3.

PROFILE ON EDIBLE VEGETABLE FATS AND

OIL
 3-2

TABLE OF CONTENTS

PAGE

I. SUMMARY 3-3

II. PRODUCT DESCRIPTION & APPLICATION 3-3

III. MARKET STUDY AND PLANT CAPACITY 3-4

A. MARKET STUDY 3-4
B. PLANT CAPACITY & PRODUCTION PROGRAMME 3-7

IV. MATERIALS AND INPUTS 3-8

A. RAW & AUXILIARY MATERIALS 3-8
B. UTILITIES 3-9

V. TECHNOLOGY & ENGINEERING 3-9

A. TECHNOLOGY 3-9
B. ENGINEERING 3-12

VI. MANPOWER & TRAINING REQUIREMENT 3-15

A. MANPOWER REQUIREMENT 3-15
B. TRAINING REQUIREMENT 3-15

VII. FINANCIAL ANLYSIS 3-17

A. TOTAL INITIAL INVESTMENT COST 3-17
B. PRODUCTION COST 3-18
C. FINANCIAL EVALUATION 3-19
D. ECONOMIC BENEFITS 3-21
I. SUMMARY

This profile envisages the establishment of a plant for the production of edible vegetable
fat and oil with a capacity of 1,500 tonnes per annum. The plant will also produce
3,520 tonnes of oil cake per annum that can be used for animal feed as by product.

The raw materials required are soybean seed, cotton seed, groundnut, caustic soda,
bleaching earth, common salt, phosphoric acid and nickel. Except phosphoric acid and
nickel the other raw materials are locally available.
 3-3

The present demand for the proposed product is estimated at 5,304 tonnes per annum.
The demand is expected to reach at 15,612 tonnes by the year 2018.

The total investment requirement is estimated at Birr 20.77 million, out of which Birr
9.6 million is required for plant and machinery. The plant will create employment
opportunities for 83 persons.

The project is financially viable with an internal rate of return (IRR) of 28.40 % and a
net present value (NPV) of Birr 21.37 million, discounted at 8.5%.

The plant will have a backward linkage effect on agriculture sector. The establishment of
such factory will have a foreign exchange saving effect to the country by substituting the
current imports.

II. PRODUCT DESCRIPTION AND APPLICATION

Vegetable fat and oil are substances derived from plants that are composed of
triglycerides. Normally, at room temperature fats are solids and oils are liquid .Edible
vegetable oils and fats are food cooking ingredients and principally used for human
consumption. The oils and fats are extracted from a variety of fruits, seeds, and nuts.
 3-4

Oils containing unsaturated fatty glycerides are by partial hydrogenation rendered into
fats of more suitable composition for edible purposes. This removal of double bond
results in improving quality, taste and odor of the oils as well as raises their melting point.
The oils commonly used are ground nut, soybean, cotton seed etc. in mixture depending
on the availability.

The cake contains crude protein and is highly appropriate for animal feed.

III. MARKET STUDY AND PLANT CAPCITY

A. MARKET STUDY

1. Past Supply and Present Demand

Vegetable fats and oils are substances derived from plants that are composed of
triglycerides. Normally, at room temperature fats are solids and oils are liquid extracted
primarily from the seeds of oil seed plants. Fats are organic compounds of plant or animal
origin that are not volatile and insoluble in water.

Vegetable fats and oils are consumed directly or used as ingredients in food, a role that
they share with some animal fats including butter and ghee. Vegetable fats and oils serve
a number of purposes to make other ingredients stick together. They can be classified
according to their degree of saturation.

The industrial use of vegetable fats and oils comprises making soaps, skin products,
candle making, perfumes, cosmetic products, dying agents and paints. The supply of
vegetable fats oils in the past ten years is presented in Table 3.1.

Vegetable fats and oils are produced locally. However, imported types are dominant in the
market. The highest and lowest imported supply recorded for the last ten years was
respectively 19,712 tonnes in 2003 and 293 tonnes in 1998. Imported figure in 2003 was
 3-5

exceptionally high because 17,194 tonnes of edible fats and oils at CIF value of 182.6
million Birr was imported from the USA alone.

