feasibility study yirol oil mill report ,south sudan

MINISTRY OF COMMERCE, INDUSTRY AND INVESTMENT

FINAL REPORT

FOR FEASIBILITY STUDY ONTHE DEFUNCT YIROL OIL MILL IN LAKES STATE,

SOUTH SUDAN

OCTOBER 2012

Adroit Consult International

i

Final Reportfor Feasibility Study on the Defunct Yirol Oil Mill in Lakes State,

South Sudan.

ContentsThe Consulting Team vii

Acknowledgements viii

Acronyms ix

Executive Summary xi

1.0 Introduction 3

1.1 Introduction 3

1.2 Specific Objectives 3

1.3 Background 3

1.4 South Sudan Economic Development Agenda 6

1.5 Study Approach And Methodology 8

1.6 Organization Of The Report 9

2.0 Market Feasibility 11

2.1 Availability Of Raw Materials 11

2.2 Suitability Of Local Environment For Production Of Oil Seeds 17

2.3 Current Government Interventions To Boost Agriculture Production 23

2.4 Major Constraints To Production Of Oil Seeds 24

2.6 Consumption, Demand And Sales Projections Of Cooking Oil In South Sudan 45

2.7 Strategic Intervention Areas 51

2.9 Results Matrix 71

3.0 Technical Feasibility 80

3.1 The Status Of The Factory Buildings And Other Physical Assets 80

3.2 Suitability Of The Factory Building And Physical Assets 95

3.3 Agricultural Section 107

3.4. Area Of Production Including Area Of Land Available, Type Of Soil And Available Water Resources 113

3.5 Infrastructure Access 119

3.7 Availability And Suitability Of The Sites 128

3.8 Quality Requirements For The Oil Crops To Be Planted 136

3.10 Proposed Implementation Plan 187

3.11 Conclusion 187

3.12 Recommendations 188

4.0 Environmental Assessment 191

4.1 Proposed Project Components 191

4.3 Impact Identification, Evaluation And Mitigation 201

4.4 Description Of The Receiving Environment 202

4.5 Analysis Of Project Alternatives 205

4.8 Conclusion 222

5.0 Organisational Feasibility 224

5.1 Institutional Collaboration Framework 224

5.2 Factory Organizational Framework 227

5.3 Management And Staff 227

5.4 Training Requirements 231

5.5 Farmer Organizational Framework 232

5.6 Procurement Process For The Public Private Partnership Arrangement 234

5.7 Yom Implementation Plan (Blue Print For Action) 235

5.8 Risk Management And Mitigation Measures 238

5.9 Monitoring And Evaluation 239

5.10 Conclusions And Recommendations 243

6.0 Financial Feasibility 245

6.1 Estimated Costs 245

6.2 Investment 247

6.3 Expected Revenues 249

6.4 Projections 250

6.5 Financial Risks And Mitigation Measures 253

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South Sudan.

6.6 Assumptions 254

6.7 Financial Appraisal Methods 254

6.8 Major Conclusions And Recommendations 256

7.0 Macroeconomic And Development Implications For Yirol Oil Mill Project 258

7.1 Macroeconomic Stability 258

7.2 Contribution To Overall Balance Of Payment Position 258

7.3 Contribution To Employment 259

7.4 Increased Household Incomes 259

7.5 The Oilseeds Crop Subsector Contribution To Gdp 260

7.6 Contribution To Import Substitution And Export Promotion 260

7.7 Domestic Resource Mobilisation For Investments 260

7.8 Food And Nutrition Security, Health And Risk Reduction 261

7.9 Countering The Challenge Of Climatic Variability To Sustainable Agriculture Output 261

7.10 Infrastructural Development 261

7.11 Conclusion 261

TablesTable 1: Organization of the Report 9

Table 2: Population density of Lakes State 21

Table 3: Population distribution according to sex and age 22

Table 4: Prices of twenty liter jerricans of Cooking Oil 30

Table 5: Major towns in South Sudan and population of the states 34

Table 6: An Analysis of edible oil industry using Porters five forces 39

Table 7: Factors that determine Buyer Power 40

Table 8: Factors that determine Supplier Power 41

Table 9: Summary of factors that determine entry into the edible oil market 42

Table 10: SWOT analysis of Yirol Project 43

Table 11: An Analysis of Data for Cooking Oils Imported through Kaya and Nimule (Data in Liters) 45

Table 12: Value of import bill for South Sudan 46

Table 13: World market prices for major cooking oils in South Sudan for the year 2011 May-June in US $ 47

Table 14: Adjusted Results Incorporating in Projected Data 48

Table 15 Projected Consumption of Cooking Oils in the First 10 Years 48

Table 16: Market Value for South Sudan Edible Oil Industry 49

Table 17; Production potential for Yirol factory for two lines in tonnes 50

Table 18; Increase of market share for Yirol products for the first ten years of production 51

Table 20: Projected activities for implementation of the project 72

Table 21: Results matrix for project implementation 74

Table 22: Average rebound number and quality of concrete 86

Table 23: Floor results for the machine room 86

Table 24: Base of crusher machines 87

Table 25: Side of the base of crusher machines 87

Table 26: Top of screw press 88

Table 27: Base of lintel 88

Table 28: Base of second lintel 89

Table 29: Base of oil storage tank 89

Table 30: Condition of machinery and equipment 99

Table 31: Area, Production and Productivity of Sesame (2006) 111

Table 32: The Total Area Available for Production 115

Table 33: Location and distance of different farm lands visited 116

Table 34: Interpretation of the soil samples 117

Table 35: Water Resources Available in Yirol 119

Table 36: Traffic condition on various road likes 120

Table 37: Length of some of the roads from Yirol 121

Table 38: Condition of the major roads 122

Table 39: Linear programming model for the 2 raw materials growing area 136

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Table 40: Peanuts seed content 137

Table 41: Nutrient demand of peanuts (kg/hr) 140

Table 42: Peanut Diseases and preventive measures 141

Table 43: Peanut pest and preventive measures 141

Table 44: Peanut Crop Density 148

Table 45: Optimum Crop Density 149

Table 46: Nutrient Requirement for Peanuts 150

Table 47: Nutrient Contents of Individual Parts of the Peanut Plant 150

Table 48: Sesame diseases and methods of combating them 151

Table 49: Bacteria germs and regulation measures 152

Table 50: Sesame Storage Pests and Cures 153

Table 51: Oil extraction for Different Seeds 157

Table 52: Production programme line 1(groundnuts) for 40% Oil content 166

Table 53: Production Programme line 1(sesame) at 40% oil content 166

Table 54: Production programme for line 2 for 40% oil content 166

Table 55: Proposed Raw and Auxiliary Materials for Peanuts 167

Table 56: Proposed Raw and Auxiliary Materials for Sesame 167

Table 57: Proposed Raw and Auxiliary Materials for Shea nut 167

Table 59: Machinery and Equipment for Production line 1 171

Table 60: Cost Estimates for the Equipment and Machinery for Line One 172

Table 61: Machinery and Equipment for Production line 2 173

Table 62 Cost estimates for Machinery and Equipment for Production Line 2 175

Table 63: Equipment lists for Pre-treatment of Seeds 175

Table 64: Oil Expeller Manufacturers 176

Table 65: Filter Press Manufacturers 180

Table 66: Refinery Plant Suppliers 183

Table 67: Pump Suppliers 184

Table 68: Tank Suppliers 184

Table 70: Workforce Requirements 230

Table 71: YOM Implementation Blue Print 236

Table 72: Identified Project Milestones for developing a M&E System 240

Table 73: Raw Material Purchase Cost 245

Table 74: Operating capital requirement for the first six months 247

Table 75: The Cost of Fertilizers and Materials to out growers 247

Table 76 : Capital investment items 248

Table 77: Financing plan 249

Table 78 : Expected Sales Revenue 250

Table 79: Summarized Cash Flow Projections 251

Table 81: Summary of Income Statement (in USD) 251

Table 82: Summary Composition of Income. 252

Table 83: Operating Expenses 252

Table 84 : Projected Balance Sheet for 10 Years 253

Table 85 : Main Scenarios Indicators 255

Figures

Figure 1: A Satellite Showing The Location Of Yirol Oil Mill 4

Figure 2: A Map Of South Sudan Showing The Location Of Its Ten States 5

Figure 3: Population Of South Sudan By Age 5

Figure 4: Population By County In The Lakes State 6

Figure 5: Crops Grown By Farmers Visited In The Lakes State 12

Figure 6: Shea Nut Seeds And Shea Nut Tree 14

Figure 7: Acreage Under Cultivation 17

Figure 8: Groundnuts Stored For The Next Season 18

Figure 9: Low Yielding Variety Of Groundnut Seeds In The Market At Yirol 24

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South Sudan.

Figure 10: Plots Of Land Under Simple Irrigation At Aweil Northern Bahr El Ghazal 25

Figure 11: Edible Oils In A Whole Sale Shop At Konyokonyo Market-Juba Town 26

Figure 12: Cooking Oil Re-Packaged Into Used Coca-Cola Bottles Of 500Ml In Rumbek Central Market 26

Figure 13: Cooking Oils And Fats In A Supermarket In Juba 27

Figure 14: Cooking Oil Displayed In The Market 28

Figure 15: Packages And Preferences For Quantities Of Cooking Oils (Percentage Of Responses) 29

Figure 16: Used Bottles Containing Cooking Oil 29

Figure 17: Perception Of Consumers On The Prices For Cooking Oil (Percentage Of Responses) 31

Figure 18: Quality Factors For The Choice Of Cooking Oils (Percentage Of Responses) 31

Figure 19: Quality Factors For The Non Choice Of Cooking Oils (Percentage Of Responses) 32

Figure 20: Sesame Oils Popularly Sold In Aweil Market 32

Figure 22: Cooking Fats 33

Figure 23: Boxes Of Soaps Displayed At Malakia Market In Juba 33

Figure 24: Average Incomes Of Sampled Respondents (Percentage Of Responses) 35

Figure 25: The Trend Of Domestic Imports 35

Figure 26: Global Value On Oils And Fats 37

Figure 27: Trend Of Imports Distributed In Months For The Year 2011 46

Figure 28: An Illustration Of A Proposed Cooperative Model For Yirol Project 54

Figure 29:Flow Of Products Through Intermediaries 63

Figure 30: Plastic Bottle Of Cooking Oil Displayed In A Supermarket 65

Figure 31: Structural Framework Showing Interaction Of Actors 71

Figure 32: The Main Yirol Oil Factory Building 81

Figure 33: Foundation Plinth Exposed And Weathered. 81

Figure 34: Weathered Plinth Wall, Cracks In Floor 81

Figure 35: Cracks And Settlement In Shade, Weathered Figure 36: Weathered Bricks On Brick Wall Due To Rain 82

Figure 37: Cracks In Brick Wall 82

Figure 38: Cracks And Weathered Brick Wall 82

Figure 39: No Ring Beam On Top Of Brick Wall 82

Figure 40: Crack In Brick Wall Near Window And Lintel 82

Figure 41: Exposed Base Of Shade 83

Figure 42: Cracks Near Brick Wall Column 83

Figure 43: No Window & Shutters 83

Figure 44: Crack In Weathered Masonry Wall 83

Figure45: Separation Between Window & Main Brick Walls 83

Figure 46: Crack Penetrates Deeper In Walls 83

Figure 47: Cracks & Weathered Brick Walls 84

Figure 48: Exposed Foundation 84

Figure 49: Wall Damaged By Rain Water 84

Figure 50: Structural Crack From Top To Bottom 84

Figure 51: Tree Roots Penetrate The Base Of Walls 84

Figure 52: Old Roof, Holes In Iron Sheets 84

Figure 53: Machines Resting On Old Concrete Base 85

Figure 54: Concrete Lintel Damaged By Bullets 85

Figure 55: Exposed Foundation, No Doors 91

Figure 56: Back Elevation With Weathered Brick Walls 91

Figure 57: No Windows, Weathered Bricks 91

Figure 58: Plaster Peeled Off, Weathered Bricks 91

Figure 59: No Windows, Weathered Bricks 91

Figure 60: Back Elevation With Weathered Brick Walls 91

Figure 61: Timber Used As Lintel Is Now Very Old 92

Figure 62: Structural Crackswalls 92

Figure 63: Foundation Made Up Of Exposed Stones 92

Figure 64: Paint Destroyed By Weather 92

Figure 65: Front View Of Tank And Stand 93

Figure 66: Cracks On The Concrete Beams Supporting The Tank 93

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South Sudan.

Figure 67: Holes Such As This Are Evident On Most Parts Of The Tank 93

Figure 68: Cracks Originate From Concrete Through Brick Wall 93

Figure 69: Exposed Brick Foundation 93

Figure 70: Cracks In Walls Due To Foundation Settlement 93

Figure 71: Front View Of Managing Director’s House 93

Figure 72: Side View Of House, With Shed Made Up Of Timber Supports 94

Figure 73: Old Iron Sheets, Leaking Roof 94

Figure 74: Old Timber Supports On The Shed / Verandah 94

Figure 75:Holes In Windows 95

Figure 76: Extensional Made By The H.e. Commissioner 95

Figure 77: A Vip Toilet On The Same Plot 95

Figure 78 : House Dwelling On The Same Plot 95

Figure 79: Sim-Sim Seed Grown In Yirol 97

Figure 80: The Two Types Of Groundnuts Grown In Yirol 97

Figure 81: Loading Area And Decorticator Position (Blocks Show Supports For The Machinery Missing) 99

Figure 82: The Three Boiler At The Factory 100

Figure 83: Water Tubes For The Boiler Showing Corroded Plates 100

Figure 84: Boiler No.2 Having Missing Components Like A Lid 100

Figure 85: Boiler No.3 With Lid But Missing Components 100

Figure 86: The Mechanical Steam Engine, The Wheel That Runs The Shaft Is Seen On The Left. 101

Figure 87: Part Of The Steam Engine 101

Figure 88: The Oscillating Cylinder In Bad Shape 101

Figure 89: The Complete Mechanical Steam Engine With Wheels For Running The Shaft System 101

Figure 90: The Complete Mechanical Steam Engine With Wheels For Running The Shaft System 101

Figure 91: The Roll Mill 102

Figure 92: Extractor (Combined Extractor And Mini Press) 102

Figure 93: A Complete Extractor And Mini Press 103

Figure 94: Bevel Gears For The Tilting Extractor 103

Figure 96: Screw Press And Oil Container 104

Figure 97: The Rusted Power Screw 104

Figure 98: The Underground Cake Storage 104

Figure 99: The Dilapidated Inside Oil Tank 105

Figure 100: The Rusted Oil Tank (Inside The Factory) 105

Figure 101: A Hole In The Outside Oil Tank 105

Figure 102: The Outside Oil Tank 105

Figure 103: Part Of The Shaft System That Runs The Machinery 105

Figure 104: The Driving Wheel Which Is Connected To The Steam Engine And Runs The Shaft 105

Figure 105: The Shaft Connection Support 106

Figure 106: The Water Well Pump 106

Figure 107: The Inside Of The Water Well 106

Figure 108: Olive Seeds Locally Known As Laloaf 108

Figure 109: The Red Peanuts Commonly Known As Groundnuts 108

Figure 110: Sesame Seeds (Sim-Sim) 108

Figure 111: The Pink Ground Nuts 108

Figure 112: Shea Nut Seeds Commonly Known As Lulu 108

Figure 113: Land In Fankar After Harvesting Of The Ground Nuts 109

Figure 114: Poor Storage Of Peanuts In Fankar Thus Subjecting The Nuts To Pests. 109

Figure 115: Laloaf Fruits (Olive Fruits) 112

Figure 116: Sunflower Plants 112

Figure 117: Mangarguop Area Land 114

Figure 118; Nyaliel Area Land 114

Figure 119: Consultants Talking To Some Of The Factory Land Encroachers 114

Figure 120: A Map Showing Yirol And Some Of The Water Resources Like Lake Yirol And River Payii. 119

Figure 121: Gravel Road Linking To Yirol - Shambe 121

Figure 122: Culvert Crossing Lines For Drainage Improvement On Yirol - Shambe 121

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South Sudan.

Figure 123: Vehicle Slipped Off Road From Yirol To Rumbek 121

Figure 124: Bridge On Across River Payii (Yirol To Rumbek) 121

Figure 128: Fankar Road: Gravel Material Deposits For Road Construction Are Abundant 122

Figure 125: Road To Fankar Area 122

Figure 126: Pot Holes And Ruts On Road To Fankar 122

Figure 127: Feeder Roads Maintenance Programme Aluak 122

Figure 128: Fankar Road: Gravel Material Deposits For Road Construction Are Abundant Luak - Akuoc Vok Road122

Figure 129: Traffic Flow 123

Figure 130: Storage Huts In Fankar 124

Figure 131: Peanut Sacks In The Homes Of The Fankar People 124

Figure 132: Well Arranged Sacks Of Peanuts In A Home 124

Figure 133: Storage At Yirol Women’s Farm School 124

Figure 134: An Out Grower Framework 133

Figure 135: A Typical Seed Scorcher 158

Figure 136: Flow Diagram For Oil Processing 159

Figure 137: Rosedowns Maxoil Press 159

Figure 138: Typical View Of Cage Or Barrel For Rosedown Expeller 159

Figure 139; A Typical Filter Press 160

Figure 140: Proposed Production Line Flow 1 162

Figure 141: Proposed Refinery Flow For Line 1 162

Figure 142; Proposed Production Line Flow 2 163

Figure 143: Oil Fractionation For Shea Nuts 163

Figure 144 Indistrial Shea Butter Extraction Plant And Refinery 172

Figure 145: Production Line Schematic 174

Figure 146 .Automatic Filling Machine 185

Figure 147: Crop Production Cycle 191

Figure 148: A Map Of South Sudan Showing Average Annual Of The Project Area. 203

Figure 149: A Satellite Showing The Major Water Resources In The Project Area 203

Figure. 150: Yom Institutional Arrangements At National, State, County And Community Levels 226

Figure. 151 Yirol Oil Mill Organisation Chart 229

Figure. 152: The Yom 4-Tier Cooperative Model 233

AppendicesAppendix I: References 262

Appendix Ii: Consultation Log For Environmental Analysis 263

Appendix Iii: List Of Some Key Informants Interviewed 265

Appendix V: Equipment Quotation By Desmet Ballestra 268

Appendix Vi: Organization Of Other Vegetable Oil Producing Companies 300

Appendix Vii: Analysis Of Soil Sample Results 308

Appendix Viii: Selecting A Generator Set 313

Appendix Ix: Financial Analysis - Major Assumptions 316

Appendix X : Cash Flow Projections 317

Appendix Xi : Yirol Projected Income Statement For 10 Years 318

Appendix Xii: Yirol Oil Mill - Projected Balance Sheet For 10 Years 319

Appendix Xiii: Yirol Oil Mill - Manpower Cost Schedule 320

Appendix Xv: Ministry Of Agriculture And Cooperatives 337

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The Consulting TeamTeam Leader Ezra Munyambonera

Market Haam Rukundo

Dr. David Mugabi

Josiah KahimbisibweTechnical Eng. Dr. Bernard Kariko-Buhwezi

Eng. Godfrey Ssaja Ssali

Eng. David Kaddu

Environmental Isaac Tunywane

Organisational Dr. Pascal Odoch Warthum

Financial and Economic Swithern Tumwine Baseka

Ismail Kintu

Drake RukundoDocumentary Kokas Odinga

Ben TumusiimeOverall coordination Ketty Komugabo

Moses Nasa Asasira

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South Sudan.

AcknowledgementsThis feasibility study was undertaken by a multi sectoral team from Adroit Consult for the Ministry of Commerce, Industry and Investment (MCII), under the guidance of: Hon Elizabeth M Majok, the Undersecretary and Chairperson for Yirol Oil Mill Revitalisation (YOMR) Steering Committee; Mr. Jacob Ayuiu Apache, the Director General for Industrialisation, Co-chair and Team Leader for YOMR; and Eng Lino Gabriel Warkuk, the Project Coordinator.

The study team interviewed key government officials, farmers, traders, community members among others. We would like to thank all our respondents for being generous with their time and sharing with us their views.

The study team would like to thank officials in the Ministries of: Commerce and Industry; Agriculture, Forestry and Cooperatives; and Environment for the guidance provided and help extended in accessing respondents and information. It is not possible to mention everyone but in a special way Adroit Consult International recognises and appreciates the role and contribution of Mr. Jacob Ayuiu Apache who would receive and support the team every time they were in South Sudan and Mr. Abdon Akuot Pial the Acting Managing Director of Yirol Oil Mill. We are also particularly grateful to Eng. Lino Gabriel Warkuk for his guidance, constant communication and providing all the necessary information to the feasibility team. Adroit Consult would also wish to acknowledge all the national level counterpart consultants who participated in the initial preparatory meetings, data collection and more especially those who provided invaluable feedback on the draft deliverables. Thank you; Eng. Yak Malong, Prof. Daniel A Mamer, Dr. Elias Leonardo and Dr. Aleu Garang.

The team also appreciates the tremendous contribution of research assistants, who acted as translators, collected data and kept in touch with the drafting team. The research assistants were composed of: Thomas Attari Valter, Yacoub Walla, Khartouma Moses Makol, Moses Manyang Bol and Rita John Lukag. Others were: Maurice Mogga and Eliza Caezar Zamangy.

We remain responsible for any errors or omissions in presentation of the contents of this report.

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South Sudan.

Acronyms ACCA Association of Chartered Certified Accountants

AIDS Acquired Immune Deficiency Syndrome

ARC Agricultural Research Cooperation

BOD Biochemical Oxygen Demand

CBE Cocoa Butter Equivalent

CBOs Community Based Organizations

CFSAM Crop and Food Security Assessment Mission to South Sudan

COD Chemical Oxygen Demand

CPA Comprehensive Peace Agreement

CR Concentration Ratio

EIA Environmental Impact Assessment

EIS Environmental Impact Statement

EMP Environmental Monitoring Plan

ESIA Environmental and Social Impact Assessment

FAO Food Agricultural Organisation

FDI Foreign Direct Investment

FGD Focus Group Discussion

FMG Fast Moving Goods

GMO Genetically Modified Organisms

GNOM Guru Nanak Oil Mills

HACCP Hazard Analysis Critical Control Points

HEP Hydro Electric Power

HIV Human Immunodeficiency Virus

INM Integrated Nutrient Management

IO Industrial Organisation

IPM Integrated Pest Management

ISO International Organization for Standardization

KM Kilometer

M&E Monitoring and Evaluation

MCI Ministry of Commerce and Industry

MEDIC Medical Emergency & Development International Committee

MES Minimum Efficient Scale

NARO National Agricultural Research Organisation

NGO Non Governmental Organizations

PF Power Factor

PPE Personal Protective Equipment

PPM Project Planning and Management

PR Public Relations

ROI Return of Investment

RoSS Republic of South Sudan

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South Sudan.

SPLA Sudan People’s Liberation Army

SPLM Sudan People’s Liberation Movement

SSNEA Sudan National Environmental Authority

STDs Sexually Transmitted Diseases

SWOT Strengths Weaknesses Opportunities and Threats

TOR Terms of Reference

UNDP United Nations Development Program

UPS Uninterruptible Power Supply

USD United States Dollars

VFD Variable Frequency Drive

VOC Volatile Organic Compounds

WFP World Food Programme

WTO World Trade Organisation

YOM Yirol Oil Mill

YOMR Yirol Oil Mill Revitalisation

ROT Rehabilitate, Operate and Transfer

BOT Build Operate and Transfer

BOO Build Operate and Own

CPA Certificate Public Accountant

USD United States Dollars

NPV Net Present Value

IRR Internal Rate of Return

DF Discount Factor

DG Director General

PMU Project Management Unit

RoSS Republic of South Sudan

PPP Public Private Partnership

GPS Geographical Positioning System

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South Sudan.

Executive SummaryThis report presents findings of the Feasibility Study on the defunct Yirol Oil Mill located 225 Km from Juba in Yirol West, Lakes State. The study was commissioned by the MCII and was conducted in two phases. Phase I covered the Market, Technical and Environmental analysis while phase II covered the organisational, financial and economic analysis. Consultations and research for phase I were carried out in December 2011, those of phase II were in July 2012. The purpose of the study was to assess and evaluate prospects for the revitalization of the Yirol Oil Mill. The objectives of the study were to: Assess and prepare a report on the status of the assets of the project; Consult the Ministry of Agriculture and Forestry on availability of indigenous species which could be used in the project to yield quantities of desired qualities; Establish whether there are programs designed to foster development of local farmer associations; Assess and report on the required infrastructure including road access, markets, preservation facilities, export hubs for the produce to reach its intended destination; and advise appropriately on the road map to revitalize the factory to start operations. A draft report for each phase was prepared and submitted. This report presents the findings of all the thematic areas of both phase I and II. In addition, a documentary on the project was prepared and submitted separately.

A: MArket

The results indicate that groundnuts, sesame, sorghum, beans, millet, and okra are some of the crops grown in the Lakes State, with groundnuts and sesame being the major oil seeds grown around Yirol. Farmers produce an estimated average yield of 0.15 to 0.3 tonnes per acreage for the local red beauty variety of ground nuts and 0.1 to 0.3 ton per acreage for the local varieties of sesame. The yields per hectare are below the industry average productivity in the region. Factors attributed to low productivity included: pests and diseases, planting methods, heavy rainfall and soil moisture, and effects of political instability. The study also discovered presence of wild shea nut tree (called ‘lulu’ in Arabic) which thrives in the Bahr el Ghazal and Equatoria regions. Farmers around Yirol have experience in growing of groundnuts and sesame, meaning that the skill and knowledge exist. Farmers expressed willingness to open more acres in support for the project.

Land as a primary input is available. Lakes State has 87,190.08 square kilometers, and much of this land has never been opened and still holds the original fertility. Farmers interviewed had no experience with contract farming and their current capacity to develop as out growers needs further analysis. The study found 86 registered cooperatives but their operations were not clearly verified. The analysis of the population distribution according to age and sex shows that only 37% of the population is active, the remaining being young, and elderly. Government commitment at state and central level was verified through programs and projects initiated to develop the agriculture sector.

The study established that the cooking oil industry was circulated with the following players: farmers, local processors, wholesalers who get cooking oil from distributors or directly from the factory, retailers who re-pack into smaller and manageable quantities, transporters, supermarket owners who add simple value to target premium customers, service providers who perform support functions, and consumers. A survey of Juba, Rumbek and Aweil markets found the markets dominated by cooking oils from East Africa particularly Uganda and Kenya. Other oils come from Sudan, Asia, Europe and USA. The cooking oils are from ground nuts, sesame, palm tree, sunflower, olive tree, cotton seed, coconut and canola.

The cooking oils in the markets visited were packed in jerricans, bottles and sackets of different sizes. The twenty liter jerricans was reported to be the most preferred packaging by the traders. However, small bottles of up to 500 Mls were common on stalls in Yirol, Rumbek and Aweil markets.

The prices for the same oil products varied across the towns in the states visited. A 20 liter jerrican in Juba markets, cost between 140SSP to 170SSP while in Rumbek and Aweil markets, the price ranged between 180SSP to 225SSP. Price variations could be brought about by high transportation costs, lack of information, and speculation.

The study through FGDs and secondary sources established that South Sudan has a big market for

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cooking oil and related products. Being a country with relatively hot climatic conditions, biological factors require heavy intake of oil to replace the lost oils and fats in the process of body temperature regulation. The country has approximately 8.3 million people scattered in all the ten states who are potential consumers of cooking oil. The highest cooking oil consumption was reported in major towns and small trading centers which are relatively densely populated. Processed cooking oils compete with locally made lulu oil and cow ghee.

Majority of the consumers sampled (45%) had an average monthly income of 600 SPP and above while 44.2% had an average income of 100 SSP to 599 SSP. This implies that the purchasing power is average.

The trend of cooking oils and fats may continue to display robust growth, as vegetable oil presence increases to smaller towns in South Sudan. Due to estimated increase in living standards, consumers, especially those in small towns and rural areas, may shift from traditional choices of local animal fats to processed vegetable oil. As the capital Juba becomes more saturated with many products, a shift to focus on rural towns and trading centers may increase market penetration. Estimations based on data collected from Nimule and Kaya import stations indicate that 1,121,351 liters were consumed per month in the year 2011 which translates into 13,456,210 liters the whole year.

The consultant projects a 2.5% growth in demand for cooking oil in the first 5 years due to: increased popularity of cooking oil; aggressive marketing drive; and shifting of demand from locally processed cooking oils. Leaving other factors constant, this consumption is projected to increase by 10% per year for the next 5 years up to the 10th year. However, this growth may not remain increasing at a constant rate. As one moves higher the years, the trend is likely to reverse due to reasons of capacity and market concentration.

The study identifies the strengths of the revitalization to include: availability of land and lulu trees, government commitment to revitalize the factory and consumer preference towards locally produced products. The weaknesses include: high costs of production due to expensive factors of production, low purchasing power of citizens, small active population majority being the young and elderly, and poor road network. The growing population and the fact that the country is being surrounded by countries that are at higher level in terms of development, and most of the policies and strategies have already been tested and rolled out in these countries provides a good learning opportunity to the factory.

B: technicAl

6 The main factory building was constructed and has been in operation since 1924 to house machines for oil mill production. There has been no maintenance activities carried out since then. Distresses have developed on this structure. A critical analysis revealed presence of structural cracks which penetrate deeper into the brick walls, thus requiring a new, firm and modern structure that meets internationally recognized standards to replace the old and weak structure.

6 The Yirol oil mill factory used to work using the old and cumbersome methods of crushing oil seeds by mechanical means, and during the last few years this methodology has undergone a complete revolution. The modern requirements of trade have in every branch of industry compelled the abandonment of the slow, easy going methods which satisfied the times when competition was less keen. The present machinery found at the factory is not appropriate for the production and processing of oil from any oil seeds like ground nuts and seed cracker, they are obsolete and cannot be serviced back to working condition since spare parts are not possible to get. The machinery is corroded and old fashioned as will be observed in the pictures presented in this report. This therefore necessitates a new and efficient machinery, together with a new production process as proposed in the technical appraisal.

6 On the the agricultural side, four major oil crops were identified. These were: sesame/

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sim-sim (Sesamum indicum), ground nuts/peanuts (Arachis hypogea), laloaf (olive seeds) and shea nuts locally known as lulu. Sim-sim, groundnuts and lulu are the most promising oil crops in the region, and in future Laloaf seeds (olives) and sunflower (Helianthus annus) can be tried.

6 There are two virgin areas of 2,000 feddans given to the factory by the Yirol West county administration for growing groundnuts, sim-sim and sunflower and also land within the Yirol town where the factory is located. The consultant took soil samples in those different areas so as to ascertain the possibility of growing the oil seed crops to supply the oil mill with the required raw materials. Results from the soil tests revealed that the soils are generally acidic and the immediate solution is correction of pH to the optimum range through use of either CAN to supply Nitrogen or Calcium to increase the pH level to the required amount for the growing of seed crops.

6 The consultant also undertook to identify the available water resources such as lakes, rivers, etc, and their proximities to the existing and proposed agricultural production areas. Water sources available include: Lake Yirol, White Nile through Shambe, River Payii on the road to Rumbek and other minor seasonal rivers located in many other areas, however, these are mainly functional during the rainy / wet seasons, of which they completely dry out during the dry seasons, meaning that they are not reliable.

6 From the road inventory carried out, the consultant established that all roads are gravel roads and in a fair state especially during the dry season. However, many completely become impassable during the wet/rainy seasons. A random traffic survey at Yirol town on Juba–Rumbek road observed that only Juba–Rumbek road experiences heavy traffic with semitrailers, trailers and 4WD commonly available. The rest of the road links were observed to have very light traffic.

6 The consultant also undertook to identify the current facilities used for preservation of produce. The study established that once the produce is harvested, some is either sold, used for food, used in exchange for other commodities (barter trade), the remaining is stored in the residential dwellings in preparation for the planting season or selling when market is available. There are no commercial storage facilities. Most farmers store produce in their homes or in raised structures near their home. A more efficient storage system needs to be constructed to ensure efficient and safe storage of the produce.

From the findings shown above, it can then be recommended that;

6 The agricultural land amounting to 2,050 feddans is available to be starting like a pilot project. This land has all the documentation indicating that it was given to the factory by the county administration. Although this land is available it is so small to supply the raw materials to the factory, this then necessitates the establishment of out growers and cooperative societies which can be able to supply the factory throughout the year. Therefore within 5 years the management should be able to look for more land so as to control a steady supply of raw materials and increase capacity. Before establishing the nucleus estate and out growers, the factory should first address concerns about the soil fertility for both the given agricultural areas and the farmers.

6 The consultants proposes two production lines for the vegetable oil processing, one production line of capacity 25 tonnes of seed per day to process both groundnuts and sim-sim (in the ratio of 60: 40 of groundnuts: sim-sim)and another production line of capacity 10 tonnes of seed per day to process shea nuts/ lulu. Thus production line 1 is to have a capacity of 7,500 tonnes of seeds per annum and production line 2 should have a capacity of 3,000 tonnes per annum for shea nut seed, though in the first years they will be producing at a low capacity.

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6 At the initial stage of the production period, the plant would require some years to penetrate into the market and develop production skill. Therefore, in the first, second and third year of production, the capacity utilization rate will be 60%, 80% and 100%, respectively. In the fourth year and thereafter, full capacity (100%) production shall be attained.

6 There are people who are willing to work in the plantation area; these people have been working on their farms, growing the same oil crops. This labour force does not require a high skill level since they have experience in growing of the same crops. There is also existence of Cooperative societies within the area, though there is need to increase the number of people participating in such farmer groups so as to increase the raw materials supply. There is need for the extension workers to make sure that farmers collect and preserve the shea nut trees to ensure a steady supply of shea nut raw materials.

6 The factory area is suitable and available for the processing of oil. The people occupying the factory land are willing to vacate to create way for the development of the factory. There are so many vegetable oil machinery manufacturers and suppliers from China, India, Germany UK, Denmark and other countries that have reliable machinery. These provide design of the plant layout, supply of machinery, installation, commissioning and a training component in the use of their technology. The production technology proposed for this project is mechanical extraction as opposed to solvent extraction which is not only expensive but unsuitable for such a location. There are two production lines, one for the processing of both sesame and peanuts at a capacity of 25 Mt tonnes of seed per day and the other for the processing of shea nut oil and butter at a capacity of 10 Mt tonnes of seed per day. In future the plant can be able to install a soap production line, but at the moment cooking oil should be the prime objective.

6 There is need to procure the services of a plantation and irrigation engineer to study the possibility of irrigating the areas since the lake is a distance away. Rain water can be channeled to a dam and then used for irrigation during the dry season.

6 The consultant can be able to provide services like carrying out design of the factory building, bid evaluation, supervision of the construction since he is well conversant with the area and would therefore like to see timely development of the oil mill.

c: environMent

The oil mill is located in MityinyBoma in the Western part of Yirol Town within Yirol West County, Lakes State. The factory lies on a 56,000m2 land, located at geographical coordinates of latitude N06.55545 and longitude E030.49465 at an elevation of 436 m above sea level. The land lies within an urban setting characterized by mixed land use, with a number of shops, homes, cattle farms, crop fields and institutions. It borders with Lake Yirol to the North and settlements to the West, East and South.

The proposed project will have significant positive impacts on the people and economy of South Sudan. It is expected to create jobs to the people, generate revenue to raw material suppliers, increase the supply of quality vegetable oil and increase the country’s tax base thereby contributing to the growth of the country’s economy. However, like any other developments, there are likely to be negative impacts on the environment during site preparation, construction and operation phases of the project. The major potential negative environmental impacts include: loss of habitat, degradation of the soil, loss of biodiversity, contamination of ground water, generation of: noise, waste, wastewater, dust and fumes. Other negative impacts will include: creation of new quarries and borrow pits, fire outbreak, injury to workers and oil spillage. In this report, specific measures have been developed in order to avoid, eliminate, minimize or compensate for these impacts.

To monitor environmental impacts both during construction and operation of the project, a detailed environmental monitoring plan is suggested. It includes issues to monitor, mitigation/enhancement measures proposed, timing, desired outcomes, indicators, persons responsible and any capacity building requirement. Successful implementation of the mitigation measures and the environmental monitoring

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plan will ensure that the adverse environmental and social impacts of the project are minimized to acceptable levels.

