Project Proposal on

Baltina Products
Processing in Mekelle

Promoter:W/ro Tsige Birhane

 Tsige Birhane Baltina Products Processing 2024

Table of Contents
1. Summary ............................................................................................................................. 3
1.1. Rational of the project and Background of the Promoter............................................. 5
1.1.1. Rationale ............................................................................................................... 5
1.1.2. Promoters .............................................................................................................. 6
2. PRODUCT DESCRIPTION AND APPLICATION .......................................................... 8
1. MITTEN SHIRO ( Shouro ) ................................................................................... 9
2. Composit flour (mitin) ........................................................................................... 10
3. Berbere ................................................................................................................... 10
4. Beso በሶ ................................................................................................................... 11
5. Mitmita ................................................................................................................... 11
6. Fenugreek (abish). ................................................................................................. 12
7. Mekalesha .............................................................................................................. 12
8. TELBA (FLAX SEED) .......................................................................................... 13
9. Qolo (toasted cereals, legumes or sunflower seeds). ............................................ 13
10. Noug Mitin ኒሁግ ..................................................................................................... 13
11. Children Atmit (mixed Flour) ምጥን ንህፃውንቲ ........................................................ 13
12. Pure organic Teff flour ጣፍ ሕሩፅ ዕሽግ .................................................................... 14
3. MARKET STUDY AND PLANT CAPACITY ............................................................... 15
3.1. MARKET STUDY ..................................................................................................... 15
3.2. Current Demand and Supply .................................................................................. 17
3.3. Demand Projection ................................................................................................. 21
3.4. Pricing and Distribution.......................................................................................... 22
3.5. PLANT CAPACITY AND PRODUCTION PROGRAMME ............................... 23
3.5.1. Plant Capacity ..................................................................................................... 23
3.5.2. Production Programme ....................................................................................... 23
4. MATERIALS AND INPUTS ........................................................................................... 24
4.1. MATERIALS ............................................................................................................. 24
4.2. UTILITIES ................................................................................................................. 26
5. TECHNOLOGY AND ENGINEERING ......................................................................... 27
5.1. TECHNOLOGY......................................................................................................... 27
5.1.1. Production Process .............................................................................................. 27
Process Flow ........................................................................................................................ 27
Correct harvesting time ...................................................................................................... 27
Cleaning ............................................................................................................................... 27
Drying................................................................................................................................... 28
Grading ................................................................................................................................ 29
Grinding ............................................................................................................................... 29
Packaging ............................................................................................................................. 30
5.2. ENGINEERING ......................................................................................................... 32
5.2.1. Machinery and Equipment .................................................................................. 32
5.2.2. Land, Building and Civil Works ......................................................................... 32
5.3. Proposed Location ...................................................................................................... 32
6. MANPOWER AND TRAINING REQUIREMENT........................................................ 33
6.1. MANPOWER REQUIREMENT ............................................................................... 33
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6.2. TRAINING REQUIREMENT ................................................................................... 33

7. FINANCIAL ANALYSIS ................................................................................................ 34
7.1. TOTAL INITIAL INVESTMENT COST ................................................................. 34
7.2. Source of Finance ....................................................................................................... 35
7.3. PRODUCTION COST ............................................................................................... 35
8. FINANCIAL EVALUATION ....................................................................................... 36
1. Profitability ................................................................................................................ 36
2. Ratios ........................................................................................................................... 36
3. Pay-back Period ....................................................................................................... 36
4. Internal Rate of Return ............................................................................................ 36
6. Net Present Value...................................................................................................... 37
9. ECONOMIC AND SOCIAL BENEFITS ..................................................................... 38
10. Environmental Impact Assessment ............................................................................ 38
Annex: IRR table ....................................................................................................................... 39

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1. Summary
Ethiopia produces more than 50 spices, herbs, and aromatic plants, out of which 23 are trading
as export items. The average land coverage by spices is approximately 222,700 ha and the
production is 244,000 tons/annum. Spices have huge diversity and grow all over the country.

Ethiopians have been cultivating spices and herbs for a very long time now and the dedication
and skill taken to prepare them is evident in the final product. The country today produces as
much as 50 spices of the 109 spices that are listed by the ISO or the International Standard
Organization for Standardization. Ethiopia is now mainly cultivating spices on a very small
scale compared to her other agricultural products.

Ethiopia has very suitable agro ecology for the production of various spices which are very
useful for food seasoning, medicinal and for income generation for people at various
economic level and have importance to the Ethiopian economy through fetching hard
currency. Even though Ethiopia is conducive for production of spices, the contribution of the
sub-sector to national economy is low that is less than 1 percent.

The spices produced under smallholder in Ethiopia are Korarima (Aframonum Korarima), red
pepper, ginger, turmeric, cardamom, black pepper, black cumin, white cumin /Bishops weed
(Nech azmud), coriander, fenugreek, c, sage, and cinnamon. However, Korarima, red pepper,
ginger, turmeric, black cumin and cardamom are the six most important spices produced in
Ethiopia. Domestic consumption and the demand of the spices at international market are
increasing. However, the area allocated for spices production is too low as compared to other
cereal crops in the country and the production and productivity of the spices are also very low
that manifests weak attention given to the sub-sector in the country.

According to the evidence obtained from Spice Industry Strategic Plan document of Ethiopia
(2015-2025), pepper contributes 34 percent of the total of spice trade by volume followed by
chilly at 22 %, turmeric 5%, ginger 4%, cardamom 3% and vanilla at l% in terms of value and
volume at global level. Similarly, in Ethiopia, the important exportable spice in terms of
volume are ginger, turmeric and black cumin respectively where 71% of total spice export for
the period 2005/06-2009/10, is ginger followed by turmeric (8.3%), and cumin (7.9%).
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However, fenugreek and coriander, that showed higher export volume share of total spice
export (i.e., 3.4 and 3.3%. respectively) higher than that of pepper (1.5%).In value terms,
ginger claimed a higher share of 62% of total spice export, followed by cumin seed (13.7%),
turmeric (7.2%) and pepper (4%). At the moment, there are two spice extraction plants in
Ethiopia, one public and the other under private ownership. The public spice extraction plant,
the Ethiopian Spice Extraction Factory, has a processing capacity of 180 tons per year
(Vijayalaxmi and Sreepada, 2014).

Ethiopia has favorable or conducive environments for various spices production due to the
presence of varied climatic and agro-ecological conditions, abundant cultivable and irrigable
land, with encouraging government policy environment (Goshme & Ayele, Citation2019;
Herms, Citation2015; Hordofa and Tolossa, Citation2020). However, inspite of the suitable
agro-ecology base for spice production and a long history of spice cultivation and marketing
in Ethiopia, the status of spice production and export in the country is far below expectation.