Excluding the two extreme import figures of 1998 and 2003, the average annual import
for the remaining eight years becomes 5,304 tonnes. In addition to this import of fats and
oils, there is a local supply of edible oil as high as 11,408 tonnes in the same period. In
general, imports of edible oils are dominating the market since domestic producers
cannot satisfy the huge demand in both quality and quantity. However, in the long run
there is a substitution opportunity for local manufacturers.

For the particular case of edible fats and oils under this study, the current unsatisfied
demand is estimated at 5,304 tonnes being the average annual import as described above.

Table 3.1
SUPPLY OF EDIBLE FATS AND OILS IN TONNES

Imported Vegetable Local Production of

Year
Fats and Oils Total Edible Oil
1997 1,205 5,321
1998 293 8,679
1999 1,949 6,579
2000 7,279 6,637
2001 9,695 8,327
2002 7,174 7,993
2003 19,712 8,027
2004 1,339 6,931
2005 5,988 4,882
2006 7,506 11,408

Source: CSA, Customs Authority.

 3-6

2. Projected Demand

The demand for vegetable fats and oils grows with the growth in population also, as the
low level of urbanization changes through the years, the consumption of fats and oils
increases due to changes in life styles. In the rural areas as well improved standard of
living will contribute to increased fats and oils consumption. Therefore, the demand for
edible fats and oils is projected at 11.4% GDP growth rate attained in 2006/7.
Accordingly, the demand projected for 2018 is 15,612 tonnes. Projected demand is
presented in Table 3.2.

Table 3.2
PROJECTED DEMAND FOR VEGETABLE FATS AND OILS (TONNES)

Year Projected Demand

2009 5,909
2010 6,582
2011 7,333
2012 8,169
2013 9,100
2014 10,137
2015 11,293
2016 12,580
2017 14,014
2018 15,612

3. Pricing and Distribution

The current price for vegetable fats and oils is Birr 20 per kg, depending on the type of
packaging. The project under study will enter the market at a competitive price of Birr 18
per kg. The production of vegetable fats and oils will also produce oil cake as by product
which can be used for animal feed. Based on current price a factory get price of Birr 2 per
Kg is adopted for the of oil cake. The distribution of the product will follow the same
channel used by edible oil products.

B. PLANT CAPACITY AND PRODUCTION PREGRAMME

 3-7

1. Plant Capacity

Based on the unsatisfied demand of vegetable fat and oil, minimum economies of scale
and availability of the major raw material, i.e., ground nut, soybean and cotton seed the
envisaged edible oil plant will have a production capacity of 1,500 tones (1,630,435lt)/
annum, in a three shift of 8 hours per day and 300 working days per year. The plant will
also produce 3520 tonnes of oil cake per annum that can be used for animal feed.

2. Production Programme

The production program is indicated in Table 3.3. At the initial stages of the production
period, the plant requires some years to penetrate the market. Therefore, in the first and
second year of production, the capacity utilization rate will be 70% and 90%,
respectively. In the third year and then after, full capacity production can be attained.

Table 3.3
PRODUCTION PROGRAMME

Sr. Production Year

No. Description 1 2 3-15
1 Vegetable oil and fat (tonnes) 1,050 1,350 1,500
2 Expeller cake (tonnes) 2,464 3,168 3,520
3 Capacity Utilization Rate (%) 70 90 100
 3-8

IV. MATERIAL AND INPUTS

A. RAW AND AUXILIARY MATERIALS

The principal raw materials of the project are groundnut, soy bean, cotton seed, common
salt, caustic soda, phosphoric acid, nickel catalyst for hydrogenation and bleaching
powder. The agro climatic condition of Ethiopia is suitable for growing Cotton, ground
nut and soy bean. So these oil seeds are abundantly found in different regions like
SNNPRS, Oromia, Gambella and Benishangul regions. Caustic soda can be obtained
from caustic soda Share Company found in Zeway while common salt from Afar region
(Afdera). Bleaching earth can be sourced from Adami Tulu Pesticide Processing Share
Company. The other raw materials are imported. The refined oil is packed in steel drums
(200 lt). Table 4.1 shows the annual requirement and cost of raw & auxiliary materials at
full capacity production. The total annual cost of raw material is estimated at Birr
22,984,000.