The following are some of the suggested mitigation measures to avoid, minimize or compensate for the likely negative impacts:

6 Establishing a forest in another area to off-set impacts that would be caused by clearing woodlands in Nyariel and Margogoup

6 Restoring quarries and borrow pits by backfilling, contouring and re-vegetating immediately after construction

6 Preparing a construction waste management plan which include the designation of appropriate waste storage areas, collection and removal schedule

6 Practicing Integrated Nutrient Management (INM) to avoid nutrient depletion or accumulation

6 Designing and implementing an Integrated Pest Management (IPM) strategy, giving preference to alternative pest management strategies, with the use of synthetic chemical pesticides as a last option

6 Undertaking risk assessments for all species from other countries to be introduced on the farm, paying specific attention to the potential for invasive behavior

6 Applying techniques for treating process wastewater by using grease traps, skimmers or oil water separators for separation of floatable solids; flow and load equalization; sedimentation for suspended solids reduction using clarifiers; biological treatment, typically anaerobic followed by aerobic treatment, for reduction of soluble organic matter; biological nutrient removal for reduction in nitrogen and phosphorus; chlorination of effluent when disinfection is required; dewatering and disposal of residuals; in some instances composting or land application of wastewater treatment residuals of acceptable quality may be possible.

D: orgAnisAtionAl FeAsiBility

At institutional level, the YOM Steering Committee will be established and constituted by Under-Secretaries from key Ministries, Departments and Agencies both at the Central Government and State Government levels, whose mandates enable enhanced performance of the primary growth sector (in the crop sub-sector). The Steering Committee, Chaired by the Under-Secretary Ministry of Commerce, Industry and Investment will meet periodically as and when determined to channel information on YOM through Ministries, Departments Cabinet and the Parliament. Furthermore, a YOM Technical Committee will be established and constituted by Director Generals (DGs) of key sectors linked to the YOM implementation with the Director General of Industry as Chair.

During the YOM project preparation and implementation phases, coordination will be managed by the Project Management Unit (PMU) under the MCII and headed by the Director General MCII with the Under Secretary MCII as the Accounting Officer.

The YOM is structured as a public-private partnership investment between the Republic of South Sudan and the successful investor. The issue of whether it is a Rehabilitate, Operate and Transfer (ROT), or Build, Operate and Own (BOO) or Build, Operate and Transfer (BOT) will be decided in the post-feasibility study phase.

Since there will be a contribution to the investment capital by public funds on the YOM enterprise, a government appointed agency will perform the audit function on the enterprise. The YOM shall recruit a qualified lawyer eligible to practice in the RoSS, who will serve as the corporation secretary as well as the board secretary. To foster corporate governance, the YOM will be governed by a non-executive Board of Directors (a chairperson and six other members) whose composition and terms of appointment will be negotiated between RoSS and the successful investor.

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The factory management team will be headed by a Managing Director who will be deputized and supported by the departments of: Finance, Human Resources, Production and Maintenance, and Marketing and Sales. Additionally, each of the YOM nucleus estate in Nyaliel and Margogoup will be run by Farm Managers with at least 50 permanent labourers and supported by casual labourers as the need arise during peak periods.

The YOM will be implemented in a 3-phased approach. During phase 1 (first three years of the program), the nucleus estates will be opened as well as recruitment of extension workers, organizing farmers into cooperatives, construction of the factory and nucleus buildings, and establishing management and technical staff. Other activities will include: procurement, installation and commissioning of machinery and establishing of marketing infrastructures and centres. This phase will also cover initial production testing at about 40% of the full potential. During phase II (3-6 years of the program), there will be continued organizing of farmers into cooperatives, hiring of more human resources, development of market infrastructures and feeder road network. This is a critical phase where the manufacturing activity as well as raw material production will be taking place at the same time. It is in this phase that about 75-80% of the production will be realized. This phase will require close monitoring by the MCII and other management teams. In phase III, (after six years of production and manufacturing), outward market research for the project will take place. This phase will also require exploring expansion areas in the other States to boost oil production for the RoSS.

Establishment of an effective and efficient Monitoring and Evaluation (M&E) system with effectively set performance indicators will help achieve the project goals. The organizational analysis presents key milestones for M&E system that the project shall further develop.

It is recommended that the YOM ensures it collaborates and networks with key players in order to lay a fertile ground for the successful implementation of projects, as this enhances the success of the project at all levels.

e: FinAnciAl AnAlysis

The overall analysis indicates that the project is financially viable. The Net Present Value (NPV) analyzed for a period of 10 years while selling a litre of Edible Oil at 8SSP is USD 4,154,705 (SSP12,464,115) .This is greater than zero which means the project inflows can be able to finance its outflows. The projected internal rate of return over the same period is 15% which is above 12% the lending rate (discount factor) prevailing in the Republic of South Sudan.

The project Pay Back Period is 8 years which shows that initial capital injected can be recovered before the desired project period of 10 years. The Average Gross Margin in the first 5 years is 35% but raising steadily thereafter to 78% by end of 10th Year. The Net Margin improves from the first years to 42% in the tenth year, which shows improving performance over the project period.

Projections on liquidity tested using current ratios and quick ratio is on average above 2 throughout the project life, which indicates satisfactory working capital for the project. As requested by the client, the table below summarizes the financial viability of the proposed project:

Measure Indicator

Net Present Value(NPV) USD 4,154,705 (SSP 12,464,115)

Rate of Return: Internal Rate of Return(IRR) 15%

Payback Period 8 Years

Current ratio More than 2 years in all years

Quick Ratio Above 2 throughout project life

The project indicates an increasing trend of net profits after tax and dividends from USD 82,514 (SSP -247,542) in year 2 to USD 12,555,738 (SSP 37,667,214) in year 10.

The major revenue from this project will be derived from edible oil. Based on the estimated production and operational costs of the project and the current trend of edible oil prices in RoSS market which

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ranges from 7SSP and 11 SSP, the consultant estimated selling price of edible oil by the project at 8SSP per litre. The expeller cakes that are a by-product shall generate revenue for the project as well. The projected price for expeller cakes shall be 1.4 SSP per Kilogram (Kg). In both case, the price shall increase by the inflation factor of 10% in subsequent years.

The changes in the projected income statement will mainly be influenced by revenue generated from sales of edible oil and expeller cakes, operating expenses and financing costs. The project projected balance sheet shows a positive growth of assets arising from positive performance of the project. The assets are projected to grow from USD 34,127,082 to USD 84,931,105.

Risks incidences are prone to all levels of Yirol project implementation. These include country level, state level and project level as inherent risks as well as at budgeting, accounting, internal control, funds flow, financial reporting and auditing levels, as control risks. In order to militate against the anticipated financial risks, the following would among others be necessary features of a strong financial management system for Yirol Oil Mill project:

6 Yirol Oil factory management should have adequate number and a mix of skilled and experienced staff;

6 The internal control system should ensure the conduct of an orderly and efficient payment and procurement process, and proper recording and safeguarding of assets and resources;

6 The integrated information system should support Yirol project requests for funding and meet the reporting obligations to fund providers;

6 The system should be capable of providing financial data to measure performance when linked to the output;

6 An adequate internal and external audit mechanism supported by the National Auditing Office in collaboration with MCI;

The major assumption for the project is that the project will fund its operations through shareholding of GoSS, the private Investor and surplus revenue. Other assumptions are that: the current political and economic stability, with the accompanying government support will prevail and improve over the project period of 10 years, the project will able to build the Board, Management, Staff and other institutional capacity to desired levels, the inflation rate will be maintained at 10% per year and the exchange rate is 1USD equal to 3 SSP.

For its implementation, the project will require a total cost of USD 24,372,703(SSP 73,118,109) where USD 13,285,655(SSP 39,856,965) is initial capital investment, USD 1,354,249(SSP 4,062,747) is Core Man Power Costs, and USD 9,732,799(SSP 29,198,397) is working capital.

The project’s funding in its investment can be phased as indicated in the following table:

Activities/Items Year 1 Year 2 Year 3 ,4 and 5

Civil works & Waste manage-ment facility

USD 7,480,319 (SSP 22,440,957)

Factory Machinery(Lines 1& 2), Office Equipment and others (refer to table 2 for details)

USD 7,159,585 (SSP 21,478,755)

Working CapitalUSD 9,732,799 (SSP 29,198,397)

The project will require a total of USD 5,115,982(SSP 15,347,946) for the operating capital in the first six months. The detailed breakdown for the first 6 months is presented in the report.

The major assumption for the project is that the project will fund its operations through shareholding of GoSS, the private Investor and surplus revenue. Other assumptions are that: the current political and economic stability, with the accompanying government support will prevail and improve over the project period of 10 years, the project will able to build the Board, Management, Staff and other institutional

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capacity to desired levels, the inflation rate will be maintained at 10% per year and the exchange rate is 1USD equal to 3 SSP.

Based on the financial analysis indicators, the project is worthwhile to undertake by the Government of RoSS.

conclusion

From the findings of the study, the YOM revitalisation project has been found to be viable. The agricultural area for the growing of the seed crops like sesame and peanuts is available to support the factory in the short run. There is strong government commitment to the revitalization and sustainability of Yirol Oil mill both at national and state level. The Consultant has further established that the YOM is consistent with the RoSS development plan and the Constitution of the MCII which are engaged in identification of priority flagship projects within an economic and social development framework for South Sudan. The factory is strategically located, in the centre of a growing town, where, if production of oil starts, there will be a ready market in addition to other market hubs outside Yirol. Yirol Oil will have a big competitive advantage over the cooking oils on the market in terms of pricing; Yirol Oil will be priced lower than imported oils since it will save on importation costs like transport and cross border tariffs.

The proposed project will have significant positive impacts on the people and economy of South Sudan. The foreign exchange earnings on exports of YOM product lines will also contribute to building reserves of the country’s Central Bank hence ensuring stability of the financial account of the Balance of Payments (BoP). Also, stability in exchange rate and availability of the edible product lines has implications for price stability and inflation. The project is expected to create jobs to the people, address rural poverty through involvement of smallholder farmers in oil crop production and processing, improve the health of the population through increased vegetable oil intake at the community level, and increase the country’s tax base thereby contributing to the growth of the country’s economy.

Basing on the financial analysis indicators, the Net Present Value shows that the project inflows can adequately finance its outflows, which further proves the viability of the project. The Internal Rate of Return (IRR) over a 10 year period of the project life is 15% which is above the discount factor of 12 % (lending rates prevailing in South Sudan), which once again proves that the project is feasible.

2

Chapter: one

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1.0 INTRODUCTION

1.1 introDuction

This report presents the findings of the Feasibility study of the defunct Yirol Oil Mill (YOM) which is located in the western part of Yirol Town in Lakes State, South Sudan. The objective of the Feasibility study was to assess and evaluate prospects for the revitalization of the project. The findings will lead to an eventual design and development of strategies to revive the project given the availability of the primary inputs: raw materials, land, labour and good will of the government both at the state and central level. It is envisaged that this project will stimulate growth by creating job opportunities and help improve the economy of the state and that of Government of South Sudan by leveraging locally grown oil seeds and other indigenous crop species.

Agriculture is the backbone of the South Sudanese economy as recognized in Chapter One of the Constitution on the Fundamental Objectives and Guiding Principles, Article 37(2)(e). The article enacts that all levels of government shall promote agricultural, industrial and technological development by adopting appropriate policies and legislation for the encouragement and attraction of local and foreign investment. Yirol Oil Mill is therefore among the pioneer project that works towards the actualization of the above constitutional requirement. It is in support of the agricultural, industrial and technological vision of the Republic of South Sudan (RoSS).

The study is a follow up of previous studies conducted on the factory including the pre-feasibility study. The previous studies were shallow in areas that are very important for implementing the YOM project. The previous studies never focused on marketing, production infrastructure, and engineering requirements. It is against this background that the Ministry of Commerce, Industry and Investment (MCII) commissioned this study.

1.2 speciFic oBjectives

6 Visit Yirol Town in Lakes States to assess and prepare a report on the status of the assets of the project which include: factory buildings, machines, equipment and other physical assets;

6 Consult with the State Ministry of Agriculture and Forestry on availability of indigenous species which could be used in the project to yield quantities of desired qualities;

6 Consult with the Ministry of Cooperatives and Rural Development to establish whether there are programs designed to foster development of local farmers associations;

6 Assess and report on the required infrastructure including roads access, markets, preservation facilities, export hubs for the produce to reach its intended destinations;

6 Advise appropriately on the road map to revitalize the factory to start operations.

1.3 BAckgrounD

1.3.1 Yirol Oil MillThe Yirol Oil Mill is one of the first few industrial projects that were established in South Sudan. It was set up in 1948 under Yirol Cooperative Society of the Ministry of Agriculture by the colonial government, with the aim of producing quality oil from groundnuts and sesame. This plant used to operate one shift a day; each shift consisted of eleven gross hours and eight effective hours. In 1963, the factory collapsed as a result of war between the North and South Sudan. After the war in 1973, the factory was then renovated and put under Regional Development Corporation. In 1983, the factory was again destroyed as a result of the war between the Sudanese Armed Forces and Sudan People’s Liberation Movement/Sudan People’s Liberation Army (SPLM/A). With the coming of peace in South Sudan after the 2005 Comprehensive Peace Agreement (CPA), the Government of South Sudan emphasized the need for

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rehabilitation of all national industries that were destroyed during the war, including Yirol Oil Mill as a measure of stimulating economic growth and providing employment to the people.

The Oil Mill factory is located in Mityiny Boma in the western part of Yirol Town within Yirol West County, Lakes State, 123 km from Rumbek. The factory land measures about 56,000m2, including the factory premises, factory residential and extension areas. It lies at geographical coordinates of latitude N06.55545 and longitude E030.49465 at an elevation of 436m above sea level.

Lake Yirol

Factory manager’s house

Yirol Town

Factory Land

Factory Buiding

Figure 1: A satellite showing the location of Yirol Oil Mill

The land lies within an urban setting characterized by mixed land use (shops, homes, cattle and cultivation and institutions). It borders with Lake Yirol to the North and settlements to the West, East and South.

1.3.2 Current Status of the ProjectThe factory premise has a main factory building, a manager’s office, an engineer’s office and two oil storage tanks. The factory building is divided into a shed, a machine room and a store. It is currently being used as a prison, a store and a residential area for the prison authorities. It still houses factory machines that are obsolete and need to be replaced as will be elaborated in chapter three of this report. There is a manager’s residential with two permanent houses, huts and a VIP toilet at about 200m from the factory premises. The houses are currently occupied by local people. The factory residential and extension areas are occupied by homes for the local people. There is also a building for department of Agriculture and Forestry, Yirol West County and a home for the commissioner, Yirol West County. The fact that the factory land has squatters raises a legal question on the ownership of the land. This question is discussed in detail in chapter four under the regulatory framework.

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1.3.3 Socio-economic Environment of South Sudan

Administrative Structure

South Sudan is made up of ten states which correspond to three former provinces of the Sudan: Equatoria (Central Equatoria, Eastern Equatoria, and Western Equatoria); Bahr el Ghazal (Northern Bahr el Ghazal, Western Bahr el Ghazal, Lakes, and Warrap); and Upper Nile (Jonglei, Unity, and Upper Nile). The ten states are further subdivided into 86 counties.

Figure 2: A map of South Sudan showing the location of its ten states

Lakes State (the project area) is divided into eight counties, namely; Awerial, Rumbek North, Rumbek East, Rumbek Central, Kisambe, Yirol West, Yirol East, Wulu and Cueibet.

Population and Ethnicity

The “Fifth Population and Housing Census of Sudan”, conducted in April 2008 estimated the population of South Sudan to be 8,260,490; 4,287,300 males and 3,973,335 females, with over 50% of the population being below the age of 20.

Figure 3: Population of South Sudan by Age

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South Sudan.

Yirol West (103,190) was the third highly populated county in Lakes State, after Rumbek Central (153,550), Cueibet (117,755) and Rumbek East (122,832).

Figure 4: Population by County in the Lakes State

South Sudan is home to around 60 indigenous ethnic groups. Among the largest ethnic groups are the Dinka (more than 1 million/approximately 15 percent combined), Nuer (approximately 10% percent) and Shilluk. The Shilluk constitute a historically influential state along the White Nile, and their language is fairly closely related to Dinka and Nuer. In Yirol, there is a mix of traders from the North of Sudan, restaurants run by East Africans as well as local Dinka and Atuot people.

Economy

The economy of South Sudan is predominantly rural and relies mainly on subsistence farming, despite its many natural resources such as petroleum, copper, chromium ore, zinc, tungsten, mica, silver, gold and hydropower. Yirol’s economy, the project area, is dependent on three pillars. These include: cattle ranching, fishing and subsistence agriculture. Cattle ranching is mainly associated with frequent movement of animals in search of green pastures, in concert with the rain patterns in the area. Fishing takes place on nearby Lake Yirol and River Payii.

1.4 south suDAn econoMic DevelopMent AgenDA

1.4.1 National ContextAccording to UNDP Human Development report 2010, South Sudan is rated among the poorest countries in world with low Human Development Index and ranked 154 out of 159 countries (MCII, 2011), in terms of per capita income, life expectancy, infant and child mortality, maternal mortality among the many socio economic indicators. This is attributed to the long war that lasted for about 20 years, characterised with discrimination from resource sharing from the Government of Sudan. Over the years, it is indicated in the same report the regime of Sudan over dominated the implementation of development and investment programmes including agriculture, livestock, fishery, mining, among others and gave no room for private sector participation to extend economic activities to the South Sudan. This could have exacerbated the high poverty and inequality trends and levels of under development being exhibited in South Sudan Government, away from North Sudan Government. All these historical events and discrimination in resource sharing and access to development have formed the South Sudan government quest for development. Being aware that there is potential to diversify her economy from over depending on oil which currently is contributing over 90 percent, agricultural investments and programmes have been identified as alternative potential substitutes for the economy and income improvement in the medium and long term. It is this perspective that the project of Yirol is being fronted by the Government of South Sudan to demonstrate as a catalyst for development and economic transformation, where a greater mass of the population in terms of employment and consumption would benefit.

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1.4.2 Potential for Agriculture and Other Land Resources The Policy Report on Trade and Investment for South Sudan (MCII, 2011) shows that the country has virgin land which is suitable for agricultural production and also for livestock production. Nearly 85% of South Sudan land is arable for production of various crops both cash, food crops, cereal crops, drug plants, fibre crops, fruits and plantains, oil crops pulses, spices, root crops and vegetables. This crop composition provides huge potential for agricultural investments and exports for the country and this should be capitalised on by the government. The mix of crops including drug trees as well as oil crops and perennial crops such as coffee, tea and cocoa gives advantage for the country to diversify its export earnings for stability of balance of payments as well as the current account.

In terms of forestry, about 68% of forestry resources are found South Sudan. It is reported that about 85% of the entire Sudan’s sawn timber comes from South Sudan (MCII,2011). This provides a greater opportunity for rapid growth and development through infrastructures and exports.

In terms of livestock, South Sudan is so rich in variety of species. It is reported that almost half of the population of South Sudan derive their livelihood from animal resources. Cattle, sheep and chicken are the most common animal resources owned by several tribes. It is estimated that there are 19,240,000 head of cattle, 11,290,000 heads of goats, 11,322,000 heads of sheep, 5,687,000 chickens, 100,000 camels and 10,000 donkeys. A look at the dominant species indicates that there is huge potential for investment in this sector that would create employment to the country as well as contribute to revenue base, both in terms of domestic taxes as well as export receipts.

South Sudan has abundant water resources. It has heavy tropical rainfall ranging from 400 mm to 2200 mm per year, covering a period of six to nine months. A bigger proportion of South Sudan depends on Nile and its tributaries, seasonal streams, natural lakes, swamps, water catchments and in some areas on underground water, for consumption, crop and livestock production and for transports. River Nile as well as some lakes are sources of fish (MCII, 2011).

There is a huge potential in fishery and aquaculture in the country (MCII, 2011). Fishing activities are centred along the White Nile, the Sober, Pibor, and Ju rivers and their tributaries. There a wide variety of fish species of high potential that provides South Sudan with advantage on food security and export incomes. South Sudan is also rich in wild life resources. Some of the best wild life species are found in South Sudan. This prides a high potential for tourism sector growth and foreign revenue earnings from the sector. South Sudan is also endowed with a variety of bird species potential for tourism sector growth.

Petroleum and minerals also exist in many parts of South Sudan. More petroleum discoveries are reported in parts of Great Upper Nile and Abyei. This gives a great potential for additional export revenues from oil. There is need to diversify the export base of the economy from oil into agriculture for long-term economic sustainability against future shocks in oil prices. There is also great potential for a variety of minerals in South Sudan. With the mix of crop and mineral resources, South Sudan looks to have a stable economic future if investment in this sector is well coordinated.

1.4.3 Trade and Investment Policy for South SudanThe Republic of South Sudan has developed a Trade and Investment Policy to facilitate investment in the country. This policy allows for interventions of both public and private sector in fostering development. In this framework, the role of private sector is emphasised. Trade and Investment policy is based on specific values and guided by specific principles. In this policy, free market economy is embraced. However, being a young state, implementing a free economy in development may not achieve the desired results. Where there are factors of production (labour, capital, markets) and other factors to support investment, the role of government in provision of public goods such as roads, schools, health institutions, entrepreneurship development, and development of markets is very important. Republic of South Sudan has to invest in these areas to gradually build private sector which eventually will create room for free markets operations in the supply of goods and services. It is understandably agreed that free markets have failed to bring desired growth expected in most of the developing countries by World

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Bank and International Monetary Fund (IMF). The new paradigm shift would be then to adopt a mix of strategies where the state plays a moderating role. Where there are market failures in development, governments must intervene to correct them. This is consistent with the Keynesian economic theory which emphasises the role of the state in correcting market failures.

Trade and Investment Policy focuses on: domestic trade, promotion of local products, consumer welfare, external trade, competition and fair trading, international trade, economic partnerships, and export diversification among others, that are important in promoting trade and investment in the country. Its focus on international trade will enable the country penetrate external markets for exports. The policy also emphasizes quality and standards for both imports and exports which is important element in international trade.

To strengthen the successful implementation of this policy, RoSS is fully committed to the promotion of the private sector as the most important player in the economy in the provision of foods and services, investments, creating employment and other economic activities in the country that are to bring growth. Private sector development is a constitutional objective of the RoSS (The Interim Constitution of South Sudan, 2005, Paragraph 40 (2). This provides room for involvement of both domestic and external investors in the country. But to avoid crowding out of domestic investors, the government should emphasise Public Private Partnerships (PPPs) as well as joint venture partnerships in implementing strategic projects like Yirol Oil Mill. In the implementation of this policy, government has considered several factors that affect the private sector so that appropriate interventions are sought. Among the constraints identified include; political uncertainty, governance problems and weak public institutions, poor physical infrastructure, lack of capital and scarcity of financial resources. Others are: high levels of taxation and inadequate tax regimes, access to land, low level of entrepreneurship and skills, and underdeveloped markets among others. Government will therefore initially have to focus on how to correct these challenges to enable private sector operate efficiently.

In order to effectively coordinate the implementation of Trade and Investment Policy for RoSS, government has established the Ministry of Commerce and Industry (MCII) to implement the policy. The proposed structure of the Ministry into the Directorates of: trade; standards, private sector development; planning and communication; and administration and finance will be sufficient to implement the policy in the medium term (MCII, 2011). But we can say that where market failures arise as the government develops, there will be need for a review of this policy to cater for the emerging issues in trade and investment in the country.

1.5 stuDy ApproAch AnD MethoDology

The study employed different approaches for the different thematic areas. The methodology for each thematic area is further detailed in the respective chapters

1.5.1 Document ReviewA number of relevant documents were reviewed to obtain information on the proposed project, site environment and the industry sector in South Sudan. The documents reviewed include: previous reports on YOM, relevant policies and laws for the Republic of South Sudan, statistical abstracts among others.

1.5.2 Field Surveys Specific field surveys were undertaken in the project area to verify information collected from the review of documents and acquire supplementary data to fill gaps realized from the review of existing information. Surveys were undertaken on the different components of the environment; the physical (topography, geology, soil, hydrology and drainage), the biological (flora and fauna) and the socio-economical / socio-cultural environment.

To determine the soil characteristics of the project area, three soil samples were collected from the factory premise and two plots of land proposed for raw material growing in Nyariel and Margagoup. To

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South Sudan.

determine the water quality of the area, two samples were collected from Lake Yirol and River Payii. An inventory was carried out to record the dominant plant and animal species in the area to establish the ecological status of the project sites. To determine the socio-economic or cultural status of the area, social surveys were conducted at household level. The soil and water samples were analyzed in the laboratory using standard methods, according to Jackson and Black, 1965 & 1982 and APHA, 1995 respectively.

The technical assessment employed a combination of different methodologies which included: visual observation and inspection at the site, GPS, use of tape measure and schmidt hammer, laboratory analysis of soils, random traffic survey among others. The methodology for each component of the technical assessment is detailed in Chapter Three.

1.5.3 Stakeholder Consultation Consultations were held with various stakeholders in the community surrounding the project area and at national level. The consultations were in form of individual interviews with government officials, informal conversational interviews with community members and Focus Group Discussions (FGDs) with key community groups like women groups, farmers among others. In addition to the above stakeholders, the marketing team conducted FGDs with cooperatives, sales outlets (wholesalers, retailers and supermarkets), and end users/consumers. Key informants were purposively selected from the relevant ministries, opinion leaders, political leaders, and acting project staff. The geographical scope of the consultations covered three states of: Central Equatoria (the Business Center for South Sudan), Lakes state (where the project is located) and Northern Bahr el Ghazal (given its political and social characteristics). The study purposively sampled 60 farmers who deal in oil seeds. The study also interfaced with cooperative societies dealing in specific raw materials in the Lakes State where the project is expected to get the biggest volume of raw materials.

The study also purposively selected sales outlets in Rumbek, Aweil, Yirol and Juba towns. The outlets were categorized into wholesalers, retailers, groceries and supermarkets and took equal share of the questionnaire. The study sampled consumers who could be potential end users of the cooking oil products. Consumers were engaged through FGDs in order to have in depth deliberations about their opinions.

1.6 orgAnizAtion oF the report The main report is laid down in 7 chapters that are thematically generated according to the study objectives as shown in Table 1.

Table 1: Organization of the Report

Chapter Key topic

Chapter 1 Introduction: Objectives of the study, background, and methodology for the study

Chapter 2Market Feasibility: Availability of raw materials production patterns, and description of the oil industry. The chapter also identifies strategic intervention areas in production, marketing, distribution and regulations. It also presents consumption and sales projections and the implementation framework.

Chapter 3Technical Feasibility: Status of the physical assets, capacity and suitability of the present oil processing machinery, adequacy of the electrical and mechanical components of the factory, and assessment of the area of production. The chapter also provides a road map for revitalizing the factory as well as the proposed plant lay out.

Chapter 4Environmental Feasibility: Environmental legislation, description of the environment, analysis of potential impacts and alternatives; mitigation plans and the management and monitoring plan

Chapter 5Organizational Feasibility: Institutional framework, factory organization, workforce and training requirements and farmer organizational framework. The chapter also presents the procurement process for the PPP arrangement, YOM implementation blue print, risk management measures and the monitoring and evaluation plan.

Chapter 6Financial Feasibility: The key topics in the chapter of financial analysis include; estimated costs of the project, financing plan for investment, cash flow projections, projected income statement and balance sheet, financial risk, mitigation measures and assumptions.

Chapter 7 This chapter expounds on the macro-economic and development implications for the project

10

Chapter: Two

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South Sudan.

2.0 MARKET FEASIBILITYThis chapter presents findings of the veracity test on the marketability of the project and its products. The chapter addresses four objectives: (i) to study the availability of raw materials and their sustainability to realize long term project objectives; (ii) to define the product development process based on the customer’s needs and to ensure its appeal to prospective customers; (iii) to describe the edible oil industry in South Sudan and asses the magnitude of competition so as to develop strategies for positioning the project as a market leader; and (iv) to describe the market infrastructure and propose strategies for effective distribution of the products. The consultant visited three states of: Central Equatoria, Lakes, and Northern Bahr el Ghazal. In Central Equatoria, the team visited Konyokonyo, Jebel and Malakia and Juba central markets, Rumbek central and Yirol markets in Lakes while Northern Bahr el Ghazal, the team visited Aweil central and Naivasha markets. The consultant also visited farming villages in the Lakes to assess the availability of raw materials. Data collected was analyzed and this report is based on the findings from the study area, secondary data as well as the technical knowledge and experience of the consultant.

2.1 AvAilABility oF rAw MAteriAls

2.1.1 Agriculture in South SudanSouth Sudan experiences unimodal and weakly bimodal rainfall regimes, the bimodal areas covering much of Greater Equatoria (Western, Central and Eastern Equatoria), and the unimodal areas, the rest of South Sudan. This results in a range of growing seasons from 280-300 days in the south parts of South Sudan to 130-150 days per annum in the northern parts. Agricultural performance consequently varies considerably from place to place and from year to year, ranging from the possibility of two harvests per annum in Greater Equatoria between Tambura and Kejo-Keji, to one harvest in the unimodal areas further north. However, in years of poor rainfall, it is not uncommon for crops to fail in the marginal areas of Eastern Equatoria and Northern Bahr el Ghazal (FAO/WFP crop and food security assessment mission to South Sudan 2010).

Agricultural production is, for the most part, based on small, hand-cultivated units, often farmed by women-headed households. Following the loss of large numbers of draught animals during the civil war, FAO and NGO-based extension agents have made, and continue to make, efforts to introduce or re-introduce animal traction on a small-scale in Central Equatoria, Western Equatoria, Lakes, and Bahr el Ghazal. However, despite the interest professed by farmers, the 2008 Crop and Food Security Assessment Mission to South Sudan (CFSAM) concluded that the policy of providing ploughs and oxen free of charge was flawed because farmers tended to sell their oxen for slaughter after two or three years of work. Only in the Upper Nile districts of Renk, Melut and Wadakona, and to a limited extent in Malakal and Bentiu (Unity State), is tractor-farming conducted at a level that could be compared with the commercial farms of South Kordofan and Blue Nile States. However, RoSS recently purchased more than 90 tractors from India and distributed at least seven to each of the ten states with the objective of encouraging the mechanization of land preparation and other field operations. The tractors are, in principle, availed for hire to farmers, farmer groups and cooperatives, usually at a cost of about 100SSP/feddan for land preparation (FAO/WFP crop and food security assessment mission to South Sudan 2010).

Smallholder farming systems in South Sudan encompass a wide range of sorghum landraces, with minor crops of maize (often grown close to homesteads for green consumption), bulrush millet, finger millet and upland rice according to location. Cassava is widely grown, especially in the centre and south but also in the north-west, depending on access to planting material. In the north of South Sudan especially, but also elsewhere, particularly in areas of sandy soil and in years when the rains arrive late, groundnuts make an important contribution to household diet, and, as a cash crop, can contribute to household income. Okra, cowpea, green grams, Bambara nuts, sesame, pumpkin and tobacco are also widely grown. In the south and central areas, and in parts of Western Bahr el Ghazal, cassava is the most important contributor to the household food economy, providing at least half of the carbohydrate ration; in parts of Central and Western Equatoria, sweet potato, yam, coffee, mango and papaya are also common. (FAO/WFP crop

12


South Sudan.

and food security assessment mission to South Sudan 2010)

The ravaged and virtually unusable road network that resulted from the many years of civil war prior to Comprehensive Peace Agreement (CPA) has, since then, received the attention of RoSS. The benefits resulting from de-mining, clearance and grading of many of the major trunk roads are very evident; consumer goods are now found in abundance in many urban centers where they would not have been found one or two years ago. However, feeder roads are still mostly unusable, and this continues to be an obstacle to farmers’ access to inputs, as well as a serious disincentive to surplus production. (FAO/WFP crop and food security assessment mission to South Sudan 2010)

2.1.2 Production of Oil Seed in South SudanThere are various crops grown in South Sudan ranging from cereals to vegetables and oil crops. The sampled farmers in the Lakes state were asked about the crops grown on their farms. The information given was further verified through FGDs. The results show that groundnuts, sesame, sorghum, beans, millet, and okra are the major crops grown. Groundnuts and sorghum constitute a big percentage of crops grown in the great Bahr el Ghazal region states. Sesame is also widely grown in the Great Bahr el Ghazal region states. This is a success story because farmers have experience growing the raw materials for the factory.

Figure 5: Crops Grown by Farmers visited in the Lakes State

2.1.2.1 Types and Species of Oil Seeds Sampled

Ground Nuts (Arachis Hypogaea L.)

Groundnut seeds contain 40 - 50% fat, 20 - 50% protein and 10 - 20% carbohydrate depending on the variety. The sampled farmers produce an estimated average yield of 0.15 to 0.3 tonnes per acreage for the local red beauty variety.

Production Constraints

Groundnut production fluctuates greatly from farmer to farmer and yields per hectare are far below the industry average productivity in the region. Groundnut production in South Sudan is constrained by various factors such as:

Low level of inputs; Sampled groundnut farmers were small-scale farmers, with production limited by low levels of inputs. These include; limited fertilizer application, poor agronomic practices, and poor varieties. With such low levels of inputs, the potential yields expected are never realized on farm.

Pests and diseases; According to the plant protection department in the Ministry of Agriculture, common pests and diseases in South Sudan are flies, beetles, aphids, jassids, white flies, army worms, grasshoppers, birds, dessert locusts, and groundnut rosette (CFSAM 2010). Reduction in crop yields due to pests and diseases is exacerbated as a result of inadequate equipment and protection products, poor coordination, limited human capacity, and crop susceptibility to pests and diseases. There are no

13


South Sudan.

reliable estimates of crop losses caused by pests and diseases. However, subjective estimates point to 25% up to 40% crop losses. (Plant protection policy, Ministry of Agriculture and Forestry 2011)

Pests and diseases could be held to tolerable levels if the growers employ Integrated Pest Management (IPM). IPM involves using a combination of cultural practices, management techniques and protection products. If well employed, IPM could lower costs, keep pests below economically damaging levels and provide growers with greater profit. The directorate of plant protection in the ministry of Agriculture could take the leading role in implementing IPM.

Rainfall and soil moisture; Rainfall is a significant climatic factor that affects groundnut production. Low rainfall and prolonged dry spells during the crop growth period were reported to be the main reasons for low average yields in most of the regions of Asia and Africa (Camberlin and Diop, 1999; Reddy et al., 2003). According to FGDs, South Sudan experience excessive rains that cause flooding. This was reported to destroy crops including groundnuts.

Seed supply; A focus group discussion with the directors under the guidance of the Director General of Crop Production in the Ministry of Agriculture reported that the groundnut seed sector is faced with many constraints; limited supply of breeder seed, poor seed quality control, poor demand estimation and inadequate distribution systems. Secondary constraints were reported to be lack of established grades and standards. Physical factors also constrain seed supply such as: groundnut has a low seed multiplication rate, seed is delicate, bulky, sensitive to heat and moisture, and susceptible to pest attack. Thus, seed production, storage and quality control pose problems at all stages of the seed production chain.

Limited research and breeding centers; The study did not come across any deliberate research into improvement of ground nuts species in South Sudan. This has promoted continuous inbreeding which consistently produces the same poor yielding varieties. However, an interview with key informants revealed a change in climatic environment and resistance of crop pests to natural immunity. The situation could be reversed by investment in crop research and development.

Political instability; Twenty-one years of civil war imposed a horrendous loss of life on South Sudan. It has also depleted the country’s capital base. Young men left their villages, which depleted the labour force, and key infrastructure such as roads, communication and irrigation systems were destroyed or neglected during the conflict. South Sudan’s fertile soil became scarred with mines and unexploded ordinance. This has left also the groundnuts industry less vibrant and uncoordinated. Worse, many productivity enhancing technologies fell into disuse during this period, leaving South Sudan yields much lower than those of other less developed countries with similar agro-ecologies. Farmers in some states where mechanization had been well established, suffered tremendous losses as a result of the political instability and were suddenly forced back into hand hoe cultivation. The result has been a vicious circle of low input/low productivity agriculture that has proved very difficult to break.

The Lulu Tree (Shea nut Tree)

The nilotica variety of shea nut tree (called lulu in Arabic) grows mainly in a narrow band of savannah extending from Senegal to Ethiopia. Lulu trees grow abundantly on the ironstone plateau and the alluvial plains of South Sudan. This medium sized deciduous tree rarely exceeds 15m, and is estimated to live between 200 to 300 years, with 15 to 20 years of growth required before fruiting. The tree has a rich bounty of nutritious lulu nuts and yields at the exact time of the seasonal hunger. The lulu tree is famous in South Sudan as a vital natural resource. The economic value of lulu nuts is also extremely high, providing families with income and household food security. The Nilotica variety of shea nut produces pure oil that needs no bleaching and or deodorization before processing into oils and skin care products. Nilotica oil has a naturally pure and mild flavor that requires little processing, and is a highly coveted additive for skin and hair care products. Rich in olein, nilotica oil from South Sudan is superior in cosmetics and is known in South Sudan and around the world for its positive effects on the digestive system, the hair and skin. In South Sudan, the tree thrives in the Bahr el Ghazal and Equatoria regions, where it has been used for centuries for oil and foods. (Lulu Life Sudanese Shea Butter Project document 2010)

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South Sudan.

