The country is said to have livestock resources estimated at 40.9 million heads of
cattle, 25.5 million heads of sheep, 23.4 million heads of goat, and 2.3 million heads of camel.

This is a high potential resource, which accounts from 12-15 % of the country’s export earnings.
As nearly all the livestock husbandry in Ethiopia is carried out under natural grazing, the meat
from the animals is very tasty, nutritionally high and healthy for human consumption. There are
at present a number of international standard abattoirs, and there are some new ones under
construction right now. In fact, one of the new abattoirs currently under construction is found in
Dire Dawa City itself. The existing plants enabled it to export about 48, 910 tons of chilled and
frozen meat.

The country’s main meat and meat product export items includes the following: -

o Fresh and chilled lamb mutton carcass

o Fresh and chilled goat carcass

o Fresh and chilled veal carcass and beef for quarter

o Fresh and chilled boneless veal and beef

o Frozen lamb, mutton, goat carcass, veal and beef special cuts, etc.

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At present, the major export markets are Middle East countries, and Congo Brazzaville, in
Africa.

The establishment of the cold store facility in Dire Dawa City will definitely play a pivotal role
to the resumption of the export of meat and meat products to Djibouti as well. Some exporters
used to export meat to Djibouti when the old railway line operated regularly between Dire Dawa
and Djibouti cities.

In view of the existence of such diverse potential users, and the growth anticipated in the sector,
the provision of cold storage service in Dire Dawa City is bound to become a profitable business
field with optimal satisfaction for all – the exporters, the Ethiopian Government, the users of the
exported commodities, and the owners of the cold store facility.

11.Related Fields for Generating Additional Income:

A. The two refrigerated trucks with their trailers could be used for transporting refrigerated
food items to Port Djibouti, and thus generate additional income for the cold storage
owners.

B. The cold storage facility can also generate additional income by designing, producing and
renting (selling) the different kinds of packing cases used for the transportation of the
refrigerated food items to their final destinations.

C. The owners of the facility after securing permission from the concerned organs can
expand the production of packing cases to producers of other materials as well.

12.Conclusion
This project envisages the establishment of a cold storage facility in Dire Dawa City – the city
that has been Ethiopia’s gateway to the outside world playing crucial roles to the growth in the
country’s import-export trade from its very establishment in 1902to serve as a midway terminal
on the railway linking Addis Abeba with Port Djibouti on the Indian Ocean.

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Cold storage facilities are service rendering institutions which rent space in their refrigerated
warehouses for people who want to ensure that the perishable food items they intend to export
remain fresh and fit for consumption. In fact, cold stores are able to maintain the temperature of
the warehouse by removing heat from the materials stored in it by evaporating a liquid which
absorbs the heat from the materials. By so doing, the cold store is able to slow and reduce the
growth rate of microorganisms, and thus prevent the various enzymatic reactions involved in
spoilage.

Ethiopia, which is said to be one of the fastest growing countries now, is committed to enhance
its foreign currency earning by increasing the export of its agricultural products. Notwithstanding
the outstanding progress made by the country in recent years, Ethiopia remains, and will remain
for a long time to come an agrarian country relaying mainly on its agricultural export earnings to
realize the industrialization it envisages.

The existence of a cold storage facility in Dire Dawa City will play an invaluable role to the
country’s desire to increase its foreign currency earning by increasing the quantity of the
agricultural products it exports as well as diversify its exports by introducing into the market new
items.

The project needs a total land size of 3000 square meters. The implementation of the project;
that is, the procurement of materials, the cost of building and civil works, and the land lease cost,
is estimated to be 24,086,000, and it will create employment opportunity for 30 people.

13. Annexes
References:

1. Baldet, H. 1970. Urban Study of Dire Dawa , HSIU (Unpublished B.A. Thesis).

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2. BOFED, DDA Statistical Abstract, 2002/03-2004/05

3. BOFED, DDA Statistical Abstract, 2010/11-2011/12

4. BOED, DDA Education Statistic Annual Abstract, 2011.12

5. Shiferaw Bekele 1987. Aspects of the history of Dire Dawa, 1902 -1936.

(Unpublished paper presented at the Fourth Annual Seminar of the Department of

History held in Awassa in July 1987).

Appendix 1: Materials, Machinery, and Equipment

No. Description UO Qty. Unit Price Total Price (Birr)

M (Birr)

20Hp condensing unit

20
 No. Description UO Qty. Unit Price Total Price (Birr)
M (Birr)

(compressor + condenser +
Liquid receiver)

2. Evaporator

3. Thermostatic expansion

4. Aluminum sheet to cover the

total inner and outer wall of the
cold store

5. Polyurethane + foam for the total

area of insulation
6. Floor material (mild steel plate)
total floor area
7. Electric generator

8. Rack

8.1 Fixed

8.2 Movable

9. Fork lift

10. Desktop computers

11. Printer

12. Photocopier

13. Fax machine

14. Swivel chair

15. Executive table

16. Weight measurement

17. Computer table

18. Refrigerated trucks

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 Appendix 2. TYPE OF CONSTRUCTION AND ITS RATE (BIRR/m2)

Sr. Type of construction Built-up Area Unit price Total cost ('000
No m2) (Birr/m2) Birr)

1 Cold store 1200 6000 7,200,000

2. Office

2.1 General manager’s office 32 4,000 128,000

2.2 Administrator’s office 20 4000 80,000

2.3 Finance section 20 4000 80,000

2.4 Staff room 35 4000 140,000

2.5 Toilet 48 4000 192,000

2.6 Generator house 12 4000 48,000

2.7 Guard house 20 4000 80,000

2.8 Garage shade 120 4000 480,000

2.9 Receiving section 70 4000 280,000

2.10 Reception office 20 4000 80,000

2.11 Store 100 4000 400,000

2.12 Control room 24 4000 96,000

2.13 Over shade for roof cold store 1200 1500 1,800,000

2.1 Cafeteria 56 4000 224,000

4

2.15 Workshop 120 4000 480,000

Sub-Total 1897 11,788,000

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