The envisaged processing project is proposed to be establish Baltina products (spices) and
thereby increases the quality and demand of its production by all consumers.

The project is to be established on 5,000 square meters of land which is supported with
infrastructure such as electric, water, telecom and road. Besides to the favorable investment
climatic conditions, the project will be equipped with adequate and up-to-date machinery and
equipment that facilitate the production, packaging as well as storage and transportation of the
product.

The total initial investment capital requirement of the project is estimated to be Birr
10,674,231.00 of which birr 8,060,320.00 will be for plant machinery construction of the
necessary building and 2,977,269.3.00 birr for running cost for the first three months. The
annual sales revenue of the project at full capacity will be birr 3.1 million before tax and the
annual production cost. Economically, the project is believed to create a permanent
employment opportunities for 33 citizens and generate birr 0.8 million tax revenue for the city
in addition to the technology transfer end technical efficiency improvement in the region.

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With a project life of 20 years, the project is financially viable with internal rate of return
(IRR) of 86% and a net present value (NPV) of Birr 105.08 million at discounted rate of 11%.

The present demand for the proposed products is estimated at 71,955 tons for different type of
baltina products per annum. The demand is expected to be doubled with in less than 10 years
of time. With respect to production capacity of the project, it is assumed that 360 tons of
products will be produced annually when the project starts function at full capacity.

The project will be organized under three major departments/divisions (finance and
administration division, production division and marketing division). These three divisions
have their distinctive activities and will be organized under the General Manager.

Basic assumptions and justifications for the establishment of this project will be the conducive
investment policy and climate that initiated the profit making motive of the promoter. In the
real situation, Ethiopia is growing with two digits for consecutive eight years and this creates
more middle income citizens with more to consume, to save and invest in the country.
Therefore, the project assumes the economic growth will continue, purchasing power of the
population will be more improved, conducive investment policy and facilitation will be up to
the demand of the time and demand for the product will increase from time to time.

1.1. Rational of the project and Background of the Promoter

1.1.1. Rationale
Spices and herbs are used for several different applications. They serve as a natural
ingredient for food and the food industry, but also for the pharmaceuticals and
cosmetics industry. As the world is increasingly turning into a global village, culinary
traditions from other continents tend to be more widely accepted by consumers,
thereby increasing the demand for ethnic and exotic ingredients, like many spices and
herbs.

Ethiopia, having more than 120 million population and 85% agrarian economy,
Economic growth of the country is of two digits (more than 11%) for consecutive 10
years and this increases the purchasing power of its population. As purchasing power
increases, living standard and preference will be changed and hence the consumption
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of these products will be increased as the construction industry grows. Hence the
demand for such product will continuously increase.

The envisaged project is quite in line with the Growth and Transformation Plan (GTP)
strategy and can be considered as one of the contemporary business intervention as it
utilizes the key potential product of the country with modern business know how and
special focus on import substituting industries. Therefore, the viability of such project
is safely acceptable by decision makers at every level and pledged unreserved support
for its realization.

Spices constitute an important group of agricultural commodities which are virtually

indispensable in the culinary art. Spices are natural products widely accepted by
consumers. Spices are most important constituents of Ethiopian food and cuisines, and
are used not only for house hold purpose, but also in hotels, restaurants, eateries and
food processing industries.

Spices play an important role in enhancing the flavour and taste of the processed foods.
They are also used in medicine because of their carminative stimulating and digestive
properties. India produces almost all the known spices and is the largest exporter of
this commodity.

Although spices are traded chiefly in an unprocessed form, a small yet significant
quantity enters international trade as spice powders. Curry powder is the foremost of
those blends or mixes and sometimes consists of 20 or more spices designed to impact
the characteristic flavour of an Indian curry which is appreciated all over the world.
Apart from the overseas market, processed curry powder is becoming popular in the
internal market also. Hence the demand for unadulterated spices and curry powder in
attractive handy packages is fast emerging.

1.1.2. Promoters
Being encouraged by the favorable investment atmosphere in the country as well as the region
such as provision of incentives, loan facilitation, business management training and others, the
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promoter of this food complex is decided to invest Their capital in area where he can make a
significance contribution in the overall socio-economic development of the country. Therefore
W/ro Tsige Birhane is the promoter of this project where she has good experience in business
and preparation of home made baltina

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2. PRODUCT DESCRIPTION AND APPLICATION

A spice is a dried seed, fruit, root, bark or vegetative substance used in nutritionally
insignificant quantities as a food additive for the purpose of flavoring, and sometimes as a
preservative by killing or preventing the growth of harmful bacteria (Masresha, 2010). Spices
can be defined as “vegetable products used for flavoring, seasoning and imparting aroma in
foods” (FAO, 2005). Ethiopia is a source country for many spice exports, with a long history
of spices. The average land covered by spices is approximately 222,700 ha with production
reaching 244,000 tons per year. More than 50 spices are produced in Ethiopia, and a total
potential for low land spice farming is estimated to be 200,000 hectares (GIT, 2016).
In Ethiopia, the production and use of spices is perhaps the most romantic story of any plant
product, legendarily known to go back to the times of Queen of Sheba. Studies showed that,
spice crops such as korarima cardamom, Ethiopian long pepper, black cumin, bishop’s weed,
coriander, thyme and fenugreek are also attached to Ethiopia either as a center of origin or
diversity. Spices in Ethiopia are also many things and the role they played could be viewed
proportionally to the level of their utilization. For centuries, they have been used as one of the
major livelihoods and life-giving foods of both the rural and urban populations. Besides, since
most of them are labor intensive, small in bulk and so cheap to transport, and of high value per
unit, they present a special opportunity to hasten both rural and urban development
(Habtewold et.al., 2017).

The process of manufacture involves cleaning, drying, pulverizing, sieving and packaging of
spices such as chilli, pepper, turmeric, coriander, etc. either individually or in combination
with other spices. There are various formulations for curry powder, but the ingredients like red
chilli, black pepper, cloves, coriander seed, cumin seed, fenugreek seed, ginger, and turmeric
are typically common. The proportion and the inclusion of spices in a particular mix depend
on individual manufacturers.