Historical Usage of Lulu Oil

Over the past century, the secrets of the shea nut have been unearthed and passed down by South Sudanese, the traditional guardians of the lulu tree. The people share a symbiotic relationship with this life-giving tree, eating the fruit, processing the nuts into oil and enjoying the tree’s cool shade. The nutritious oil was particularly important during Sudan’s civil war and is still a main source of food security during the yearly dry season.

Figure 6: Shea nut Seeds and Shea nut Tree

Lulu Tree production potential

According to Boffa (1999), there are more than 500 million fruiting shea trees across the production belt and FAO estimate that the total shea nut production is approximately 600,000 mt per year. An average fruit yield per tree was conservatively estimated at 15-20 kg/year, Ruyssen 1957 and later more optimistically at 25-55 by Fleury (1981). Schreckenberg 1996 calculated an average annual yield of 5 kgs dried kernels per tree in a study in Benin. This would yield approximately 1.8 litres of oil.

Shea markets

6 The shea market is divided into three distinct categories:-High volume, low value locally processed products; high volume, intermediate value export to the food processing market and low volume high value export to the cosmetics market

6 By far, the largest part of the Shea production (65%) is not harvested, of the 35% which is gathered by women and children, 30% is locally processed, at an extraction rate of 20%, to make an annual production of 100,000 mt of local butter. Virtually all of this is used as local cooking oil. The remaining 5% or less is exported, mostly to the food industry, which uses the shea butter as a Cocoa Butter Equivalent (CBE). Shea butter is currently trading on the international market at 50-60 US dollar cents per kg, (US$500 / mt). It is estimated that only 5% of the 65,000 mt exported to Europe and North America is used in the cosmetics industry, however, in a report by Collinson and Zewdie-Bosuener, (2009), this level is rising.

Traditional Processing of Lulu Oil: Taking a case study of Lulu Works, an initiative of Lulu Life Sudanese Shea Butter Project by a French non-government organization MEDIC (Medical Emergency and Development International Committee); Wild-crafted, non-certified organic lulu nuts are collected and fully dried, then pounded into a mash using a large mortar and pestle called a funduk. Men and Women push the mash through a hand-powered cold press mill that squeezes the oil from the nuts, retaining the nutritive properties and yielding clear, lightly scented oil that transforms readily into a creamy butter. They add beeswax and essential plant oils to convert the lulu oil into naturally pure soaps and lip balms.

Sesame (Sesamum Indicum L.)

6 Sesame is one of the most ancient oil crops in the world (Weiss, 1983, Ram et al., 1990). Almost all sesame cultivation and consumption occurs in developing countries with only 10% entering the international trade (Kambikambi et al., 1997). According to FAO (2001), the leading producers of sesame in the world are India, China, Myanmar and Sudan. In

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South Sudan.

Africa, Sudan (before splitting into Sudan and South Sudan), Uganda and Nigeria are the leading producers. Sudan (before splitting into Sudan and South Sudan), is the fourth largest producer of this crop in the world and the leading producer in Africa followed by Uganda (FAO, 1998). The Sudan production statistics captured by FAO are inclusive of South Sudan contribution. This is further verified by the study results which show that sesame is the second largest crop grown in the greater Bahr el Ghazal region states after groundnuts. Productivity ranged between 0.1 to 0.3 tonnes per acre per season. The common variety in South Sudan is the shattering white developed from Kansas-10(K-10).

6 Intercropping is a traditional practice used to grow sesame in all the parts visited. It is extensively practiced by smallholder farmers in many parts of the developing countries (Boudreau, 1994). According to Norman (1975), Willey, (1979), Ugen and Wien, (1996), Chemeda (1997), Eneji et al., (1997) and Itulya and Aguyon (1997), intercropping is associated with certain advantages like: (a) improved soil erosion control, (b) insurance against crop failure, (c) spreading labor and harvesting more evenly throughout the season, (d) facilitating production of many commodities in a limited area, (e) efficient utilization of resources, (f) transfer of N fixed by legumes to the companion crops and (g) control of spread of diseases and pests, but more important of all is that it (g) helps in improving yields.

Production Constraints

Planting methods; An interview with sesame farmers revealed that farmers use broadcasting method of planting; this exposes the garden to uneven distribution of seeds and lowers productivity.

Pests and diseases; Sesame is highly susceptible to insect pests and diseases (Tripathi and Galhotra, 1992). Among the thirty two most important diseases, wilt (Fusarium oxysporium f.sp. Simsim) takes heavy toll every year in India. Root and stem rot caused by Macrophomina phaseolina is also a very serious and destructive disease, which is present in all simsim-growing areas (ibid). The study could not get specific information about sesame pests and diseases specific to South Sudan.

Weed problems; Sesame growers interviewed under the scope of the study reported experiencing weed problems. Previous studies verify the finding through experiments done in Uganda. Losses were reported in none weeded plots. (NARO sesame production report 2009).

Undefined growth habit; Crop duration is one of the major factors that influence crop growth and productivity in sesame (Saravanan et al., 2000). One of the major problems associated with sesame production is the uneven ripening of capsules (Wasana Wongyai, 1997). At present, all commercial and domestic sesame grown in South Sudan and other countries are indeterminate; producing leaves, flowers and capsules as long as the weather conditions and soil moisture permit. Thus, some yield is lost either because the early produced capsules shatter before harvesting or because late produced capsules are immature at harvest time (Ashri, 1989). Ibrahim et al. (1983), Osman (1989), Vanisri et al. (1994) have indicated that number of capsules per plant is the most important yield contributing character in sesame.

Sunflower (Helianthas Annuus L)

6 The sunflower seeds have high oil content (40-50%) and are 30% digestible protein and can thus be used as a source of food for humans or as a poultry feeds (Oilseed Crops Research Center, Agricultural Research Corporation (ARC). The white seeded varieties have the lowest oil content, followed by the stripped and black varieties. Sunflower varieties with thin seed coats are usually higher in oil content than those with thick coats and are preferred for crushing because they cause less damage to the screw presses. Although seed color is not always an indication of oil content, usually dark colored seed tend to be higher in oil content than light colored seeds (Buker J.R. and Denton G.W., 1991).

6 Without careful isolation, sunflower is readily cross-pollinated by the activities of bees and

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South Sudan.

other insects. As a result, most of the sunflower available in South Sudan is highly mixed and lacks uniformity in color, maturation period, height, yield, and oil content. (Oilseed Crops Research Center: Agricultural Research Corporation Wad Medani, Sudan).

6 Common variety in South Sudan is the sunny smile variety with dark seeds, with productivity of 4-5 blooms per plant. Given the physiological growth requirements, the greater Bahr el Ghazal region and the equatorial states are potential areas for production of sunflower seeds. However, this would require further soil testing and piloting the crop.

Production Requirements

6 Sunflower grows well in soils ranging in texture from sand to clay with good drainage. Like most field crops, sunflower requires good seed-bed which results from carrying out a second ploughing if the field is planted on virgin land.

6 Traditionally, the crop is grown using broadcasting method.

6 However, line planting is the recommended method, with recommended spacing of 75cm by 50cm and 2 seeds per hole.

6 An application of P205 fertilizer before planting and 60kg/ha of Nitrogen at thinning are recommended.

6 Thinning can be done to leave only one or two plants to a hill resulting in an approximate plant population of 55,000 plants/ha. Lower plant populations are recommended in areas where rainfall is limited (on average 33,000-45,000 plants per acre in semi-arid areas). This compares with a recommendation for 45,000-60,000 plants/ha in areas where there is more moisture.

6 Early planting enables the crop to utilize early rains and can obtain the optimum oil percentage levels and higher yields. (Robinson 2006).

6 A planting depth of 3cm is excellent in moist soils or if rain is imminent. Seed can be planted to a maximum depth of 10cm if necessary to reach moisture. Sunflower planted 9cm to 15cm deep yields 10-28% less than that planted 7cm deep (Robinson 2006).

Yields: According to Oilseed Crops Research Center, Wad Medani, Sudan, Sunflower yield is influenced by three factors: 1) Number of heads per hectare; 2) Number of seeds per head and 3) Average weight per seed. The number of heads per hectare influences yields more than the other two variables. Since under normal circumstances there is only one head per plant, plant population is the major determinant of yield. It should be noted that sunflower adjusts to low populations by increasing weight/seed and seeds/head and to high populations by decreasing weight/seed and seeds/head. Therefore, yield, which is the product of the three components, remains relatively constant through a wide range of populations except that the size of the head may not compensate for loss of space in case of very wide spacing. Variety, weather, soil conditions and sunflower pests, however, can contribute to considerable variability.

2.1.3 Production pattern, Acreage and Productivity

Production Methods:

6 The farmers under the scope of the study were found to use traditional methods of farming with a hand hoe as the common tool for farming.

6 Agronomic practices were rudimental which lead to unexploited potential of the crops and soils.

6 Mixed farming was widely practiced where farmers kept animals and grew crops for food security especially in the Lakes and Northern Bahr el Ghazal a cattle keeping area.

6 There was little use of fertilizers and soil additives.

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South Sudan.

6 There is high potential for irrigation but the farmers under the scope of the study seemed to have no idea about irrigation technology. The Lakes state region is blessed with rains which could be harvested and used for irrigation during periods when the rains are not enough.

Acreage:

6 Land is a major factor of production in agriculture. South Sudan is endowed with vast area of land for cultivation. Lakes state has 87,190.08 square kilometers and much of this land was reported never opened and still holds the original fertility. Farmers were asked the average acreage under cultivation. The following results were obtained;

Figure 7: Acreage under Cultivation

6 Majority of the farmers (90%) interviewed had opened land between 1 up to 10 hectares. An in-depth interview with farmers revealed that out of this category, the average land cultivated is 5 acres per household. However, this seems below the available land for cultivation. Farmers articulated the constraints limiting them as; labor, access to seeds and harsh weather. In several interviews with farmers, it came out that farmers can open as much land as they can afford.

6 According to census 2008, the average number of members in a household is seven (7) and an average of 5 members is productive. If on average each member opens 2 acres in each season, then the average acreage per household would double to ten (10).

Productivity:

6 Productivity is the yield per crop. The average productivity of the crops under study was below the average productivity for the same crops in the region.

6 The productivity of groundnuts per acreage for farmers visited was between 150 to 300 Kilograms. This is below the ideal of 800 kilograms for local breeds according to FAO 2009.

6 Use of unimproved and traditional seed varieties could among other factors be contributing to low yields.

6 This situation could be improved by use of improved high yielding seeds from known research centers within the region.

2.2 suitABility oF locAl environMent For proDuction oF oil seeDs

2.2.1 Rainfall PatternsSouth Sudan receives abundant rainfall. It receives heavy tropical rains, ranging from 400mm to 2200mm per year, covering a period of six to nine months. (Special Report FAO/WFP Crop and Food Security Assessment Mission to South Sudan 17 February 2010).

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South Sudan.

2.2.2 Community Willingness to Grow the Oil Seeds 6 The Lakes State is thought to be the hub for inputs to the Oil Mill at Yirol. This would make

the inputs cheaper and also benefit the immediate community.

6 There is considerable growing of groundnuts and sesame in all the parts of the Lakes State. However, (40%) of the farmers interviewed purposely grow for commercial purposes. Majority (60%) of respondent farmers grow the crops for food security.

6 This would mean farmers have experience with the oil seeds and they expressed interest to increase production if necessary support is given. However detailed sensitivity analysis need to follow this expression of interest for the better future of the oil mill.

2.2.2.1 Expressed needs for Support

Provision of Seeds:

6 Seeds availability ranked on top as the major hindrance for growth of oil seeds. Farmers reported that they get the seeds from their fellow farmers in exchange for money or other produce.

6 The seeds got are a surplus from the previous season.

6 With observed poor storage facilities the seeds have a low germinability and hence end up producing low yields per acreage.

6 It was also observed that the seeds available determine the size of acreage opened.

6 Deliberate measures to avail farmers with improved oil seed varieties could be of a tremendous advantage to farmers and can facilitate increase in acreage.

6 This could run concurrently with research on what is being given to farmers. Research could be done with collaboration and assistance from key stakeholders before and during implementation of the project.

Figure 8: Groundnuts stored for the next season

Farm Equipment:

6 A hand hoe is the main equipment for opening land and other preliminary cultivations.

6 High labor costs came out as a major challenge faced by farmers and this is attributed to heavy dependency on a hand hoe. The youth and energetic men were reported to spend most of the time in trading centers while women are in the fields busy cultivating. This is as a result of the war because the fighters were targeting the men and energetic youth thus prompting them to flee homes and get into groups in trading centers. This has developed into a norm and has had negative impact on farming.

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South Sudan.

6 The remedy for this would be assistance with tractors to open up most of the land then the labor available can do soft activities like weeding, garden cleaning and harvesting.

6 This would be an added asset to the farming community and ensure sustainability of oil seeds production. This would require a cost benefit analysis of this innovation during the implementation of the project.

Ready Market:

6 Markets are the main motivators of commercially oriented agriculture.

6 Most of the farming areas are completely inaccessible, markets are concentrated in a few trading centers across the main roads. When it rains, access roads become impassable.

6 This has facilitated trade imbalances and a sharp price difference between villages and communities.

6 Farmers are dependent on middle men passing in villages with bicycles and sacks buying produce. This could be among the demotivators for crop production and subsequent effect on the proposed project.

2.2.2.2 Contract Farming/Out-grower Scheme Initiatives

Contract Farming:

6 Contract farming is an arrangement between farmers or groups of farmers and a contractor/processor/trader for the production of specific crop varieties and types at predetermined quality and quantities over a specified period and delivery dates. The contractor normally provides incentives for production in form of advance credit for labor, inputs and extension services.

6 The farmers under the scope of the study had no experience with contract farming. However secondary sources indicate of development partners who were contracting farmers to multiply seeds though no clear data was accessible about such initiatives.

6 However there was expressed willingness to engage in contract farming. Major challenge with contract farming arises when one of the parties in the agreement is weaker than the other. Chances are high that the weaker party is exploited to the advantage of the stronger party. However, this could be an area for sensitivity analysis.

Out Growers Scheme:

6 Out Growers Scheme is a duplicate of contract farming with a deviation in contractual obligations. In contract farming, the either party outlines the contractual mandates over each other while in out growers’ scheme, there is no contractual commitment.

6 Out growers develop naturally according to demand and the people enrolled have entrepreneurial skills to tap into the identified opportunity.

6 The factory may or may not provide any incentive to production but guarantees the purchase of the produce if it meets the quality requirements. Factories that adopt this approach normally have their own fields that support their production targets.

6 Farmers seemed indifferent on whether they need to be contracted or left to develop as out growers. The choice between the options depends on the capacity of out growers to emerge and further analysis needs to be done in order to support decision making.

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South Sudan.

2.2.3 Organization of the Farmers into Associations

Farmer Groups:

6 Farmer groups are membership based organizations brought together by a common objective of farming. Normally membership is voluntary. Membership varies depending on area covered and activity engaged in but larger groups are discouraged.

6 In South Sudan, the development of farmer institutions seems to be taking a wrong direction. There are existing structures at state and national level but without any representation on the ground. For-example, there is a national farmers union of South Sudan but it has no membership of farmers and or farmer groups.

6 The consultant discussed at length with the former president of South Sudan Farmers Union who is the Chairman of the same union at the Lakes State; He appeared to be concentrating on forming committees first at the Payam and Village levels and also on advocacy for agriculture loans and assistance.

6 Such, is a good strategy but it will not stand to deliver results to the farmers represented.

6 There are scattered Women Groups initiated by development partners but still concentrate on small geographic and conceptual scope.

6 A big percentage (93%) of sampled farmers belongs to no groups. The 7 % that belonged to groups was not sure about the objectives of the groups in which they belong.

Cooperative Movement:

6 The history of cooperative movement dates as far back as the history of South Sudan.

6 The study discovered that there are no operational cooperatives in the areas visited though reports indicate that there are 86 registered cooperatives in South Sudan. Efforts were antagonized by the civil war for the last century.

6 However, the government of South Sudan has shown commitment towards reviving cooperatives; there is also a Cooperative Societies’ Act of 2003 providing a frame work of operation.

6 There is an independent ministry to deal with cooperative movement both at the national and state levels.

6 However, much emphasis should be put at promoting farmers’ capacities to develop into groups and finally into cooperatives. Such will create a strong foundation for the cooperatives formed.

6 The Yirol project will also benefit from the initiative by dealing directly with the groups to ensure quality and quantity requirements. Farmers around the Lakes State will get the first benefit of working together in cooperatives.

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South Sudan.

2.2.4 Capacity to Increase Scale of OperationLand, a Primary Input: The table below presents analysis of the population of the Lakes state per county in relation to the area (sq km).

Table 2: Population density of Lakes State

NO County Population Area (sq Km) Density

Lakes State 695,730 43,59515.9

1 Cueibet 117,755 4,823.56 24.41

2 Rumbek North 43,410 4,531.13 9.58

3 Rumbek Centre 153,550 3,866.85 39.71

4 Wulu 40550 11,700.6 3.47

5 Rumbek East 122,832 3,588.1 34.23

6 Yirol West 103,190 5,024.84 20.54

7 Yirol East 67,402 5,400.9 12.48

8 Awerial 47,041 4,659.1 10.1

TOTAL 1,391,460 87,190.08 170.42

Average 154,606.67 9,687.79 18.94

Source: 5th Sudan Population and Housing Census 2008

On average, 19 people have square kilometers available for cultivation. And on average, a household in South Sudan comprises of 7 members. This means that every 2.6 household members have a square kilometer to cultivate.

6 The land tenure system is flexible because land is given according to how much one can cultivate.

6 This is in line with the findings of the study that farmers owned land according to their capacities i.e. those who would afford to open 6 hectares owned 6 hectares and the relationship is direct.

Productive Labor:

6 Labor is the second most important input after land.

6 Most of the productive populations were absorbed into the army and or were killed during the war.

6 In addition the research discovered that women do most of the digging while men gather in trading centers and this is attributed to historical reasons related to the war. The table below presents an analysis of the population distribution according to age groups for South Sudan.

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South Sudan.

Table 3: Population distribution according to sex and age

NO AGE TOTAL MALE FEMALE

Total 8,260,490 100% 4,287,300 51.9% 3,973,190 41.1%

1 0-4 1,308,691 15.8 687,946 8.3 620,745 7.5

2 5-9 100,145 15.7 687,620 8.3 612,525 7.4

3 10-14 1,059,057 12.8 569,467 6.9 489,590 5.9

4 15-19 874,111 10.6 458,580 5.6 415,531 5

5 20-24 723,186 8.8 359,638 4.4 363,548 4.4

6 25-29 688,225 8.3 334,530 4 353,695 4.3

7 30-34 542,101 6.6 259,913 3.1 282,188 3.4

8 35-39 475,413 5.8 237,495 2.9 237,918 2.9

9 40-44 348,116 4.2 175,837 2.1 172,279 2.1

10 45-49 278,844 3.4 150,347 1.8 128,497 1.6

11 50-54 201,863 2.4 106,306 1.3 95,557 1.2

12 55-59 123,794 1.5 68,416 0.8 55,378 0.7

13 60-64 11,867 1.4 65,365 0.8 53,302 0.6

14 65-69 74,351 0.9 41,916 0.5 32,435 0.4

15 70-74 61,493 0.7 35,659 0.4 25,834 0.3

16 75-79 29,814 0.4 17,710 0.2 12,104 0.1

17 80-84 26,780 0.3 15,286 0.2 11,494 0.1

18 85-89 11,544 0.1 6,943 0.1 4,601 0.1

19 90-94 7,626 0.1 4,558 0.1 3,068 0

20 95 And Over 6,669 0.1 3,768 0 2,901 0

Source; 5th Sudan Population and Housing Census 2008

The figures in the table above show that 31.6% of South Sudan Population is between the ages of 0-9 years. If the school going age of up to 20 years is added, the percentage increases to 55% and the elderly i.e. between 50 and above, the percentage of inactive population increases to 63%.

6 This may be interpreted that South Sudan has 37% active population. The percentage reduces further with a reduction of the labor force in formal employment, the army and disabled persons.

6 The war was very destructive especially to the population production potential.

6 However the study ascertained a number of energetic youth and men redundant along the roads and trading centers during morning hours. If these are put to productive use together with women, the production potential can be reclaimed.

6 An interview with the Director General Crop Production in the Ministry of Agriculture indicated that the Government of Ministry of Agriculture and Forestry is proactive towards addressing the labor shortage by planning for tractors to help supplement manual labor. The director general further informed the study team that there is a directorate of agriculture mechanization at the Ministry of Agriculture and Forestry charged with this responsibility.

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South Sudan.

Government Commitment:

6 A new state surrounded by developing countries is at an advantage of utilizing the available examples in the neighborhood. South Sudan is surrounded by members in the East African community and Arabic countries. All these countries are at a higher level in terms of development.

6 This is an advantage because most of the policies and strategies may be already tested, tried and rolled out. It is however a disadvantage because the new economy can be exploited by the neighbors.

6 The Government of South Sudan under the Ministry of Agriculture and Forestry has a leading role in fostering agriculture development which is a foundation for sustainable development of South Sudan. Some of the Governments projects include: The mechanization program which promotes use of ox-ploughs and tractors, categorization of farmers into small holder, medium and large scale for effective delivery of services according to needs. This will be followed by institutionalizing the categories into groups and association and or cooperatives for effective service delivery and empowerment. The government is also working in partnerships with FAO, USAID and other development partners towards provision of quality seeds and farm inputs, and promotion of value chain approaches towards crop promotion per region.

6 If these projects are integrated into the oil mill operations, the collaboration would yield meaningful results for both the oil mill and the government.

2.3 current governMent interventions to Boost Agriculture proDuction

2.3.1 Ministry Of Agriculture Interventions 6 The ministry of Agriculture and Forestry is the main catalyst for agriculture production. The

ministry is structured into departments with technocrats in each department to handle specialized services.

6 The ministry has a mission of transforming agriculture from traditional subsistence system to achieve food security through scientific, market oriented, competitive and profitable agricultural system without compromising the sustainability of natural resources for future generations. The vision for the ministry is: Food security for all people of South Sudan to enjoy improved quality of life, environmental and economic prosperity.

6 The ministry has a policy role of guiding government interventions into agriculture development. The establishment of the ministry and government commitment to support its operational activities is a good step towards reviving the agriculture systems in the country.

2.3.2 Ministry of Cooperatives and Rural Development 6 The ministry exists to facilitate and encourage equitable and sustainable development

towards improved livelihood through sensitization, mobilization, capacity building and direct involvement of rural communities in their own development.

6 The Ministry of Cooperatives and Rural Development performs the following functions and duties; Formulate and implement Cooperative Society legislation and policy, establish and train a cooperative extension service, promote and undertake the training of cooperative societies, promote and enhance the formation of cooperative societies and community-based organizations as vehicles of community empowerment and poverty eradication and mobilising and organizing communities to initiate community-based and self help development projects. Other functions of the ministry are to: Develop policy on Cooperative Savings and

24


South Sudan.

Banking services and facilitate their establishment throughout South Sudan, provide training to upgrade the management and performance of community based programmes, support the Amadi Institute of Community Development, develop, in conjunction with other relevant ministries, state and local governments, policies, and strategies for the development of rural areas in South Sudan, promote and coordinate area-based rural development schemes until such time as the appropriate state or local government has the capacity to undertake such responsibility; and provide technical assistance to State governments to build their capacity to support cooperative societies and undertake rural development planning and manage the implementation of rural development plans.

2.4 MAjor constrAints to proDuction oF oil seeDs

High Labour Costs: Labor as discussed above is among the constraints that limits production of oil seeds in South Sudan. Women are the most active members of the community. Men do other activities such as trade, providing security for households and this has shaped their norms and negatively affected their involvement into farming. The other cause of labor shortage could be population distribution against age and gender. The population as discussed earlier is more concentrated on the young and the elderly. Much of the active population was either absorbed into the army or killed during the conflict. The youth interviewed seemed indifferent about engagement into farming. If interventions offer incentives for youth involvement, the project could yield benefits for the people and the oil mill.

Low unimproved yielding seed varieties: The seed varieties used by farmers interviewed were low yielding and more adapted to survival than yield. The maximum such varieties of groundnuts can yield is 800kgs/acreage. Improved varieties of groundnuts can yield triple the traditional varieties’ yields. The establishment of research and breeding centers for oil seeds could be of great value for the proposed oil mill project. Below is a snapshot of local varieties popularly grown in the Lakes State.

Figure 9: Low yielding variety of Groundnut seeds in the market at Yirol

Over dependency on natural factors: The farmers covered during the study and secondary literature confirm that a big percentage of farmers in South Sudan heavily depend on natural factors of production. The soils support water logging and rain seasons are becoming more unpredictable. This supports farming in a short run because farmers can afford to open plots of land and abandon them when the fertility levels have been depleted. The Ministry of Agriculture and Forestry is currently finalizing a fertilizer policy which will guide government on interventions to avail fertilizers to farmers. This could further be rectified by adopting simple irrigation technologies if it becomes the most viable remedy.

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South Sudan.

Figure 10: Plots of land under simple irrigation at Aweil Northern Bahr el Ghazal

Pests and Diseases: South Sudan being a tropical country exposes crops to a number of tropical diseases and pests. The pests reduce the productivity and diseases increases chances of non productivity. The crop protection department at the ministry of agriculture could do more research and deal with diseases prevention and pest control.

High Transportation Costs: Trucks spend longer hours on the roads. During heavy rains, some parts of the country are completely inaccessible. Movement of goods from one point to another is temporally blocked. This is a serious bottleneck to produce market access, considering the fact that agricultural products are perishable and needs faster movement to consumption points. The government has a deliberate program to work on all the major access roads, though this would take considerable time to complete the roads.

2.5 EDiBle oil inDustry in south suDAn

2.5.1 Industry PlayersFarmers/Input Producers; A lot has been discussed about the characteristics of farmers the study interfaced with. Farmers will play a big part in availing seeds for processing. The detail of the recommendations on organization of farmers is discussed in the proceeding chapters. Their involvement and motivation will to a large extent determine the success of the project.

Processors;

6 There is local processing of shea nut seeds into shea nut oil. Picking, sorting and processing is done by women. It is processed into oil, soap and cosmetics.

6 There were no processing companies found for other products other than lulu oil.

6 An international organization (Medical Emergency and Development International Committee) launched a lulu livelihood project to facilitate women exploit the natural lulu into a living. They facilitated the formation of a company called Lulu works which is making soaps, oils and cosmetics and they are consumed in some parts of South Sudan.

6 There are currently 25 processing centers each handled by a group of women. Each group of women is comprised of 20 members. Other processing is done at the household level to get oil to use in homes. The team never got information about the annual output and prices for the different products processed by Lulu works.

Importers/suppliers: Importers of packed edible oil from Uganda, Kenya, Sudan, Ethiopia and other Countries. They import in bulk and supply to whole sellers in market centers.

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South Sudan.

Whole Sale Shops;

6 These use the business to business model of distribution. They get their products from suppliers and some get them directly from manufacturers.

6 They buy in bulk and sometimes re-package to meet the customer requirements. They buy in dozens of Jerricans of 20 liters and 5 liters and dozens of boxes for smaller packages.

6 Wholesalers have big capital and determine the prices for the products. They incur the big costs of transportation, storage, and sometimes distribution.

Figure 11: Edible oils in a whole sale shop at Konyokonyo Market-Juba Town

Retail Shops/Kiosks;

6 Retail shops use the business to customer model. In rare cases and depending on location and size, they sell to smaller kiosks and stalls.

6 They use smaller capital than wholesalers. They buy in bulk and re-packs to affordable quantities. They buy boxes but sell in pieces.

6 Those who buy in jerricans re-pack into smaller quantities of less than ½ a liter. They measure in 300 ml and 500 ml used bottles of Soda and mineral water. Those who buy boxes disassemble them and sell pieces of smaller jerricans and sackets.

Figure 12: Cooking oil re-packaged into used Coca-Cola bottles of 500ml in Rumbek Central Market

Supermarkets;

6 A supermarket is a self-service store offering a wide variety of food and household merchandise, organized into departments. It is larger in size and has a wider selection than a traditional grocery store. A key differentiating feature is self service and convenience. They contain a display of highly organized and first-class packaged products.

6 A wide range of edible products were found in the supermarkets packaged in convenient packs and bottles. Products come from Dubai, Malaysia, India and some from East Africa

27


South Sudan.

particularly Uganda, Kenya and Sudan.

6 The target customers are middle and rich class. Customers pay a premium price for the products. There is a considerable price difference between same product bought in a supermarket and in a retail shop.

6 This therefore means that products targeting supermarket should be of exceptional quality, well sorted to match the demands of the gold customers. Majority of the supermarkets were found in Juba town and are owned by foreign businesses.

Figure 13: Cooking Oils and Fats in a Supermarket in Juba

Transporters;

6 Transporters facilitate the movement of products from one location to the other, normally from the factory to the sales outlets and also from outlet to outlet.

6 Big transporters have trucks that carry hundreds of tones and normally are either owned by the factory or a transporting company. Most of the vehicles that were cited on road had Kenya, Uganda and Sudan number plates.

6 Critical is that they are transporting products from the three countries. Transporters play a big role of bringing goods nearer to the consumers.

Service Providers;

6 Support services facilitate trade by allowing flow of information between the different players at different levels:

6 The telecommunication industry was fairly developed with MTN, VIVACELL and ZAIN as the main players. Competition has dragged down prices and thus lowering the cost of making calls. The trend has reduced costs of doing business in South Sudan.

6 There is a national TV and various local radio stations that facilitate information sharing about products and services in markets in Juba and other towns.

6 South Sudan widely uses generators and thermo to provide power to business centers. However the power generated is expensive because fuel is relatively expensive and this has increased the cost of doing business in South Sudan.

Consumers;

6 The 8.3 million people represent the consumers in South Sudan. South Sudan has considerable high temperatures in most times of the year and this facilitates high intake of

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South Sudan.

cooking oils. The consumers to be counted on must have the purchasing power backed by the existing need. Consumers are the ultimate target for edible products.

6 Consumers are in different niches and have different tastes, preferences, and capacities. The design of the products needs to take care of the niches and incorporate their demands into the products brought to the market.

Government Departments:

6 Ministry of Commerce, Industry & Investment (MCII), Ministry of Agriculture & Forestry are the main government bodies playing key roles in the cooking oil industry. The vision of MCII is to play a stimulating, facilitating and regulatory role in building, strengthening and promoting the country’s trade and industrial development for the benefit of its people. The mission is to foster internal and external trade, and to systematically build an industrial sector that is dynamic, competitive and fully integrated into the domestic, regional and global economies.

6 The Trade and Industrial policy framework is key in the pursuit of the above vision and mission and specifically aims at achieving full integration of the economy of South Sudan domestically, regionally, and globally through:-building, supporting and regulating a dynamic trade and investment sector; and establishing a solid base for the development of a vibrant industrial sector that has structural linkages with the dominant agricultural sector.

2.5.2 Cooking Oil Industry ProductsThe products identified include; cooking oils, cooking fats, bakery fats, soaps and cosmetics. The concentration of cooking oils was higher than the concentration of all other products combined.

2.5.2.1 Cooking Oils

6 A survey of the Juba markets, Rumbek and Aweil found out that markets were dominated by ground nuts oil, sesame oil, palm oil, sunflower oil, olive oil, cotton seed oil, coconut oil, and canola oil. These are imported from Uganda, Kenya, Ethiopia, and Sudan. Other oils come from Asia, Europe and USA..

Figure 14: Cooking Oil displayed in the market

Packaging; The cooking oils in the markets visited were packed in different sizes and quantities. They are packed in jerricans, bottles and sackets.

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South Sudan.

Figure 15: Packages and Preferences for Quantities of Cooking Oils (percentage of responses)

Source: Yirol oil mill feasibility study data analysis results 2012

6 The study sampled 100 sales outlets distributed evenly among the four markets visited. The twenty liter jerricans was reported the most preferred by the traders.

6 This could be due to the need to re-pack into smaller bottles of manageable quantities popularly found in open stalls and kiosks in towns.

6 The smaller packages of half liter, one liter, and two liters were found common in groceries and advanced retail shops.

6 The five liter and three liter were equally popular especially in hotels and restaurants.

6 The intervention would be to pack the cooking oil in smaller quantities using cheaper packaging materials so that the price is not inflated by the packaging materials used.

Figure 16: Used bottles containing Cooking Oil

Pricing;

6 There was observed exaggeration of prices in the states visited. As one moves across the towns, the price difference for the same product was observed.

6 Price is heavily determined by traders and there is limited government intervention in setting the prices.

6 Forces of supply and demand do not act in a uniformed economy so do not determine the prices. The sharp difference is brought about by the following factors;

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South Sudan.

High Transportation Costs:

6 Transportation of products is mainly by road. However, roads connecting major towns in South Sudan are in a bad state and become impassable when it rains.

6 Trucks spend many days on the road, consume more fuel and the security risk is very high. The additional cost is translated into the prices charged for the products.

Lack of Information: Consumers are very ignorant about the prices for the different oil products. Traders take advantage of the price ignorance to charge exaggerated prices.

Speculation: There is very little networking between the traders in the towns visited. The South Sudan pound is unstable; weather conditions cut off roads, insecurity create unrest among the people. These and other factors create a lot of speculation about future availability of oil products. Traders thus charge different prices over and above the manufacturers recommended prices.

Information was collected on the prices of oil products and below is the price ranges for twenty liter jerricans, the fast moving quantity.

Table 4: Prices of twenty liter jerricans of Cooking Oil

Oil) Freq. Percent Cum

140 SSP 5 8.93 8.93

143 SSP 1 1.79 10.71

145 SSP 5 8.93 19.64

147 SSP 1 1.79 21.43

150 SSP 8 14.29 35.71

155 SSP 6 10.71 46.43

158 SSP 1 1.79 48.21

160 SSP 4 7.14 55.36

170 SSP 1 1.79 57.14

180 SSP 7 12.5 69.64

190 SSP 2 3.57 73.21

199 SSP 1 1.79 75

200 SSP 5 8.93 83.93

210 SSP 1 1.79 85.71

215 SSP 2 3.57 89.29

220 SSP 5 8.93 98.21

225 SSP 1 1.79 100


6 In Juba markets, prices ranged between 140SSP to 170SSP while in Rumbek and Aweil markets, the price ranged between 180SSP to 225SSP.

6 Even in the same town but in different markets, the price differed.

6 An example of Juba town, the prices were lower in Konyokonyo and Jebel Markets than in Malakia and Juba central market.

6 Consumers were asked their opinion about affordability of products and 83% reported the products were very expensive. Affordability is directly related to purchasing power.

6 A product may have the same price but is rated as very expensive and cheap at the same

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South Sudan.

time depending on who is rating the product. The results below may be as a result of purchasing power and or the products having high prices and or both.

Figure 17: Perception of Consumers on the prices for Cooking Oil (percentage of responses)


Quality Aspects:

6 Quality is a key determinant for choice of a product in the market.

6 The quality factors considered in this study include: taste; color; viscosity; packaging; moisture content; and preservatives added.

6 It appears consumers are concerned about three major aspects of quality i.e; taste, color and price. Taste is the sensation of flavor perceived in the mouth and throat on contact with a substance. Consumers were randomly selected and put in Focus Group Discussions to get detailed information. The graph shows the ranking of the three quality aspects according to importance.

Figure 18: Quality factors for the Choice of Cooking Oils (percentage of responses)


6 In order to verify the information given above, the same consumers were asked about the quality factor they consider important and can stop their decision for purchasing the oil product. The following results came out;

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South Sudan.

Figure 19: Quality factors for the Non choice of Cooking Oils (percentage of responses)


6 Taste still came out clearly followed by price and packaging. Consumers however were not certain about the taste of cooking oils.

6 It only came out in Aweil market where respondents preferred oils from the Sudan because they are sure they are from groundnuts and sesame and were not sure of the oils from East Africa.

6 It also came out clearly that oils from groundnuts and sesame make the fries more delicious than other cooking oils. This explains the reason for the choice of the cooking oils.

6 Some markets appeared indifferent about the specific tastes of specific oils while in others customers did not have alternatives and only had experience of one taste.

Figure 20: Sesame oils popularly sold in Aweil market

Uses: Majority of the consumers interacted with used cooking oil for enhancing business. This was an indirect approach to reaching many consumers. Some of the business uses identified include: added during the preparation of processed foods, frying foods, making salad dressing, making bakery products, deep frying meats, chips, and local foods. Some of the uses are displayed in the pictures below;

Figure 21: Variety Uses of Cooking Oil

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South Sudan.

