Bahir Dar University

Bahir Dar institute of Technology

Faculty of Mechanical and Industrial Engineering

Feasibility study Framework Document

of Agricultural Machinery Assembly, Manufacturing and Maintenance
Industry

Prepared by: -
Wogiye Wube ………. Chair Person
Tsehay Seid …………. Secretary
Abebaw Mulat………… Member
Biresaw Belisty………… Member
Gebeyehu Tebabal………… Member
Semegnew Moges………… Member

11th Oct, 2021

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1. Introduction
In Ethiopia, agriculture accounts for around 46% of gross domestic product and 80% of exports
by value. It supports the livelihoods of 85% of the population (International Monetary Fund
2012). Agriculture is likely to remain a key growth sector, particularly in rural Ethiopia. Hence,
agriculture-led growth and economic development are crucial for meeting Ethiopia’s needs for
food security, income security and wealth creation objectives.

The farming practice in the Ethiopian agriculture sector uses traditional farming system which
has savior impact on the performance of the sector. Fortunately, the Ethiopian government gives
emphasis to modernize the traditional farming practices through using agricultural machineries.
However, the level of using agricultural machineries for farming activities across Amhara region
in particular and other regional states of Ethiopia in general is found at infancy stage (Amhara
regional state agricultural office report).

According to Amhara regional state agricultural office report, the interests of farmers, who live
in Amhara region, to use agricultural machines such as, tractors, combiners, planters, and others
have been increasing since the recent years. They have been attempting their best to access the
required agricultural machineries. However, they couldn’t access the required machinery at the
right time and at the right place. The reason is lack of industry which is engaged in
manufacturing as well as assembling of agriculture machinery across the Amhara region. In
addition, the price of the machineries supplied by either government agency or privet sector from
abroad is not affordable for farmers.

Thus, faculty of Mechanical and Industrial Engineering of Bahir Dar Institute of Technology is
encouraged to address the abovementioned problems of the farmers through engaging in
modernizing the existing farming practices. Addressing these problems could be potential
business opportunity for the faculty. It will be the source of income generation for the faculty as
well as its staff. Besides to this, the students under the faculty will get opportunity to integrate
their theoretical knowledge with practical one. To implement this encouragement, the faculty has
assigned committee to study the feasibility of the proposed business idea.

Accordingly, the assigned feasibility committee has proposed five potential business ideas that
that will help to generate income and address the problem of the community. Based on the set

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selection criteria, the committee has selected one potential business idea entitled as agricultural
machinery assembly, manufacturing and maintenance industry among the proposed one.

2. Current situation
The current situation of agricultural machinery usage level in Amhara region is described as
follows:
 The region has tremendous potential land which is suitable for agricultural production
through mechanization such as land leveling, tillage, sowing, spraying, harvesting and
threshing machines.
 As Amhara region agricultural office report, the intensity of usage of agricultural
machineries has been increased from year to year, for instance, in 2013 Ec 234,205
hectare of land has been tilled using tractors. Because of unavailability of enough
combine-harvester in the region, farmers have attempted to get them via rent from
Oromia region.
 The initial price of tractor is expensive which makes it unaffordable to farmers. Thus,
Ethiopian development bank provides 70% long term loan which makes attractive for
them and business individuals and organizations.
 In the region, due to the absence of skilled maintenance personnel and organization,
imported agricultural machineries have been out of use after short period of utilization.
 In national and regional level, farm machineries and tractors assembly and manufacturing
industries is planned to establish in Woreta, Debre Birhan, D/markos and Kombolcha in
the near future.
 There is unavailability of spare parts for tractors and farm machines in the region as well
as in the country wide.
 The agricultural machineries being imported does not fit to the requirements of Ethiopian
agro-ecologies and lack the necessary quality check in the country.
 Currently, large scale farmers or investors use rice trans-planter, combine harvester,
tractor and attachment equipment; however, these machineries are inaccessible to all
medium and small scale farmers.
 Since most of the machineries imported into the country are partially assembled, the
overall cost of the machinery is higher. Therefore, the cost of the machines would reduce
if each component is assembled in the country itself.