Spices and herbs are natural plant-based ingredients that are used to add flavor, aroma, color,
and nutritional value to food and beverages. While both spices and herbs come from plants,
there are some differences between the two:

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1. **Spices**:
- Spices are derived from the seeds, bark, roots, fruits, or other parts of plants that are
dried and used for flavoring.
- Spices are typically more potent in flavor compared to herbs and are often used in
smaller quantities.
- Examples of spices include cinnamon, cumin, cloves, black pepper, and paprika.
2. **Herbs**:
- Herbs are the leaves of plants that are used fresh or dried for flavoring, garnishing, or
medicinal purposes.
- Herbs are generally milder in flavor compared to spices and are often used in larger
quantities.
- Examples of herbs include basil, parsley, mint, thyme, and rosemary.
Both spices and herbs have been used for centuries in cooking, medicine, and cultural rituals.
They offer a wide range of flavors and health benefits, making them essential ingredients in
various cuisines around the world. Spices and herbs can be used individually or combined to
create complex flavor profiles in dishes.
In addition to their culinary uses, spices and herbs are also valued for their medicinal
properties, aromatic qualities, and potential health benefits. They are often used in natural
remedies, beauty products, and aromatherapy for their therapeutic effects.

1. MITTEN SHIRO ( Shouro )

Shiro is a homogeneous stew whose primary ingredient is powdered chickpeas or broad bean
meal. (Shimbra) It is often prepared with the addition of minced onions, garlic and, depending
upon regional variation, ground ginger or chopped tomatoes and chili-peppers. Shiro is served
atop injera or kitcha (a sugarless pancake kind of bread). However, it can be cooked in
shredded taita and eaten with a spoon, this version would be called shiro fit-fit. Shiro is an
essential part of Ethiopian. It is a favorite dish during special occasions, including Lent,
Ramadan, and other fasting seasons. It is a Vegan food, but there are variations including
Nitre Kibbe (a spiced, clarified butter) or meat (in which case it is called bozena shiro). Mitten
Shiro is a blend of shiro powder and pre mix spices.

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2. Composit flour (mitin)

Flour, in general is a finely ground meal of cereal crops such as wheat, rye, maize, soya bean,
sorghum, rice, soya bean, etc. obtained by milling and blending different streams. Based on
the required ratio of endosperm and bran of the milled cereals, flour may be distinguished as
whole meal flour, composite flour, special flour, etc. Flour contains various nutrients such as
starch, carbohydrates, minerals, proteins (glutein) and others.

To produce whole meal flour, the whole amounts of grain prepared for milling is crushed into
fine meal of desired quality. Special flour is produced by grinding and sifling of grains of
certain cereals and by fortifying (improving its nutritional value by adding vitamins or other
ingredients). For the production of composite flour, grains of various cereals such as wheat,
maize, rice, rye, etc. are ground and blended in required prior to packing. In the
present profile; wheat, sorghum, maize and soya beans are supposed to be blended to obtain a
composite flour. Composite flour has better nutritional value in respect to elements of
minerals, vitamins, fibers, proteins and the like than flour milled from any specific cereal
alone. It can be consumed by infants, adults and the old.

3. Berbere

The signature red spice mound that delivers magic to most Ethiopian stews, berbere is
composed of ground semi-spicy chili peppers (which themselves are called berbere to further
confuse) mixed with upwards of 20 individual herbs, spices and ingredients including garlic,
cumin, coriander, ginger, and fenugreek.

Berbere is usually made with fresh onion, garlic and ginger, but you can of course use dried
powders, although not the same. But give it a go and have fun. If you want the real deal, we
would suggest that you buy some, preferably direct from a source in Ethiopia. A few notes on
herbs & spices in Ethiopian Berbere. Cumin. This is not the same as regular cumin you get in
stores outside of Ethiopia. In fact it is nothing like it and has no features in look, smell or taste.
ጥቁር አዝሙድ or Tikur Azmud. In English it is commonly referred to as Black Cumin or Black
Caraway, although it has no relation to the common Cumin or Caraway that is used as a spice
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in cooking. It is also known as Black Seed (Nigella Sativa). Black Cardamon. Again these are
very different from the Indian types found outside of Ethiopia. They are much much bigger
and contain, many small seeds that have a eucalyptus aroma. Korerima or Korarima
(Aframomum corrorima) are a vital part of Ethiopian cooking and although you can find the
smaller black cardamon that are sometimes use in Indian cooking, they do not contain the
same punch. Using green cardamon will result in a 100% failure in your berbere, these are so
different, there is is just no point trying them. So the bottom line is, Ethiopian Berbere is fairly
hard to make properly, even if you have all the correct ingredients. Now do not let this stop
you having a go and creating your own, but if you need that authentic Ethiopian, it will take a
lot of practice and as we have found, Mums version beats ours overtime. You can find many
Recipes on our site on both the Recipes Pages and the Video Section. Please let us know how
you got on!

4. Beso በ ሶ

Beso is prepared using cold or hot water to moisten the flour on a bowl in such a way that it
can be balled/rolled using hand and served. Salt is usually added in the water, but sugar or
melted spiced butter can also be added, if available.
Organic Besso barley is imported from Ethiopia.

BESSO is prepared in an artisanal manner to retain all of its natural fiber, including
antioxidants for maintaining good health and controlling hunger.

Barley provides a range of important vitamins and minerals: fiber, selenium, B vitamins,
copper, chromium, phosphorus, magnesium, niacin, and more. And when compared to many
other grains, even other ancient whole-grains, barley is lower in fat and calories, but higher in
dietary fiber and certain trace minerals.
Beso and chuko are basically prepared from the same type of flour that is prepared from
roasted barley. The preparation of the barley grain for beso and chuko flour is almost similar
to the steps followed for the preparation of flour for genfo.

5. Mitmita

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Mitmita is hot spice bend made of chili peppers, garlic, cardamom, salt, white cumin, white
cumin and more used for making traditional dish Kitfo. See our recipes. It can also be used to
spice up any non traditional food like chili, pot roast, pasta sauce, pizza, eggs, burgers.

Mitmita (ሚጥሚጣ]) is a powdered seasoning mix used in Ethiopian cuisine. It is orange-red in

color and contains ground African birdseye chili peppers, cardamom seed, cloves and salt. It
occasionally has other spices, including, but not limited to, cinnamon, cumin and ginger. The
mixture is used to season the raw beef dish. In addition, mitmita may be presented as a
condiment and sprinkled on other foods.

6. Fenugreek (abish).

Fenugreek is one of the oldest cultivated plants and has been grown in Egypt and India since
ancient times. The early Egyptians recognized it as a health-giving plant and used it as a medicine, for
food and in religious ceremonies. Harem women of the East ate the seeds to give themselves a pleasing
plumpness. In India the young plants are used as a vegetable and the seeds as a spice. In Ethiopia
fenugreek seeds are used extensively as a spice, a food and a medicine. The green part of the plant is
apparently never used as a vegetable. It would be of great nutritive value, because of the content of
calcium, iron, carotene and ascorbic acid in the leaves. The seeds are used with other spices in the wot
or they can be used to flavour enjera. In infant-feeding it is common to give the infant the third or
fourth decoction of the seeds. The seeds contain around 22% of protein and the decoction about O,5%.
It can also be used to prepare a beverage which is frequently consumed during the fasting period. The
flour is poured slowly over the surface of cold water and should not be stirred. The flour will be
allowed to sink to the bottom of the bowl and remain undisturbed from the evening to the next
morning, in order to remove the bitterness of the seeds. In the morning the water is slowly but
completely poured away, the dough is beaten for about 5 minutes and sugar or honey and water are
added at intervals. This drink is believed to be especially valuable during the long fasting period.