Additional Uses: Cooking oils were reported to be used as medicine to cure simple diseases like cough, flue, and headache. Most communities visited revealed that lulu oil is traditionally known for its healing ability. Lulu Oil was also used as a cosmetic.

2.5.2.2 Cooking Fats

6 Cooking fats were not found common in South Sudan markets. The mostly available fat was ghee, which is locally extracted from the cow milk.

6 Cow ghee was commonly found in local markets, and was packed in used materials.

6 Cooking fats were used for baking, as margarine (like blue band), frying, cooking, and salad dressing.

6 Some fats were found in supermarkets in Juba and most of them were imported and branded.

6 Lulu works also processes shea butter and packed in container as shown in the picture below;

Figure 22: Cooking Fats

Other fats like margarine were also found in supermarkets and groceries.

2.5.2.3 Soaps and Cosmetics

Soaps are made from the bi-products of cooking oils. Most of the soaps reported in markets were imported from Uganda and Kenya. Retailers buy boxes of bars and chop into tablets that are manageable by consumers.

Figure 23: Boxes of Soaps displayed at Malakia Market in Juba

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South Sudan.

Secondary sources of data (in focus productions (lulu life project documentary) 2011) discovered Lulu works a company in South Sudan that makes soap from lulu bi-products. The company is owned and managed by women groups.

2.5.3 Industry Markets

2.5.3.1 Local Markets

6 The study through FGDs and secondary sources discovered that South Sudan has a big market for cooking oil and related products. South Sudan has a population of approximately 8.3 million people scattered in all the ten states.

6 The biggest cooking oil consumption seems to be in major towns and small trading centers which are relatively densely populated.

6 The preference for different types of cooking oils changes with the states and regions. Below is the population distribution for South Sudan states;

Table 5: Major towns in South Sudan and population of the states

NO STATE MAJOR TOWN POPULATION

1 Upper Nile Malakai 964,353

2 Jonglei Bor 1,358,602

3 Unity Bentiu 585,801

4 Warrap Kuajok 972,928

5 Northern Bahr el Ghazal Aweil 720,898

6 Western Bahr el Ghazal Wau 333,431

7 Lakes Rumbek 695,730

8 Western Equatoria Yambio 619,029

9 Central Equatoria Juba 1,103,557

10 Eastern Equatoria Torit 906,161

South Sudan 8,260,490

Source; 5th Sudan Population and Housing Census 2008

6 Jonglei is the most populated state (1,358,602) in South Sudan with Bor as the main town. Central Equatoria which hosts the South Sudan capital city Juba is the second densely populated state (1,103,557). Conventionally, this doesn’t mean that Jonglei has more market potential than Central Equatoria. The study observed many big businesses that use cooking oils in Juba. Also the highest number of people who are not South Sudanese were observed in South Sudan though were not included in the national census and yet they use cooking oils on a daily basis.

6 Majority of the focus groups participants purchased cooking oils daily in quantities of less than ½ a liter. This is a purchasing power issue. Consumers that afford one liter and two liters on a daily basis use it for business while those who purchase 5 liter and above daily are kiosks and retail shops. The frequency of buying is directly related to purchasing power.

Purchasing Power;

6 The consumers sampled had an average income of 600 SPP and above followed by 100 SSP to 599 SSP as detailed in figure 24 below. This income is relatively low but may cater for household food expenditure.

6 Though the sampling method was able to capture all categories of the consumers, the

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South Sudan.

results may not necessarily give a true picture of the national income statistics as it was deducted from a small sample of the population.

Figure 24: Average Incomes of Sampled Respondents (percentage of responses)


2.5.3.2 International and Regional Markets

Regional Market

6 Kenya: Kenya imports over US $ 100 million worth of edible oil annually. Top on the list of edible oil imports are sunflower, simsim, groundnuts and soy bean oils. Kenya imports vegetable oils and fats in order to supplement its local production, which is presently inadequate to meet local demand. The trend of domestic imports is detailed in chart below. (Economic Survey, 2010 by Central Bureau of Statistics, Min of Planning & National Dev, Kenya)

Figure 25: The Trend of Domestic Imports

Source: Economic Survey, 2010 by Central Bureau of Statistics, Min of Planning & National Dev

6 Uganda: Uganda remains a net importer of oil products. Uganda`s edible oil demand for 2010 was 150,000 metric tons. Mukwano alone would need approximately 450,000 metric tons of sunflower to support oil production to these levels. With the presence of BIDCO, the domestic market has two major suppliers/competitors. The demand for vegetable oil in Uganda is increasing at a rate of 3% per annum and is currently estimated at 220,000 MT. Local production is estimated at 45,000 MT making Uganda a net importer of edible oil (Mukwano Industries, personal comm.). This presents an investment opportunity at any point of the commodity chain; be it seed supply, production, services, processing or marketing. As

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South Sudan.

a consequence of population growth and affluence, there is increasing demand. However local production cannot meet the demand and therefore most of it is imported. The main players in the industry are Mukwano Industries Ltd and Bidco Uganda Ltd trading as BIDCO. (Mukwano Industries, personal comm.)

6 Tanzania: Over the next 10 years, the population of Tanzania is expected to grow by 2.8 Percent. Oil seed production in Tanzania mainly focuses on groundnuts, sunflower, sesame, cotton and palm oil. More than half of the vegetable oil consumed in Tanzania is imported due to the lack of supply in the local production. The FAO recommends an annual vegetable oil consumption of 5kg per capita. Based on this the demand for vegetable oil in Tanzania is expected to increase by 2.8 percent. (KPMG, Tabora Tanzania Report: Opportunities for Investors, 2011).

World Market

6 Trends in the global market for “fair trade” agreements also indicate that western consumers are prepared to pay higher prices for products that are processed in the country of origin and for a limited niche production system that may be feasible. (Suong Jian & Liu Yan, MGMT Panel, Guangdong University of Finance).

6 Other unexplored potential markets are to sell value added products into the middle to higher income African consumer market. In West Africa, the local cosmetics industry is using increasing amounts of Shea nut in its beauty products and this may be a market, which has potential in Eastern Africa. (Suong Jian & Liu Yan, MGMT Panel, Guangdong University of Finance).

6 According to FAO world edible oil consumption survey, world vegetable oil production has grown by nearly two-thirds over the past decade and potentially reached 120 million tons in the year 2011. The expansion of oil palm plantations in Southeast Asia and the aggressive development of soybean acreage in South America have accounted for nearly all of the growth, while production of minor oilseed and oils generally have remained flat. Growth in vegetable oil consumption is driven mainly by economic expansion in developing countries. Vegetable oil consumption also is growing in the developed world, but primarily among premium oils with special nutrient profiles. Consumption of vegetable oils in the United States is among the highest in the world, although growth in oil use is below that of developing countries. Yirol factory may sell the cooking oil to the world market through partnerships with world market leaders.

6 World population growth, especially in emerging markets is creating opportunities in the edible oils market. Production of edible oils has consistently increased across the world with traditionally high exports of soya oils from South America and palm oil from South East Asia. China and India are the leading two importers today; however across the world, demand for edible oils is exceeding supply and new markets prospects are developing. (KPMG, Tabora Tanzania Report: opportunities for investors, 2011)

6 The global oils and fats market grew at a compound annual growth rate (CAGR) of 5.0 percent and is projected to grow at a faster pace up to a value of US$92.3 billion by 2014. According to Oil World global demand for eight vegetable oils including palm oil and soybean oil is expected to exceed production for the first time in eight years in 2010-11. (KPMG, Tabora Tanzania Report: opportunities for investors, 2011)

6 The world population is expected to increase by 2.5billion to reach 9.1 by 2050. The majority of the growth is expected to take place in the less developed countries and concentrated among the poorest populations in the urban areas. In 2008, for the first time in history, more than half of the world population lived in towns and cities. By 2030 this number is

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South Sudan.

expected to swell to almost 5 billion. Global population growth, increased urbanization, and a rise in per capita income are fundamental drivers in the increase of edible oil market demand. Global oils/fats demand in 2010-11 is anticipated to exceed production and in-turn lead to a drop in global inventories; the production shortfall is estimated to amount to 3.3 million tones or 2 percent. (KPMG, Tabora Tanzania Report: Opportunities forInvestors, 2011)

Figure 26: Global Value on Oils and Fats

Source: KPMG, Tabora Tanzania Report: opportunities for investors, 2011

Note: Compound Annual Growth Rate (CAGR) in 2004 to 2010 was 5.0percent and in 2011 to 2014 CAGR was 6.3 percent (KPMG, Tabora Tanzania Report: Opportunities for Investors, 2011)

2.5.4 Industry Regulation, Policy and Taxation

2.5.4.1 Taxation

6 Concern has been expressed about the high rates of taxes imposed concurrently by the different levels of government and other unknown authorities in a much uncoordinated manner.

6 This is particularly true in the border towns, and this has made tax administration extremely difficult. These taxes and the manner in which they are administered have a disincentive effect on business.

6 There are three levels of formal taxes paid by traders; import taxes-when goods are entering the country at boarder points, state taxes - when the goods are entering the state and are charged by the state revenue authority and local market taxation-collected by the local market authorities.

6 This is a form of multiple taxation of the same product. There are also numerous taxation points on the main roads connecting the different states in form of road blocks. The market study counted ten roadblocks between Yirol and Rumbek. In each road block were trucks carrying goods stopping for either checking and or paying taxes.

6 All these taxes have a direct effect on the prices charged for the products. All taxes and costs are transferred to the consumer. This mostly explains why prices are high and the difference is sharp as one move from one town to another.

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South Sudan.

2.5.4.2 Policy Framework

The MCII has developed a policy document that is not yet passed by the legislators in parliament. The document emphasizes the 4 thematic principles:

Specialization and Division of Labour: Specialization and division of labour enable production to be broken down into a number of simpler, more specialized tasks and skills, thus allowing people to acquire a high degree of efficiency. This allows benefits of economies of scale and exploitation of entrepreneurial and management skills. The trade and investment policy guides investment decisions to produce where the country has natural endowments among which vegetable oil could be. This is a positive direction for the project.

Comparative Advantage: (David Ricardo 1772 – 1823). A country should specialize in those goods and services in which she has a comparative advantage. Issues of concern should be production costs due to location, natural factors, labour, skills, natural resources, technology, climate, social and cultural assets. Although no serious study has been carried out with respect to South Sudan, it would appear that South Sudan would have comparative advantage in certain agricultural goods.

Investment, Production, Trade and Economic Growth: It is evident that there is a close link between investment, production, trade and economic growth. The policy will guide growth through production and trade.

Private Sector Development: In a free enterprise economy, the greater proportion of investment, production and trade takes place in the private sector. But in an underdeveloped economy, such as South Sudan, markets do not function efficiently because of rigidities leading to market failures. Under such circumstances, the state may intervene in the markets by supporting the private sector directly or through appropriate policies, laws and regulations.

2.5.5 Industry Competitive Environment

2.5.5.1 Porters Five Forces: A Model for Industry Analysis

Porter’s five forces is a framework for the industry analysis and business strategy development developed by Michael E. Porter of Harvard Business School in 1979. It uses concepts of developing Industrial Organization (IO) economics to derive five forces that determine the competitive intensity and therefore attractiveness of a market. Attractiveness in this context refers to the overall industry profitability. An analysis of the five forces model is given in the figure below;

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South Sudan.

Table 6: An Analysis of edible oil industry using Porters five forces

COMMENTSAsset specificity

66 High exit costs

66 Incentives to local production

66 Government policy – tariff and non tariff barriers

66 Un common technology

66 Easy Access to distribution channels

66 High scale threshold

66 Unsalable assets

66 Patent and proprietary know-how

SUPPLIER POWER

Supplier concentration

Importance of volume to supplier

Differentiation of inputs Impact of inputs on cost or differentiation Switching costs of firms in the industry Presence of substitute inputs Threat of forward integration Cost relative to total purchases in industry

COMMENTS

66 Suppliers of raw materials are farmers

66 Farmers have no organized structures

66 Farmers are producing on a small scale and with low productivity

66 The potential to increase scale and productivity is mammoth

66 There is minimal or no threat of forward integration

66 Raw materials constitute a relative cost percentage

BARRIERS TO ENTRY

Absolute cost advantages Proprietary learning curve Access to inputs Government policy Economies of scale Capital requirements Brand identity Switching costs Access to distribution Expected retaliation Proprietary products

LOW RIVARLY-MARKET DOMINATED BY FOREIGN PRODUCTS

LOW CONCERTRATION RATIO

LUCRATIVE MARKET

VERY PROFITABLE MARKET

THREAT OF SUBSTITUTES

Switching costs inclination to substitute Price-performance trade-off of substitutes

COMMENTS

66 Many buyers and no single buyer with significant market share

66 Buyers are fragmented (many, small and different)

66 Buyers are price takers

66 Buyers have no power to influence prices and production

66 Products are not critical portions of buyers ‘inputs

66 Buyers have Lower switching costs

66 No possibility of backward integration

BUYER POWER

Bargaining leverage Buyer volume Buyer information Brand identity Price sensitivity Threat of backward integration Product differentiation Buyer concentration vs. industry Substitutes available Buyers’ incentives

COMMENTS

66 No substitutes from other industries

66 Close substitutes in the same industry include; local ghee, local Lulu oil, imported cooking fats and margarines

66 The market goes for substitutes because of cost and availability.

66 Price, quality and product differentiation may counteract the threat of substitutes.

Source; Modified M.E. Porter, Competitive Model on Industry Competitiveness (1980).

Rivalry: In the traditional economic model, competition is not perfect and firms are not unsophisticated passive price takers. Rather, firms strive for a competitive advantage over their rivals. Economists measure rivalry by indicators of industry concentration. The Concentration Ratio (CR) is one such measure. A high concentration ratio indicates that a high concentration of market share is held by the largest firms - the industry is concentrated. A low concentration ratio indicates that the industry is characterized by many rivals, none of which has a significant market share. These fragmented markets are said to be competitive.

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South Sudan.

An analysis of South Sudan edible oil industry Rivalry:

6 The cooking oil industry in South Sudan has a low concentration ratio with foreign products dominating the industry.

6 The products are differentiated but the consumers are ignorant about the product sources and brands.

6 It is an infant industry, and Yirol factory may have a big competitive advantage.

Some of the strategies the factory should adopt to increase the competitive advantage include;

i. Changing prices - lowering prices to gain a temporary advantage.

ii. Product differentiation - adopting features, implementing innovations in the manufacturing process and in the product itself.

iii. Creatively using channels of distribution - using vertical integration i.e. using a distribution channel that is novel to the industry.

iv. Exploiting strategic relationships with suppliers in the region

Threat of Substitutes: according to Porter’s model, substitute products refer to products in other industries. To the economist, a threat of substitutes exists when a product’s demand is affected by the price change of a substitute product. A product’s price elasticity is affected by substitute products - as more substitutes become available, the demand becomes more elastic since customers have more alternatives. A close substitute product constrains the ability of firms in an industry to raise prices. The competition engendered by a Threat of Substitute comes from products outside the industry.

An analysis of South Sudan edible oil industry:

6 The cooking oil industry in South Sudan is characterized by many locally made substitute products. They include locally made ghee, locally processed Lulu oil and other locally processed oils.

6 The threat for substitutes is minimal because there are no close substitutes. What can influence demand is price, quality and product differentiation.

6 Consumers use substitutes for two major reasons; affordability and availability. Locally processed oils are cheap and or have no cost attached.

6 Such consumers can change their behavior when the factory innovate products that are affordable.

Buyer Power: The power of buyers is the impact that customers have on a producing industry. In general, when buyer power is strong, the relationship to the producing industry is near to what an economist terms a monopsony - a market in which there are many suppliers and one buyer. Under such market conditions, the buyer sets the price. In reality, few pure monopsonies exist, but frequently there is some asymmetry between a producing industry and buyers. The following tables outline some factors that determine buyer power.

Table 7: Factors that determine Buyer Power

Buyers are Powerful if:

Buyers are concentrated - there are a few buyers with significant market share

Buyers purchase a significant proportion of output - distribution of purchases or if the product is standardized

Buyers possess a credible backward integration threat - can threaten to buy producing firm or rival

Buyers are Weak if:

Producers threaten forward integration - producer can take over own distribution/retailing

Significant buyer switching costs - products not standardized and buyer cannot easily switch to another product

Buyers are fragmented (many, different) - no buyer has any particular influence on product or price

Producers supply critical portions of buyers ‘input - distribution of purchases

M.E. Porter, Competitive Strategy: Techniques for Analyzing Industries and Competitors 187 (1980).

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South Sudan.


6 The cooking oil industry in South Sudan has many and different buyers.

6 This makes the industry very lucrative.

6 Consumers are price takers and have no power to influence the prices and or production.

6 This puts them at a vulnerable state and makes the industry lucrative for producers.

Supplier Power: Producing industry requires raw materials - labor, components, and other supplies. This requirement leads to buyer-supplier relationships between the industry and the firms that provide the raw materials. Suppliers, if powerful, can exert an influence on the producing industry, such as selling raw materials at a high price to capture some of the industry’s profits. The following table outlines some factors that determine supplier power according to Michael Porter.

Table 8: Factors that determine Supplier Power

Suppliers are Powerful if:

Credible forward integration threat by suppliers

Suppliers concentrated

Significant cost to switch suppliers

Customers powerful

Suppliers are Weak if:

Many competitive suppliers - product is standardized

Purchase commodity products

Credible backward integration threat by purchasers

Concentrated purchasers

Customers weak

Source; M.E. Porter, Competitive Strategy: Techniques for Analyzing Industries and Competitors 187 (1980).


6 The suppliers of raw materials are farmers who grow groundnuts and sesame.

6 The farmers have a weaker bargaining power because they do not have alternative markets to sell their produce.

6 This is an advantage the factory should take because they can dictate the quality and influence the terms of agreements signed between the farmers and the factory.

6 Suppliers’ power for this case is weak.

Threat of Entry: It is not only incumbent rivals that pose a threat to firms in an industry; the possibility that new firms may enter the industry also affects competition. In theory, any firm should be able to enter and exit a market, and if free entry and exit exists, then profits always should be nominal. In reality, however, industries possess characteristics that protect the high profit levels of firms in the market and inhibit additional rivals from entering the market. These are barriers to entry. Barriers to entry are more than the normal equilibrium adjustments that markets typically make and may arise from several sources: the government of South Sudan may reduce the threat of entry by adopting the strategies below:

Government creating barriers. Although the principal role of the government in a market is to preserve competition through anti-trust actions, government also may restrict competition through the granting of monopolies and through regulation. The government of South Sudan may put deliberate measures to restrict firms from entering into the industry. The regulation can be in form of tariff and non tariff.

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South Sudan.

Patents and proprietary knowledge. Patents and proprietary knowledge serve to restrict entry into an industry. Ideas and knowledge that provide competitive advantages are treated as private property when patented, preventing others from using the knowledge and thus creating a barrier to entry. The Government of South Sudan may deliberately patent the idea of starting an oil mill into the country for a specified period of time until Yirol mill has gained ground to compete favourably.

Asset specificity inhibits entry into an industry. Asset specificity is the extent to which the firm’s assets can be utilized to produce a different product. When an industry requires highly specialized technology or plants and equipment, potential entrants are reluctant to commit to acquiring specialized assets that cannot be sold or converted into other uses if the venture fails. Asset specificity provides a barrier to entry for two reasons: First, when firms already hold specialized assets they fiercely resist efforts by others from taking their market share. New entrants can anticipate aggressive rivalry. These assets are both large and industry specific. The second reason is that potential entrants are reluctant to make investments in highly specialized assets. The machinery used during extraction and refinery of cooking oil require a heavy investment and are purpose specific. This therefore means an investment into Yirol may inhibit other players who may not commit a heavy investment in an industry that is already circulated with Yirol products.

Table 9: Summary of factors that determine entry into the edible oil market

Easy to Enter if there is:

Common technology

Little brand franchise

Access to distribution channels

Low scale threshold

Difficult to Enter if there is:

Patented or proprietary know-how

Difficulty in brand switching

Restricted distribution channels

High scale threshold

Easy to Exit if there are:

Salable assets

Low exit costs

Independent businesses

Difficult to Exit if there are:

Specialized assets

High exit costs

Interrelated businesses

Source; R. Caves & M. Porter, “Market Structure, Oligopoly, and Stability of Market Shares,” 26 Journal of Industrial Economics 289 (1978)

The Government of South Sudan should create deliberate measures to regulate the industry from entry of many firms that will intensify rivalry. The current situation is still at benchmark and the industry is profitable. It is therefore likely to attract many firms that will eventually lower the profitability of the industry.

2.5.5.2 SWOT Analysis

This section consists of a SWOT Analysis of the cooking oil industry in South Sudan. The analysis looks at internal aspects of the industry to identify weaknesses and strengths that may either help or hinder the development of the industry. It will also address contextual factors, highlighting possible external elements that may present obstacles to the development of the industry and make it difficult to take advantage of opportunities offering the potential to facilitate this development.

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South Sudan.

Table 10: SWOT analysis of Yirol Project

STRENGTH WEAKNESSES

6 Land availability for growing oil seeds. On average, a household in South Sudan comprises of 7 members. This means that every 2.6 household members have a square kilometer to cultivate.

6 Availability of lulu oil growing naturally all over South Sudan. The country is endowed with a natural raw material. What the factory needs to do, to mobilize people who can collect the seeds for cash. Since the seeds flourish once in a year, the factory may devise means of preserving the seeds during periods of excess so that there is production throughout the year.

6 Secure raw material supply; Farmers experience in growing oil seeds especially groundnuts and sesame. This is just a blessing for the factory because efforts to re-enforce production will land on a soft ground. Technology adoption will be much faster and best practices will be learnt with ease. This is also evidence that the local physical environment is favorable for the production of the oil seeds. It also means community acceptance of the project is guaranteed since all the activities are already done in the community.

6 Consumer’s preference towards locally produced products (patriotism). An interview with consumers revealed a certain level of patriotism that South Sudanese would choose a local product to imported products. This may be used as a tool to strengthen the consumption of Yirol products throughout South Sudan.

6 Strong management: the project manager seems to have a wealth of knowledge in managing complex projects. He has all the history of the factory and he is a born of the area. He mingles very well with the local people around the factory and he appears to have knowledge on resource mobilization and networking. His potential and willingness to engage in project activities is a strength that can be exploited for the smooth implementation of the project.

6 Extensive distribution network: South Sudan is blessed by a federal government which has balanced urban development throughout the country. All the ten state capitals are distribution centers and other state towns are sub centers fed by the state center. This would make it easy to distribute the products because it is easy to determine the population in each state as well as a business count to establish the potential dealers of the product.

6 High costs of production due to expensive factors especially power. There may be a need for heavy investment in power machinery to run the machines that extract oil in the factory. South Sudan is less advantaged with less power options. The generators that will be installed may need to run for longer hours, overnight which increases their fuel intake. This may be expensive to maintain as compared to when the factory would be using Hydro-Electric Power.

6 Low purchasing power of the citizens of South Sudan. Majority are below the poverty line. This seems to explain why locally made substitutes are popular especially in states markets and trading centers. They are cheap and affordable and some of which are locally made at home thus have no cost attached. South Sudan is categorized as a less developed country and with such an economy, the population lives below the poverty line. Products designed should be able to address a cost constraint.

6 Farmers’ limited capacity to increase their scale of operation and productivity. Capacity in-terms of labor, seeds, equipments and agro-chemicals. The study team discovered that there are limited agro-inputs accessible to farmers. Labor is concentrated to young and elderly. The youth and energetic people are concentrated in urban town. This is likely to cause a shortage of labor to engage in production of oil seeds.

6 Poor road network connecting the major towns in South Sudan. Most roads are impassable when it’s a rainy season thus cutting accessibility between the states. This is likely to hinder delivery of Yirol products to all the ten states in time & good condition, and delivery of raw materials to the factory.

6 Limited varieties of oil seeds that are resistant to pests, diseases and harsh climatic conditions. The varieties currently grown are local and have less inbuilt resistance to diseases and pests. Pests and diseases have continued to reduce the productivity of oil seeds.

6 Heavy dependency on natural factors e.g. rain and natural soils. The rains received have continued to follow the world trends of climatic change. This would call for alternative measures of supplying water to the fields and or enriching the depleted soils with nutrients. The study analyzed a scheme initiated by State Government of Northern Bahr el Ghazal region and the scheme is a success with rice production throughout the year. Such initiatives may be adopted and scaled up so as to have a continuous supply of raw materials to the factory.

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South Sudan.

OPPORTUNITIES THREATS

6 Growing population creating an increase in demand for cooking oil products. Due to cease fire agreement signed between Sudan and South Sudan, the number of deaths due to war attacks has drastically reduced. An intervention by government and NGOs has also reduced the number of deaths due to increased accessibility to health facilities. This creates an opportunity for Yirol mill to exploit the created consumption potential.

6 World change in perceptions about South Sudan. This means that products that originate from the country would be acceptable by consumers in the region and the world. It is also evident that investment in a less developed country is cheaper due to lower costs of labor and land. It is likely that some investors who are targeting the East African regional market may locate their production lines in South Sudan than in other East African countries. This presents an opportunity for Yirol Oil mill to benefit from the increased demand of edible oil from Yirol oil mill factory.

6 Possibility for a highly productive farming sector. The agriculture potential is enormous. Land is virgin and the youth are unproductively employed. An improvement in methods of farming would attract more youth into the sector. Government commitment towards improving food security and commercialization of agriculture is a great opportunity the oil mill should take advantage. There is already wide growing of oil seeds around the Lakes State which shows farmers experience with the production of oil seeds.

6 Possibility for integration into the production of bi-products like soap and animal feeds. The study team also observed that most of the edible oil bi-products on the market in South Sudan are imported from East Africa and other neighboring countries. The Yirol factory can earn money through processing of bi-products.

6 Regional Integration. South Sudan has expressed interest to join the East African Community. With this development, the country will benefit from a larger market with a well developed structure and where marketing systems exist. This is also an opportunity for the factory to learn best practices from the leaders of the industry in the region. The purchasing power of the East African member countries is higher than South Sudan (less developed country) which increases the demand potential of the Yirol products.

6 Growing government support: government has shown interest in the factory. Part of the interest is seen through funding research like the on-going feasibility study. The findings of the research would continuously update the factory to change with the changing market requirements. Government has also shown interest by putting deliberate measures to protect infant industries through incentive provision so as to increase competitiveness.

6 High inflation levels creating a situation of price instability. The South Sudan pound is declining against the dollar. This puts the country at a disadvantage because it would spend a lot of money to cater for the imports. Since the economy is a consuming economy, it spends a lot of money on imports. This will create a deficit in the balance of payment. This means the cost of living will rise, labor costs will increase and raw materials will increase in price which puts the factory at the edge.

6 Political insecurity in some parts of South Sudan that scare away investors. The Yirol project is expected to be implemented under a private partnership arrangement. However if the country continues to pose a threat of loss through war, the prospective investors will withhold their interest in the partnership. This will also affect local involvement because people would be on the run instead of concentrating on productive activities.

6 Competitive environment created by a free market policy. This may lead to continued influx of cheap edible oils that may render the industry less profitable. Rivalry is likely to increase because the industry is virgin and profits are very lucrative. This would attract more players that in the long-run may reduce the profitability of the industry.

6 Threat of substitutes; there is a potential threat of substitute products coming from the neighboring countries at a lower cost. The lower cost is due to economies of scale and comparative advantage due to differences in natural and artificial resources. Local substitutes are also likely to gain popularity especially if the refined edible is produced at a higher cost.

6 Lower levels of land available for oil seed plantations. This may be due to the land tenure system that could threaten investors from opening plantations. All forms of tenure systems exist and there is no clear guideline on how to acquire land. There is less popularity of the government policy on acquisition of land which leaves the community with extreme powers to allocate land.

6 Shortage of labor especially skilled to take up supervisory and managerial roles in Yirol factory. This may require hiring of expatriates which may increase the cost of production. Increased cost of production would make the products very expensive and less competitive in the local and regional market.

6 Global warming that is threatening the production of crops throughout the world. Seasons have changed and shortened, droughts are prolonged and the sun hits directly to the earth surface due to destruction of the ozone layer. This threatens the industry because it depends entirely on grown seeds.

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South Sudan.

2.6 ConsuMption, DeMAnD AnD sAles projections oF cooking oil in south suDAn

6 Sales forecasting is the process of estimating what business sales are going to be in the future. It also provides a benchmark for accurate and timely budgeting processes. Sales forecasting for a new business is more problematical as there is no baseline of past sales.

6 Forecasts are based primarily on recent sales trends, competitive developments, and economic trends in the industry, and region.

6 The trend of cooking oils and fats may continue to show robust growth, as vegetable oil presence increases to smaller towns in South Sudan.

6 Due to estimated increase in living standards, consumers, especially those in small towns and rural areas, may shift from traditional choices of local animal fats to processed vegetable cooking oil.

6 As the capital Juba becomes more saturated with many products, a shift to focus on rural towns and trading centers may increase market penetration.

6 The consultant collected information about the volume of cooking oil imported through Kaya and Nimule the main entry points into South Sudan from the East African region, the main herb. Data was collected for the year 2011. The table below was generated from the data collected from Nimule and Kaya stations.

Table 11: An Analysis of Data for Cooking Oils Imported through Kaya and Nimule (Data in Liters)

MONTH KAYA 1 KAYA 2 NIMULE T0TAL.

JAN N/A 268,998 N/A 268,998

FEB N/A 582,963 N/A 582,963

MAR 124,800 N/A N/A 124,800

APRIL 68,320 790,108 N/A 858,428

MAY 25,000 458,749 N/A 483,749

JUNE 156,600 355,339 N/A 511,939

JULY N/A 48,420 N/A 48,420

AUG 102,600 124,536 3,930,636 4,157,775

SEPT 417,300 63,487 478,040 958,827

OCT 102,600 271,430 750,393 1,124,423

NOV 460,960 92,568 1,307,001 1,860,529

DEC 232,660 232,660

TOTAL 11,213,511.00

Source; Cooking Oil Import record Collected by South Sudan Custom Corporation at Nimule and Kaya Station in litres 2011. Note: N/A denotes Not Available

6 According to the data collected from the Nimule and Kaya stations, 11,213,511 liters were imported through the stations in the year 2011.

6 Leaving other factors constant, it would appear that each individual in South Sudan consumed 1.4 liters in 12 months.

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South Sudan.

Table 12: Value of import bill for South Sudan

MONTH Imports (liters) Value in US ($)

JAN 268,998 443,846.70

FEB 582,963 961,888.95

MAR 124,800 205,920.00

APRIL 858,428 1,416,406.20

MAY 483,749 798,185.85

JUNE 511,939 844,699.35

JULY 48,420 79,893.00

AUG 4,157,775 6,860,328.75

SEPT 958,827 1,582,064.55

OCT 1,124,423 1,855,297.95

NOV 1,860,529 3,069,872.85

DEC 232,660 383,889.00

TOTAL 11,213,511 18,502,293.15


In the year 2011, Government of South Sudan spent approx. 18.5 million United States dollars to import cooking oil.

Figure 27: Trend of imports distributed in months for the year 2011


6 The highest period over which the country imported the highest amounts of cooking oils through Nimule and Kaya was August and November.

6 This could have been brought about by the speculation about the expected demand of the cooking oils during the December festive season.

6 It can also be interpreted that after the independence in July, borders became more flexible and more goods entered the country.

6 The trend kept higher than before until December.

6 This could mean that sales outlets had stocked enough for the December season and there was no demand for cooking oils from the suppliers during the month of December.

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South Sudan.

Limitations of this Data

6 The data does not consider informal trade that takes place across the borders.

6 Sudan formally banned exchange of goods with South Sudan but many trucks carrying goods were seen on the road from the Sudan connecting up to Juba.

6 Also goods made from Sudan were seen on the markets of South Sudan.

6 Other goods could be coming in through Ethiopia, Congo and other neighbouring countries.

6 There could be informal trade between other informal borders connecting east African countries.

6 This informal trade may be estimated at 20% of the total edible oils consumed in South Sudan.

6 There is also local processing of oils from groundnuts and lulu nuts for use at household level which are used because of their availability and affordability. They are processed locally and consumed locally and are not captured anywhere in the trade statistics.

6 Considering the above statistics as a baseline, and assuming the data recorded at the border points constitute 80% of the total edible oils consumed in South Sudan, and keeping in mind the size of the population, the above data may be re-adjusted as follows;

Major Assumptions

i. Due to limited available data about the population statistics, the import bill was used as a basis for demand and consumption analysis

ii. Local cooking oil consumed and informal trade of cooking oil constitute 20% of total oils consumed in South Sudan

iii. Boarder ports of Nimule and Kaya are the main entry points for imported cooking oil products and this constitutes 80% of total cooking oil consumed in South Sudan.

iv. Annual consumption growth rate of 2.5% based on population growth rate of 2.5%. The population growth rate was deducted from a comparison analysis of regional population growth rates (UGANDA =3.2%, KENYA=2.6, TANZANIA =3%, and SUDAN =2.5%). The consultant took a conservative rate of 2.5% given the fact that the figure for Sudan includes the statistics for South Sudan before independence.

v. Value of import bill calculated at world market prices. Prices are based on Costs Insurance and Freight (CIF). IMF/FAO Statistics for World Prices of Cooking Oils in South Sudan is given below;

Table 13: World market prices for major cooking oils in South Sudan for the year 2011 May-June in US $

Cooking oil types May (data in tonnes) June (data in tonnes)

PALM OIL 1,219 1,290

SOYABEAN 1,159 1,020

OLIVE OIL 3,130 3,050

SUNFLOWER 1,731 1,881

GROUNDNUTS 1,780 1,800

TOTAL 9,019 9,041

AV 1,803.8 1,808.2

Source: IMF/FAO 2011

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South Sudan.

6 Taking the average for the two months, a tone goes for 1806 US$ on the world market. This further calculated per liter would give 1.65 US$ on the world market.

Table 14: Adjusted Results Incorporating in Projected Data

MONTHS KAYA 1 KAYA 2 NIMULE IMPORTSI N F O R M A L TRADE

TOTAL CONSUMP-TION

JAN - 268,998 - 268,998 53,800 322,798

FEB - 582,963 - 582,963 116,593 699,556

MAR 124,800 - - 124,800 24,960 149,760

APRIL 68,320 790,108 - 858,428 171,686 1,030,114

MAY 25,000 458,749 - 483,749 96,750 580,499

JUNE 156,600 355,339 - 511,939 102,388 614,327

JULY - 48,420 - 48,420 9,684 58,104

AUG 102,600 124,536 3,930,636 4,157,772 831,554 4,989,326

SEPT 417,300 63,487 478,040 958,827 191,765 1,150,592

OCT 102,600 271,430 750,393 1,124,423 224,885 1,349,308

NOV 460,960 92,568 1,307,001 1,860,529 372,106 2,232,635

DEC 232,660 - - 232,660 46,532 279,192

Total 11,213,508 2,242,702 13,456,210


6 The figures including the 20% increment become 13,456,210 liters of cooking oil in the year 2011

6 On average, 1,121,351 liters of cooking oil were consumed per month in the year 2011.

6 Comparing the results with the population (8,260,490) of South Sudan, each individual consumed 1.63 liters in the year 2011.

Table 15 Projected Consumption of Cooking Oils in the First 10 Years

Actual local &informal Projected Consumption

2011 base year 11,213,508.00 2,242,701.60 13,456,209.60

2012 11,493,845.70 2,298,769.14 13,792,614.84

2013 11,781,191.84 2,356,238.37 14,137,430.21

2014 12,075,721.64 2,415,144.33 14,490,865.97

2015 12,377,614.68 2,475,522.94 14,853,137.62

2016 12,687,055.05 2,537,411.01 15,224,466.06

2017 13,004,231.42 2,600,846.28 15,605,077.70

2018 13,329,337.21 2,665,867.44 15,995,204.65

2019 13,662,570.64 2,732,514.13 16,395,084.77

2020 14,004,134.90 2,800,826.98 16,804,961.88

2021 14,354,238.28 2,870,847.66 17,225,085.94


6 Taking 2011 as a base year, the trend increases by 2.5% up to the tenth year.

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South Sudan.

Table 16: Market Value for South Sudan Edible Oil Industry

PERIOD (YEARS) PROJECTED DEMAND (liters) VALUE OF DEMAND IN US ($)

2011 base year 13,456,210 22,202,746

2012 13,792,614.84 22,757,814

2013 14,137,430.21 23,326,760

2014 14,490,865.97 23,909,929

2015 14,853,137.62 24,507,677

2016 15,224,466.06 25,120,369

2017 15,605,077.70 25,748,378

2018 15,995,204.65 26,392,088

2019 16,395,084.77 27,051,890

2020 16,804,961.88 27,728,187

2021 17,225,085.94 28,421,392


6 The market value is expected to increase up to approximately 28.5 million US dollars.

6 This is the amount the government would spend through imports.

6 If the factory starts production, it would facilitate import substitution that eventually stabilizes the country’s balance of payment through imports.

