3 Agenda • Objective • Bamboo Market • Bamboo in Ethiopia • Current Status • Supply Chain • Industrial Processing of Bamboo • International Market for Bamboo Products • Stakeholders
Objective & strategy4 Fortune Enterprise will become an African exporter of compressed panels and decking material produced from domestically grown bamboo, thereby providing the world market with a highly competitive alternative for hardwood composites and bamboo products from China. Key success factors: • Tubes of Ethiopian highland bamboo are more straight, contain less starch and more fibre than the Chinese Moso varieties, making it very suitable for outdoor applications. • Lower labour costs & raw material price (-20%) than China • Incentives Ethiopian government: profit tax holiday and zero import tax • Technical assistance secured • Experienced international Staff 20 Germans and 5 Chinese • High certified quality (EN350-2; E1, EN-350-Part 1, EN 335, CEN/TS 15083, EN 113, EN ISO/IEC 17025:2005, ISO 14000; ISO 9001) • Cooperation and market access through Elephant Bambusprodukte GmbH.
Objective & strategy5 Specific company objectives: 1. Source bamboo splits through an outgrower scheme and own plantations in Ambo and Sidama • outgrower scheme: 2,000 ha, 4,000 farmers organized in some 30 coops, 30 collections centres • 1,500 ha plantation, 500 ha established per year from own nursery (cuttings) • at full capacity, factory requires 2,2 mio culms annually • first four years, raw material supply solely through outgrowers • first harvest plantation in yr 4 (8%), full productivity yr 12 2. Establish industrial bamboo production in Ethiopia consisting of two regional pre-processing plants (Tikur Inchini , Ambo and Titicha, Sidame) and a main factory in Welmera producing compressed panels destined for the export market. 3. Produce 245,000 m2 of compressed bamboo panels during first year of production (2013) worth Eur 3.9 Mio, increasing to 500,000 m2 per year from year 3 onwards (2016) worth Eur 15 Mio. 4. To lay the ground for further investments in the Ethiopian bamboo sector. Investing in more private plantations and product diversification.
What has been done ( 2009-2011)6 • Bamboo Task Force • In October 2009, Public Private Partnership worth € 400,000. Main activities: - analysis into competiveness of Ethiopia bamboo - numerous feasibility studies to determine technology and product - market & technology investigation in Europe and China - Initial inventory and assessment of standing bamboo culms in Ambo and Sidama - prototypes development from Ethiopian Bamboo species for testing and certification at Fraunhofer Institute for Wood Research - establishment of outgrowers scheme in Ambo, encompassing over 250 farmers organised in 5 Coops
What has been done ( 2009-2011)7 • Commercial contract with Elephant Bambusprodukte GmbH for the first 750,000m2 valued at EUR 18.75m annually for next five years. • Profound technical assistance secured during the start up phase of the project. • Land secured for plantation development ( 1,500 ha at two different regions), nursery site ( 1 ha each, at two locations), pre-processing plants ( 5 ha each, at two locations), and main factory ( 10 ha). • Finalization of proforma based machinery and equipment list. • Finalized production planning and flow chart. • Award of highly competitive grant programme in June 2011 to Elephant and FE partnership, funded through the Dutch Private Sector Investment Programme (PSI). The total project budget is € 1.5 mio of which 50% is a result-based grant. • Raised debt totalling Eur 7Mio, raised Eur 5M in Equity, total Project Budget Eur 12M
8 Bamboo Development 2011 - 2013 PPP with GIZ Acquiring Private Sector Investment Third Party Funding Long Term Loan Strategic Alliance International Climate Initiative EU Energy Facility
9 Bamboo Development 2009 - 2011 PPP with GIZ Market Development
10 Bamboo Development 2009 - 2011 PPP with GIZ
11 Bamboo Resource in Ethiopia • Ethiopia has 1 million ha of bamboo • It accounts to 67% of African‘s bamboo resource • 30% being high land bamboo and • 70% is low land bamboo
Status quo of Bamboo in Ethiopia12 + ETH accounts for 67% of Africas Bamboo resource + 1 Mio. ha Bamboo coverage in total (estimation) + 30% highland, 70% lowland bamboo + Bamboo is one of the fastest growing plants on earth with great potential for reducing pressure on forests + a quickly-renewing and sustainable source of biomass + vital role in environmental amelioration, bio-diversity preservation, soil and water conservation + can serve as substitute for traditional woods which are mostly imported from abroad due to their scarcity in Ethiopia
Status quo of Bamboo in Ethiopia-13- Image Problem • Value of Bamboo has not been recognized yet • Unawareness about high quality of Bamboo- Weakness of the Economic Environment • State-led and NGO initiatives of the past have promoted the bamboo sector only on household level • Development of the private sector has been insignificant so far • No industrial use of Bamboo so far- Lack of Credit and Financing • No microfinance for MSEs like farmers and cooperatives so far • Poor capital endowment and access to credits have prevented industries from up-scaling their bamboo-related activities
34 China study tour • Fortune Enterprise has done a study tour to China two times to understand the WSB production scheme. • Some of the WSB production factories visited in china were: 1. Werner flooring 2. Anhui Fengtian Bamboo Manufacturing 3. Wuxi Senda Bamboo & Wood Products CO.LTD. 4. Xingli ( Everjade) Bamboo Products Co 5. Three WSB factories in Anji province 6. DASSO flooring …etc
35 China study tour • Fortune Enterprise after visiting some WSB factories in China , has selected the below stated machines for its production of WSB outdoor decking.
36 Source of Bamboo • 30 Bamboo Co-operatives • 2 million bamboo culms
37 Collection Center Manual Cutting Manual splitting
50 Main Industrial plant (supplementaries) Gen set Boiler Transformers Air compressor
51 Main Industrial plant (supplementary) Weighing scale Dust extraction Waste gas treatment Weighing bridge
52 Machinery supplier visited • Fortune Enterprise has visited many bamboo making machinery companies • Some of the companies visited are: 1. Qingdao Guosen 2. Anji Yukang Machinery 3. Hangzhou Garden Corporation 4. Shanghai Wood Based Panel Machinery - Dieffenbacher Group 5. Fujian Jinmen 6. Changshan hot Press manufacturer .. etc
53 Machinery supplier selected • Form the companies visited Guosen, Anji Yukang and Garden corporation has provided quotation for the full line machineries. • From the information gathered Guosen presses are currently big in the market. • They have provided us reasonably better specification of the machineries compared to the other two manufacturers. • even if Also Guosen is a bit expensive in price, compared to the other two they have helped us with our production flow, machinery requirement and factory design. • Finally after considering the above selection criterias, We have decided to buy the full line machineries from Qingdao
58 Pre-Processing Plant • The two Pre-Processing plants are located 1. Sidama Zone, Tetecha Wereda,355 km from Addis Ababa. Total Area allocated=50,000 m2 1. West Shewa Zone,Tikur inchini,147 Km from Addis Ababa. Total Area allocated=50,000 m2
62 Construction of the preprocessing plants • The construction of the pre-processing plants Can be categorized in to two: 1. Sub-structure-Mainly includes, Excavations, earth works and flooring either with concrete or cobble stone. 2. Super structure-Mainly includes Construction of bamboo columns, beams and trusses.