7. Mekalesha

Mekelesha is a spice mixture made up of imported spices and can be bought in the local spice
market or made at home. Black pepper, long pepper, cloves and cinnamon are heated slightly
on the metal mitad in order to dry them and are then ground in the mortar. It is often used in

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wot and allicha, when the dark colour of the spice mixture does not interfere with the desired
colour of the dish.

8. TELBA (FLAX SEED)

Telba, Ethiopian Flax seeds are small oblong shiny brown seeds, rich in Omega-3 essential
fatty acids. Boiled in water they become a gelatine-like beverage, popular for its health
benefits. Whole Flax seeds toasted are healthy snacks. They are grounded and are used to
flavor sauces or for blended drinks.

9. Qolo (toasted cereals, legumes or sunflower seeds).

Toasted foodstuffs are either eaten as a snack with coffee or (in one part of the country) served
as the main meal. The cereals, legumes or sunflower seeds are toasted on the metal mitad
(sometimes corn is boiled before being toasted). The toasted products are difficult to digest,
especially for the children, and the nutritive value is reduced, because some of the amino acids
lysine and thiamine are destroyed by the toasting process.

10. Noug Mitin ኒ ሁግ

Niger seed is socked in normal water for 3 hours, and then washed 3-4 times with tap water.
After washing, the seeds were dry in a cabinet dryer for 2 hours at 450C temperature. After
drying, Niger seeds were divided into two parts.

The first was non-roasted, and the second was roasted for 5 min on medium flame. Both are
grounded with grinder in the food technology department at Bundelkh and University, Jhansi.
Composted flour was prepared by blending refined flour with whole Niger seed flour (WNSF)
in different ratios (100:0%, 85:15%, 70:30%, and 55:45%), and refined flour with roasted
Niger seed flour (RNSF) in different ratios (100:0%, 85:15%, 70:30%, and 55:45%).

11. Children Atmit (mixed Flour) ምጥ ን ን ህ ፃ ውን ቲ

Composite flour is the combination of different protein enriched foods and starches. The
mostly used starches and protein to prepare the composite flour are jam, sweet potatoes as
well as also peanut and soy, respectively.

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12. Pure organic Teff flour ጣፍ ሕሩ ፅ ዕ ሽ ግ

Teff can be eaten whole and steamed, boiled, or baked as a side dish or main course. It can
also be ground into flour to make an excellent gluten-free flour alternative, and can be used to
make waffles, cookies, bread, crackers and an assortment of other baked goods.

Teff Flour can be used in a variety of sweet and savoury recipes. A nutritional powerhouse,
Teff is packed with vitamins, minerals, protein, prebiotics (which your gut will love!). The
smallest of all the grains but a nutritional giant! Use Teff Flour to bake cakes, breakfast
muffins, flat-breads, or thicken sauces.

1. Other products such as Tibs kimem, Kitfo kimem, Hilbet, Akure Ater

Table: some components of spices used in Ethiopian food items and wet
Common name Scientific name Family Spice of common
Black pepper Piper nigrum Piperaceae Berry / fruit
Long pepper Piper longum Piperaceae Berry / fruit
Cardamon Elettaria cardamom Zingiberaceae Capsule / fruit
Ginger Zingiber officinale Zingiberaceae Rhizome
Garlic Alum sativum Liliaceae Bulb / cloves
Vanilla Vanilla fragrans Orchidaceae Beans/ pods
Nutmeg & mace Myristica Fragrans Myristicaceae Kernel (N), Aril (M)
Turmeric Crucuma longa Zingiberaceae Rhizome
Clove Eugenia caryophyllus Myrataceae Unopened flower bud
Cinnamon Cinnamomum zeylanicum Lauraceae Bark
Asafetida Ferula asafetida Apiaceae / umbelliferae Latex / gum
Saffron Crows sativus Iridaceae Stigma of flower
Bay leaves Laurus nobilis Lausaceae Leaves
Cumin Cuminum cyminum Apiaceae Seeds
Caraway Carum carvi Apiaceae Seeds / fruit
Fennel Foeniculum vulgare Apiaceae Seeds / fruit
Poppy seeds Papaves somniferum Papaveraceae Seeds
Amchur Mangifera indica Anacardiaceae Fruit
Mustard Brassica nigra Brassicaceae Seed
Condiments
Fenugreek Trigonella foenum gracicum Fabaceae Seeds & leaves
Coriander Coriandrum sativum Apiaceae Seeds & leaves
Tamarind Tamarindus indica Fabaceae Pod/ fruit
Chillies Capsicum annum Solanaceae Fruit
Onions Alum cepa Liliaceae Bulb

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3. MARKET STUDY AND PLANT CAPACITY

3.1. MARKET STUDY

The global market for seasoning and spices has been growing steadily in recent years. The
market has grown from a global value of US$12.7 billion in 2012 to an expected market value
of US$16.6 billion at the end of 2019.1 By 2024, the market is expected to range from
US$19 billion to US$21 billion, and to reach US$25 billion by the end of 2026.

Europe is the largest market for spice and herb extracts. Due to very limited European
production potential, Europe is for the most part dependent on the import of spices, herbs and
their extracts from emerging economies in the Asia-Pacific region, the Middle East and
Africa. 2 The market for spices in Western economies, such as Europe and North America,
will continue to grow, but will be slower than in other regions such as Asia, where general
economic growth is higher and markets are expanding rapidly. Asia-Pacific has the fastest
growing spices market, with a projected annual growth rate of 6% from 2019 to 2021,
reaching US$3.27 billion by 2021. The food processing industry and the promotion of organic
spice cultivation in Asia will be an important driver behind this growth. In Africa, the spices
market is growing as well. Key drivers behind this growth are an expanding middle class and
the upcoming tourism sector, combined with increased consumer awareness of the benefits of
using spices and seasoning.

The global seasoning & spices market size was valued at USD 37.26 billion in 2022 and is
expected to grow at a compound annual growth rate (CAGR) of 5.6% from 2023 to 2030. The
growing awareness of the medicinal benefits of spices & herbs along with the rising number of
people cooking at home has been attributed as the major factor driving the growth of this
market. Furthermore, the increasing willingness of buyers to pay a premium price for new and
ethnic flavors has been fueling the market. Local cuisines have been gaining international
recognition, owing to their flavors of cuisines, which are also driving the growth.