6 There is also a possibility of exporting shea nut oil to premium markets that would further stabilize the balance of payments.

2.6.1 Yirol Factory Production Capacity 6 The factory will have two production lines; one line for groundnuts oil and sesame oil and the

other for shea nut oil and bi-products.

6 It is eminent that the capacity of the machinery be based on the total available land and future supply of raw materials from the different area neighbouring the factory. The 2,050 feddans owned by the oil mill and the 3,000 feddans for the out-growers and small farmers can be able to provide 1,050 tonnes of groundnuts seeds and 3,00 tonnes of sesame seeds in a season.

6 Since there are two seasons in the region, it is estimated that 2,000 tonnes of groundnuts and 600 tonnes of sesame can be attained per annum from the available and the out growers land. Assuming that only 60% of the produce reaches the production flow in the first phase, 3,600 tonnes of groundnuts per annum and 1,080 tonnes of sesame per annum will be processed. It has also been estimated that 3,500 tonnes of shea nuts can reach the production flow per annum.

6 The consultants therefore propose two production lines for the vegetable oil processing, one production line of capacity 25 tonnes of seeds per day to process both groundnuts and sesame (in the ratio of 60: 40 of groundnuts: sesame)and another production line of capacity 10 tonnes1 of seeds per day to process shea nuts/ lulu. Thus production line 1 is to have a capacity of 7,500 tonnes of seeds per annum and production line 2 of 3,000 tonnes per annum for shea nut seed though in the first years they will be producing at a low capacity.

1

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South Sudan.

6 Therefore the oil produced for line one is estimated 10 tonnes per day (for 45% oil content in seeds) and 4 tonnes of shea nut oil per day, all at full capacity. Therefore at full capacity, the Yirol oil mill will be able to produce an aggregated amount of 4,200 tonnes of oil per year, which can be estimated to be 4.59 million litres at full capacity.

2.6.2 Increase in Market Share 6 Market share is the percentage of an industry or market’s total sales that is earned by a

particular company over a specified time period. Market share is calculated by taking the company’s sales over the period and dividing it by the total sales of the industry over the same period. This metric is used to give a general idea of the size of a company to its market and its competitors. Investors look at market share increases and decreases carefully because they can be a sign of the relative competitiveness of the company’s products. As the total market for a product or service grows, a company that is maintaining its market share is growing revenues at the same rate as the total market. A company that is growing its market share will be growing its revenues faster than its competitors.

6 According to South Sudan’s` market findings, sesame, groundnuts and shea nuts have market and the raw materials are available in the areas surrounding the factory. The production capacity is estimated according to the machinery available on the market and the availability of raw materials. The table below shows the production capacity of Yirol factory:

Table 17; Production Potential for Yirol Factory for two Lines in Tonnes

LINE 1(Groundnuts) LINE 1(Sesame) LINE 2(Shea nut oil) Total (tonnes)

year 1 (2015) 900 600 300 1,800

year2 (2016) 1,350 900 450 2,700

year 3 (2017) 1,620 1,080 540 3,240

year 4 (2018) 1,800 1,200 600 3,600

year 5 (2019) 1,800 1,200 600 3,600

year 6(2020) 1,800 1,200 600 3,600

year 7 (2021) 1,800 1,200 600 3,600

year 8 (2022) 1,800 1,200 600 3,600

year 9 (2023) 1,800 1,200 600 3,600

year 10 (2024) 1,800 1,200 600 3,600


6 At the initial stage of the production period, the plant would require approximately 3 years to utilize full production capacity. Therefore in the first, second and third year of production, the capacity utilization rate would be 50%, 75% and 90%, respectively. In the fourth year and thereafter, full capacity (100%) production shall be attained.

6 Due to the nature of edible oil industry in South Sudan and the level of competition in the industry as discussed in the previous sections of this chapter, it is anticipated that all the cooking oil produced at Yirol will be consumed.

6 The first two years (2013 and 2014) will be setting up the machinery, opening up of the nucleus farm and mobilizing farmers. Production will be actualized in the year 2015 and thereafter production will continue.

6 The market share for Yirol is calculated according to anticipated production/sales vis-à-vis the total projected consumption for the industry products.

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Table 18; Increase of market share for Yirol products for the first ten years of production

Yirol total production(tonnes) Projected consumption (tonnes)Market share (%)

2011 0 12,311 0

2012 0 13,081 0

2013 0 13,408 0

2014 0 13,743 0

Year 1(2015) 1,800 14,087 13

Year2 (2016) 2,700 14,439 19

Year 3 (2017) 3,240 14,800 22

Year 4 (2018) 3,600 15,170 24

Year 5 (2019) 3,600 15,549 23

Year 6 (2020) 3,600 15,938 23

Year 7 (2021) 3,600 16,336 22

Year 8 (2022) 3,600 16,744 22

Year 9 (2023) 3,600 17,163 21

year 10 (2024) 3,600 17,592 20


6 During the first year of production, Yirol will have 13% of the market share in the industry. The other market share will be shared between companies in the region.

6 The market share is expected to increase at an increasing rate up to the fourth year. Key assumption is that all the products will be consumed locally.

2.7 strAtegic intervention AreAs

2.7.1 Production of Oil Seeds

2.7.1.1 Land Ownership

6 Land is relatively plentiful in South Sudan. Yet many difficulties are experienced in acquiring ownership rights, both by the citizens and foreigners. The role of the Government vis-à-vis the community is very unclear. Similarly there is no clear line of demarcation between the roles of the various levels of Government with respect to land.

6 These ambiguities act as constraints to agricultural investments and for appropriate business premises for all types of business enterprises. It would appear that people of South Sudan are uncertain of how to acquire land for production. It appears all the tenure systems including communal, freehold, leasehold and customary ownership exist.

6 The study discovered through FGDs and other consultations with Clan leaders that where land has visible economic value, the tenure system is free hold and where the land has no visible economic value, the tenure system is communal. The Land Act of South Sudan also indicates that land belongs to the Government. This is an impediment to investments that require land as a major input.

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Recommendations

6 The Land Act needs to be revised to attract private sector investment. All local administrative structures and clan heads may be sensitized about land acquisition in South Sudan. The land tenure system must be able to allow easy access of land for production.

6 The 2030 acres allocated to the project may be sustaining in the short term but as the market grows, it will necessitate having more land available to local investors for the production of oil seeds to supply the factory as long as they fulfil the investment requirements.

6 The popular controversy is that states are operating as small governments with resources for their own citizens and all people outside the states are perceived to be foreigners. For example an investor in Central Equatoria may not easily access land in the Lakes State.

6 This means growth will only be generated by state local people only and Foreign Direct Investment (FDI) will be limited though it has proved to catalyze development in many developing countries.

2.7.1.2 Organization of Producers and Capital Development

6 The effects of the civil war contributed to a large extent on the depletion of the capital base of South Sudanese. All forms of physical and social capital were left scared by the prolonged conflict and mines. Forms of capital include; cultural, human, knowledge, institutional, financial, manmade and natural resources.

6 South Sudan is rich in natural capital including oil, good climate, abundant rainfall, and vast chunk of arable land; however, it possesses relatively low stocks of the other six forms of capital: social, human, knowledge, institutional, financial, and man-made.

6 The natural endowments can be a waste if the other forms of capital remain inactive to exploit the natural capital. South Sudan evidently needs to invest in building critical infrastructure and strengthening its financial services sector; it must also invest in the higher forms of capital: social, human, knowledge and institutional capital. This will empower South Sudanese with tools to exploit the vast opportunity in the region.

6 The starting point may be creation of smaller social groups with common objectives and similar goal. Cohesion develops naturally as the group members interact and do activities with one another. Such initiatives can yield huge national results if rolled out into the entire country and in all the sectors. It makes service delivery easy for the Government across all the sectors for example; a farmer’s cooperative can stimulate development of health related services. The models discussed below are alternative channels for capacity development of farmers to supply the factory.

2.7.1.3 The Co-operative Model

6 A cooperative is an autonomous group of persons united voluntarily to meet their common needs through a jointly owned and democratically controlled enterprise. A fully functioning cooperative is based on 5 basic values. These include; Self help; Democracy; Equity; Equality and Solidarity.

6 Cooperatives are guided by the following principles: Voluntary and open membership, democratic member control, member economic participation, autonomy and independence, education, training and information to its members on their responsibilities to the cooperative, cooperation and harmony among members and concern for the community

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The Genesis of Agriculture Cooperative

6 Agriculture cooperation has been practiced since the Babylonian civilization. However its present form owes its genesis to the industrial revolution in Britain in the 19th century. The cooperatives were formed to take advantage of the economies of scale against exploitation by the middlemen and traders and share the benefits equitably among the members. Consequently, cooperatives are always found to be engaged in economic activities promoting increase in income and thereby enhancing living standards.

6 All agriculture cooperatives are formed around a common commodity or group of similar commodities. The principle of formation and management of cooperatives as the term itself refers, is the promotion of cooperation among members for common good, equitable ownership of the enterprise, and profit distribution in share of the patronage by members.

Benefits of Organizing into Cooperatives

As mentioned above, cooperatives are formed around a commodity or group of similar commodities, it enables the members to pool their resources and thus take advantages of economies of scale. The economies of scale benefits at all levels of supply chain starting from:

6 Collective procurement of raw materials or agriculture inputs allows members to negotiate for lower prices and ensure quality raw materials.

6 Economical warehousing facilities. Since farmers want to collect their produce in a common place for quality and transport purposes, they build warehouses as collection centers with good conditions for storage and preservation facilities. This too helps to ensure quality and uniformity in the produce supplied.

6 Leveraging of transportation costs. It is evident that 10% – 20% of the cost of agriculture raw materials at the factory is transport costs. This in most cases is because farmers act in isolation and middlemen take advantage of the disorganization to exploit them because they own the means of transport. Since they operate at a profit, they inflate transport costs and hence making the product expensive. If farmers are organized into a cooperative, they bridge the gap and can easily own the transport means to transport their produce at a lower cost.

6 Preliminary Value Addition including sorting, grading, cleaning, drying and packaging can be done at a cooperative level. This ensures the raw materials supplied to the factory are uniform and standardized.

6 Eliminating Intermediaries. Cooperation reduces the hands that get hold of the produce thus reducing extortions.

6 Creation of social cohesion. Members of cooperatives meet regularly, and engage in collective activities. Through this, members build social ties and relationships that are long lasting and other social services can easily penetrate the community. Government can also take advantage of this to advance its social objectives into a solid community.

6 Creation of societal infrastructure, mainly education and health: experience and case studies visited during the study show that where a cooperatives are located, there is better education and health services. Either the government puts up the infrastructure to respond to the growing need or private individuals establish the infrastructure.

6 Creation of employment opportunities: During advanced stages of cooperative movement, the youth can get jobs as accountants, community mobilizers, extension workers and administrators.

6 Quality Consciousness. Members of the cooperative societal set rules of quality standards. These rules must be adhered to by all members that sell their products to the cooperative.

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Normally there is a committee that specifically looks at quality.

6 Leverage finance at softer interest rates: Because of higher bargaining power, financial institutions find it easy to lend to organized groups than isolated individuals. This is because the costs of giving loans and recovery costs are low. Thus it’s interest rates can be negotiated due to lower costs of loan administration.

6 Attract international development agencies: international organizations prefer to work with organized community based organizations. They can channel funds and community assistance through cooperatives since they are member based and understand communities better. The project can take advantage of such assistance to increase productivity and recruit more farmers.

Recommendation

6 The Ministry of Cooperatives and Rural Development is mandated with the responsibility of promoting cooperatives in South Sudan. According to the Sudan national census 2008, there were 86 registered cooperatives in South Sudan of which 46 were agro-based. These cooperatives were formed before independence.

6 As earlier discussed, cooperatives are sustainable if they have a strong foundation of members. A cooperative can have members as individuals and or groups of individuals as primary cooperatives who share intrinsic common goals.

6 The Government needs to empower the farmers to form into groups and sell to them the benefit of registering either in an existing cooperative or form a new cooperative society. Given that cooperative movement is going on and deliberate strategies to form cooperatives are in place, formation and farmer empowerment can go hand in hand.

6 For purposes of YOM project, three cooperative societies may be formed around the three production lines of groundnuts, sesame and shea nut (Lulu tree). The process of cooperative development goes around systematic components. The model containing stages is illustrated below;

SIMSIM COOPERATIVE SOCIETY

G.NUTS COOPERATIVE SOCIETY

LULU COOPERATIVE SOCIETY

COOPERATIVE SOCIETIES HANDLING SECONDARY ACTIVITIES THAT SUPPORT LOWER LEVEL SOCIETIES (EACH COMPRISING 50 PRIMARY COOPERATIVES)

INDIVIDUAL FARMERS GROWING SIM SIM, G. NUTS AND COLLECTING LULU SEEDS

FARMER GROUPS EACH COMPRISING OF 20 INDIVIDUAL FARMERS

PRIMARY COOPERATIVE SOCIETIES FORMED AROUND G.NUTS. SIMSIM AND LULU SEEDS (EACH COMPRISES 5O FARMER GROUPS)

Figure 28: An illustration of a proposed cooperative model for Yirol Project

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Component One: Mobilization of Farmers

This is the first and most important stage for it creates a foundation for the success of proceeding stages. The major objective of this component is building the capacity and empowerment of farmers thus raising their expectations for formation into groups and collective production of oil seeds.

Sensitization: Now that the war is over and the long waited independence is finally attained, it is good timing that the government needs not to lose it at this infancy stage in the development of South Sudan. Farmers need to be sensitized on general principles and practices of working together and government’s commitment towards improving their livelihoods. Government’s commitment needs to come out very clearly so as to encourage farmer’s involvement in government programs.

Capacity Building: The study has discussed the traditionalistic nature of farming in South Sudan. It is at this stage of cooperative formation that farmers need to get equipped with the farming skills and agronomic practices. This should start with the existing extension staff at all the levels of administration including the central government. There is need for refresher courses for all the extension staff in order to get the basic dynamics of farmer mobilization and fill the gaps for agronomic practices. The starting point should be a needs assessment for effective formulation of the training curriculum for extension staff. The training should be managed and executed by an external consultant who should report to the Ministry of Agriculture with clear parameters and outcomes needed.

Entrepreneurship Development: Breaking the norm creates an intrinsic force that facilitates development. Entrepreneurship development helps in breaking the norm and farmers start thinking outside the box to do things that appear unknown to them. An entrepreneurship development program

needs to be developed with dynamic methods of facilitation to capture the interest of farmers.

Component Two: Formation of Farmer Groups

Small groups of 20 members each need to be facilitated to form and members need to have received the facilitation from component one. This will make the process of group formation faster because the members share a common goal and they have the same interests. Majority of the farmers in South Sudan are small holder and subsistence only producing for household consumption. These individual, small and medium-scale farmers are facing significant constraints in responding to sourcing opportunities in the environment. However, horizontal co-operation through sustainable institutions can provide a potentially effective mechanism to achieve collective efficiencies through joint action, and collective efforts towards achieving a common objective. This would consequently increase production and productivity ratio. This also expands joint production capacity for meeting large orders on a regular basis through joint economies of scale; facilitate specialization in production; and strengthen bargaining power thus reducing the risk of exploitation by middlemen who offer exaggerated prices.

It was observed that farmers in the project areas (Lakes State) are characterized by small scale production, poor quality of produce, low productivity, low information access and uncoordinated production activities. The local farmer groups play a key role in enhancing productivity, social learning, labor pooling, and risk sharing. Both ‘newly formed’ and traditional institutions should be seen as complementary and used as building blocks for community and resource mobilization. Some of the functions of the groups include;

Building of Group Structures: The groups facilitated to form should have transparent visionary leaders as role models and facilitators. The process of leadership selection need to be transparent and should not be a source of conflict between the members.

Training into Group Dynamics: Group dynamics and conflict resolution should be at the forefront of the training. South Sudan is blessed because the villages are living as communities and they have a local way of resolving conflict through their local courts. This can be built on to have a more improved system of building cohesion and resolving conflict centred at increasing local crop production. Farmer groups also need to be facilitated to build their capacities in areas like:

6 Problem identification

6 Identifying alternative options for addressing the problem

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6 Communication skills and ability to share freely with others in a group;

6 Identify effective linkages with available institutions, as well as technical personnel

6 Knowledge on broader issues on relevant topics such as improved farming methods, water resource management, market opportunities, value addition all aiming at improving their socio-economic welfare.

6 Developing strong and accountable leadership and organizational capacities of the groups. These should ensure group cohesiveness, team building, and building common goals.

6 The building of strong and accountable farmer group’s leadership is viewed as a key precondition for success of farmer extension service delivery. Individual group members should play a key role in decision making processes as this strengthens ownership; demand for accountability from their leaders; demand for extension services that are based on informed choices and needs. The groups should support oil seed development; influence policies related to agricultural services delivery; and ensure that the natural resource base is maintained and improved.

Due to the nature of the public system in the country, it is strongly recommended that the public sector be entirely involved in farmer mobilization during the initial stages of implementation. The extension staff at government and state levels should strengthen the delivery of extension services with an objective of strengthening the capacity of the farmer groups to take up extension services.

Key Success Factors for Group Formation

Institution Development time and depth: The development of sustainable farmer institutions requires significant investment in developing partnership and social capital (networks among various stakeholders) over a longer period of time. Considering that farmers (who are the suppliers of raw materials) are the foundation of the Yirol project, increased investment in developing local expertise in Farmer Institutional Development is pertinent. It also requires constant motivation to maintain interest.

Dealing with diverse needs: The differing needs and capacities of farmers participating in the process needs to be addressed. For example, poorer households are more often interested in pursuing food security or selling their labour than pursuing oil seed development. Likewise, farmer groups have diverse interests and capabilities, and therefore require different levels and intensity of support depending upon their history and evolution. The project can consider tailoring extension services to address different livelihood options with the aim of eventually creating bigger cooperative societies.

Benefits to farmers: A sustainable commitment to the YOM project by farmer groups will only come about when the groups and members see themselves as realizing some tangible benefits from their involvement in the project activities. Therefore, attention should be directed towards broadening the range of group activities, to include value addition production activities; social benefits and increased earnings of individual farmers.

Capacity Limitations. There are capacity limitations such as limited extension staff at the state level and extension structures which may affect their ability to meet the targets with quality work, given the definition of the task, time and resource allocation. This therefore implies that the effectiveness of the extension staff in these federated states is limited. This can be addressed through partnerships with NGOs and the central government.

Strengthening Resources Base: Most existing farmer groups lack financial resources to run their activities. There is need to explore mechanisms to strengthen funding to the farmer groups. The ability of the farmer groups to contribute resources locally would significantly empower, enhance sustainability and increase their relevance. The most viable sources would be internal sources – but these sources can only be viable if the group members not only own the groups but also expect tangible benefits.

Mentoring: Longer term and more in-depth mentoring of farmer group leaders and executive committees are required to build their capacities in organizational development, group cohesion, and participatory

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decision-making. It also involves up-scaling of best practices

Performance Measurement: A performance measurement and feedback framework with indicators and mechanisms needs to be developed through agreement with other actors. There is need to develop a systematic, coherent, and uniform procedure of verifying performance indicators.

Conflict resolution mechanisms: Conflict resolution mechanisms need to be established. Democratic means of changing leaders needs to be put into place. Similarly, there is need for agreed upon mechanisms for resolving disputes.

Component Three: Primary Cooperative Societies

Primary cooperative societies are umbrella organizations for producer groups at the village levels. These may be formed at payam levels and their membership is the farmers’ groups. According to this model the maximum number of groups in each cooperative is 50. This implies that each primary cooperative contains 1,000 individual members. The functions of the primary cooperatives include but not limited to the following;

Savings and credit: Farmers need to learn and adopt saving habits through small group savings. This helps farmers to have access to smaller monies to cater for the domestic needs as the crops are growing and or awaiting payment from the factory or cooperative society. The savings can start at the group level and the groups have savings in the primary societies. In order to allow transparency and continuity, simple accounting principles need to be exercised and members updated on the status on agreed periods.

Group Facilitation: Group facilitators should be developed from the internal resources. The skills of group facilitators should be developed and they may be given incentives and motivation to do their work. They can take up the role of training and monitoring their fellow farmers.

Collection Centers: Economies of scale should be enjoyed at this stage. Farmers should be facilitated to establish a collection center for each primary society for transportation to the factory. The collection centers should be built to standard so that they do not compromise the quality required at the factory.

Transportation: Transportation is an expensive function given the fact that farmers produce in smaller quantities. It becomes very expensive for each farmer to transport his produce to the factory. If produce is collected at a common place (collection centers), the primary society may arrange a transport facility and the cost can be shared amongst the members. As the resource envelope expands, the primary cooperative can acquire a truck for transport. In the long run, the society can exploit strategically available sources of funds and purchase transport facilities.

Component Four: Cooperative Societies:

According to this model, cooperative societies have membership of primary cooperatives. The functions of the cooperative society include but not limited to the following;

Coordination: A cooperative society being at the upper level of management has a wider representation and coordinates a wide scope. All activities, work plans, and budgets of member based cooperatives should be made in consultation with the cooperative society. The society can develop a framework over which the member based societies can operate. This helps in planning and projecting the input sales to the factory.

Lobbying and fundraising: A bigger voice can be heard more than a smaller voice. The cooperative society may help fundraise for the needs of the members. The fundraising function is very important for the success of the society. There may be a committee specifically charged with the responsibility of raising funds for the activities of primary cooperatives/ groups.

Representation: Cooperative societies represent individual farmers at all levels of government and society. This is very possible because they are member based and they perform only the interests of the members.

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Savings and Credit: The savings and credit component of the groups and primary associations should be developed further to form a fully fledged savings and credit cooperative society. This can be nurtured by the cooperative society and with further lobbying and fundraising can accumulate the necessary capital to register as a Savings and Credit Cooperative (SACCO) and start serious lending business.

Table 19: Volume of inputs expected from each cooperative society

GROUNDNUTS COOPERATIVE SOCIETY

Average Productivity/Acreage Average Acreage Number of Members Total Production

0.75 tonnes/acre 5 50,000 187,500 tonnes

SESAME COOPERATIVE SOCIETY

0.3 tonnes/acre 5 50,000 75,000 tonnes

Assumptions

66 Average productivity = 0.3 tonnes/acre for Sesame and 0.75tonnes/acre for groundnuts

66 Average acre/member = 5

Source: Yirol oil mill feasibility study data analysis 2012

6 NB. The cooperatives act as out grower schemes and each cooperative formed has obligations to supply the seeds to the factory. During the implementation of the project, the factory may have contractual obligations to procure the farmers produce on agreed market prices. This will motivate the farmers to own the process and the oil mill.

2.7.1.4 Contract Farming Model

6 Contract farming is carried out according to an agreement between a buyer and farmers which establishes conditions for the production & marketing of farm products. The farmer agrees to provide established quantities of specific agriculture product, meeting the quality standards and delivery schedules set by the contractor. The buyer commits to purchase the products often at a pre-determined price. In most cases, the buyer commits to support production through supplying farm inputs, land preparation, technical advice, and arranging transport of produce to the buyer premises.

Benefits to Farmers:

Assured market; the market is guaranteed by the contractor and the three parameters of price, quality and quantity are predetermined at the initiation of the contract. This helps farmers to focus their production to the required quality and quantity. Issues of price fluctuations and periods of produce boom and scarcity are eliminated. Farmers are also given an opportunity to forecast their incomes and expenses and hence can predetermine their net cash inflows.

Support services; in most cases, farmers are supplied with farm inputs, assisted in land preparation, are given extension services, transport arrangements to the factory, and after sales services. All this is done to ensure that farmers deliver according to the agreed standards of quality and quantity. However, these services are not given for free. The price offered to farmers is always a discounted price to include the payments for the services supplied.

Benefits to the Oil Mill Factory:

Assured supplies; one major constraint that has always hindered companies from putting heavy investments in local communities is lack of capacity to supply the required raw materials to make full utilization of plant capacities. Farmers have proved to be the most unreliable suppliers of raw materials. They switch from crop to crop according to the shift in price boom. Contract farming helps contractors to plan for the produce they have contracted with the farmers and can make deliberate efforts motivated by incentives to increase acreage so as to meet the full utilization of plant capacities.

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Desired quality; quality is also predetermined at the initiation of the contracts. Extension workers are normally utilized to advise, monitor and supervise farmers to ensure that all the activities carried out are in line with producing the best products required by the contractors.

It would appear that farmers in South Sudan are vulnerable to enter into contractual obligations with the factory. Their vulnerability can be shielded by the cooperatives societies. As the process of farmer empowerment is still going on, the factory should deal with cooperative societies as farmer representatives. However during such arrangements, the following issues of concern need to be taken into consideration for sustainable relationships:

6 If the terms of the contract are not respected by one of the contracting parties, then the affected party stands to lose.

6 Farmers sell to different buyers ( side selling or extra contractual marketing)

6 A company refusal to buy products at agreed prices or the down grading of produce quality by the buyer or buying less than the pre-agreed quantities

6 Potential for buyers to take advantage of farmers because of higher bargaining clout and higher switching costs by farmers to other crops

6 Over pricing for the inputs and transport provided

6 Cooperative societies may use all the public extension services available and integrate alternative methods of extension for quicker adoption. The study recommends farmer field schools approaches as integrated methods for technology transfer.

Targeting Rural Women as Actors in the Project

Women are more involved in farming activities than men. To enhance the participation and involvement of women in the project, tailor-made arrangements to fit the prevailing conditions of women have to be evolved. These will include:

6 Developing criteria for selection of contact farmer group members where the contact persons or leaders will not necessarily be heads of households (traditionally heads of households are men) but rather active farmers such that women can also take part.

6 Facilitating women’s attendance at extension meetings. This can be done through: advertising meetings of particular interest to women; holding meetings at times and in locations convenient and accessible to both men and women e.g. at religious centers, markets etc. This will be a pull factor for them to participate.

6 Setting the time, location, and day of extension activities that suits women’s schedules. For example, meetings can be held in the evenings when women have reduced on their domestic chores. There is need to liaise with women and male elders to make schedules that are mutually appropriate.

6 Availing separate facilities for women as necessary at training centers, in markets, or other public places. This is because women may feel uncomfortable to discuss certain gender issues yet these issues greatly affect the success of the project.

6 Availing training in one-day modules or provide mobile training units to visit farms and transport women to and from nearby villages particularly where women cannot afford attending residential trainings.

6 Designing appropriate messages in written, oral, and visual media, targeting women.

6 Holding informal meeting interactions at extension sessions so as to address the needs of those who may not articulate their issues in a group setting.

6 Involving women groups involved in other development programmes in order to synergize efforts.

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2.7.2 Product Development

2.7.2.1 Pricing

Price is a key determinant for a decision to purchase or not to purchase fast moving goods. Demand is a result of price and quantity in an inverse relationship. In a free market where there is free movement of goods and services and perfect substitutes, quantity is determined by price. The two factors are related inversely, meaning, an increase in price will reduce the quantity consumed and the reverse is true. The demand is elastic. This is because there are perfect substitutes on the market and the switching costs are too minor to hinder the shifting of demand.

Costs of Production: Price is a function of total costs and returns on investment. Total cost is a function of fixed costs and variable costs. Variable costs are costs incurred during operations of the factory and they vary as the output varies. Variable costs include costs of labor, and costs of raw materials. Fixed costs are costs incurred at the initiation of the project to purchase inputs like machinery that will work over a long period of time. What the company incurs on a regular basis are the costs of depreciation and maintenance for machinery.

Return on Investment (ROI): Return on investment is the additional money the investor expects back from his money invested into the project. This varies from investor to investor. ROI also depends on the bank’s lending rates, interest on investment and current economic conditions. ROI which is the cost of capital to the factory has a direct relationship with the price charged for the product. Comparing two investors; A and B. If investor A charges 10% for his capital and investor B charges 15% for his capital, assuming the two companies produce the same product and they sell in the same market but company A utilizes capital for investor A and company B utilizes the capital for investor B. Assuming other factors remain constant, products from company B will be more expensive than products from company A due to the increment in the cost of capital.

As recommended in other chapters of this report, and in accordance with the private sector development framework of South Sudan, YOM project will be implemented through Public Private Partnership (PPP). The selection of the investor needs to be thorough putting in mind the national interests. Investors are popularly categorized into three broad categories:

Investors Seeking to Exploit Basic Factors: These investors are exploitative and target the natural endowments such as sub-soil natural resources, low-cost labor, location, trade preferences, or similar advantages. Their strategy is based on low-price and arbitrage. Such investments usually produce relatively fewer competitive advantages and thus produce the weakest foundation for sustainable development.

Investors seeking access to the domestic market of a country: Such investors focus on finding attractive domestic consumer and business markets for products and services often produced elsewhere. Such investments usually yield gains for consumers and business customers, and only involve a few local partners in the domestic huddle.

Investors seeking access to the factor endowments of the country: Factors of endowments include human, iInstitutional and knowledge capital. This type of investor benefits from investing in the people, institutions and infrastructure of the host country. Such investments usually have the most positive effects on development and sustainable local competitiveness. This is the most preferred category of investors because they aim at building local capacity.

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Recommendations;

6 Cooking oil is under the category of Fast Moving Goods (FMGs). The big determinant of demand for such goods is price. Given the two factors of costs and return on investment, the project needs to have cost minimization at the heart of every activity and investment undertaken.

6 Variable costs should be maintained at minimum levels as long as there is no potential to damage the performance of the operations. As is recommended on proceeding chapters, the private investor selected should fall under the third category of investors.

6 The project may not break-even in the first two years but as the market share increases and the volume of business expand, the project will break-even and make profits as well. As long as quality is maintained, prices can be reduced to lower than the market prices.

6 The advantage that Yirol Oil has over imported oils is the cut on transport of importation and cross-border tariffs. This implies Yirol oil can be priced lower than imported oils and can still have higher profits. This will be a big competitive advantage over other cooking oils on the market.

2.7.2.2 Promotion

Effective communication with customers is vital for successful introduction of a product into the market and sales generation. Effective communication is deliberately designed to stimulate the target audience to buy the product. The overall objective of any promotional campaign is to effectively communicate to target customers about the products and services. A successful promotion must have a well balanced blend of five tools.

Advertising: Advertising is normally done through media including yellow pages, local news papers, radio, trade journals, exhibitions and websites. This is mainly done for three main reasons;

6 Creating awareness; to provide the target information about the products, services and benefits.

6 Promoting the product and company benefits; To persuade the target audience to buy the products and enjoy the benefits

6 To reinforce the existence of the company, products and benefits. This is done by consistently repeating key messages. Research shows that people need to see or hear an advert at least seven times before it starts to make meaning to them. So to be effective, advertising needs to be conducted regularly in a consistent and recognizable manner.

Public Relations: Public Relations (PR) involve a sustained attempt to develop the reputation of the business using media to create the desired image. This is done through news and press releases to announce for example product launches, or company successes. Articles are distributed to trade journals, or local news papers, sponsorships and or charitable donations. This helps to position the business more prominently in the market place than competitors. Attendance at exhibitions and seminars also help to promote the image of the business to a chosen target audience.

Sales Promotion: This is a specific activity, usually short term that is over and above what is provided to customers. When used effectively, sales promotions are successful in counteracting competitors and merchandise new products in addition to encouraging repeat purchases. It is a good way of attracting new customers though on its own is unlikely to build customer loyalty and or change customer’s longer term buying habits. Sales promotions are monitored and so the success of a particular sales drive can be measured overtime.

Direct Marketing: This involves addressing specific messages to specific target customer groups. It is a flexible method because each letter/message is personalized and the chances of a response are greatly improved. An in-house database is created by collecting information on customers. It is a time consuming activity but the information gathered is accurate and relevant and can be updated regularly.

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South Sudan.

The strongest advantage with this method is that the database if well built can be used during distribution of the products to markets.

Personal Selling: This is the most effective form of promotion because the approach is tailored to the needs of an individual customer. It enables having a constructive dialogue with customers to listen to their needs, promote product and company benefits on an individual basis, answer any questions, and resolve any problems and getting feedback before closing a sale. Personal selling involves employing sales persons which is a costly exercise in the first instance but will pay back usually within 1-2 years. The sales persons build relationships with the customer, understanding their needs and feeding back this knowledge to the business for continuous improvement of the products, customer service standards and competitor knowledge. Personal selling also involves active networking with existing customers, suppliers, business associations, and specialized industry groups. This however is aimed at promoting the business to a wider target audience.

Recommendations:

6 Yirol products will be a new brand in South Sudan market. However, the markets are already full of similar products some of which are imported and others locally made within South Sudan.

6 This puts the Yirol oil at a bigger challenge of breaking people’s norms about what they are used to.

6 It is better to note at this point that some sections of the population have never tasted the oil from Yirol mills even when it was in existence.

6 This therefore calls for a combination of all the promotional mix strategies in order to get a wholesome and rapid response. The main target audience is the customers and sales outlets and each target requires different methods.

AVERTISINGC O N S U M E R S / E N D USERSSALES PROMOTION

PUBLIC RELATIONS

6 Promotional methods that target consumers complement each other and if implemented concurrently or one after the other, can reduce missing targets.

6 Advertisements need to be placed in popular radio stations and television and should frequent each other for a period of time until the customers’ expectations rise.

6 Promotions in form of price discounts and or additional benefits make customers like the product and want to associate with it.

6 Public relations help to work on the perceptions and image of the product and have long term impact.

6 These methods create impact that can be measured periodically but there is some level of patience needed because the impact may not be immediate until the message is repeated in hundreds of times.

The advantage is that once a customer is convinced and makes a decision to buy, as long as the quality maintained, the customers can tell more people. These rapid methods create loyal customers who are sales representatives to friends and family.

DIRECT MARKETINGSALES OUTLETS/WHOLESELLERS

PERSONAL SELLING

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South Sudan.

6 A database of all wholesale shops in all the states in South Sudan should be developed including their location, level of business volume and relevant contact details.

6 A sales representative should be employed in each state under a one year’s contract with clear target of closed sales. These should reach all the whole sale shops to promote the products and company interests. They should market with an aim of creating distribution channels for the product for each state.

6 Different methods of communication should be adopted including e-mail, telephone for preliminary discussions and direct visits to close the deals. They should create a database of closed deals and potential outlets and full information including locations and location coordinates clearly mapped.

6 They should be facilitated well with transport facilities so that they move with samples of the products. They should report directly to the marketing manager based in either Yirol or Juba.

2.7.2.3 Distribution

Products produced at Yirol need to move to all the market centers in South Sudan and the rest of the world. Distribution can be in form of direct or through intermediaries.

Direct Distribution: Under direct distribution, products allotment is managed directly by the producer. The manufacturer establishes his sales points, manages transportation, handling, and all other functions performed by the distributors. However this may not be sustainable as the volume of business increases to overpower the internal sales force. The manufacturer deals directly with the consumers. This is only possible when the products are still at initiation stage and the customers are few and or around the manufacturing point. Another alternative is where the manufacturer establishes sales outlets and manages them, pays all the workers and all other costs related. The only advantage is profit maximization on behalf of the company and job creation for the workers in sales outlets.

Distribution through Intermediaries:The most successful companies are those who have the widest distribution to deliver products or services to their customers. Wide distribution can be realized if a network of intermediaries is built to distribute products to the market. The intermediaries include; independent representatives, wholesalers, or distributors. The distribution channel resembles the following illustration:

Figure 29:Flow of Products through Intermediaries

Distributor: Distributors are companies and or businesses that get products directly from the manufacturer. Once the distributor meets certain qualifications, they become the authorized distributors and are given at a distributor price. Each state can have one distributor who wholesales to wholesalers. Among other qualifications needed should be; capital base, possession of transport facilities, a warehouse, business contacts and experience in similar business.

Wholesalers: Get products from distributors and wholesales to retailers. They get products at wholesale prices from the distributor and sells at a price difference. They have a smaller margin but benefit from the big volume of business.

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South Sudan.

Retailers: Retails products into manageable quantities. They bring products near to the consumers. They have direct contact with consumers and thus get direct feedback about the performance of the products.

Recommendation

6 The vision of the project is to produce products that will be consumed all over South Sudan and targeted countries. In order to realize this vision, the project needs to adopt the distribution channel that involves many intermediaries. Each state needs a distributor but can have as many wholesalers as possible.