Table 4.1
RAW AND AUXILIARY MATERIALS
REQUREMENT AND COST

Sr. Materials Unit Qty. Cost (‘000 Birr)

No. LC FC Total
1 Soybean seed Ton 2,083 8,332 - 8,332
2 Cotton seed Ton 1,875 3750 - 3,750
3 Groundnut Ton 1,875 10,312 - 10,312
4 Caustic Soda Kg 12 84 - 84
5 Bleaching earth Ton 33 66 - 66
6 Common salt Ton 34 68 - 68
7 Phosphoric acid Ton 12 36 204 240
8 Nickel Kg 750 18 104 120
8 Replacement of Drums - Pes 60 12 - 12
2%
Total 22,678 308 22,984
* Barrels are recyclable with 5% loss. Jute sack or PP bag used to pack the oil cake will be
brought by the customer or pay for it so that it is not included in the raw material cost. The plant
can generate an annual income of Birr 1,890,000 from the sale of oil cake.
 3-9

B. UTILITIES

Electricity, furnace oil and water are utilities of the envisaged project. Table 4.2 indicates
the annual utility requirement and cost at full capacity. Process water shall be supplied by
submersible pumps installed by the project.

Table 4.2
ANNUAL UTILITIES REQUIREMENT & COST

Sr. Utility Unit Qty Cost (‘000 Birr)

No.
1 Electricity kWh 1,200,000 568,320
2 Furnace oil Lt 65,000 379,600
3 Water M3 250,000 812,500
Total 1,760,420

V. TECHNOLOGY AND ENGINEERING

A. TECHNOLOGY

1. Process Description

There are two extraction technologies, one is mechanical pressing and the other is solvent
extraction. The most important factor in the choice of the processing plant, and the
processing sequence, is the seed to be extracted, its yield, capacity and the quality of
products to be achieved. The minimum capacity recommended for solvent extraction
process is 150-200 t /day feed stock. In addition to the above restriction, mechanical
presses has the advantage of reduced capital cost, no danger of fire from combustible
solvent, simpler process control and smaller number of skilled staff over solvent
extraction process. Therefore, screw press expulsion is recommended for the envisaged
plant.
 3-10

The seed requires a thorough cleaning process to remove sand, stalk, plant debris and any
foreign matters by rotary or table sieves, usually with air aspiration by fans, and cyclones
for dust removal from the air. Then, the seed have to be prepared for efficient oil
recovery. The stages involved in pre-treatment are:

a) Size reduction of the seeds by breaking them, usually in fluted roller mills;
b) Flaking of the seed particles in roller mills with smooth roller surfaces (0.2
-0.3 mm);
c) Conditioning the seed by adjusting their moisture content and temperature,
while keeping the seed hot (say 90-950C) for periods that vary widely (30-60
minutes). Then, extraction by using high pressure screw press follows.

The crude oil obtained from the press requires undergoing refining processes to produce a
bland tasting, light coloured oil without odour or flavour. To obtain fully refined oil from
crude oil, the following steps are necessary: degumming, neutralizing, bleaching,

Winterizing and deodorizing. The refined oil is, then, packed and marketed. The refined
oil containing unsaturated fatty glycerides are by partial hydrogenation rendered into fats
of more suitable composition for edible purposes. The hydrogenation process consist of
the following two process steps; hydrogenation and post hydrogenation refining stages
(the refining process mentioned above)

The main waste material from oil manufacture is water and much attention should be
given to the water treatment to avoid its adverse effect in the environment. Biological
treatment by aerating, activated sludge system, addition of flocculating agent and
filtration are used before the effluent is discharged.