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The global market is primarily driven by the increasing interest in diverse cuisines and
culinary experiences. In line with this, the rising awareness among consumers regarding the
health benefits associated with spices and seasonings, including their antioxidant, anti-
inflammatory, and digestive properties, is significantly contributing to the market.
Furthermore, the growing multiculturalism and globalization of food preferences lead to the
demand for a wide variety of spices and seasonings, reflecting different culinary traditions and
regional flavors. Apart from this, the busy urban lifestyles and the desire for convenient and
flavorful meal options contribute to the demand for spices and seasonings that can add depth
and complexity to dishes quickly and easily. Moreover, the rise of culinary tourism and the
exploration of new flavors and authentic cuisines from around the world fuel the demand for
spices and seasonings associated with different culinary destinations. Besides, the food service
sector, including restaurants, hotels, and catering services, catalyzes the market as chefs and
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culinary professionals seek to offer unique and flavorful dishes. Additionally, the rapid
product innovation in the spice and seasoning industry, including the development of new
blends, flavors, and formulations, stimulates the market.

Rising preference for clean-label and natural ingredients

The rising preference for clean-label and natural ingredients is fueling the market. Consumers
are increasingly seeking products with minimal processing, free from artificial additives,
preservatives, and flavor enhancers. Spices and seasonings are crucial in meeting this demand
as they are naturally derived from plants. They offer a way to enhance food flavor and aroma
without using synthetic or chemical additives. Clean-label and natural spices and seasonings
are perceived as healthier and more authentic, aligning with consumer desires for transparency
and a closer connection to the origins of their food. They offer a way to infuse dishes with
distinctive flavors while focusing on simplicity and purity. Brands and manufacturers
responding to this trend are offering spice and seasoning products that are minimally
processed, organic, non-GMO, and free from artificial ingredients. They emphasize using
high-quality raw materials, responsible sourcing, and sustainable farming practices. The rising
preference for clean-label and natural ingredients has driven innovation in the spices and
seasonings market, leading to the development of organic spice blends, reduced-sodium
options, and unique flavor profiles worldwide. This trend continues to shape the market as
consumers seek spices and seasonings that enhance the taste of their dishes while aligning
with their desire for clean, natural, and unadulterated ingredients.

3.2. Current Demand and Supply

The total global spice production was amounted to 12.8 million tons in the year 2018. Chilli
was the most commonly produced spices, with a total production of 4.1 million tons in the
year 2018 (32%) according to Titus and Wojtek (Citation2020). The top five spices producer
countries in the world are India, China, Turkey, Bangladesh and Indonesia, in that order
(FAOSTAT (Food and Agriculture Organization of the United Nations, Statistics Database),
Citation2019). With long history of spices production (Kifelew et al., Citation2017; Tesfa et
al., Citation2017), Ethiopia is one of the East African countries that produce and export
various spices (Dessie et al., Citation2020) with production reaching 244,000 tons per year

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(GIT (Gatefarms International Trade), Citation2016). Spices production in Ethiopia was

expanded between 1995 and 2011 from 107,000 to 153,000 tons with annual growth rate of
9.5% (EMI (Ethiopian Ministry of Industry), Citation2015). In Ethiopia, more than 50 spice
crops are grown and a total potential for growing low land spices is estimated to be 200,000
hectares (GIT (Gatefarms International Trade), Citation2016; ITC (International Trade
Centre), Citation2020).

The total spice production in Ethiopia increased from 234,000 tons in 2013 to 356,000 tons in
2018, while the area under spice cultivation increased from 150,000 ha to 207,000 ha (Titus &
Wojtek, Citation2020). Chilli pepper is the most commonly produced spice (ITC
(International Trade Centre), Citation2010; Herms, Citation2015; EMI (Ethiopian Ministry of
Industry), Citation2015; Dessie et al., Citation2019) accounts for over 80% of total spice
produced in the country (Titus & Wojtek, Citation2020). Ginger is the second most produced
spice crop until 2013 (EMI (Ethiopian Ministry of Industry), Citation2015; Herms,
Citation2015). However, ginger production has devastated in 2013 on wards due to bacterial
wilt epidemic and hence, turmeric occupies the large share of its production and exports (Titus
& Wojtek, Citation2020). According to Kifelew etal. (Citation2017) among the total seed
spices grown in Ethiopia; black cumin, ajwain or bishop’s weed (netch azimud), fenugreek
and coriander were known to have around 36 and 17% share in area and production,
respectively.

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It was estimated that the Ethiopian spice export trade was below 1% of the country’s total
export earnings (Yimer, Citation2010). However, the share of spice exports was 1.1 and 1.4%
in volume and value, respectively, during the crop year 2003/04 and 2004/05. It was reported
that the average annual growth rate of spices was 25.6 and 25.3% in volume and value,
respectively, between 1998 and 2010 (Yimer, Citation2010). The total value of spice exports
earnings was estimated at US$ 18.568 million in 2009/10 alone. Export earning of an
approximately US$ 50 million per year was achieved in 2015, mainly from black cumin,
ginger and turmeric, thereby showing an increasing trend compared to the previous years in
export spice market (ITC (International Trade Centre), Citation2010).

The table shows the export of spices for the past 2 fiscal years, showing Sudan as still
the major importer followed by Saudi Arabia, Yemen and India among 39 counties for
2012/13 EFY.

Ginger was the most commonly exported spice accounting for the lion’s share of 60.75% in
volume during the years 2007/08-2012/13, followed by turmeric (11.47%), pepper (9.26%)

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and cumin (8.85%) (EMI (Ethiopian Ministry of Industry), Citation2015). From 2013 on
wards, the Ethiopian spice exports have shown a declining trend due to the bacterial wilt
epidemic that considerably affect ginger production (Titus & Wojtek, Citation2020). As a
result, the export of ginger was almost entirely disappeared in 2015 (Herms, Citation2015). In
2017, ginger exports from Ethiopia had a value of just only US$10,000 and was thus
responsible for a negligible share of Ethiopian spice exports (Titus & Wojtek, Citation2020)
Currently, selam baltina, Abeba baltina, Mami baltina are the largest baltina products
processing firms in the country and there are many small sized firms in all regions that
produce batina products in a cultural way mostly they are organized as Micro and Small
Enterprises. The past production/supply data of the commodity of interest show an increasing
trend in relation to the elapse of time and the growth in population in the country.

PRODUCTION OF BALTINA PRODUCTS (TONNES)

Year Quantity Year Quantity
2014 17646 2011 21648
2015 17008 2012 26452
2016 19927 2013 29367
2017 15333 2014 30296
2018 11999 2015 36398
Source: Ministry of Economic Development and cooperation.