6 The marketing department may develop qualifications for distributorship and framework for operation. The benefits of using beneficiaries include; finding more customers for products/services without hiring additional internal sales staff, using their customer and community relationships to garner more business, sharing the risk of sales and doing business in the market by assuming responsibilities for marketing, sales, and distribution, advertising at the local level. Other benefits include; receiving and monitoring customer feedback in the market, breaking down bulk shipments into smaller units for resale, moving goods throughout the market efficiently, consolidating goods and services for distribution, managing point-of-purchase promotions, financing purchases and providing customer service and support on a local level.

2.7.2.4 Packaging

6 Cooking oil may be packed in jerricans, sackets and bottles. Both packages if well designed are long lasting and can maintain the quality of the cooking oil. The key point is maintaining the quality of the oil.

6 Jerricans: These can be of various sizes. The study found out that the 20 liter jerricans and 3 liter were the fast moving sizes. However consumers prefer small packages of ½ liter due to their purchasing capacity. For strategic reasons, the factory may make jerricans in the following quantities;

vi. 20 litre jerricans for customers who cannot afford packed cooking oil.

vii. 10 litre jerricans for customers and retailers who may not afford 20 litre jerricans

viii. 5 litre jerricans for retailers who may not afford 10 litre jerricans

ix. 3 litre jerricans for retailers who may not afford 5 litre jerricans

Plastic Bottles: plastic bottles too can be of various sizes: the advantage with bottles is that they can easily be disposed off and convenient during handling. They are made of relatively cheaper materials than jerricans and thus good at cost cutting.

i. 1 litre bottle for consumers and business who cannot afford the 3 litre

ii. ½ litre bottle for consumers who may not afford to purchase a litre at once

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South Sudan.

Figure 30: Plastic Bottle of Cooking Oil Displayed in a supermarket

Sackets: Sackets made of polythene that is hard and liquid proof can be good at keeping the oil quality and purity.

i. 50mls for customers who do not afford bigger quantities. The sachets are good for small income earners who are the majority in South Sudan.

2.7.3 Infrastructure Development 6 South Sudan is a very large territory which covers an approximate area of 648,051 Km2. The

costs of transport, telecommunications, water and sanitation services, and power supply are major concerns to the development of markets. These raise the cost of production and undermine the ability of the private sector to do business in South Sudan.

6 The Government of South Sudan has been making tremendous efforts over the last few years to address the infrastructural bottlenecks through public investment in roads, bridges, airports, water, power and broadcasting.

Roads: The major access roads that connect the major towns in South Sudan are not in a good state. They are a major impediment to movement of goods from one state to the other. Government is positive about working on the roads. The Roads Authority established will be very fundamental in changing the state of roads. The feeder roads that connect villages the major sources of raw materials need to be improved so that transportation of raw materials becomes cheaper and convenient.

Communication: Communication is a very important factor in development of markets. Telecommunication is good at information sharing and flow from one actor to another. The private sector is good at developing the telecommunication system. The only incentive they need is a good business environment. The radio network, television and other channels of communication are equally important when it comes to passing of information to mass people at the same time. The private sector too needs to be encouraged to invest in such information channels so that all efforts of promoting the Yirol products become effective at influencing the buying habits of individuals in South Sudan.

Warehouse for Products: The factory should have a warehouse where products from the factory are temporarily stored before transportation to market centres. The warehouse should be strategically built to accommodate room for expansion. The warehouse should be built with all the standard storage facilities and conditions included. An external contractor technically skilled should be contracted to construct the warehouse. It should be constructed some distance from the factory and the office of the marketing manager should be included on the structure so that marketing is separated from the production line.

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South Sudan.

Warehouse for Raw Materials: Raw materials should have a store where they are kept. The major point to note here is quality preservation. The cooperative model developed above ensures that oil seeds brought to the factory are of very good quality. The quality needs to be preserved until the processing time. The warehouse built should not give any room for quality deterioration. The office of the agriculture manager should be built at the warehouse for effective coordination of activities at the warehouse and meetings with producer organizations. An external contractor technically skilled at building produce warehouses should be contracted to handle the construction.

Transport facilities: trucks with carriers built purposely to carry raw materials may be purchased to transport the oil seeds to the factory. They need to be specific to ensure quality maintenance of raw materials. Trucks to carry products from the factory may be purchased. The transport function may also be tendered to private investors so as to minimize expenditure on capital items. However, comparative analysis of the two options may be done so that the alternative that minimizes costs is adopted.

2.7.4 Regulation and Taxation

2.7.4.1 Import Substitution Strategy

Various schemes can be used in deliberately discouraging importation of cooking oil into the South Sudan. The schemes can be in form of protective taxes and or regulations. They include the following:

Duty Drawback Scheme:

This essentially provides a refund on import taxes on imported inputs used in manufacturing goods for export. The objective in adopting such a scheme is to ensure the efficient operation for refunding importers.

Tariff Measures:

Export Taxes: Export taxes are often imposed to discourage the export of specific products

Import Duties: Tariffs can be used as the major policy tool in South Sudan. The tariff structure should be determined in accordance with those recommended by WTO and adopted by COMESA or any other regional organization.

Non – tariff Measures:

These refer to various measures which may be used to restrict imports into a country. They range from quantitative restrictions (such as quotas) to various administrative requirements (such as import licenses) and stringent standards and quality requirements. Within the framework of the WTO, countries are encouraged to reduce, and ultimately eliminate their non – tariff measures and also to convert quotas into their equivalent tariff.

2.7.4.3 Taxation Strategy

6 Multiple taxation is a major disincentive to private sector development in South Sudan. Taxes are simultaneously collected from businessmen by the national government, the RoSS, States, Counties, Payams, various security organs, and at road blocks.

6 These taxes have become a real problem to the development of the private sector. However, this system is now being reformed. The RoSS Ministry of Finance and Economic Planning recently commissioned a report into non-oil revenue collection.

6 The recommendations of this report may be implemented by a committee within the Ministry of Finance and Economic Planning. According to an agreement between the RoSS Ministry of Finance and Economic Planning and its counterparts in the States, action is being taken on the following issues:

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South Sudan.

Checkpoints: The following actions are recommended:

6 Only checkpoints for security should be maintained. All other checkpoints should be removed. No checkpoints should collect revenue, including security checkpoints.

6 Police and army political leadership need to be involved to ensure this happens.

6 A law or decree on checkpoints will be made

Inter – state trade: the following actions are recommended:

6 Goods crossing from one state to another should not be interfered with.

6 State should not tax goods which are in transit to other states.

6 Goods will only be taxed at final point of sale/consumption.

Tax Collection: the following actions are recommended:

6 The issue of RoSS tax collectors in the states must be re–examined. It needs to be confirmed what taxes they are collecting, how much and where they are remitting.

6 States can collect revenues on behalf of the RoSS as part of good practices in harmonization and coordination.

Legislation: the following actions are recommended:

6 There is need to ensure harmonization between the RoSS and the states. This must make clear which taxes belong to each level of government. The RoSS should provide a model Taxation Act which each state can then modify and adopt.

2.7.5 Management and Human Resource Needs for Marketing

2.7.5.1 Technical Assistance

6 The project needs an external consultant to oversee the implementation of the project in the first two years. The technical staff in the Ministry of Commerce, Industry & Investment has limited experience in the implementation of oil milling projects. The technical consultant should work closely with the technical staff at the MCII so that they can learn from the consultant.

6 This will be important for the sustainability of the project after the expiry of the contract of the external consultant. The consultant may also do continuous monitoring and evaluation. The technical consultant should report directly to the project director in MCII.

6 The consultant may be selected through an open bidding process. The terms of reference may be developed comprehensively so that there is no room for gaps during implementation.

2.7.5.2 Marketing Management Team

6 The marketing component of the project will have a member on the management team i.e. the Marketing and Sales Manager. Among his/her responsibility will be strategic planning of the marketing department.

6 The marketing and sales manager will be responsible for: Strategic planning of marketing activities, managing and coordinating marketing executives, mapping of the markets and sales outlets, manage the distribution channels and outlets involved, market research to have a feedback on products for continuous improvements, quality assurance of all the products to the market, and other activities related to the marketing function

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South Sudan.

2.7.5.3 Other Sales staff

6 The project may deploy up to 10 sales executives and will be based in the 10 states. The sales executives will require experience in marketing of fast moving goods and a diploma/degree in marketing and sales. They will require facilitation with a motorcycle to help them move throughout the state. They will report to the marketing and sales manager based at Yirol/Juba.

6 Other staff will include; sales officer, transport and distribution officer, inventory and stores officer, drivers, distribution agents, security and verification officer, and records assistant. A detailed staffing framework and organisational chart is presented in chapter 5 of this report.

2.8 iMpleMentAtion oF MArketing AnD oilseeDs proDuction

6 As will be discussed in chapter 5 of this report (organisational feasibility chapter), the project will be implemented in partnership with the private sector. However, government may strongly support the organization of farmers to benefit from ready market for oil seed crops. A Memorandum of Understanding (MOU) should be developed outlining the roles and responsibilities of government and for the private players as regards farmer mobilisation.

6 Oil seeds will be produced through cooperative movement and the nucleus farm. However, farmers need time to adopt the technologies. Meanwhile, the project can open up the 200 feddans of groundnuts and 200 feddans of sesame as farmers develop capacities to produce enough oil seeds. The farms opened can also act as demonstration plots for better technology transfer. This can be done for two seasons as the farmers are mobilized for massive production.

6 In the long term, farmers can take full charge of raw material production through the cooperatives formed. The factory will thus have two production lines for cooking oils i.e. for lulu oil and bi-products and another for ground nut and sesame oil.

2.8.1 Actors Involved

2.8.1.1 State Extension Workers

6 Yirol oil project will utilize the existing public extension workers both at central government level and the state level in the delivery of extension services to the farmers enrolled into the project. These shall be responsible for:

i. Training courses in agronomic practices of oil seeds. This will facilitate productivity, quality and sustainability of production.

ii. Train farmers in best production management practices for increased productivity of the identified enterprises and post harvest handling and primary processing of the products of the enterprises

iii. Mobilization of farmers to grow oil seeds and join into cooperatives for effective service delivery

iv. Coordination of farmer activities, factory staff and government/state authorities

v. Linkage to research institutions in South Sudan. Research institutions continuously make improvements in varieties of seeds to develop traits that resist diseases and harsh conditions.

vi. Identify model (contact) farmers from farmers groups within the catchment area

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South Sudan.

vii. Develop contractual arrangements for produce buying and distribution of associated inputs including farmer credit schemes

viii. Provide periodic physical & financial reports to the factory and state line ministries

6 The main challenge of public extension worker is the traditional mind set of understanding extension. They seem to conceptualize extension in a traditional sense only focusing on agronomic practices planting, seeding, weeding and fertilizer and pesticide application. This is a narrow understanding of agricultural extension. Modern extension that can transform farmers not only focuses on production practices but also includes organization of farmers for development.

6 Other information about innovations, value addition, enterprise development and marketing needs to be incorporated in the training curriculum.

6 Fortunately the government has realized this problem and is committed to change the mindsets from traditional to modern practices of extension. The ultimate aim is to ensure the buy-in of extension services at all levels.

2.8.1.2 Civil Society Organizations

6 Community Based Organizations (CBOs) and NGOs are best known for the role they play during mobilization of society.

6 Due to the demand for the project to deliver outputs, there is high need to carry out mass mobilization of the project beneficiaries to get involved in the project activities. There is need to interest them into the project activities and its intended benefits to the community.

6 A contractual arrangement needs to be entered into with these organizations but among the criteria for selection of such partners should include; familiarity with the local conditions, experience with similar settings, and strong support from the community and community leaders.

6 In addition to mobilization, such organizations can be utilized during capacity building and linkage development between the producers, input suppliers and the oil mill.

2.8.1.3 Ministry Of Commerce

6 Central coordinating point: The ministry will have a Project Coordinator that will be a focal point for all the project activities. He will maintain the project files and keep an update on progress for revitalization and ongoing activities. He is the source of information for investors, and the private business community about the project.

6 Market research: market conditions are continuously changing on the world trends and local trends. In order for the products not miss the changing target, there should be a mechanism of updating the market parameters continuously. This can be fed into the factory so that products design and quality conform to changing tastes and preferences

6 Local business environment: Formulating the policies that keeps the market regulated to protect the local edible industry suppliers. This will be done through an incentive structure for the local suppliers. Incentives in terms of; tax exemptions, building local capacity and offering free research and development services.

6 Policy and advocacy: This is the primary role of government ministries to put interests of the citizens at heart of every activity.

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South Sudan.

2.8.1.4 Ministry of Agriculture and Forestry

6 Extension services: facilitation of extension services to the farming communities. These will be implemented through local extension service providers at state, counties and payam levels. Extension works will also be helpful during mobilization of farmers.

6 Mechanizations: mechanization is a quicker means of facilitating farming activities so that early planting is done. Early planting increases the productivity of the crops because they utilize early rains.

6 Crop research and development: research and development of resistant varieties to counteract changing climatic conditions.

6 Support to cooperative movement: The role of the Ministry of Cooperative and Rural Development is to accelerate the development of cooperatives. Their services need to be incorporated into the implementation of the project.

2.8.1.5 Farmers/Cooperative Societies

6 Cooperatives will help to coordinate all the farming activities and the mobilization of farmers to produce oil seeds. They will also do the lobbying of assistance for support of the cooperative activities.

2.8.1.6 Business Community

The business community will be the ultimate distribution channels for the oil products. They will help to bring the products near to the consumers. They include:

6 Whole sellers will help to store and distribute the oil products to the whole sellers and supermarkets. They buy in bulk and sells in manageable quantities to retailers at a price difference.

6 Retailers: Buy in boxes and unpacks into single units purchasable by consumers. They are closer to the consumers.

6 Supermarkets will avail products to consumers. Supermarkets display the products making them visible to consumers.

2.8.2 Linkages among the Actors 6 Linkages among the players along the value chains are key for a fully functioning food value

chain. Input suppliers should have direct linkage to the producers who should also be linked to the processing factory.

6 Backward linkages are also key because they need to obtain raw materials for processing and products for selling. The process is continuous and each player keeps feeding into the other players and the system functions as a whole.

6 A complete value chain with good governance and effective linkages makes service delivery along the chain easy and reduces the risk of ambiguity because whatever happens is shared among the members and a solution is brainstormed together. The system becomes interlocked with players connected to each other.

6 However, the precondition for a sustainable linkage is a win-win situation. There should be mutual benefit for all the players in the cooperation. The starting point for linkages is for the project to initiate the mobilization process which will create a catalyst for transformation. When all the actors work together, they can easily share information and establish avenues for cooperation.

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South Sudan.

Figure 31: Structural framework showing interaction of actors

2.9 results MAtriX

2.9.1 Key Marketing and Oil seeds Production ActivitiesThe marketing and oil seeds function will be implemented in four components. I.e. raw material mobilization, product development, market infrastructure development, Monitoring and Evaluation.

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South Sudan.

Table 20: Projected activities for implementation of the project

COMPONENT ACTIVITIES RESPONSIBLE AGENCY

RAW MATERIAL MOBILISATION

Identification of potential oil seed farmers Extension workers

Registration and mobilization of oil seed farmers Extension workers

Identification of existing farmer groups Extension workers

Registration and mobilization of existing farmer groups Extension workers

Establishment of training centers Extension workers

Training of Trainers External Consultant

Training of farmers Trained extension workers

Establishment of model farmers villages State Ministry of Agriculture

Farmer visits and knowledge sharing Trained Extension workers

Formation of farmer groups External Consultant

Capacity building of farmer groups External Consultant

Formation of primary cooperatives External Consultant

Capacity building of primary cooperatives External Consultant

Formation of cooperative societies External Consultant

Establishment of collection centersTrained extension workers/state ministry of Agriculture

Establishment of a warehouse at Yirol for Oil seeds Contractor

Facilitating establishment of multiplication, breeding and disease control centers

Ministry of Agriculture

PRODUCT DEVELOPMENT

Procurement of packaging materials Ministry of commerce

Branding the packaging materials Ministry of commerce

Quality assurance Project Staff

Establishment of distribution channels Project Staff

Recruitment of marketing staff Ministry of Commerce

Product launching Project staff

Launching of sales promotions Project staff

Developing local media advertisements Project staff

Developing of outdoor advertisements Project staff

Development of strategic international partnerships Ministry of commerce

MARKET INFRASTRUCTURE

Opening of feeder roadsMinistry of commerce/ national roads authority

Procurement of transport facilities Ministry of commerce

Construction of warehouse for products contractor

Improvement and maintenance of major access roads National Roads Authority

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South Sudan.

MONITORING AND EVALUATION

Continuous project monitoring Ministry of commerce

Quarterly project evaluation External Consultant

Assessment of functionality of farmer cooperatives Ministry of commerce

Farmer linkages to financial institutions Ministry of commerce

Establishment of Information Systems Ministry of information

Coordination and meetingsMinistry of commerce/Project staff

Mentoring group leadership and governance External Consultant

Impact assessment of project to local environment External Consultant

2.9.2 INPUT-OUTPUT FRAMEWORK

The Yirol Oil Mill Project will be based on five strategic results namely:i. Improved productivity and acreage of groundnuts and sesame crops in Lakes State and South Sudan

ii. Improved availability of raw materials for edible oil milling at Yirol

iii. Processing of refined vegetable oil at Yirol

iv. Improved marketing infrastructure at Yirol and the Republic of South Sudan

v. Improved accessibility of edible oils from Yirol factory at local and international markets

74

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Con

flict

#

Gro

ups

men

tore

dFa

cilit

ate

men

tori

ng

sess

ions

Civ

il S

ocie

ty O

rgan

izat

ions

Act

ivity

Rep

orts

Coo

rdin

atio

n P

rote

ctio

n of

Inte

rest

s a

nd c

once

alin

g of

in

form

atio

nIm

prov

ed c

oord

inat

ion

leve

lsFa

cilit

ate

link

ages

am

ong

acto

rs

Loca

l adm

inis

trat

ion/

Agr

onom

ists

at

all

leve

ls.

Act

ivity

Rep

orts

Reg

ular

mee

tings

C

omm

itmen

t #

M

eetin

gs

# A

tten

ded

Enco

urag

e re

gula

r m

eetin

gs

All

Pro

ject

Sta

keho

lder

sM

onito

ring

R

epor

ts

Esta

blis

hing

MIS

Lack

of c

ompr

ehen

sive

dat

a ca

ptur

e S

tand

ard

tool

for

data

ca

ptur

e

Faci

litat

e th

e

deve

lopi

ng o

f a

stan

dard

too

lM

inis

try

of C

omm

erce

/Y

irol

Oil

Pro

ject

Ev

alua

tion

Rep

orts

Faci

litat

ing

form

atio

n of

co

oper

ativ

e so

ciet

ies

Com

mun

ity u

nwill

ingn

ess

to c

oope

rate

# o

f coo

pera

tive

soci

etie

s fo

rmed

Enga

ge m

inis

try

of

coop

erat

ives

Pri

vate

and

Civ

il S

ocie

ty O

rgan

izat

ions

Act

ivity

Rep

ort

Esta

blis

hmen

t of

pr

oduc

e co

llect

ion

cent

ers

Fund

ing

# o

f col

lect

ion

cent

ers

esta

blis

hed

Sec

ure

Fund

ing

Exte

nsio

n w

orke

rs a

nd P

riva

te S

ecto

rA

ctiv

ity R

epor

t

Esta

blis

hmen

t of

a

war

ehou

se a

t Y

irol

for

oil s

eeds

Fu

ndin

g A

war

e ho

use

esta

blis

hed

Sec

ure

fund

ing

Pri

vate

Con

trac

tors

Eval

uatio

n R

epor

ts

Link

ing

farm

ers

to fi

nanc

ial

inst

itutio

ns

Hig

h in

tere

st r

ates

In

form

ality

of

som

e fa

rmer

gro

ups

# o

f Fin

anci

al in

stitu

tions

ass

istin

g fa

rmer

sP

rovi

sion

of i

nfor

mat

ion

on fi

nanc

ial i

nstit

utio

nsP

riva

te

Sec

tor

Act

ivity

Rep

orts

76

STR

ATE

GIC

OB

JEC

TIV

E T

HR

EE: P

RO

CES

SIN

G O

F R

EFIN

ED V

EGET

AB

LE O

IL A

T Y

IRO

L

Pro

gram

Are

aC

halle

nges

O

utpu

t In

dica

tors

B

asel

ine

20

13

Targ

et 2

01

9Y

IRO

L M

ill P

roje

ct

Act

ions

P

artn

erD

ata

Sou

rce

Out

put

: P

roce

ssed

Veg

etab

le c

ooki

ng o

il

Com

pone

nt A

ctiv

ities

Pro

cure

men

t of

pac

kagi

ng

mat

eria

lsFu

ndin

g #

of m

ater

ials

pur

chas

edP

rocu

re s

ervi

ce

prov

ider

Pri

vate

con

trac

tor

Act

ivity

rep

orts

Bra

ndin

g th

e pa

ckag

ing

mat

eria

lsFu

ndin

g #

of m

ater

ials

bra

nded

P

rocu

re s

ervi

ce

prov

ider

Pri

vate

con

trac

tor

Act

ivity

Rep

orts

Qua

lity

Ass

uran

ce

Expe

rtis

e in

qua

lity

assu

ranc

e#

of c

ompl

aint

s re

gist

ered

Em

ploy

qua

lity

spec

ialis

tM

inis

try

of C

omm

erce

Eval

uatio

n R

epor

ts

STR

ATE

GIC

OB

JEC

TIV

E FO

UR

: S

TRA

TEG

IC M

AR

KET

ING

OF

EDIB

LE O

ILS

Pro

gram

Are

aC

halle

nges

Y

irol

Oil

Mill

Out

put

Indi

cato

rs

Bas

elin

e 2

01

3

Targ

et

20

19

Yir

ol O

il M

ill P

roje

ct A

ctio

ns

Par

tner

s D

ata

Sou

rce

Out

put

: Pre

ferr

ed E

dibl

e O

il on

the

loca

l mar

ket

and

inte

rnat

iona

l mar

ket

Com

pone

nt A

ctiv

ities

Rec

ruitm

ent

of

mar

ketin

g st

aff

Lim

ited

know

ledg

e an

d ex

pert

ise

Are

a co

vere

d

# o

f sta

ff re

crui

ted

G

ood

Wor

king

env

iron

men

tR

ecru

itmen

t A

genc

yA

ctiv

ity R

epor

ts

Pro

duct

la

unch

ing

Com

mun

ity

Att

itude

to

war

ds lo

cal

prod

uct

# o

f pro

duct

laun

ches

in t

he s

tate

s Fa

cilit

atio

nM

inis

try

of c

omm

erce

Act

ivity

Rep

orts

Laun

chin

g of

sa

les

prom

otio

ns

Com

mun

ity

Att

itude

to

war

ds lo

cal

prod

uct

# o

f res

pons

es t

o th

e pr

omot

ion

Faci

litat

ion

Min

istr

y of

com

mer

ceA

ctiv

ity r

epor

ts

Dev

elop

ing

and

exec

utin

g lo

cal m

edia

ad

vert

isem

ents

Lim

ited

med

ia

hous

es w

ith

a na

tiona

l ou

trea

ch

# o

f adv

ertis

emen

ts d

one

Faci

litat

ion

Loca

l Med

ia H

ouse

sEv

alua

tion

repo

rts

Dev

elop

ing

and

exec

utin

g of

out

door

ad

vert

isem

ents

Lim

ited

outd

oor

adve

rtis

ing

part

ners

# o

f bill

boar

ds d

one

Faci

litat

ion

Adv

ertis

ing

com

pani

esEv

alua

tion

repo

rts

Iden

tific

atio

n an

d de

velo

pmen

t of

str

ateg

ic

dist

ribu

tion

chan

nels

Lim

ited

capa

city

of

busi

ness

es#

of d

istr

ibut

ors

Faci

litat

ion

Cha

mbe

rs o

f com

mer

ceA

ctiv

ity R

epor

ts

77

STR

ATE

GIC

OB

JEC

TIV

E FI

VE:

IM

PR

OV

ING

MA

RK

ET IN

FRA

STR

UC

TUR

E

Pro

gram

Are

aC

halle

nges

Y

irol

Oil

Mill

Out

put

Indi

cato

rs

Bas

elin

e 2

01

3Ta

rget

20

19

Yir

ol O

il M

ill P

roje

ct A

ctio

ns

part

ners

Dat

a S

ourc

e

Out

put:

Bet

ter

Infr

astr

uctu

re

Com

pone

nt A

ctiv

ities

Ope

ning

of F

eede

r ro

ads

to t

he r

aw

mat

eria

l sou

rces

Fund

ing

# o

f fee

der

road

s op

ened

Roa

d m

apLo

cal

adm

inis

trat

ion

Act

ivity

R

epor

ts

Pro

cure

men

t of

tr

ansp

ort

faci

litie

sFu

ndin

g#

of t

ruck

s pu

rcha

sed

Fund

s S

ervi

ce

prov

ider

sA

ctiv

ity

Rep

orts

Con

stru

ctio

n of

a

war

ehou

se fo

r pr

oduc

tsLo

catio

n an

d fu

ndin

gC

ondi

tion

of a

war

e ho

use

Ava

il la

nd a

nd fu

nds

Con

trac

tor

Act

ivity

R

epor

ts

Impr

ovin

g an

d m

aint

aini

ng o

f m

ajor

acc

ess

road

sFu

ndin

gC

ondi

tion

of a

cces

s ro

ads

Lobb

y G

over

nmen

tR

oads

A

utho

rity

Eval

uatio

n R

epor

ts

STR

ATE

GIC

OB

JEC

TIV

E FO

UR

: S

TRA

TEG

IC A

CC

ESS

IBIL

ITY

TO

INTE

RN

ATI

ON

AL

MA

RK

ETS

Pro

gram

Are

aC

halle

nges

Y

irol

Oil

Mill

Out

put

Indi

cato

rs

Bas

elin

e 2

01

3

Targ

et

20

19

Yir

ol O

il M

ill P

roje

ct A

ctio

ns

Par

tner

D

ata

Sou

rce

Out

put:

Pre

senc

e of

Yir

ol O

il P

rodu

cts

on In

tern

atio

nal m

arke

ts

Com

pone

nt A

ctiv

ities

Dev

elop

ing

stra

tegi

c pa

rtne

rshi

ps

with

par

tner

s in

str

ateg

ic

coun

trie

s

Att

itude

tow

ards

S

outh

Sud

an

prod

ucts

# o

f int

erna

tiona

l Dea

lers

hips

est

ablis

hed

R

esea

rch

on in

tern

atio

nal d

eale

rshi

pM

inis

try

of C

omm

erce

Eval

uatio

n R

epor

ts

STR

ATE

GIC

O

BJE

CTI

VE

SEV

EN:

MO

NIT

OR

ING

AN

D E

VA

LUA

TIO

N F

OR

EFF

ECTI

VE

DEL

IVER

Y O

F O

UTP

UTS

Pro

gram

Are

aC

halle

nges

Y

irol

Out

put

Indi

cato

rs

Bas

elin

e 2

01

3

Targ

et

20

19

Yir

ol P

roje

ct A

ctio

ns

Par

tner

D

ata

Sou

rce

Out

put

: Fe

edba

ck o

n pe

rfor

man

ce

Com

pone

nt A

ctiv

ities

78

Qua

rter

ly p

roje

ct

mon

itori

ng

Pre

cise

pe

rfor

man

ce

indi

cato

rs#

of R

epor

tsP

lan

for

mon

itori

ng

Min

istr

y of

Com

mer

ce/

Y

irol

Oil

Pro

ject

Mon

itori

ng

Rep

orts

Ass

essm

ent

of fu

nctio

nalit

y of

farm

ers

coop

erat

ives

Lack

of U

nifo

rm

stan

dard

s#

of F

arm

er C

oope

rativ

es a

sses

sed

Pla

n fo

r as

sess

men

t M

inis

try

of C

omm

erce

/Y

irol

Oil

Mill

Pro

ject

Act

ivity

Rep

orts

Ass

essi

ng t

he

impa

ct o

f the

pr

ogra

m t

o lo

cal

envi

ronm

ent

and

livel

ihoo

ds

Lack

of p

reci

se

indi

cato

rs

Hou

seho

ld In

com

es

Jobs

Cre

ated

Pla

n fo

r as

sess

men

t M

appi

ng o

n w

elfa

reM

inis

try

of C

omm

erce

/Y

irol

Oil

Mill

Pro

ject

Eval

uatio

n R

epor

ts

Con

clus

ion i.

Ther

e is

hig

h po

tent

ial f

or r

aw m

ater

ials

ava

ilabl

e th

roug

h or

gani

sed

farm

er g

roup

s as

wel

l as

thro

ugh

the

nucl

eus

farm

. Th

e pr

opos

ed

coop

erat

ive

mod

el is

exp

ecte

d to

exp

loit

the

max

imum

cap

acity

of

farm

ers

in t

he L

akes

sta

te. T

his

will

als

o ha

ve p

ositi

ve b

enef

its f

or t

he

com

mun

ity t

hrou

gh in

crea

sed

hous

ehol

d in

com

es a

nd im

prov

emen

t of

infr

astr

uctu

re. T

he n

ucle

us f

arm

will

pro

vide

40

% o

f th

e to

tal r

aw

mat

eria

ls a

nd t

he fa

ctor

y w

ill d

epen

d on

farm

ers

for

the

60

% r

emai

ning

to

fill t

he fa

ctor

y ca

paci

ty.

ii.

Ther

e is

hig

h po

tent

ial d

eman

d fo

r th

e co

okin

g oi

l. S

esam

e oi

l, gr

ound

nut

oil a

nd s

hea

nut

oil h

ave

pote

ntia

l dem

and.

Am

ong

the

impo

rts

of

cook

ing

oils

, gro

undn

uts

and

sesa

me

oil c

onst

itute

a c

onsi

dera

ble

perc

enta

ge.

iii.

Ther

e is

no

loca

lly m

anuf

actu

red

cook

ing

oil i

n S

outh

Sud

an m

arke

t an

d th

e co

untr

y is

a n

et im

port

er o

f coo

king

oil

and

rela

ted

prod

ucts

.

iv.

Ther

e is

hig

h po

tent

ial f

or r

egio

nal a

nd in

tern

atio

nal m

arke

ts fo

r co

okin

g oi

ls. T

he la

test

dev

elop

men

ts o

f adm

ittin

g S

outh

Sud

an w

ill e

xpos

e it

to t

he E

ast

Afr

ican

mar

kets

. Lul

u O

il ha

s an

exp

ort

pote

ntia

l for

wes

tern

pre

miu

m m

arke

ts.

79

Chapter: Three

80


South Sudan.

3.0 TECHNICAL FEASIBILITYThis chapter addresses the following objectives:

6 Evaluate the status of the factory buildings and other physical assets.

6 Evaluate the status of the factory machines and equipment.

6 Evaluate the suitability of the oil processing machinery to produce quality oil.

6 Evaluate the adequacy of all the electrical and mechanical components/equipment of the factory.

6 Assess the performance and capacity of the factory machinery

6 Assess the area of production including quantity of land available, the type of the soil in that land, available water resources.

6 Assess the required infrastructure like road access, preservation facilities, markets and export hubs for the produce to reach its intended destination.

A study visit was done to assess the state of the machinery as well as a document review of the factory plans. Observations of the state of mechanical and electrical installation were done. The team also had interviews and discussions with former managers and technicians at the factory together with officials from relevant ministries. Furthermore an independent assessment and analyses of the data collected was done to verify the findings. This report is also based on our technical knowledge.

3.1 The stAtus oF the FActory BuilDings AnD other physicAl Assets

3.1.1 GENERAL DESCRIPTION OF THE STRUCTURES The factory building is located in a plot of area 100 x 100 m2, with a factory employee’s residential house of 80 x 50 m2. The consultant was also shown land set aside for the future extension of the factory measuring 100 x 50m2, making a total factory land of 280 by 200m2. There is currently a cattle camp in the factory premises in addition to the residential dwellings currently occupied by the encroachers on the factory land. No technical documents or drawings were obtained pertaining to the building and the following description is based on an oral account, visual and analytical assessment of the structure.

3.1.1.1 Structures within the Factory

The following structures are located within the factory premises:

6 Main factory building

6 Former maintenance engineer’s office

6 Former factory manager’s office

6 Oil storage tanks supports

Results and discussions

3.1.1.2 Main Factory Building

The main factory building is measuring about 43 x 12m divided into: a shed, machine room, store and general manager’s office. The building is currently used a prison, a residential area and a store for various commodities including those used by the prison authorities. The structure was constructed using bricks and cement mortar, columns of size 0.4 x 0.4m are made up of bricks. The roof is made up of angle steel truss sections, covered with gauge 30 iron-sheets. There are beams (lintels) mainly constructed on door and window openings. Visual observations of the cracked and destroyed sections of such beams revealed that the concrete used in beams was not reinforced.

81


South Sudan.

Figure 32: The Main Yirol Oil Factory Building

Further visual observations revealed the following distresses on the structure: (figs. 33-54)

6 Foundation is eroded and exposed, made up of bricks

6 Columns / pillars are made up of bricks

6 Roof is made up of leaking and very old iron sheets

6 There are visible cracks in walls

6 Columns are detached from the brick walls

6 No ring beams

6 Lintels are made up of unreinforced concrete

6 Poor drainage conditions

6 Plaster is peeled off, replaced with cow dung

6 Trees in the neighbourhood have their roots into the structure

6 No floor screed

Figure 33: Foundation plinth exposed and weathered. Figure 34: Weathered plinth wall, cracks in floor

82


South Sudan.

Figure 35: Cracks and settlement in shade, weathered Figure 36: Weathered bricks on brick wall due to rain

Figure 37: Cracks in brick wall Figure 38: Cracks and weathered brick wall

Figure 39: No ring beam on top of brick wall Figure 40: crack in brick wall near window and lintel

83


South Sudan.

Figure 41: Exposed base of shade Figure 42: Cracks near brick wall column

Figure 43: No Window & shutters Figure 44: Crack in weathered masonry wall

Figure45: Separation between window & main brick walls Figure 46: Crack penetrates deeper in walls

84


South Sudan.

Figure 47: Cracks & weathered brick walls Figure 48: Exposed foundation

Figure 49: Wall damaged by rain water Figure 50: Structural crack from top to bottom

Figure 51: Tree roots penetrate the base of walls Figure 52: Old roof, holes in iron sheets

85


South Sudan.

Figure 53: machines resting on old concrete base Figure 54: concrete lintel damaged by bullets

Factors causing Building Distress

The reason for distress during service is the lack of maintenance of the building which results in deterioration/aging of materials and structural components leading to corrosion and cracking, and this can be seen in the figures 33-54, for the Yirol oil mill factory.

Buildings or structures are damaged at different grades of damage when they experience extreme loading conditions like in severe conditions like wars, floods, earth quakes or cyclonic storms for which they are not designed.

They may also fail if the building, including the foundation is not properly designed and constructed following the standard codes of practice. An impression exists that taller structures (like this factory) are seismically unsafe in comparison with low-rise buildings. On the contrary, when properly designed and built, taller structures are generally safer. It is to be noted that most lives were lost in Kachchh (Gujarat) earthquake of 2001 in one and two storeyed masonry buildings. Hence, all buildings have to be built safe.

Inadequacy of design and poor quality of construction and maintenance are therefore the main reasons for the distress seen in the factory building during service or under natural hazards. This is because building codes and by-laws are not conscientiously followed in design and quality of construction or in maintenance and this factory was built at the time when codes of safety were not put into consideration.

CONCRETE STRENGTH

Concrete strength is the most important parameter in assessing the safety of a structure against loading. Due to lack of construction supervision, sometimes, very low strength concrete may be encountered in existing structures. Such locations are to be identified and suitable remedial measures to be taken. The testing methods for concrete strength vary from very indirect surface hardness test to the direct testing of concrete strength by removing cores. With the Yirol factory building, we were able to use indirect surface hardness using a Rebound Hammer or Schmidt hammer.

A Schmidt hammer was used to test the grade of concrete that was used for construction. In particular, concrete lintels, base of machines, concrete floor and base of oil storage tanks were tested. Surface hardness measured during the test give an idea about the soundness and quality of cover concrete. Locations having very low rebound numbers indicate weak surface concrete and may be affected by corrosion. The quality of concrete may be interpreted as shown in the Table 22.

86


South Sudan.

Table 22: Average rebound number and quality of concrete

Average Rebound Number Quality of Concrete

>40 Very good hard layer

30 to 40 Good layer

20 to 30 Fair

< 20 Poor concrete

0 Delaminated

Source: Feasibility Study, December 2011

The average results for the tests done on the Yirol oil mill factory are indicated in tables 23-29.