2. Source of Technology
 3-11

The machinery and equipment for the oil mill can be acquired from a Chinese company
named:

1. Mitsun Engineering
FF-107, silver coin, shrenikpark Char Rasta, Akota, Baroda-390
Phone: + (91)-(265)-2352802
Fax: + (91)-(265)-2352802
Mobile: + (91)-9824083532/9824097599
E-mail: mitsunengineering@yahoo.com,mcpaid@indiamart.com

2. DAYAL IMPEX
77-A, Industrial Estate
Ludhiana-141 003, Punjab, India
Phone: +(91)-(161)-4640008
Fax: +(91)-(161)-4640008
Mobile: +(91)-9872100027
Email: dayalimpex@yahoo.com,mcpaid@indiamart.com

3. Henan Times Trading Com. Ltd

Tel: 0086-371-9013776
Fax: 0086-371-3812887
E-mail: shang5@371.net

B. ENGINEERING
 3-12

1. Machinery and Equipment

The list of machinery and equipment is indicated in Table 5.1. The total cost of
machinery is estimated at Birr 9.6 of which Birr 7.68 is in foreign currency.

Table 4
LIST OF MACHINERY & EQUIPMENT

Sr. Description Qty. COST(`000 Birr)

No. No. LC FC TC
1 Dehulling Machine 1 76.8 307.2 384
2 Delinting machine 1 61.44 245.76 307.2
3 Vibratory Cleaner 1 53.76 215.04 268.8
4 Crusher 1 57.6 230.4 288
5 Cooker 1 53.76 215.04 268.8
6 Expeller press 1 201.6 806.4 1,008
7 Settling tank 1 48.0 192 240
8 Hot water tank 1 55.68 222.72 278.4
9 Alkali Treatment tank 1 107.52 430.08 537.6
10 Filter press 1 101.76 407.04 508.8
11 Holding tank 1 51.84 207.36 259.2
12 Neutralization and Bleaching 1
tank 119.04 476.16 595.2
13 Deodorization tank 1 105.6 422.4 528
14 Cooling tower 1 145.92 583.68 729.6
15 Hydrogenation tank 1 111.36 445.44 556.8
16 Submersible pump 1 24.96 99.84 124.8
17 Boiler 1 unit 199.68 798.72 998.4
18 Water Reservoir 1 44.16 176.64 220.8
19 Crude and Refined oil tank 2 69.12 276.48 345.6
20 Waste water treatment plant set 230.4 921.6 1,152
Total 1,920 7,680 9,600

2. Land, Building and Civil Works

 3-13

The total land requirement for the envisaged plant is estimated at 1,500 m2 out of this
1000 m2 is built-up area. Out of the total 1000 m 2 built up area ,200 m2 is for office
building, 300 m2 is for raw material and finished product store, 450m 2 is for production
hall and 50 m2 is for the waste treatment plant. Cost of building construction at rate of
Birr 2,400 per m2 amounts to Birr 2,400,000.

According to the Federal Legislation on the Lease Holding of Urban Land (Proclamation
No 272/2002) in principle, urban land permit by lease is on auction or negotiation basis,
however, the time and condition of applying the proclamation shall be determined by the
concerned regional or city government depending on the level of development.

The legislation has also set the maximum on lease period and the payment of lease
prices. The lease period ranges from 99 years for education, cultural research health,
sport, NGO , religious and residential area to 80 years for industry and 70 years for trade
while the lease payment period ranges from 10 years to 60 years based on the towns
grade and type of investment.

Moreover, advance payment of lease based on the type of investment ranges from 5% to
10%.The lease price is payable after the grace period annually. For those that pay the
entire amount of the lease will receive 0.5% discount from the total lease value and those
that pay in installments will be charged interest based on the prevailing interest rate of
banks. Moreover, based on the type of investment, two to seven years grace period shall
also be provided.

However, the Federal Legislation on the Lease Holding of Urban Land apart from setting
the maximum has conferred on regional and city governments the power to issue
regulations on the exact terms based on the development level of each region.

In Addis Ababa the City’s Land Administration and Development Authority is directly
responsible in dealing with matters concerning land. However, regarding the
manufacturing sector, industrial zone preparation is one of the strategic intervention
 3-14

measures adopted by the City Administration for the promotion of the sector and all
manufacturing projects are assumed to be located in the developed industrial zones.

