4th ENTAG platform meeting Spices-Opportunities and challenges of aromatic subsector
1. Opportunities and Challenges of Aromatic
Subsector
Presentation Highlighting the Experiences of Terra Plc
Organized by ENTAG Programme Management Unit
Presented by: Fekade Lakew
2 August 2017
Azzeman Hotel
Addis Ababa
14. Opportunities
• Favorable attitude of GoE towards promoting private sector participation
• Stable security and political environment
• Conducive climate and vast bio-diversity of country
• High potential for promoting environmental friendly agriculture
• Increasing international preference for environmental friendly and socially responsible operations
• Increasing international demand for organic products
• Desire by international development partners to support the development of the sector
• Untapped forward and backward linkages (value chain)
• Minimum need for imported Inputs
• Requirement on high labor inputs
• Availability of affordable and large labor force in rural areas
• High potential for involving farmers as out-growers
• Income diversification for farming communities
15. Challenges
• Limited information on locally available plants for aromatic and essential oils
(plant species, end-uses,, local and international demand, etc.)
• Limited knowledge and experience in processing aromatic and essential oils
(infancy of the fragrance industry)
(limited knowledge on appropriate technologies, distillation times, temperature, harvesting,
storage, value adding and other processing steps)
• Lack of Scientific Files and software for classifying essential oils
(i.e. database for comparing standard values and classifying products)
• Lack of IFRA Certificates
(International Fragrance Association Standard Certificates, i.e. globally adopted risk management system)
• Need for organic certificates to export into developed economies
• Long learning curves and maturity periods due to lack of local knowledge
16. Challenges cont’d
• Difficulty in exporting sample products and seeds
(including compost and soil for analysis of chemical properties)
• Difficulty in acquiring export licenses
• Difficulty in importing planting materials
• Limited experience and lack of legal framework for out-grower
systems
• Lack of legal framework for water utilization rights in rural
environments
• Constraints in supply and provision of infrastructure
(unreliable and limited supply of electricity, telecommunication services)
17. Challenges cont’d
• Access to finance and credits
(lack of innovative financing modalities such as venture capital and crowd funding)
• Restrictions in acquiring foreign currency for importing capital goods and spare
parts
• Lack of clear overview on customs and tax regimes
• Cumbersome procedures in clearing imported items
• Access to land and land-holding certificates
• Sudden changes in government regulations
(steep increases in annual land holding t
• Difficulty and ambiguities in securing working/trading permits for related
products
• Difficulty in and high cost for business start-ups
18. THANK YOU FOR YOUR PATIENCE
D/General Manager
Terra Plc
P.O.Box: 30109
Addis Ababa/Ethiopia
Tel: +251-911-227753