SCHMIDIT HAMMER TEST RESULTS

A Schmidt rebound hammer was used to establish the strength of concrete, which is practically governed by the strength of the cement paste. It was used to provide a quick and simple non-destructive test for obtaining an immediate indication of concrete strength in various parts of the structure. The general quality, uniformity and relative strength of concrete members within the structure were assessed. These included the concrete floor, base of machines, base of oil storage tanks and concrete lintels. It should be noted here that, the test was carried out to identify areas of lower strength concrete within the members tested. Thereafter conversion curves were used to enable the average rebound value to be converted to estimated concrete strength in N/mm2, taking into account the angle of application.

PRESENTATION OF RESULTS

Table 23: Floor results for the machine room

FLOOR IN MACHINE ROOM

Sample No. 1 No. 2 No. 3 No. 4 No. 5

1 44 38 44 42 28

2 43 42 40 35 32

3 48 39 42 38 41

4 48 40 46 32 38

5 48 41 40 38 38

6 48 43 42 34 42

7 48 42 40 42 38

8 48 40 44 40 40

9 45 40 40 31 47

10 40 42 44 36 42

Mean 46.0 40.7 42.2 36.8 38.6

Std Dev 2.9 1.6 2.2 3.9 5.4

CV% 6.2 3.9 5.2 10.5 13.9

Strength (N/mm2) 51.4 42.2 44.0 35.3 38.7


87


South Sudan.

Table 24: Base of crusher machines

TOP OF BASE OF CRUSHER MACHINES

Sample No. 1 No. 2

1 44 40

2 40 42

3 50 48

4 48 49

5 45 42

6 42 42

7 45 46

8 48 44

9 44 42

10 45 42

Mean 45.1 43.7

Std Dev 3.0 3.0

CV% 6.6 6.8

Strength (N/mm2) 49.5 47.7


Table 25: Side of the base of crusher machines

SIDE OF BASE OF CRUSHER MACHINES

Sample No. 1 No. 2

1 40 29

2 40 36

3 39 32

4 40 32

5 37 30

6 42 30

7 40 32

8 42 32

9 40 29

10 31 33

Mean 39.1 31.5

Std Dev 3.2 2.1

CV% 8.1 6.7

Strength (N/mm2) 38.7 27


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Table 26: Top of screw press

TOP OF PRESSING MACHINE

Sample No. 1 No. 2

1 40 42

2 43 33

3 40 38

4 46 38

5 46 39

6 40 40

7 42 40

8 40 45

9 40 44

10 42 44

Mean 41.9 40.3

Std Dev 2.4 3.6

CV% 5.8 9.0

Strength (N/mm2) 44 40.4


Table 27: Base of lintel

BASE OF LINTEL

Sample No. 1 No. 2

1 40 56

2 50 45

3 51 50

4 49 44

5 44 48

6 51 46

7 47 50

8 41 46

9 46 44

10 52 44

Mean 47.1 47.3

Std Dev 4.3 3.8

CV% 9.1 8.1

Strength (N/mm2) 53 53


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Table 28: Base of second lintel

BASE OF SECOND LINTEL

Sample No. 1 No. 2

1 40 40

2 50 45

3 51 50

4 49 44

5 44 48

6 51 46

7 47 50

8 41 46

9 46 44

10 52 44

Mean 47.1 45.7

Std Dev 4.3 3.1

CV% 9.1 6.7

Strength (N/mm2) 53 51


Table 29: Base of oil storage tank

BASE OF OIL STORAGE TANK

Sample No. 1 No. 2 No. 3

1 23 29 31

2 18 24 26

3 23 31 20

4 27 27 30

5 24 28 36

6 31 29 28

7 29 30 30

8 37 28 36

9 34 20 29

10 29 22 32

Mean 27.5 26.8 29.8

Std Dev 5.7 3.6 4.7

CV% 20.7 13.5 15.7

Strength (N/mm2) 20.8 19.3 23.9


Interpretation of results

It can be observed that almost all concrete test results were above the minimum of 25N/mm2 required except the base of oil storage tank which were below 25N/mm2. This structure has the weakest concrete members. The test was done on structures that have existed for a very long period of time meaning that, concrete had accumulated strength over a period of time. However, a critical analysis of the tested concrete members revealed the following:

6 All concrete members i.e. lintels, beams e.t.c. were found to be made up of unreinforced concrete.

6 The concrete floor was directly placed on soft ground, contrary to the conventional and

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accepted standard of placing hardcore first, followed by the wire fabric and concrete. Though compaction of the leveled ground may have been done, over a period of time, the concrete has been detached from the ground, and separation of stones aggregates and sand mortar is evident on site. The installation of wire fabric should have been done to prevent cracking and also to act as temperature reinforcement. This may explain the presence of deep cracks into the floor. In fact, there is a complete detachment of concrete segments from the rest of the body of concrete.

6 From the readings of the rebound hammer, the results deviate tremendously; indicating presence of voids in some parts and in other areas there is concentration of the aggregate mass. This is supported by the fact that the concrete was manually mixed (mixed by hand).

6 There were no construction expansion and contraction joints in concrete floor to cater for contraction and expansion of the concrete due to changes in temperature and the vibrations.

6 Even where the concrete is likely to be strong, the fact that it is resting on soft ground, distresses will soon arise.

6 In some cases such as lintels, the concrete is strong but the whole lintel structure is detached from the rest of the brick wall by cracks arising out of the settlement of the structure and other factors such as wars.

6 Vibrations from the machines that are to be proposed for the oil milling will further weaken the structure and cause more damage.

MANAGER’S OFFICE

The manager’s office is 5m by 5m square with the following observed structural distresses (figures 55-64):

6 Cracks

6 Plaster peeling off

6 Old timber used as lintel and ring beam

6 Bricks are weathered by water

6 Iron sheets are old and leaking roof

6 Foundation in collapsing, tampered by insects

6 No floor screed, where it was originally placed, it has been peeled off

6 Shallow foundation, originally made of stones now exposed

6 No window and door shutters.

6 Not habitable at all

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Figure 55: Exposed foundation, no doors Figure 56: Back elevation with weathered brick walls

Figure 57: No windows, weathered bricks Figure 58: Plaster peeled off, weathered bricks

Figure 59: no windows, weathered bricks Figure 60: Back elevation with weathered brick walls

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Figure 61: Timber used as lintel is now very old Figure 62: Structural crackswalls

Figure 63: Foundation made up of exposed stones Figure 64: Paint destroyed by weather

ENGINEER’S OFFICE

The engineer’s office is 6m by 6m square with the following observed structural distresses (figures 65-70):

i. Cracks

ii. Plaster peeling off

iii. Old timber used as lintel and ring beam

iv. Bricks are weathered by water

v. Iron sheets are old and leaking roof

vi. Foundation in collapsing, tampered by insects

vii. No floor screed, where it was originally placed, it has been peeled off

viii. Shallow foundation, originally made of stones now exposed

ix. No window and door shutters.

x. Not habitable at all

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Figure 65: Front view of tank and stand Figure 66: Cracks on the concrete beams supporting the tank

Figure 67: Holes such as this are evident on most parts of the tank Figure 68: Cracks originate from concrete through brick wall

Figure 69: Exposed brick foundation Figure 70: Cracks in walls due to foundation settlement

The distresses documented include;

i. Holes, from bullets in tank

ii. Weak foundation

iii. Cracks in pillars supporting the tank

iv. Cracks in concrete beams

v. Eroded bricks

vi. Foundation exposed and it appears to be weak

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South Sudan.

MANAGING DIRECTOR’S RESIDENTIAL HOUSE

The consultants were also shown a house meant to house the managing director. The house is fairy in good shape and needs some minor repairs to make it habitable in the short term. It is also proposed in the referenced documents that the same house will be used by the visitors and technocrats from the central government when on official duties to Yirol Oil Mill. The consultants also noted the presence of a newly constructed house as an extension to the managing director house constructed by H.E. Commissioner of Yirol West County. The consultant was informed that this is also part of the factory premises. It is measuring roughly 8 x 6m2 and is currently being used for residential purposes. There are also temporary house dwellings occupied by the encroachers, two toilets of which one is fully functioning while the second one is no longer functioning.

The following are the defects identified on the managing director’s house as in figures 71- 78:

i. Painting peeled of

ii. Floor screed needs replacement

iii. No verandah, it needs replacement

iv. Roof leakages

v. Doors need replacement

vi. Cracks in walls of building

vii. Bath rooms are not working

Figure 71: Front View of managing director’s house Figure 72: Side View of house, with shed made up of timber supports

Figure 73: Old iron sheets, leaking roof Figure 74: Old Timber supports on the shed / verandah

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Figure 75:Holes in windows Figure 76: Extensional made by the H.E. Commissioner

Figure 77: A VIP Toilet on the same plot Figure 78 : House dwelling on the same plot

3.2 SuitABility oF the FActory BuilDing AnD physicAl Assets

The consultant undertook a critical analysis of the available building assets and recommends as follows:

i. Main factory building

The main factory building was constructed and has been in operation since 1924. It was initially being used to house machines for oil mill production. Due to wars, oil production process stopped and now the building is being used as a prison by the local authorities. There has been no maintenance activities carried out since then. Distresses have developed on this structure. A critical analysis reveals presence of structural cracks which penetrate deeper into the brick walls. Columns are made up of brick walls (old construction technology), which also already show evidence of structural failures. The concrete floor has been worn out, with many structural cracks penetrating deeper into the floor. Structural members and brick walls are likely not to withstand vibrations from the new machines. The bases of machines need to be constructed on firm concrete floor which is already weak. The building is badly damaged.

A new, firm and modern structure that meets internationally recognized standards should be constructed to replace the old and weak structure.

ii. Engineer’s office

The engineers’ office is too dilapidated and should be demolished, to give way to a new, fully equipped and modern office.

iii. Manager’s office

Like the engineers’ office, the manager’s office is too dilapidated and should be demolished to give way to a new, fully equipped and modern office. It is moreover too small for a modern office and cannot accommodate office assets.

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South Sudan.

iv. Managing director’s house

The managing director’s house is still in good shape with some repairs that need to be done to make it more habitable to the residents.

The proposed scope of renovation2 activities will involve the following:

i. Replacement of old timber purlins, rafters and iron-sheets

ii. Construction of ceiling

iii. Replacement of doors and windows

iv. Re-construction of verandah by replacement of timber supports, iron-sheets and floor screed.

v. Painting of the house

3.2.1 THE OIL PRODUCTION PROCESS

3.2.1.1 The production process

The Yirol oil mill consists of the following machinery: Three vertical steel boiler, 3 ft. 7 in. diameter, 8 ft. 1½ in. high, with three cross tubes 7½ in. diameter, shell 5/16 in. thick, crown 3/8 in. thick, uptake 9 in. diameter. This boiler supplies the steam not only for the engine, but also for heating and damping the seed in the extractor. The engine is vertical, with 8 in. cylinder and 12 in. stroke, with high speed governors, and stands on the cast iron bed-plate of the mill. When the machines are in position they form a support for the shafting. The seed to be crushed is stored in a bin, placed above and behind the roll frame hopper which is in the cleaning room.

The roll frame has two chilled cast iron rolls, 15 in. face, 12 in. diameter, so arranged as to subject the seed to a single roll, with patent pressure giving apparatus. These rolls are driven by fast and loose pulleys by the shaft above. After rolling, the seed falls through an opening in the foundation plate in a screen driven from the bottom roll shaft by a belt. This conveys the seed in a trough to a set of elevators, which supply it continuously to the extractor. This extractor, which is 3 ft. 6 in. internal diameter and 20 in. deep, is made of cast iron and of special strong construction. The inside furnishings of the extractor/ expeller are a damping apparatus with perforated boss, upright shaft, stirrer, and delivery plate, and patent slide. The extractor body is fitted with a wood frame and covered with felt, which is closed within iron sheeting. The crushed seed is heated in the extractor to the required temperature by steam from the boiler, and it is also damped by a jet of steam which is regulated by a wheel valve with indicating plate.

When the required temperature has been obtained, the seed is withdrawn by a measuring box through a self-acting shuttle in the extractor bottom, and evenly distributed over a strip of bagging supported on a steel tray in a virtue patent mini press, where it undergoes a compression sufficient to reduce it to the size that can be taken in by the presses, but not sufficient to cause any extraction of the oil. The seed leaves the mini press in the form of a thick cake then to the press. The press cylinders are 12 in. diameter and are of crucible cast steel. To insure strength of construction and even distribution of strain throughout the press, all the columns, cylinders, rams, and heads were planed and turned accurately to gauges, and the pockets that take the columns, in the place of being cast, as is sometimes usual, with fitting strips top and bottom, are solid throughout, and are planed or slotted out of the solid to gauges. The pressure is given by a set of power screw cast steel and bored out of the solid. This ram gives only a limited pressure, and the arrangements are such as to obtain this pressure upon each press in about a few seconds. This pump then automatically ceases running, and thework is taken up by a second plunger, having a ram 1 in. diameter and stroke of 7 in., the second pump continuing its work until a gross pressure of two tons per square inch is attained, which is the maximum, and is arrived at in less than two minutes. For shutting off the communication between the presses, the stop valves are

2 This may require another technical review to estimate what needs to be renovated and at what costs.

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South Sudan.

so arranged that either press may be let down, or set to work without in the smallest degree affecting the other.

The oil from the presses is caught in an oil tank behind, from which an oil pump, worked by an eccentric, forces it in any desired direction. The cakes, on being withdrawn from the press, are stripped of the bagging and cut to size in a specially arranged paring machine, which is placed off the bed-plate behind the extractor, and is driven by the pulley on the main shaft. The paring machine is also fitted with an arrangement for reducing the parings to meal, which is returned to the extractor, and again made up into cakes.

3.2.1.2 The summary of the oil mill process

The Yirol oil mill factory used to work using the old and cumbersome methods of crushing oil seeds by mechanical means, and during the last few years this methodology has undergone a complete revolution. By this old process, the seed, having been flattened between a pair of stones, was afterward ground by edge stones, weighing in some cases as much as 20 tons, and working at about eighteen revolutions per minute. Having been sufficiently ground, the seed was taken to an extractor/expeller or steam jacketed vessel, where it was heated, and then drawn- in quantities sufficient for a cake- in woolen bags, which were placed in a screw press. From four to six bags was the utmost that could be got into the press at one time, and the cakes were pressed between wrappers of horsehair or similar material. All this involved a good deal of manual labor, a cumbersome plant and a considerable expense in the frequent replacing of the horsehair wrappers, each of which involved a high cost of about 6 USD. The modern requirements of trade have in every branch of industry ruthlessly compelled the abandonment of the slow, easy going methods which satisfied the times when competition was less keen. This production process was meant for both ground nuts and sim-sim (sesame) seeds as can be seen in the figures 90 and 80.

Figure 79: sim-sim seed grown in Yirol

Figure 80: The two types of groundnuts grown in Yirol

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South Sudan.

3.2.2. THE FACTORY MACHINERYThe approach used by the team was to visit and ascertain the condition of the machinery at Yirol oil mill; the team had to look particularly at the different machinery found and positions for the missing machines including the boilers, the steam engines, the sheller, the crusher, weighing machines, oil expeller, the screw/ oil cake press, the underground cake storage tank and the oil storage tanks inside the factory premises and that outside used for loading oil into oil jerry cans. We took measurements of the production area, looked at the condition of the machinery, pictures of the whole machinery from the raw materials to the final product; we had also to ascertain the positions of the different machinery and the current plant layout. After collecting this data, we had to make independent verifications and analyses using our technical knowledge.

The machinery analyzed included;

6 The three boilers

6 The steam engine

6 The roll mill/ seed crusher

6 The combined extractor and mini press

6 The screw/oil cake press

6 Underground cake storage

6 Inside oil storage tank

6 Outside oil storage tank

6 Water well

3.2.3: SUITABILITY OF THE OIL PROCESSING MACHINERY TO PRODUCE QUALITY OIL

The present machinery found at the factory is not appropriate for the production and processing of oil from any oil seeds like ground nuts and seed cracker, they are obsolete in a way that it is very difficult to service them back to working condition since spare parts are not possible to get, these machinery are corroded and old fashioned as will be seen in the pictures. These machines maintenance history or program is not available to determine the state at the time of use, the main purpose of the Preventive maintenance program is to reduce physical components from being damaged during and after normal operations. Some of the factory machines like the groundnut decorticator, seed crackers are missing from the factory premises and it is said that when the country was at war, the soldiers may have taken the machines to Khartoum. The present machinery is obsolete and need to be replaced for a new production process as can be seen in the discussions below.

3.2.3.1 Groundnut decorticator

Groundnut ‘decorticator’ shells the groundnut into husks and kernels. Husks are thrown away by built in air blower and kernels are screened to separate split kernels from whole kernels. Since this machinery is missing it can be time consuming to separate the husks and kernels, the position where the decorticator and sunflower cracker use to settle is shown in figure 81 below.

3.2.3.2 Seed cracker

The seed cracker may have existed in the same position as the groundnut decorticator, the cracker breaks the sunflower seeds or sim-sim seeds and gives the mixture of kernel and husks for crushing. This is also missing from the company premises.

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South Sudan.

Table 30: Condition of machinery and equipment

Machinery Condition/status

Groundnut Decorticator Missing

Sunflower cracker Missing

The three boilers Old machinery and Poor condition

The steam engine Old machinery and Poor condition Old ma

The Roll mill/ seed crusher Old machinery and Poor condition

The combined Extractor and Mini press Old machinery and Poor condition

The Screw/oil cake press Old machinery and Poor condition

Underground cake storage Old machinery and Poor condition

Shaft system Obsolete technology

Inside oil storage tank Poor condition

Outside oil storage tank Poor condition

Water well Poor condition though can be rehabilitated


Figure 81: Loading area and decorticator position (blocks show supports for the machinery missing)

3.2.3.3 The three boilers

It is always advisable that boilers of over 25 years old should be replaced, since these boilers have worked for over 40 years and given that they have not been serviced as per the requirements of most manufacturers, the conditional status of these boilers can be seen in figure 82 and figure 83. Figure 83 shows water tubes that have rusted, subjecting these boilers back to working conditions would necessitate obtaining services of a certified boiler services company for major repairs such as re-tubing the boilers, tube sheet repairs, replacing gauge glass, pressure gauge and the rest. This would seem to be very expensive given the fact that such a company may not be near Yirol or even in the whole country. The present boilers were made in the 1940’s where designers had little thought on effectiveness and efficiency of fuel use. We then recommend that new boilers should be installed with better operating parameters.

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Figure 82: The three boiler at the factory Figure 83: Water tubes for the boiler showing corroded plates

Figure 84: Boiler No.2 having missing components like a lid Figure 85: Boiler No.3 with lid but missing components

It can be seen in both figure 84 and 85 that the boilers that were being used are too mechanical, lacking in the obvious components like temperature gauges, pressure gauges, and gauge glass for water level. The consultant’s analysis found out that these boilers were using firewood for generating steam for running a mechanical steam engine which would then run the rest of the machines like the decorticator, seed crusher, oil expeller chamber and screw press, presently all these machines can be operated on diesel generators or electricity effectively with less effect to the environment. This calls for a selection of process boilers which consume little space yet efficient if need for them is required anyway.

3.2.3.4 Mechanical steam engine

The steam that is produced from the three boilers is directed to the mechanical steam engine which runs all the other machinery using shafts connected via the belt system. This is an earlier technology that was used in areas where electricity was not possible as can be seen in figure 86, this steam engine used to direct process steam to the extractor, run the shafts and presumably run the lighting system at night. In figure 87, the gear system can be seen in poor condition, this gear system used to run the gear train. In figure 88, the oscillating cylinder can be seen in a really sorry state (the cylinder is part of the steam engine).

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Figure 88: The oscillating cylinder in bad shape Figure 89: The complete mechanical steam engine with wheels for running the shaft system

Figure 90: The complete mechanical steam engine with wheels for running the shaft system

Figure 86: The mechanical steam engine, the wheel that runs the shaft is seen on the left.

Figure 87: part of the steam engine

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South Sudan.

3.2.3.5 The roll mill/seed crusher

The roll frame has two chilled cast iron rolls, 15 in. face, 12 in. diameter, so arranged as to subject the seed to a single roll, with patent pressure giving apparatus as shown in figure 91. These rolls are driven by fast and loose pulleys by the shaft above. After rolling the seed falls through an opening in the foundation plate in a screen driven from the bottom roll shaft by a belt.

Figure 91: The roll mill

The rolls together with the gears are rusted and the conveyor train is blocked with soil. The condition of this machine does not permit for human healthy processing. The mill is of ROSEDOWNS make.

The rolls together with the gears are rusted and the conveyor train is blocked with soil. The condition of this machine does not permit for human healthy processing. The mill is of ROSEDOWNS make.

3.2.3.6 The combined expeller and mini press (rosedowns maxoil press type)

The mini press is always used in specialist applications, where small scale extraction of high value products is required. They may be used either as single stage high pressure press, or as part of a mini mill where it would undertake a double-pressing duty. Some mini presses are designed for cold pressing of most oil bearing seeds without pre-treatment, the Yirol oil mill press was efficient at rupturing the structures of oil bearing materials like the ground nuts and sim-sim, it was used to process cooked and prepared feed materials using the extractor shown in figure 92. This pretreatment enabled greater oil yields than is possible with the press alone. This expeller consists of a helical thread (worm assembly) which revolves concentrically within a perforated cylinder (the cage or barrel). The barrel is usually formed by a series of axially placed lining bars contained within a robust frame.

New mini presses have been designed from the outset to give excellent performance and to be easy to maintain and operate. These presses have a fully welded steel frame that provides maximum strength and allows for simple installation of press. In this model a motor is mounted on the press, either on the base plate behind the gear box or on top of the gear box unlike the older technology whose bevel gear system shown in figure 92 was on the top of the expeller driven by belts run by the shaft system. This technology run by the shaft is an old technology which necessitates strong buildings to support the shaft system.

Figure 92: Extractor (combined Extractor and Mini press)

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South Sudan.

The latest extractor to be developed for mainstream oleaginous material extraction applications is a rotary-type extractor with fixed slotted floor and bevel gear drive as in figure 94 trademarked as the reflex extractor. The latest extractor to be developed for mainstream oleaginous material extraction applications is a rotary-type extractor with fixed slotted floor and bevel gear drive as in figure 93 trademarked as the reflex extractor.

Figure 93: A complete Extractor and Mini press Figure 94: Bevel gears for the tilting Extractor

Heated oil seeds enter one end of the barrel through the feed inlet and are conveyed by the rotating worm assembly to the discharge end. With any power driven equipment, it is important to consider how this equipment will be repaired as it becomes worn. Local refurbishment is normally cheaper than importing spare parts. Today increased interest is being expressed in the mechanical extraction processes. Pressing is a chemical free process, and as such is attractive to the organic market. Additionally the planning requirements of a mechanical extraction plant are much less onerous than for a solvent plant.

Figure 95: Typical view of a cage or barrel of an expeller

3.2.3.7 Mechanical screw press

This equipment was manufactured by Rosedowns and Thompson of Hull, England, it is known as the screw press for oil extraction. Oilseeds were milled, cooked, and wrapped in screws cloths woven from horse-hair. The oilseeds wrapped in screw cloths were manually loaded into perforated, vertical boxes in line with head block and the ram of the press. The boxes were pressed together using vertical screw pressure on the ram. The oil was pressed out through the screw cloths surrounding the oilseeds. The expelled oil was collected in a trough under the screw, and the de-oiled cake was discharged at the end of the screw press. The primary advantage of the mechanical screw press was that it allowed continuous oil extraction and could process large quantities of oleaginous materials with minimal labor. The figures 96 and 97 show the Screw press for oil extraction found in Yirol Oil mill factory. The power screw is rusted though serviceable but this technology is obsolete.

In the past 100 years, the primary improvement in mechanical screw press design has been developing

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South Sudan.

materials of construction that extend wearing part life. Screw and barrel parts that once lasted three months before requiring replacement may now last up to two years. Additionally, mechanical screw presses have been built to much larger scale, going from initial capacities of 5 tons per day up to present-day capacities of over 100 tons per day for full pressing and over 800 tons per day for pre-pressing applications.

Figure 96: Screw press and oil container Figure 97: The Rusted power screw

3.2.3.8 Underground cake storage

The cake from the mechanical screw press was collected in underground steel cake storage as shown in figure 98. The cake used to pass through an opening at the end of the screw press to the cake storage. The cake was then packed into bags where it was taken to make feeds for chicken or given to children or the community for eating. It is now filled with rubbish.

Figure 98: The underground cake storage

3.2.3.9 Oil tanks (the holding tank and the oil storage tank)

The oil collected in the trough was then pumped to the oil tank inside the factory for temporary storage; this is the holding tank as in figure 99 and 100. The holding tank stores the oil prior to filtration under pressure through special filter cloths, this tank has been found to be rusted and containing bullet holes as can be seen in figures. The oil storage tank which is outside also contains bullet holes and rusted at the base, these tanks used to store oil from both ground nuts and sim-sim but at different times. This depended most on the availability of either oil seed. Figure 101 and 102 shows the outside tank.

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South Sudan.

Figure 99: The dilapidated inside oil tank Figure 100: The rusted oil tank (inside the factory)

Figure 101: A Hole in the outside oil tank Figure 102: The outside oil tank

Storage of oil in tanks is now an old endeavor though unavoidable due to logistical problems of cans, currently after production of oil; it is advisable to store the oil into jerry cans or containers where it can be sold. If incorrectly stored, some types of oil rapidly go rancid (tasting or smelling bad) and develop an unpleasant odour and flavor. The main factors that cause rancidity (in addition to moisture, bacteria and enzymes above) are light, heat, air and some types of metals. To obtain a shelf life of several months, oils should be stored in lightproof, airtight and moisture proof containers in a cool place.

3.2.3.10 The shaft system

The shafting system is what used to run the entire machines at the factory by connecting the machinery to the steam engine, it was mounted at the walls (fig. 105) to connect the machines to the steam engine through the belt technology as seen in figures 103-105.

Figure 103: Part of the shaft system that runs the machinery Figure 104: The driving wheel which is connected to the steam engine and runs the shaft

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South Sudan.

Figure 105: The shaft connection support

3.2.3.11 Water well

the water well is currently defunct and was being used by the Sudanese government as a dumping place for dead persons and rubbish. It is round with a diameter of 4m. All the accessories designed for oil processing purposes were vandalized and is currently being used as a dumping place for rubbish. The water well used to supply water to the factory. The well is not in good condition as can be seen in figures 106 and 107. The well in the war had turned into a ditch were dead bodies where thrown

Figure 106: The water well pump Figure 107: The inside of the water well

The water well can be refurbished and cleaned so as it can be able to serve its purpose.

3.2.4 PERFORMANCE AND CAPACITY OF THE MACHINERYThe machines found at the factory premises are more than 30 years old; these machines are all obsolete and need to be replaced. The three boilers are not serviceable though the body looks to be strong; the steam engine together with the roll mill/seed is an obsolete technology, whose construction did not involve accessibility for easy maintenance. The oil expeller is old and not working, the screw press is old and unserviceable and misses filter cloths, and the oil tanks are also rusted with bullet holes. The driving shaft system is to be taken as old technology since generators and electricity can be taken to run the machinery at a lower costs and low adverse effects to the environment. It was not possible to determine the capacity of the machinery found on the site since the technicians who used to work there did not remember to the exact figures. The machinery to be designed is to be dependent on the availability of the raw materials like the peanuts, sun flower, sim-sim, laloaf (olive seeds) and lulu (Shea nut) seeds.

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South Sudan.

3.2.5 THE ADEQUACY OF THE ELECTRICAL AND MECHANICAL COMPONENTS OF THE FACTORY

The machinery in the factory are not at all controlled centrally, there are no controls on any machinery, all control depended on the supply of steam from the boilers, maintenance of the machines depended on the experience and skill of both the technicians and the machine operators since they were not able to see any fault as it has happened and where as it would if there was a control board to show fault in the factory. The advantage of a centrally controlled system enables automatic monitoring and regulation of the system

3.2.6 RELIABILITY OF THE FACTORY MACHINERYThe installed machines were found to have been operated manually, this would not guarantee a 100% reliability since steam also depended on the supply of wood. Since the machinery were found not to be working and also depending on the fact that they have spent over 30 years, the reliability of these machines can be taken to be 0%, necessitating replacement of the entire production line.

In modern systems, the machines are connected to the Hydro Electric Power (HEP) grid and incase of load shedding a standby generator is readily available, a production line is supposed to have standby operator available to ensure conformity to the set standards of oil production and in case there is a shortcoming, the maintenance department is contacted immediately to ensure continuous production with minimal machine downtime. The commonest mode of maintenance in all companies now is preventive maintenance, and breakdown maintenance incase of unexpected failure. General maintenance is usually carried out on weekends when the factories have closed off production and this depends on the manufacturer of the machinery specifications on service and maintenance and the factory agenda on the same subject.

3.2.7 RECOMMENDATIONS FOR THE FACTORY MACHINERYThe machinery within the factory building is obsolete and old as seen in the pictures taken above. To be able to start production of oil using ground nuts, sesame and the rest of the oil seeds as will be analyzed, requires a complete set of new and efficient machinery. When new machinery is procured there is need of installation of such equipment, this is always done by the equipment suppliers. They monitor the machinery for a year and teach other technicians on how to service the machinery. Within a year, they can be able to recruit technicians within the country to be taught on how to maintain and repair faults that may occur when production is going on and because some machinery and equipment is designed in a particular environment, redesign of these to suit the area would be better endeavor by the manufacturer. The manufacturer of the equipment also has to help the factory set up spares and tools storage for the machinery so as to quicken the lead time for spare ordering.

3.3 AgriculturAl section

This section documents the information got from the field in Yirol West County as regards the different indigenous species of oil seed crops used in the production of edible oil within Lakes state, the different locations of farmers involved in this trade, the ownership of such farms and also assessment of the factory land including the size of the land, the type of soils within, the availability of water resources. This information was attained from the technical experience of the forestry and agricultural department of Yirol West County and our technical experience.

3.3.1 DIFFERENT OIL SEEDS TYPES FOUND IN YIROLWithin the places we managed to visit such as Yirol, Fankar, Rumbek and others, the consultant identified four major oil crops; these includes sesame/sim-sim (sesamum indicum), ground nuts/peanuts (Arachis hypogea), laloaf (olive seeds) and shea nuts locally known as Lulu as can be seen in the different pictures shown below; it can also be noted that sim-sim, groundnuts and lulu are the most promising oil crops in this region, and in the future laloaf seeds(olives) and sunflower (Helianthus annus) can be tried.

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South Sudan.

Figure 108: Olive seeds locally known as Laloaf Figure 109: The red peanuts commonly known as groundnuts

Figure 110: Sesame seeds (sim-sim) Figure 111: The pink ground nuts

Figure 112: Shea nut seeds commonly known as lulu

3.3.1.1 PEANUTS/ GROUNDNUTS

Groundnut or Arachis hypogea is a domesticated pulse, leguminous, protein-rich oilseed. Groundnuts thrive in sandy soil with ample rainfall, which is characteristic of many areas of South Sudan, particularly Lakes state, Central and Eastern Equatoria, much of which is characterized by areas of wooded savannah containing sandy soils and rainfall lasting 4-5 months (VEGA, 2008). Areas identified as having significant surplus production such as Rumbek, Akot and Yirol in Lakes State, and Terekeka and Liria in Central Equatoria, as well as the Juba market, and included visits to markets, farming areas, farmers’ groups and cooperatives, county, and states.

There are three main varieties of groundnuts cultivated in South Sudan. The first, called Jang, is indigenous to the area and is a spreading, long maturing variety (4 – 4.5 month), with comparatively low oil content. The second variety, called Mr. Lake, or Mathalek in local dialect, was introduced to the area in late

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1940s during the colonial era by a British government official from whom the locally produced variety took its name. Mr. Lake is a short-maturing variety (60-90 days) with bunchy growth habit and high oil contents. It is said that it was introduced to the area for purposes of oil production. The Mr. Lake variety is very popular because of its early maturity characteristics, which also means that it covers the hunger-gap when other crops like sorghum, cowpeas, pumpkins etc. are not yet ready for harvest. This variety can be planted twice per year (April – June and July – October). The third variety, Red Beauty, which is similar to Mr. Lake except that it matures earlier (45-60 days) but has a slightly higher oil content and is not as drought resistant. A visit to Fankar established that they had just finished harvesting the peanuts and in fig. 113 one can be able to see the fields with un-harvested pods.

Globally, 50% of groundnut produce is used for oil extraction, 37% for confectionery use and 12% for seed purpose. Global exports of edible groundnuts amounted to 1.2 million tons annually as of 2001 – representing an average increase of 2.2% per year since early 1980s (Diop et al (2005) Global exports of groundnut oil were 250,000 tons per year in 2001, a decline of an average of 1% per year since the early 80’s; and groundnut meal exports showed a decline of an average of 2.5% per year during the same period.( Diop et al (2005))

Figure 113: Land in Fankar after Harvesting of the Ground Nuts Figure 114: Poor Storage of Peanuts in Fankar thus subjecting the nuts to Pests.

Production of ground nuts

As mentioned by VEGA (2008), groundnut production is widespread in South Sudan where 85-90% of the households are engaged in small scale production. Groundnut is cultivated either in pure stand, often mixing different varieties of seed together, or intercropped with other crops such as sorghum and maize. Groundnut production is uniformly the domain of small-scale farmers, the vast majority of whom are subsistence farmers. Around 80% cultivate less than a feddan and 60% cultivate less than half a feddan.

As of 2005, the yields for groundnuts in South Sudan (based on data mainly from the Equatoria region) were found to range between 1.20 to 1.30 Mt per ha, or around 500 kg/feddan – which was consistent with information obtained in the study.

Groundnut farmers in South Sudan have between one and two harvests per year depending on location and climate. In Lakes and parts of Central Equatoria states, there is generally one harvest starting from late July through October, while in most parts of greater Equatoria there are two harvests, one in June-July and one in November- December.

Source of seeds and other inputs

Seeds

The first source of seeds comes from the individual farmers who use the surplus from the previous season to plant in the new season. If not available the farmers can purchase from other local farmers. The consultant also noted that previously seeds were being distributed to farmers by FAO and other

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NGOs, an operation that has since ceased. However Yirol womens farm school obtains seeds from the Yirol local market using money donated by Total and the French Cooperation.

Fertilizers

Farmers do not use fertilizers other than manure in form of cow dung from grazing cows whose application is on a very low scale.

Pesticide

Like fertilizers, pesticides are not being used, in the Yirol women farm school, their use is still experimental. This applies to all other oil crops grown in the same region.

Tools

Simple agricultural tools such as hoes, pangas purchased from the local market are the main tools used for groundnut production. Ox ploughs can be a key resource for farmers who expect to produce groundnuts on a large scale.

The main distinguishing factor in terms of productivity for groundnut farmers is ox-plough technology, which is replacing hoeing and revolutionizing both farming and household dynamics for the fortunate farmers who have been provided with ox-ploughs by NPA and other NGOs. Farmers in the high producing areas between Rumbek, Akot and Yirol reported that the average farmer with ox-plough and training can cultivate 20 feddan per season, compared to 10 feddan without training and ox-plough technology. (VEGA, 2008)

Quantities produced

As mentioned earlier groundnut production is carried out on a very small scale by individual farmers. Reference is made to a prior study conducted in 2008 showing that the yields for groundnuts in South Sudan ranged between 1.20 – 1.30 Mt per ha or around 500kg / feddan (VEGA, 2008). However, from the interviews conducted with the farmers, it was found out that on average, there is a production of around 350kg per feddan. Farmers need to be organized in cooperatives so as to increase their productivity to be able to supply to the factory.

3.3.1.2 Sesame (sim-sim)

Sesame commonly known as sim-sim in Swahili, with a botanical name sesame indicum is one of the earliest domesticated plants, it is a short duration crop grown throughout the year. The seeds of the plant yield edible oil. The seed contains about 50% edible oil which is used for cooking and commercially as blend salad oil. It is also used in the pharmaceutical industry in the manufacture of margarine, soap and also as a fixative in the perfume industry. Sim-sim seed has a protein content of 16- 32% and is also used as a confectionary in bakery The whole seed can be eaten after roasting. Sim-sim can also be used as protein supplement in livestock and poultry feeds. Sim-sim has potential yields of between 500- 800 kg/ha of improved varieties compared to 300-400 kg/ha of most local cultivars.