Production of the item under discussion rather than always being need based, seems to have
been influenced by factors such as substitutes- imported souces, for instance which very likely
is a result of poor marketing efforts made by the supplier of the commodity in question.

Baltina products and spices being food item of high nutritive value is expected to be consumed
by the urban, educated, relatively well to do and nutrition conscious element of the society.

To get this target market, however, a great deal of marketing effort to create the awareness of
the presence of the commodity and the necessity of a more nutritive food item for health and

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strength compared to food items of a mono-crop type should be made from the producers/
sellers side.

This effort will bring about a change in taste which will raise the demand and hence the
production of Baltina products. This being the case, though the historical supply of the
product does not show a big leap in taste preference of consumers, there is no reason why a
shift from quantity to quality does not appear at least in the case of the section of the
population that is experiencing a fast income growth provided that various steps in marketing
efforts are taken.

As the living style of the society is changing, people are preferring to buy these baltina
products rather than preparing in their home. This will create an important demand effect to
have larger market opportunity for the project.

It is a simple fact, however, that an increasing trend will appear to exist once the product is
introduced and tasted. Availability is after all one of the major determinants of demand
which will lead to the gradual change in consumption habits.

Annual Growth Rate in terms of Volume and the Value of Spice Exports for 2007/8 –
2012/13 (Volume in Tons and, 000 USD)

3.3. Demand Projection

National Baltina products being a food item mostly consumed by the urban population of a of
all income group, the future demand for the product depends on the growth in urbanization
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and income. This being so, an annual growth rate of 7% to reflect the growth in urban
population and hence the growth in the demand for composite flour is assumed in computing
the demand figure in the years 2024-2031.

PROJECTED DEMAND FOR BALTINA PRODUCTS

(TONNES)
Year Quantity Demanded
(Projection)
2024 29775.4
2025 31561.92
2026 33455.64
2027 35462.98
2028 37590.76
2029 39846.2
2030 42236.97
2031 44771.19
2032 47457.46
Estimated demand gap for baltina products thus ranges from 28,090 tonnes in the year 2017to
47,457 tonnes by the year 2026.

3.4. Pricing and Distribution

Locally produced high quality baltina products is varying with the type of baltina products for
example red pepper (Berbere) is selling between Birr 275.00 and Birr 290.00 a killo
according to the quality and taste.

The market outlets for such items vary according to size of purchase. As such while large
super markets, hotels, hospitals, universities get their requirements directly from producers,
small retailers obtain their supplies from a relatively medium - scale distributors.
Households, of course, usually get their daily requirements from the nearby general
merchandise shops or supermarkets.

The proposed Baltina products producing firm in this case is to sell its product directly to large
supermarkets and large and medium size wholesalers. The firm will have its own selling outlet

in the best location of the city to reach its customers.

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3.5. PLANT CAPACITY AND PRODUCTION PROGRAMME

3.5.1. Plant Capacity

Based on the assumption in the market study that 1.5% of the total yearly demand gap for
Baltina products should be considered as the plant capacity, the envisaged plant is planned to
produce 500 tonnes per annum. This production at 100% capacity utilization of the plant is
based on 1 shift of 10 hours per day and 300 working days per year.

3.5.2. Production Programme

The plant will start operation with 80% of its rated capacity in the first year and will attain
90% capacity utilization in the second year. 100% capacity utilization will be achieved in the
third year and thereafter.

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4. MATERIALS AND INPUTS

4.1. MATERIALS
The production of Baltina products may involve milling and blending of any number of
different types of cereal crops, legumes and spices. For the purpose of the present project
profile; the principal raw materials are presented below.

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Price
S.N Type of raw material U.o.M Quant Remark
Unit price total
1 Gebse kuintal 30 125500
2 Zala Berbere (Red Pepper Feresula 144 185680
3 Ater kik quintal 24 157600
4 White onion KG 648 119440
5 Red onion Ls 24 16000
6 korerima Kg 264 23760
b Beso bla Kg 120 15400
8 koseret Kg 48 12064
9 Azmerino Kg 8 1200
10 tossigne Kg 96 13360
11 Liyu liyu Kg 48 12400
12 Tikur Azmud Kg 168 18064
13 Nech Azmud Kg 180 18640
14 Salt Kg 408 12448
others L/s 125000
Total 1,275,556

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4.2. UTILITIES

The major utilities required by the plant are electric power, water for processing and personal
use, and lubricants. The estimated annual requirement at 100% capacity utilization rate and
corresponding costs are given in the Table below.
ANNUAL UTILITY REQUIREMENT AND ESTIMATED COSTS
Cost Birr
No. Description Unit Qty rate L.C. Total
1 Electric power kWh 120,054 - 4.57 548646
2 Water m3 1200 - 65 78000
3 Oil and Lubricant kg 700 - 70 49000
Total - - - 675646

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5. TECHNOLOGY AND ENGINEERING

5.1. TECHNOLOGY

5.1.1. Production Process

Process Flow
These steps generally include cleaning, drying, grinding, blending, sieving, and grading.
Following the removal of dust and dirt, pure raw spices are sun-dried or carefully roasted.
Poorly dried raw spice can lead to the development of mold.

The processing and trade of spices has always been an important industry. The spice trade still
has a significant impact on the economy of many countries. Small-scale processing of spices
can be economically and socially successful.

 Correct harvesting time

 Cleaning
 Drying
 Grading
 Grinding
 Packaging
 Equipment suppliers
 References and further reading

Correct harvesting time

It is not possible to produce a good spice product from low quality harvested material. The
main obstacle to correct harvesting is the crop being picked immature. This is usually due to
fear of theft or the farmer requiring money urgently. However, every effort should be made to
wait until the spices are fully mature.

Cleaning

The crop should be cleaned before processing. The first stage is to remove dust and dirt using
a winnowing basket. This can be made locally from bamboo, palm or other leaves. Someone

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used to this work can remove the dust, dirt and stones quickly and efficiently (eg they could
clean 100kg of pepper in an eight-hour day). Small machines are available for cleaning but
they are rarely cost effective.

After winnowing the crop needs to be washed in water, all that is needed is two or three 15
litre buckets. For larger quantities a 1m³ sink/basin with a plug hole needs to be constructed.
This can be made out of concrete. However, the water must be changed regularly to prevent
recontamination of spices by dirty water. Only potable water should be used.

Drying
This is by far the most important stage in the process to ensure good quality spices.
Inadequately dried produce will lead to mould growth. The sale value of mouldy spices can be
less than 50% of the normal value. In addition the growth of food poisoning bacteria on some
spices is a real danger if proper washing and drying is not carried out.