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3. Aim of visiting companies
 To identify agricultural machinery importers and manufacturers and to know what they
import and manufacture.
 To assess the manufacturing and assembly process of farm machineries:
 Manufacturing system
 Lay out design
 Space utilization
 Supply chain
 Product design
 To assess the required resources for assembly of tractors and combine harvester
 To get work experience of companies and organizations
 To select the right machines for the proposed business
4. Proposed list of institutions for official visit
The feasibility study committee members have proposed the following institutions for official
visit.
1. Ethiopian engineering group(EGG) located in Adama
2. Ethio-Agri business located in AA
3. Kaleb service and farmer house PLC located in Shashemene
4. Asitunet business enterprise PLC located in AA
5. MOENCO main branch located in AA
6. Kulmsaa agricultural training center located in Assela
7. Gedeb engineering located in AA
8. Kotebe metal work factory located in AA
9. Selam TVET college located in AA

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5. Trip schedule
Table: schedule

Company Starting Finishing

S.n. Company name Location Date Date Duration
1 Asitunet business enterprise AA 8/02/2014 8/02/2014 1 day
PLC
2 MOENCO main branch AA 09/02/2014 09/02/2014 1 day
3 Selam TVET college AA 10/02/2014 10/02/2014 1 day
4 Kotebe metal work factory AA 11/02/2014 11/02/2014 1 day
5 Ethio-Agri business AA 12/02/2014 12/02/2014 1 day
6 Gedeb Engineering PLC AA 13/02/2014 13/02/2014 1 day
7 Ethiopian engineering Adama 15/02/2014 15/02/2014 1 day
group(EGG) (Adama
Agricultural Machinery
Industry)
8 Kaleb Service Farmers’ House Shashemene 17/02/2014 17/02/2014 1 day
PLC
9 Kulmsaa agricultural training Assela 19/02/2014 19/02/2014 1 day
center

The above table depicts only the total number of day/s to be spent to visit the mentioned
institutions.

6. Work Plan
The detail work plan prepared by the committee members is shown in the table below:-

S.N. Task Description Responsible Allocated Time

Party Remark
 Phase I
1st Phase Bench Mark
1 Study
 Visiting the All committee 2 to 3wks
aforementioned members
organizations
Team Meeting Review All committee
2 members

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 As Is Situational Analysis

 Review Faculty BP/SP [WW], [AM] [SM] 4wks

and Prepare Review KPI's

 Faculty resource Visit [TS], [WW], [GT],

Based on Prepared KPI's [BB], [SM]

 Secondary Data [GT], [BB] ,[SM]

Collection
 Desk Study of [TS], [WW], [GT],
Documents [BB] [AM]

Team Meeting Review [AM]

Evaluation of the current
(Top - Down) Agricultural
equipment manufacturing
 Benchmark Desk Review [TS], [WW], [GT],
[BB] [AM],[SM]
3  Gap Assessment w.r.t [WW],[TS],[SM]
International Standards
 Gap Assessment w.r.t [BB], [GT], [SM]
2wks
International Practice
 Gap Assessment w.r.t [AM], [GT], [SM]
Local Scenario
 Result Documentation [WW], [BB], [SM]
Team Meeting Review [AM]
2nd phase Bench Mark
Study
4 2wks
 Visiting [WW],[TS],[SM]
o Workshop [BB], [GT], [AM]

Team Meeting Review [AM]

5 SWOT Analysis [WW],[TS],[SM] 2wks
[BB], [GT], [AM]
Team Meeting Review [AM]
Phase II
Integrating FS w.r.t [TS], [WW], [GT], 1wk
6 SP of FMiE [BB], [AM],[SM]
Preparing feasibility study [TS], [WW], [GT], 3wks
7  Market Analysis [BB], [AM],[SM]
 Technical analysis
 Financial analysis
 Environmental
assessment
 Risk assessment
Team Meeting Review [TS], [WW], [GT],

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 [BB], [AM],[SM]
8 Implementation of [TS], [WW], [GT],
feasibility study [BB], [AM],[SM]
 Monitoring and [TS], [WW], [GT],
Evaluation [BB], [AM],[SM] 2wks
 Key Performance [TS], [WW], [GT],
Indicator [BB], [AM],[SM]
Team Meeting Review [AM]
9 Meetings and Consultation
 Introductory Session [TS], [WW], [GT],
with Focus Group (BiT, [BB] ,[AM],[SM]
FMiE) 2wks
 Status Reports and [TS], [WW], [GT],
Discussion (FMiE) [BB],[AM],[SM]
 Final Report and [AM]
Discussion with Team
 Final Report and [AM]
Presentation to FMiE