Regarding land allocation of industrial zones if the land requirement of the project is
blow 5000 m2 the land lease request is evaluated and decided upon by the Industrial Zone
Development and Coordination Committee of the City’s Investment Authority. However,
if the land request is above 5,000 m 2 the request is evaluated by the City’s Investment
Authority and passed with recommendation to the Land Development and
Administration Authority for decision, while the lease price is the same for both cases.

The land lease price in the industrial zones varies from one place to the other. For
example, a land was allocated with a lease price of Birr 284 /m2 in Akakai-Kalti and Birr
341/ m2 in Lebu and recently the city’s Investment Agency has proposed a lease price of
Birr 346 per m2 for all industrial zones.

Accordingly, in order to estimate the land lease cost of the project profiles it is assumed
that all manufacturing projects will be located in the industrial zones. Therefore, for the
this profile since it is a manufacturing project a land lease rate of Birr 346 per m 2 is
adopted.

On the other hand, some of the investment incentives arranged by the Addis Ababa City
Administration on lease payment for industrial projects are granting longer grace period
and extending the lease payment period. The criterions are creation of job opportunity,
foreign exchange saving, investment capital and land utilization tendency etc.
Accordingly, Table 5.2 shows incentives for lease payment.

Table 5.2
INCENTIVES FOR LEASE PAYMENT OF INDUSTRIAL PROJECTS
 3-15

Payment Down
Grace Completion Paymen
Scored point period Period t
Above 75% 5 Years 30 Years 10%
From 50 - 75% 5 Years 28 Years 10%
From 25 - 49% 4 Years 25 Years 10%

For the purpose of this project profile the average i.e. five years grace period, 28 years
payment completion period and 10% down payment is used. The period of lease for
industry is 60 years.

Accordingly, the total lease cost, for a period of 60 years with cost of Birr 346 per m 2, is
estimated at Birr 31.14 million of which 10% or Birr 3,114,000 will be paid in advance.
The remaining Birr 28.03 million will be paid in equal installments with in 28 years i.e.
Birr 1,000,929 annually.

VI. MANPOWER AND TRAINING REQUIREMENTS

A. MANPOWER REQUIREMENT

Manpower requirement of the plant is 83 persons, of which 48 are direct production

workers and 35 are administrative and supervisory staff. Details of manpower
requirement and estimate of annual expenses for salaries is presented in Table 6.1.

B. TRAINING REQUIREMENT

Workers directly related to production; supervisors, foreman, operators, mechanics and

electricians need to be given on-the-job training for one month by qualified personnel of
machinery supplier. The training cost is estimated at Birr 80,000.
 3-16

Table 6.1
MANPOWER REQUIREMENT AND ANNUAL LABOUR COST ( IN BIRR)

Sr. Description Req. Monthly Annual

No. No. Salary Salary
1 General manager 1 4,500 54,000
2 Executive secretary 1 900 10,800
3 Finance and Adm. Manager 1 4,000 48,000
4 Production and technic manager 1 4,000 48,000
5 Commercial manager 1 4,000 48,000
6 Production head 1 3,500 42,000
7 Technic had 1 3,000 42,000
8 Production supervisor 3 6,000 72000
9 Operators 24 21,600 259,200
10 Labourers 12 4,200 50,400
11 Mechanic 3 2,700 32,400
12 Electrician 3 2,700 32,400
13 Personnel 1 2,000 24,000
14 General service head 1 2,000 24,000
15 Accountant 2 4,000 48,000
16 Cashier 1 600 7,200
17 Time keeper 3 1,200 14,400
18 Boiler operator 3 2,700 32,400
19 Purchaser 1 2,000 24,000
20 Sales officer 1 2,000 24,000
21 Store keeper 2 1,200 14,400
22 Chemist 3 6,000 72,000
23 Guard 6 2,100 25,200
24 Messenger 2 700 8,400
25 Cleaner 2 700 8,400
26 Driver 3 1,500 18,000
Sub-Total 83 1,083,600
Workers Benefit (25% of basic salary) 270,900
Grand Total 83 1,354,500