Drying during the dry season

During the dry season, sun drying is usually adequate to dry the produce. The simplest and
cheapest method is to lay the produce on mats in the sun. However, there are problems
associated with this method. Dust and dirt are blown onto the crop and unexpected rainstorms
can re- wet the crop.

For larger units (over 30kg/day) an 'Exell Solar Dryer' could be used, see Figure 2. However,
the construction costs are greater and a full financial evaluation should therefore be made to
ensure that a higher income from better quality spices can justify the additional expense.

Drying during the wet season

During the wet season or times of high humidity, which often coincides with the harvest of the
spices, a solar dryer or sun drying cannot be used effectively. An artificial dryer that uses a
cheap energy sourceis necessary. This may be a wood or husk burning dryer or a combined
wood burning and solar dryer. Figures 3-6 show a combined wood burning and solar drier
which is based on the McDowell Dryer and has been used in Sri Lanka.

The crop should not be overheated (eg the maximum air temperature for drying pepper and
cardamom is 50ºC). Neither should it be overdried (the final moisture contents for various
spices are shown in Table 1).

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Spice Maximum final moisture content % (wet basis)

Mace 6.0
Nutmeg, cloves 8.0
Turmeric, coriander 9.0
Cinnamon 11.0
Pepper, pimento, chillies, ginger 12.0
Cardamon 13.0

Table 1: Spice moisture content

The drying of certain spices requires special conditions. For example, cardamom has to be
dried in the dark so that the green colour is retained.

Grading
Spices can be graded by size, density, colour, shape and flavour. Machines are available for
larger scale production units.

Grinding
Grinding may also add value but must be done carefully as there are difficulties. A whole,
intact product can be easily assessed for quality whereas a ground product is more difficult.
There is a market resistance to ground spices due to fear of adulteration or the use of low
quality spices. This can only be overcome by producing a consistently high quality product
and gaining the confidence of customers.

For small-scale production (up to 100kg/day) manual grinders are adequate. Small Chinese or
Indian models designed for domestic spice grinding are suitable. A treadle or bicycle could be
attached to make the work easier.

For larger scale production a small, powered grinding mill is needed and models are available
that can grind 25kg/hour. A grinding mill needs to be placed in a separate and well ventilated
room because of the dust. Great care is needed to ensure uniform sized pieces/powders after
grinding and also to prevent heating of spices during grinding.

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Sifter International manufactures Industrial ACM Spice Grinding Machinery. ACM grinder
works in way that the characteristic flavor aroma and color of spices are same due to steam
volatile essential or volatile oils and organic solvent soluble oleoresins, which is the strength
of the spices. These volatile substances start evaporating at a temperature above 30°C. In
ordinary Hammer Mill, Beater type Pulverizer is used in which temperature of the product
goes up to 80°C, which affects quality of the spices. In addition to this additional cooling is
required before packaging of the final products. Sifter International ACM Spice Grinding
Machinery has got solution to this problem in our ACM series Micro Pulverizer (Cryogenic
Grinding) and perfect technology for grinding of spices. ACM Spice Grinder will produce the
exact desired finished size while preserving aroma and volatile oil qualities.

Packaging
The packaging requirements depend on: 1) the type of spice, 2) whether it is ground or intact
and 3) the humidity of storage. Most intact spices will store adequately in sacks/boxes if the
humidity of the air is not too high. Ground spices can also be stored without special packaging
if humidity is low but over long periods there is a loss of flavour and risk of contamination
and spillage.

It is therefore better to store spices in a barrier film such as polypropylene (essential in areas
of high humidity) to provide an attractive package, retain spice quality and prevent
contamination and losses. If polypropylene is not available, cellulose film is adequate if it is
heat sealable. Polythene is a poor substitute and should only be used for short term storage as
it allows the flavour/aroma of the spices to escape.

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5.2. ENGINEERING

5.2.1. Machinery and Equipment

The production equipment required and the estimated cost are given in the Table.

S.n Type of fixed U.M Qua

1 Elektric Stove(roaster) No. 2

3 Peper & shiro mill 2

4 Grain mill & Spice 2

5 Dinamo 3
6 Packing (laminating machine) 1
7 Stirs 10
8 Lining (lying) 5
9 Weighing (large) 1
10 Weighing (digital) 4
11 Packaging and Other equipment l/s
Total Cost 4,200,320

5.2.2. Land, Building and Civil Works

The total area of land required will be about 5,000 square meters of area where all
infrastructure is available. The total built-up area is about 3,200 square meters which includes
machinery warehouse, raw material warehouse, product store, lying are for drying of spices
and mixtures. Total cost of building is estimated at Birr 3,200,000.

5.3. Proposed Location

The project is Extremely appropriate to be located Around Mekelle that the demand for the
products is maximum and the promoter decided to implement the project at Mekelle city

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6. MANPOWER AND TRAINING REQUIREMENT

6.1. MANPOWER REQUIREMENT

The total manpower requirement of the plant is 33 persons. Details of manpower requirement
and estimated annual labour cost including fringe benefits are shown in the Table below.

MANPOWER REQUIREMENT AND ESTIMATED LABOUR COST

No. of Salary, Birr
No. Job Title Persons Monthly Annual
1 Manager 1 10,000 120,000
2 Quality control head 1 7,500 90,000
3 Production & technical head 1 5,500 66,000
4 Commercial head 1 7,000 84,000
5 Finance & administration head 1 7,500 90,000
6 Storekeeper 1 4000 48,000
7 Purchaser 1 3000 36,000
8 Salesman 1 3000 36,000
9 Cashier 1 3000 46,000
10 Operator 6 2500 180,000
11 Labourer 8 2,000 202,000
12 Cleaning worker 4 1500 72,000
13 Guard 4 1500 72,000
Total 31 1,158,000

6.2. TRAINING REQUIREMENT

The production shift leaders, operators and quality controller should be given a three weeks
on-the-job training by the technicians of the machinery and equipment supplier on the
technological process, machinery operation and quality aspects. The cost of training is
estimated at Birr 125,000.

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7. FINANCIAL ANALYSIS
The financial analysis of the composite flour project is based on the data presented in the
previous chapters and the following assumptions:-

Construction period 1 years

Source of finance 20 % equity
80 % loan
Tax holidays 2 years
Bank interest 11.5%
Discount cash flow 11%
Land value Based on estimated lease rate of the region
Repair and maintenance 2% of the total plant and machinery
Accounts receivable 30 days
Raw material local 30 days
Work in progress 2 days
Finished products 30 days
Cash in hand 5 days
Accounts payable 30 days

7.1. TOTAL INITIAL INVESTMENT COST

The total investment cost of the project including working capital is estimated at Birr
14,486,370.00. From the total investment cost the highest share (8,870,320) is
accounted for fixed investment cost and initial working capital 5616050 birr for the
first six months of opperation.