VII. FINANCIAL ANALYSIS

The financial analysis of the vegetable fats and oils project is based on the data presented
in the previous chapters and the following assumptions:-
 3-17

Construction period 1 year

Source of finance 30 % equity
70 % loan
Tax holidays 2 years
Bank interest 8.5%
Discount cash flow 8.5%
Accounts receivable 30 days
Raw material local 30 days
Raw material import 90 days
Work in progress 1 days
Finished products 30 days
Cash in hand 5 days
Accounts payable 30 days
Repair and maintenance 3% of machinery cost

A. TOTAL INITIAL INVESTMENT COST

The total investment cost of the project including working capital is estimated at Birr
20.77 million, of which 9 per cent will be required in foreign currency. The major
breakdown of the total initial investment cost is shown in Table 7.1.

Table 7.1
INITIAL INVESTMENT COST ( ‘000 Birr)
 3-18

Sr. Cost Items Local Foreign Total

No. Cost Cost Cost
1 Land lease value - 3,114.
3,114.0 0
2 Building and Civil Work - 2,400.
2,400.0 0
3 Plant Machinery and Equipment 1,920. 9,600.
7,680.0 0 0
4 Office Furniture and Equipment - 150.
150.0 0
5 Vehicle - 500.
500.0 0
6 Pre-production Expenditure* - 1,147.
1,147.6 6
7 Working Capital - 3,864.
3,864.0 0
Total Investment cost 18,855. 1,920. 20,775.
6 0 6

* N.B Pre-production expenditure includes interest during construction ( Birr 967.64

thousand ), training ( Birr 80 thousand) and Birr 100 thousand costs of
registration, licensing and formation of the company including legal fees,
commissioning expenses, etc.

B. PRODUCTION COST

The annual production cost at full operation capacity is estimated at Birr 28.58
million (see Table 7.2). The material cost accounts for 80.40 cent of the production
cost. The other major components of the production cost are cost utility, depreciation and
financial cost which account for 6.16%, 4.31% and 3.15% respectively. The remaining
5.99% is the share of repair and maintenance, direct labour and other administration cost.

Table 7.2
ANNUAL PRODUCTION COST AT FULL CAPACITY ('000 BIRR)
 3-19

Items Cost %
Raw Material and Inputs
22,984.00 80.40
Utilities 1,760.42 6.16
Maintenance and repair
288.00 1.01
Labour direct 720.00 2.52
Labour overheads
270.90 0.95
Administration Costs 433.44 1.52
Land lease cost
- -
Total Operating Costs 26,456.76 92.54
Depreciation 1,231.00 4.31
Cost of Finance 900.64 3.15
Total Production Cost
28,588.40 100

C. 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 after tax will grow from Birr 3.04 million to Birr
3.75 million during the life of the project. Moreover, at the end of the project life the
accumulated cash flow amounts to Birr 46.47 million.

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
 3-20

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. Break-even Analysis

The break-even analysis establishes a relationship between operation costs and revenues.
It indicates the level at which costs and revenue are in equilibrium. To this end, the
break-even point of the project including cost of finance when it starts to operate at full
capacity ( year 3) is estimated by using income statement projection.

BE = Fixed Cost = 19 %
Sales – Variable Cost

4. Payback Period

The pay back period, also called pay – off period is defined as the period required to
recover 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 4 years.

5. 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. Accordingly, the IRR of this porject is computed to be 28.40 %
indicating the vaiability of the project.
 3-21

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
principal a project is accepted if the NPV is non-negative.

Accordingly, the net present value of the project at 8.5% discount rate is found to be
Birr 21.37 million which is acceptable.

D. ECONOMIC BENEFITS

The project can create employment for 83 persons. In addition to supply of the domestic
needs, the project will generate Birr 10.66 million in terms of tax revenue. The
establishment of such factory will have a foreign exchange saving effect to the country by
substituting the current imports. It has also a back ward linkage effect with the
agricultural sector.