Table 6; INITIAL INVESTMENT COST ( Birr)

Sr. Cost Items Fixed investment Total
No Cost
1
1.1 Land Lease (20%) 360,000
1.2 Building and civil work 3,000,000
1.3 Machinery and equipment 4,200,320
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1.5 Office furniture and equipment 250,000

Sub total 7,810,320
2 Pre operating cost 250,000
Subtotal (fixed) 8,060,320
3 Working capital (Six Months) 2,613,911
Grand Total 10,674,231

7.2. Source of Finance

The source of finance for the implementation of these envisaged projects is expected to
originate from promoter’s own contribution and bank loan.
 Equity share (25%) = birr 2,668,557.75
 Loan from Banks (75%) = birr 8,005,673.25
Total = 10,674,231.00

7.3. PRODUCTION COST

The total production cost at full capacity operation is estimated at Birr 10,455,646. Raw materials
and utilities account for 70.5%, while the rest together costs 5% of the total production cost.

Table 7.4 Total Production cost at full capacity

Items Cost
1. Raw Material 6,500,000
2.Utilities 675,646
3.Wages and salaries 1,180,000
4.Spares and Maintenance (5% of F.I) 250,000.00
5. Depreciation & Amortization 800,000.00
4. Cost of Finance 800,000
7.Adminstrative Expense 250,000.00

Total Production cost 10,455,646

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8. FINANCIAL EVALUATION

1. Profitability

Based on the projected profit and loss statement, the project will generate a profit
through out its operation life. Annual net profit before tax will grow from Birr
8,920,571.02 to Birr 14,017,900.00 during the life of the project. Moreover, at the end
of the project life the accumulated net cash flow amounts to Birr 104,915,918.1.

2. Ratios

In financial analysis financial ratios and efficiency ratios are used as an index or yardstick for
evaluating the financial position of a firm. It is also an indicator for the strength and weakness
of the firm or a project. Using the year-end balance sheet figures and other relevant data, the
most important ratios such as return on sales which is computed by dividing net income by
revenue, return on assets (operating income divided by assets), return on equity (net profit
divided by equity) and return on total investment (net profit plus interest divided by total
investment) has been carried out over the period of the project life and all the results are found
to be satisfactory.

3. Pay-back Period

The pay-back period, also called pay – off period is defined as the period required for
recovering the original investment outlay through the accumulated net cash flows earned by
the project. Accordingly, based on the projected cash flow it is estimated that the project’s
initial investment will be fully recovered within 2 years.

4. Internal Rate of Return

The internal rate of return (IRR) is the annualized effective compounded return rate that can
be earned on the invested capital, i.e., the yield on the investment. Put another way, the
internal rate of return for an investment is the discount rate that makes the net present value of
the investment's income stream total to zero. It is an indicator of the efficiency or quality of an
investment. A project is a good investment proposition if its IRR is greater than the rate of
return that could be earned by alternate investments or putting the money in a bank account.

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Accordingly, the IRR of this project is computed to be 39% indicating the viability of the
project.

6. Net Present Value

Net present value (NPV) is defined as the total present (discounted) value of a time series of
cash flows. NPV aggregates cash flows that occur during different periods of time during the
life of a project in to a common measuring unit i.e. present value. It is a standard method for
using the time value of money to appraise long-term projects. NPV is an indicator of how
much value an investment or project adds to the capital invested. In principle, a project is
accepted if the NPV is non-negative.

Accordingly, the net present value of the project at 11% discount rate is found to be Birr 105
million which is acceptable. For detail discounted cash flow see Appendix.

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9. ECONOMIC AND SOCIAL BENEFITS

The project can create employment for 33 persons. The project will generate Birr 800,000 in
terms of revenue before tax. The establishment of such factory will have a foreign exchange
saving effect to the country by substituting the current imports. The project will also generate
other income for the Government.

10. Environmental Impact Assessment

Waste management is the "generation, prevention, characterization, monitoring, treatment,
handling, reuse and residual disposition of different wastes". It is a set of processor and
practices that enable an organization to reduce its environmental impacts and increase its
operating efficiency.

Plastic bags are used for an average of five minutes, but takes over thousands of years to
decompose in landfills, they don't biodegrade, but are broken into smaller fragments that are
toxic and contaminate soil and waterways. Plastic bags are also posing as a danger to animals,
as they often mistake them for food and die after swallowing it! The solution is only to reduce
plastic bags consumption and start producing paper bags.

Paper Bags Benefits: 100% reusable, recyclable and biodegradable, Easier to carry than plastic
bags, Holds more items than plastic bags; fewer bags to handle, Environmentally preferred,
Contains 40% post-consumer recycled material, A renewable resource comes from trees.

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Annex: IRR table

Fixed cost Running
cost Discoun
Yea Gross t factor Discounted
r Revenue Total cost Net Benefit (11%) Benefit
0 0 8,060,320 0 8,060,320 -8,060,320 1 -8,060,320
1 17,675,000 7,862,470 7,862,470 9,812,530 0.9091 8920571
2 21,462,500 9,547,285 9,547,285 11,915,215 0.8264 9846734
3 25,250,000 11,232,100 11,232,100 14,017,900 0.7513 10531648
4 25,250,000 11,232,100 11,232,100 14,017,900 0.683 9574226
5 25,250,000 11,232,100 11,232,100 14,017,900 0.6209 8703714
6 25,250,000 11,232,100 11,232,100 14,017,900 0.5645 7913105
7 25,250,000 11,232,100 11,232,100 14,017,900 0.5132 7193986
8 25,250,000 11,232,100 11,232,100 14,017,900 0.4665 6539350
9 25,250,000 11,232,100 11,232,100 14,017,900 0.4241 5944991
10 25,250,000 11,232,100 11,232,100 14,017,900 0.386 5410909
11 25,250,000 11,232,100 11,232,100 14,017,900 0.3505 4913274
12 25,250,000 11,232,100 11,232,100 14,017,900 0.3186 4466103
13 25,250,000 11,232,100 11,232,100 14,017,900 0.2897 4060986
14 25,250,000 11,232,100 11,232,100 14,017,900 0.2633 3690913
15 25,250,000 11,232,100 11,232,100 14,017,900 0.2394 3355885
16 25,250,000 11,232,100 11,232,100 14,017,900 0.2176 3050295
17 25,250,000 11,232,100 11,232,100 14,017,900 0.1978 2772741
18 25,250,000 11,232,100 11,232,100 14,017,900 0.1799 2521820
19 25,250,000 11,232,100 11,232,100 14,017,900 0.1635 2291927
20 25,250,000 11,232,100 11,232,100 14,017,900 0.1486 2083060
105,725,918
IRR 82% NPV

39 | P a g e