Due to the presence of potent antioxidant, sesame seeds are known as “the seed of immortality”. The two distinct types of seeds are recognized, the white and the black. There are also intermediate colored varieties ranging from red to rose or from brown or grey. India ranks first in the area; however, as per 2006 data it comes after China in production of sesame seeds in the world. During the year 2007 however, India leads world in sesame production. India’s contribution to the production of sesame seeds in the world is 18.8% in 2006-07. Other major sesame producing countries are China (19.9%), Myanmar (17.3%), Sudan (5.9%), Uganda (4.9%), Nigeria (2.9%), Pakistan (0.8%), Ethiopia (4.7%) and Bangladesh (1.4%). The productivity of sesame in India is 0.33 tons/ha compared to world average of 0.44 tons/ha in the year 2006-07. Sesame can strive with a limited amount of rain in the driest regions as well as in the less fertile soils.

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Table 31: Area, Production and Productivity of Sesame (2006)

CountryAREA

(‘000ha)PRODUCTION

(‘000tons)PRODUCTIITY (‘000tons/ha)

% SHARE OF WORLD PRODUCTION

India 1,900.0 628.0 0.33 18.8

China 640.0 665.0 1.03 19.9

Myanmar 1,570.0 580.0 0.36 17.3

Sudan 1,270.0 200.0 0.15 5.9

Uganda 276.0 166.0 0.60 4.9

Ethiopia 219.6 159.0 0.72 4.7

Nigeria 196.0 100.0 0.51 2.9

Pakistan 68.2 29.5 0.43 0.8

Bangladesh 80.0 50.0 0.62 1.4

Others 1,319.6 760.4 0.57 22.7

World 7,536.4 3,337.9 0.44

Quantities produced

Sim-sim is also produced and grown on a small scale by individual farmers. On average, there is an output of 150kg per feddan. This is a very low production as compared to what is expected of 200-400kg per feddan.

For storage; Sesame seeds should be stored in clean and dry, moisture proof area free from insects, pests and rodents. In South Sudan, there are no storage facilities for all oil seeds there are placed in the same houses where the farmers reside.

3.3.1.3 The lulu tree (shea nut tree)

As elaborated in the previous chapter of market feasibility, the shea nut tree (called lulu in Arabic) grows mainly in a narrow band of savannah extending from Senegal to Ethiopia. Lulu trees grow abundantly on the ironstone plateau and the alluvial plains of South Sudan. This medium sized deciduous tree rarely exceeds 15m, and is estimated to live between 200 to 300 years, with 15 to 20 years of growth required before fruiting. The tree has a rich bounty of nutritious lulu nuts and yields at the exact time of the seasonal hunger. The lulu tree is greatly celebrated in South Sudan as a vital natural resource. The economic value of lulu nuts is also extremely high, providing families with income and household food security. The nilotica variety of shea nut produces pure oil that needs no bleaching and or deodorization before processing into oils and skin care products. Nilotica oil has a naturally pure and mild flavor that requires little processing, it is a highly coveted additive for natural skin and hair care products. Rich in olein, and is superior in cosmetics and is known for its positive effects on the digestive system, the hair and skin. In South Sudan, the tree thrives in the Bahr el Ghazal and Equatorial regions, where it has been used for centuries for oil and foods.

According to Boffa, (1999), there are more than 500 million fruiting Shea trees across the production belt and FAO, estimate that the total Shea nut production is approximately 600,000 mt per year. This volume translates to more than 1.5 M mt of fresh fruit which is comparable to the production of other commercial oil crops, such as avocado, which currently stands at 2 M mt tonnes per annum. This is a huge production given that there are no shea plantations and farmers only start to protect trees once they are more than saplings as part of traditional parkland farming system. Studies by Ruyssen 1957, found that productivity in subsp V. paradoxa rises rapidly in the age range 40-50 years and stabilizes in trees of 100-200 years before declining in aging plants of 200-400 years. Due to the adverse weather conditions in the region, fruit production fluctuates considerably from tree to tree and between seasons. An average fruit yield per tree was conservatively estimated at 15-20 kg / year, Ruyssen 1957 and later more optimistically at 25-55 by Fleury (1981). Schreckenberg 1996, calculated an average annual yield of 5 kgs dried kernels per tree in a study in Benin. This would yield approximately 1.8 litres of oil. Using sampling techniques and extrapolating this data over the Shea belt it has been estimated that the

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total yield of shea nuts is 1,760,000 mt of nuts, which translates into 432,000 mt of Shea butter.

However, due to the scattered nature of the crop over an extensive and remote landscape, it is estimated that only a third of this amount is collected. Therefore a harvested yield of 545,000 mt, (=131,000 mt shea butter), is used for household and commercial purposes. According to Obi (2000), approximately 65,000 mt of nuts (26,000 mt butter) are exported for use in food and cosmetics industries.

Other oil seeds include

3.3.1.4 Laloaf seeds / olive fruits

Figure 115: Laloaf fruits (olive fruits)

3.3.1.5 Sun flower plants

SUNFLOWER (Helianthas annus L): Oil content of these seeds varied from 10 to 30%. The white seeded varieties having the lowest oil content, followed by the striped and black varieties respectively. Sunflower varieties with thin seed coats are usually higher in oil content than those with thick coats and are preferred for crushing because they cause less damage to the screw presses. Although seed color is not always an indication of oil content, usually dark colored seed tend to be higher in oil content than light colored seeds (Buker J.R. and Denton G.W., 1991). Without careful isolation, sunflower is readily

Figure 116: Sunflower Plants

cross-pollinated by the activities of bees and other insects. As a result, most of the sunflower available in South Sudan is highly mixed. It lacks uniformity in color, maturation period, height, yield, and oil content.

Sunflower has modest fertility needs, but does respond to nitrogen. One of the real advantages of sunflower is that its vigorous growth and robust size make it very competitive with most weeds. However, weeds must not be allowed to get a head start on sunflower. Weeds can be controlled either through herbicides or tillage.

Production Requirements

Sunflower grows well in soils ranging in texture from sand to clay. It does not require as high levels of fertility as do maize, wheat, and Irish potatoes in order to produce satisfactory yields. It produces a lot of hot protein and oil, however, it extracts a considerable amount of nutrients from the soil, especially nitrogen. Soils should have good drainage for sunflower production, but the crop does not differ greatly from many other field crops in this respect. Like most field crops, sunflower requires the kind of good

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seed-bed which results from carrying out a second ploughing if the field is planted on virgin land and ploughing only once on already cultivatable land, however, a farmer can reduce his variable costs of production.

Traditionally, the crop was grown using broadcasting method. Line planting however is the recommended method, with recommended spacing of 75cm by 50cm and 2 seeds per hole. An application of P205 fertilizer before planting and 60kg/ha of Nitrogen at thinning are recommended. Thinning can be done to leave only one or two plants to a hill resulting in an approximate plant population of 55,000 plants/ha. Lower plant populations are recommended in areas where rainfall is limited (on average 33,000-45,000 plants per acre in semi-arid areas). This compares with a recommendation for 45,000-60,000 plants/ha in areas where there is more moisture.

Early planting enables the crop to utilize early rains and can obtain the optimum oil percentage levels and higher yields. (Robinson 1978). A planting depth of 3cm is excellent in moist soils or if rain is imminent. Seed can be planted to a maximum depth of 10cm if necessary to reach moisture. Sunflower planted 9cm to 15cm deep yields 10-28% less than that planted 7cm deep (Robinson 1978).

3.4. AreA oF proDuction incluDing AreA oF lAnD AvAilABle, type oF soil AnD AvAilABle wAter resources

3.4.1 AVAILABLE LAND (AREA OF LAND FOR AGRICULTURAL PRODUCTION)The area of land available for farming of different oil crops identified above is majorly located within Yirol West County. Part of the land is currently used for agriculture, while the other is still virgin because it has just been allocated by the authorities to Yirol Oil Mill. The rest of the agricultural farmland is located in Rumbek county and other parts of Lakes state regions. The section hereunder describes the status and quantity of the available factory agricultural land and other proposed farmlands to supplement the supply of raw materials to the factory.

3.4.2. STATUS OF THE FACTORY LAND

Factory premises land

The factory land housing the building is on a plot of area 100 x 100 m2, with a factory employee’s residential house of 80 x 50 m2. The land set aside for the future extension of the factory measuring 100 x 50m2, making a total factory land of 280 by 200m2. There is currently a cattle camp in the factory premises in addition to the residential dwellings currently being occupied by the encroachers on the factory land.

Agricultural land

There are two virgin areas of 2,000 feddans3 given to the factory by the Yirol West county administration for growing groundnuts, sim-sim and sunflower and also land within the Yirol town where the factory is located. The consultant was able to take soil samples in those different areas so as we can ascertain the possibility of growing the oil seed crops to supply the oil mill with the required raw materials together with ascertaining the nearest water bodies in such lands.

6 Agricultural land situated near the factory in Yirol town. It is currently encroached on by residents, it is estimated that 50 feddans of land exists around the factory (according to the lands department in Yirol west). The consultant was informed by the commissioner of Yirol west-county that the residents can be shifted to another area to give way to the factory developments.

3 One feddan is equivalent to 1.038 acres

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6 Agricultural land in Nyaliel Area, this land is 9 km from the factory premises on the road from Yirol west to east that leads to Shambe, this land is 1,000 feddans and a virgin land that was given to the factory for cultivation by the county administration and according to the title of the land is present. This land has never been used before for growing any plant though it is occupied by a natural forest. The nearest water resource is Lake Yirol. Soil samples were taken from this place for analysis.

6 Agricultural land in Mangarguop Area, this land is 12 km from the factory premises on the road to Juba; the nearest water resource is Lake Anyii which is 5 miles from the agricultural area, the road is gravel and is in a fair condition. 1,000 feddans were allocated for this agricultural area which is a forest area covered by natural forests.

3.4.3 LAND CERTIFICATES ISSUANCE 6 The court president of Yirol West county on the 24th of June 2011, issued a certificate of

1000 feddans of agricultural development land to Yirol oil mill project in Mangaroup area, this was confirmed by H.E Makur Kulang Liap, the commissioner of Yirol West county.

6 Another issuance was made for 1000 Feddans in Panliet Area as agricultural development land to Yirol oil mill project and confirmed by the same commissioner.

Figure 117: Mangarguop Area land Figure 118; Nyaliel Area land

Figure 119: consultants talking to some of the factory land encroachers

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3.4.4 OTHER AGRICULTURAL AREASThe consultant visited some of the existing and potential agricultural areas. These included;

Yirol Women Farm school (Farmers Groups)

This is located 10 km from Yirol town; a total of 36 hectares of land is being used for the growing of groundnuts and maize but on a small scale. This scheme is being funded by the Total, KUFPEC, and the French Cooperation and implemented by DIAR for Rehabilitation and Development Association (DRDA). The scheme started with about 300 participating women and has since grown to about 535 participants. The consultant also established that only 9 hectares are being used for active growing of crops. The nearest water source is Lake Yirol which borders with the agricultural area. The major road link here is the road to Shambe which is gravel and in a fair state.

Fankar area:

It is another agricultural area, managed by private individuals. Agriculture here is carried out on an individual basis. It is located 14km from Yirol Town with Lake Yirol as the boundary between the two areas. There are about 5,000 feddans of land here being occupied by about 1,000 private individual farmers. The main crops grown include ground nuts and sim-sim. The road connecting the two centres is a feeder road in very poor condition and is always impassable during the rainy seasons.

Rumbek County

The consultant also carried out an assessment of the agricultural area in Rumbek county and established that the potential to grow oil crops around Rumbek town and within a radius of 4km from the town. (As seen in the marketing section).

Other areas like in Eastern Equatoria, Western Equatoria, Bahr el Ghazal and parts of Upper Nile which have been estimated as averaging about 123,000MT and rising to an estimated 823,000MT in 20024 of groundnuts.

3.4.5 TOTAL AREA OF PRODUCTIONThe consultant identified and documented the available / proposed land for the growing of the oil crops and summarized them as below:

Table 32: The Total Area Available for Production

Agricultural area Estimated size of land available Ownership status

Factory agricultural land 50 Feddans Factory though enchroached

Nyaliel Area 1,000 Feddans Factory allocated land

Mangargoup area 1,000 Feddans Factory allocated land

others

Fankar region 3,000 Feddans Individual farmers

Yirol farm school 80 Feddans school

Rumbek County (Marketing section) Individual farmers

Yirol East County (Marketing section) Individual farmers


4 Abel et al (2005)Foodnet, USAID,CRS

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Table 33: Location and distance of different farm lands visited

Location Size of Available Area Distance from Yirol Town

Comments

Yirol Central Town

Total area is 280 x 200m2 broken down as below:

Factory premises are on a plot of 100 by 100m2

Staff Residential area is 80 x 50m2

Reserve area is 100 x 50m2

0 km Land is encroached on

Yirol Farm School (Farmers Groups)

36 hectares 10 km

Production going on but on small scale

Maize, ground nuts and sorghum

Nyaliel Area 1000 feddans 9km

On road to Shambe

It is virgin land and has never been occupied.

Nearest lake is L. Yirol, approx. 8km away

No water on this land

Mangarguop Area

1000 feddans 12km

On road to Juba

Nearest Lake is L. Anyii. – 5miles away (8km)

It is virgin forest land.

Road is in good condition

Fankar (East of Yirol town) – across L. Yirol

3000 feddans (land department) 14km

Individual farmers, about 1000 in no.

Road is a feeder road, very poor

No cooperatives as yet.

Groundnuts and sim-sim

Around Rumbek

Within a radius of 4km from Rumbek town

123kmGroundnuts and sim-sim

Few cooperatives


3.4.6 TYPE OF SOIL IN THE AREAS The consultant undertook analysis of the soil samples from the potential oil seed growing areas. Based on the local experience of the locals, the consultant came to understand that the areas below have soils that are suitable for the growing of the different oil seed crops as listed. The same seed crops have been grown previously in the same areas and they have performed exceptionally well.

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3.4.6.1 Methodology

The consultant undertook the collection of the soil samples from the mentioned proposed growing areas. First, the area was divided into equal parts to obtain an even distribution of sample points. The soil samples were then collected. The area at which the sample was to be collected was first cleared to remove the vegetation cover and humus. Using a hoe and a pick axe, a hole of about 0.5m wide and 0.5m deep was excavated. Soil samples were taken at each of the levels indicated below, namely; at 0m (surface), 0.2m, 0.3m and at 0.5m depth. The samples were packed carefully in bags and transported to Kampala for laboratory analysis.

3.4.6.2 Soil laboratory test results

Sampled soil was tested for presence and percentage concentration of mainly the following components: pH; Nitrogen (%N); Organic matter content (%O.M); Potassium; Calcium; Magnesium; Sodium; Sulphur (%S); Clay content (%Clay) and Silt content (%Silt). The interpretation is based on 10 samples that were received for analysis as shown in Table 34.

Table 34: Interpretation of the soil samples

Label pH %N %OMBray II P (ppm)

K Ca Mg Na %S %Clay %Silt

Around Factory 4.17 0.017 0.173 0.571 0.492 1.20 0.40 0.043 67.0 23.0 10.0

At Factory 5.67 0.1 2.42 56.443 0.441 3.80 0.91 0.078 72.0 15.0 13.0

Btn Yirol town and Yirol Women Group - Left

4.65 0.033 0.692 6.857 0.154 1.00 2.50 0.017 85.0 10.0 5.0

Btn Yirol town and Yirol Women Group - Right

4.09 0.033 0.692 1.333 0.113 1.00 3.00 0.017 72.0 14.0 14.0

Yirol Women Farm School - Ground Level

4.94 0.05 1.124 6.476 0.208 1.40 0.35 0.026 73.0 9.0 18.0

Yirol Women Farm School - 0.4m

3.5 0.042 0.692 0.762 0.077 1.20 0.50 0.035 47.0 41.0 12.0

Yirol Women Farm School - 1.5m

3.89 0.025 0.259 2.286 0.108 1.00 0.30 0.078 39.0 51.0 10.0

Agricultural Farmland - Nyaliel Area

4.4 0.033 0.692 2.794 0.062 0.80 0.20 0.009 86.0 7.0 7.0

Agricultural Farmland - Mangargoup Area

3.94 0.042 0.778 2.857 0.077 0.80 0.24 0.052 79.0 17.0 4.0

Fankar Area - Behind Lake Yirol

4.7 0.042 0.519 6.793 0.241 0.80 0.23 0.052 86.0 8.0 6.0


The pH of all soil samples ranged from 3.5 to 5.67. the distribution in pH rating is as follows:

6 1 sample (collected at the Factory) is acidic (5.3 – 6.5)

6 5 samples are strongly acidic (4.1 – 5.2)

6 4 samples are extremely acidic (4.0 and below) All values obtained are below the critical value of pH of 5.5, an indication that most crops will be negatively affected.

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The distribution of nitrogen levels is as follows:

6 Eight samples are below the low / poor rating (0.05 – 0.12%) while two samples conform to the poor rating.

6 The organic matter content was low at all sites sampled. The threshold value for most soils is 6.8%.

6 Apart from the agriculture land at the factory, all other sites have available P below 15ppm. This shows a serious P problem and any crop grown on such sites will show deficiency symptoms.

6 Calcium levels range from 0.8 to 3.8me/100g. All crops are likely to experience problems as values from all sites fall below 4me/100g.

6 Half of the samples show a serious deficiency of potassium while the other half of sites give values that can be termed as adequate. This is based on the critical value of 0.2me/100g.

6 Sodium levels are low but cannot pause any big agronomic threat to crops.

6 The soils are generally light in texture (largely sandy and red loamy soils for the two agricultural areas (Nyaliel and Mangargoup areas). They can therefore be termed as sandy clay loam soils.

Recommendations

6 Since the soils are generally acidic, the immediate solution is correction of pH to the optimum range. There are two possible options depending on the size of the proposed project. For extensive agriculture which is the aim of the Yirol Oil Mill project, the use of fertilizers such as CAN may supply nitrogen which is limiting in this case but also calcium which is good at liming, i.e. increase the pH value. For small scale agriculture, application of manure may be ideal to both supply nutrients and modify the soil environment for crop growth.

6 All nutrients specially the major ones namely N, P, K can be supplied by use of fertilizers. It is important to note that acidic fertilizers such as urea are not good for sites in question as it can aggravate the acidity problem.

6 The soil nutrient status in terms of chemical composition has shown poor results, however with minor modifications; the soils are good for agricultural mechanization. This is based on the key properties of these soils having good porosity and being easily workable.

6 It is strongly recommended that crop rotation be adopted in the proposed agricultural areas. This will help in rejuvenating the soil nutrients and may act as the best alternative to alteration of planting seasons.

6 The agricultural land is situated in an area that undergoes extreme weather conditions i.e. extreme dry conditions and when it rains, it instead floods. The consultant hereby recommends irrigation to be carried out. To be specific, water catchment facilities can be constructed to store water during the wet season, so that this can be used for the first half of the planting season by irrigation.

6 Overturning of the soil over a number of seasons should also be highly avoided. The soil may be overturned by constant cultivation. This leads to exposure of nutrients. Where possible, the consultant recommends that non destructive herbicides can be used to spray the herbs and weeds.

3.4.6.3 Available water resources

The consultant also undertook to identify the available water resources such as lakes, rivers, etc, and their proximities to the existing and proposed agricultural production areas.

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Water sources available include:

6 Lake Yirol

6 White Nile through Shambe

6 River Payii on the road to Rumbek

A number of other minor seasonal rivers are also located in very many areas, however, these are mainly functional during the rainy / wet seasons, of which they completely dry out during the dry seasons, meaning they are not reliable.

Table 35: Water Resources Available in Yirol

Water Resources Production area served

Lake Yirol Yirol area, Fankar area, Yirol Women’s Group.

White Nile Shambe

River Payii On road to Rumbek, may serve Yirol and neighboring areas.

Figure 120: a map showing yirol and some of the water resources like Lake Yirol and river payii.

Most of the water resources are far away from the proposed agricultural areas.

3.5 inFrAstructure Access

3.5.1 ROAD ACCESSThe consultant undertook an inventory of the road network in order to identify routes that will ease the process of transportation of raw materials from the gardens or from the different production areas to the factory and also from the factory to the proposed and potential markets for the vegetable oil produced.

3.5.1.1 Methodology

6 Consultations from the federal Ministry of Roads and Transport in Juba, Central Equatoria state and in the Lake state to obtain baseline information on the road links and the different towns that are served by the above road networks. The consultant can hereunder report that the Director General of Infrastructure in Lakes state was not cooperative at all, reserved and didn’t contribute at all to this endeavor.

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6 The consultant identified and obtained plans and programs if any, for improvement of access routes to communities where there are prospects for agriculture and more importantly the oil crops.

6 A drive through some of roads was conducted to physically assess the road conditions and to identify any distresses.

6 Visual identification and location of potential construction materials, mainly gravel, sands and water was made and documented.

6 A random traffic survey was undertaken to establish the type of traffic using the key main road links. Photographs were taken and road condition extensively documented.

3.5.2 ROAD NETWORK A vast network exists and for ease of analysis, the consultant has divided it into two groups, with group one indicating the road network directly serving the potential agricultural areas, while group two is focusing on the potential markets for the finished oil products.

3.5.2.1 Group One: Road network serving the agricultural areas

Under this group, the consultant travelled through most of the roads and identified the distresses. The exact lengths to these agricultural areas were directly measured. Pictures or photographs of the current state of the roads were also taken using a digital camera as in figures 121-128.

Traffic analysis

An analysis of the traffic using various road links was made and the following observations were made:

6 The consultant established that the main road linking Juba to Rumbek is being used by vehicles classified as 4WD, trucks and semi articulated trucks. They carry various goods to and from Rumbek and Juba respectively such as fuel, foodstuffs, construction materials etc. this traffic can be categorized as heavy traffic because of the cumulative load repetitions imposed on to the road by these heavy goods carrying vehicles. It is this heavy traffic that causes damage on the road pavement.

6 Other road links such as the Yirol – Shambe is carrying mainly 4WD and double cabin pickups, used for passengers and other light trucks (Dynas) carrying goods to the above destinations. This can be categorized as medium traffic. But this traffic is expected to grow as a result of the new trading centres emerging alongside these routes.

6 Light traffic is mainly in form of small cars, motorcycles and bicycles. These are evident mainly in Fankar area where the above serves as the only means of transport. However, the road condition is still poor, with many potholes, poor drainage and narrow road sections.

The traffic condition on various road links is summarized in table 36 and 37:

Table 36: Traffic condition on various road likes

Road Link Major area Length (km) from Yirol Town Traffic

Juba - Yirol Mangarguop Area, Yirol 12 Heavy

Yirol - Rumbek Yirol, Rumbek 123 Heavy

Yirol - Shambe Yirol Farm School Nyaliel Area 9 Medium

Yirol - Fankar Fankar agricultural area 14 Light


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Table 37: Length of some of the roads from Yirol

Road Link Major areaLength (km) from Yirol Town

Average width (m)

Paved / Unpaved

Drainage condition

Surface condition

Juba - Yirol Mangarguop Area, Yirol 12 10 Unpaved fair fair

Yirol - Rumbek Yirol, Rumbek 123 6 UnPaved fair fair

Yirol - ShambeYirol Farm School Nyaliel Area

9 8 Unpaved fair fair

Yirol - Fankar Fankar agricultural area 14 3 Unpaved poor poor


Figure 121: Gravel Road linking to Yirol - Shambe Figure 122: Culvert crossing lines for drainage improvement on Yirol - Shambe

Figure 123: Vehicle slipped off Road from Yirol to Rumbek Figure 124: Bridge on across river Payii (Yirol to Rumbek)

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Figure 125: Road to Fankar area Figure 126: Pot holes and ruts on road to Fankar

Figure 127: Feeder roads maintenance programme Aluak Figure 128: Fankar road: Gravel material deposits for road construction are abundantluak - Akuoc vok Road

3.5.2.2 Group Two: Road network serving the market areas / centres

The consultant, using maps and the available documentations identified the road network linking the proposed production area of the oil produce to the potential market centers. The consultants through discussions with officials from the Ministry of Roads and Infrastructure Development and through physical assessments done, established that most of these roads are in very poor condition and need urgent repair, with some requiring a complete upgrading.

The major connection centers identified are listed in the table 38:

Table 38: Condition of the major roads

Road Link Name Status/ condition

Tuli – Jambo - Moduli Gravel/poor

Tarekeka – Tali – Jambo Gravel/poor

Rumbek – Yirol Gravel/poor

Pacong – Lol town Gravel/poor

Yirol – Pagarau Gravel/poor

Juba – Awerial – Ramciel (New Capital) Gravel/poor

Yirol – Bentiu (oil fields) Gravel/poor

Shambe Port- Pagarau - Yaru Gravel/poor

Yirol – Ramciel Gravel/poor

Mwolo – Majok – Aluak luak (Western Equatorial) Gravel/poor

Yirol – Aluak luak Gravel/poor


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3.5.2.3 General road status and recommendation

From the road inventory carried out, the consultant established that all roads are gravel and in a fair state especially during the dry season. However, many completely become impassable during the wet / rainy seasons. In particular the general road condition is described in section below:

Juba – Yirol Road: This is major road linking the present capital city to Yirol Town. As seen in Table 37, it is wide enough with some sections about 10m. However, some sections become completely impassable during the rainy seasons. There is generally poor drainage along the road majorly in areas of seasonal river crossings. As a result, many potholes and ruts have developed hampering the smooth flow of traffic and reducing on the smoothness and riding comfort of the users. This later leads to unnecessary delays.

Yirol – Rumbek Road: it is 123km and this connects South Sudan to Sudan. The road is also in a fair state, with many performance distresses such as major potholes and corrugations. It also becomes impassable during rainy seasons.

Yirol – Fankar growing area: Fankar is another potential growing area and a source of raw materials mainly ground nuts. Therefore accessibility in form of a good road network is essential. Presently, there is a community access (feeder) road about 3m wide with many impassable areas.

ASSESSING THE TRAFFIC

The consultant undertook a random traffic survey at Yirol town on Juba – Rumbek road. From the analysis of traffic using the road; it was observed that only Juba – Rumbek road experiences heavy traffic with semitrailers, trailers and 4WD commonly available. The rest of the road links were observed to have very light traffic.

Figure 129: Traffic Flow

The consultant would like to make the following recommendations as far as the road network is concerned;

6 At the moment, there are no tarmac roads outside of Juba, and feeder roads are limited and often un-passable, particularly during rainy season. This can result in many cultivation areas inaccessible except by foot and bicycles. This entails that most feeder roads are worked on immediately to enable supply of raw materials to the factory in the short run.

6 For investors to be able to invest in the oil mill there is need for passable roads to major towns or a link using water transport to transport the crude oil to a refinery which is more suitable in a town setting. Most of the road networks to major towns need total revamping.

6 Road networks run hand in hand with telecommunication systems, apart from the mobile networks, telecommunications remain limited and uncoordinated throughout the country

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to help make the facilitation of market information and business linkages become extremely easy and accessible.

3.5.3 PRESERVATION FACILITIESThe consultant also undertook to identify the current facilities used for preservation of produce. The produce once harvested, some is either sold, used for food, used in exchange for other commodities (barter trade), the remaining is stored in the residential dwellings in preparation for the planting season or selling when market is available. There are no commercial storage facilities. Most farmers store produce in their homes or in raised structures near their homes. These are not very efficient storage facilities since highly perishable goods are likely to get damaged. They are placed either directly on the floor which is made up of soil or placed on top of wooden materials. In all cases, these do not last long. A more efficient storage system needs to be constructed to ensure efficient and safe storage of these produce. The photographs below show the storage facilities currently being used.

Figure 130: Storage huts in Fankar Figure 131: Peanut sacks in the homes of the Fankar people

Figure 132: Well arranged sacks of peanuts in a home Figure 133: Storage at Yirol women’s farm school

As far as preservation facilities are concerned the consultant would like to make the following observations;

6 The farmers in Yirol have poor storage facilities that can adversely affect the industrial extraction of oil. According to Martini and Anon (2005), storage conditions of oil seeds before industrial extraction might influence the quality of crude oil. Storage is done to maintain harvesting quality of product but not to improve it. A fatty acid composition is the

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most important factor which determines oils susceptibility to oxidation. The types of fatty acids present in oil, and particularly their number of double bounds, determine the type and extent of chemical reactions which occur during storage time.

6 The conditions of the storage facilities need to be worked on, accordingly increase in temperature and humidity can cause a spoil of oil and increase free fatty acids and thus a decrease in the oil content of the seeds and high reactive potency with chemicals especially oxygen, and since vegetable oils are unsaturated, this leads the oil to be more reactive and unstable, thus a low shelf life.

3.6.4 CONCLUSION Basing on the finding from the study visit at the factory in Yirol and also the secondary documents provided together with our technical knowledge, it can be concluded that;

6 The factory building is badly damaged, a critical analysis has revealed presence of structural cracks which penetrate deeper into the brick walls, the concrete floor has been worn out, with many structural cracks penetrating deeper into the floor. All the other buildings that were supporting the factory like the MD’s office and the engineer’s office are dilapidated.

6 The factory machinery is obsolete, all machines are rusted due to the many years of none servicing and maintenance, some of the equipments are missing from the factory premises.

6 Since the machinery has not been functioning for the last 30 years and so, the consultant would like to say that they are not suitable for processing of oil at all.

6 There were no electrical controls in the factory, all equipments were mechanical whose servicing depended on the skill and expertise of both the technician and the machines operators at that time, the electrical and mechanical components in the factory were inadequate.

6 It was extremely had to find the capacity of the factory at the time it was working though it can be assumed that it operated between 5-10 tons per day using both ground nuts and sim-sim.

6 The farmers in Yirol and Lake state in particular are cultivating both groundnuts and sim-sim, they are doing this at a low capacity but can be able to increase if they have an assured market potential. There are many shea trees in the area, this can also be another oil seed that can be a potential for oil, and the local women use the lulu to extract Shea butter.

6 The factory has two pieces of land in Nyaliel area of 1,000 feddans and in Mangarguop area of 1,000 feddans. It was also established that near the factory premises there is an estimated 50 Feddans that are currently occupied by local people though the commissioner is willing to settle them elsewhere to give way to the factory development. Apart from the 50 feddan land near the factory premises which is neighbouring Lake Yirol, the rest of the factory agricultural areas are far away from the water resources. The two pieces of land have land certificates issued by the court president of Yirol West County.

6 The soils in the agricultural areas were found to be acidic with low; organic matter, potassium, and calcium contents. And although the sodium levels are low, they can not any pose big agronomy threat to the crops. This is a characteristic of virgin areas like these ones. The soils in the two agricultural areas can be said to be light in texture and termed as sandy clay loam soils.

6 At the moment, there are no tarmac roads outside of Juba, and feeder roads are limited and often un-passable, particularly during rainy season. Road networks run hand in hand with telecommunication systems, apart from the mobile networks, telecommunications remain limited and uncoordinated throughout the area, this makes connections to the business

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or market hubs and market information flow impossible. The farmers in Yirol have poor storage facilities that can adversely affect the industrial extraction of quality oil.

3.6.5 RECOMMENDATIONFrom the conclusions made, the following can be recommended.

6 A new, firm and modern structure that meets internationally recognized standards should be constructed to replace the old and weak structure.

6 In order for the factory to be able to start up production, there is need to procure machinery for the extraction of groundnuts, sim-sim and in the future be able to extract sun flower. The machinery or equipment suppliers need to help the factory install the equipment, train technicians and operators of the machinery together with establishment of spares and tools storage.

6 Since the soils in the areas are generally acidic, the immediate solution is the correction of the Ph to the optimum range. This can be done using CAN as a fertilizer which can supply nitrogen and calcium. With minor chemical composition modification, the soils can be good for agricultural mechanization due to their good porosity and easy workability properties.

6 Since the lands are not near the water resources and transporting of water may be a very expensive endeavour, the factory should be able to utilize the two planting seasons so as to maximize the capacity of the land, or may be dig dams to store water in a rainy season and utilize it when there is a dry season.

6 In order to ease the transportation of both raw materials and finished products there is need to work on the road network in the region to enable it be passable even in the rainy seasons. To be able to convince an investor to invest in such a company, there is need for the government to show commitment to revamp the road and establish telecommunication network in the region.

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ROADMAP TO REVITALIZING OF THE YIROL OIL MILL FACTORY

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3.7 AvAilABility AnD suitABility oF the sites

3.7.1 FACTORY SITE One of the major outputs for this study is to recommend the best suitable place for the location of the factory. The consultant hereby recommends that the factory may be situated in its current location i.e. in Yirol town because of the following reasons:

6 The factory is strategically located, in the centre of a growing town where, if production of oil starts, there will be a ready market in addition to other market hubs outside Yirol West county like Rumbek, Yirol East county.

6 There is availability of labor force, where if re-located, there would be extra costs incurred in transporting workers to and from the factory since most of the people are highly concentrated in Yirol town.

6 Lake Yirol is a few meters away from Yirol town, implying that the water needed by the factory can be obtained and accessed with ease. There is no nearby source of water in the rest of the proposed agricultural areas. Relocation of the factory to one of these areas where the water sources are very far would require extra costs in bringing the water to the factory.

In the near future, it would be advisable that the site can be situated near one of the plantation areas, since this will be able to enable future growth and expansion of the factory without affecting the population.

3.7.1.1 Challenges in the current location

6 In the current location, there is no easy access to electricity, but accordingly the entire town is using generators, the factory can be able to attain a generator that can run all the factory machinery.

6 As mentioned earlier, the factory is located in Yirol town where due to growth of the town, there has been encroachment of the factory agricultural land by the residents. In fact, the administration on Yirol town was responsible for demarcation and allocation of land to these residents. The consultant therefore proposed that the factory land should be vacated as soon as operations begin to give way to the factory growth and expansion of structures and agricultural space. There is need to analyse the legal status as regards occupancy of the population on the company land, if compensations are advocated for, then the factory may have to shift to another area.

6 The current factory building is being used as a prison by the Yirol administration. Efforts should be made to relocate the prison and all other prison related amenities to other areas.

6 The consultant was informed while assessing the factory assets that the area of land housing the managing director’s house is being used by other people. This should also be vacated, renovated and handed over to the authorities of Yirol Oil Mill to serve the interests of the factory.

3.7.1.2 Assets requirements for the new factory

The consultant noted the status of the existing buildings, assessed their suitability to still function as factory assets and hereby recommends as detailed below:

6 There is need to construct a new and modern structure suiting internationally recognized standards to serve as a factory building. The current structure is too weak and cannot support the new machines that have been proposed to kick start the process of oil production.

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6 There is need of the purchase and installation of modern production and processing machinery and equipment for the factory.

6 The manager and engineer’s offices need to be demolished and new ones constructed. The consultant therefore recommends the construction of one administrative block to house offices and other services as detailed below:

i. Managing Director’s office

ii. General Manager’s office

iii. Engineer’s office

iv. Estates office

v. Accountant’s office

vi. Boardroom

vii. Sales executive office

viii. Clinic

6 Renovations to the managing director’s house, to house even other factory officials and engineers.

6 There is need to setup an estate/ nucleus farm for the growing of both peanuts and sesame as will be discussed

6 There is need for the construction of workers camps to keep workers as near as possible to the plantation estate.

3.7.2 FARM SECTION SUITABILITYThere are two virgin areas of 2,000 feddans5 given to the factory by the Yirol West county administration for growing groundnuts sim-sim and sunflower and also land within the Yirol town where the factory is located. The consultant was able to take soil samples in those different areas so as to ascertain the possibility of growing the oil seed crops to supply the oil mill with the required raw materials together with ascertaining the nearest water bodies in such lands and also access the transport network to the factory. The land owned by the factory is as follows;

6 Agricultural land situated near the factory in Yirol town estimated to be 50 feddans.

6 Agricultural land in Nyaliel Area, estimated to be 1,000 feddans.

6 Agricultural land in Mangarguop Area, estimated to be 1,000 feddans.

In terms of suitability of the land the following can be stated;

6 The area of land available for farming of different oil crops identified above is majorly located within Yirol West County. This land is virgin containing trees and shrubs, the soil tests taken showed that the land is lacking in essential elements, this is a characteristic of all virgin lands, in order to attain high output from the land, steps should be taken to improve it as shall be seen in the agricultural section.

6 The land has been allocated to the factory by the authority, so there is no land dispute as far as land is concerned. This also means that the factory does not need to hire land for growing of the raw materials.

6 The land located in both Nyaliel area and Mangarguop area is far away from the water resources, but as indicated earlier, the two seasons of rain can be utilized to grow the oil crops and also store water in the dam to use it in the half season of the dry spell to supply the factory with the raw materials sustainably.

5 One feddan is equivalent to 1.038 acres

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6 The agricultural area is well connected to the factory through the road network. The roads are murram and in a condition that requires little maintenance so as to be passable in the rain season.

6 The agricultural land will provide jobs for workers who will be involved in looking after the farms, in harvesting and sorting and loading of the oil seeds in the preparation for oil extraction at the factory in Yirol together with the extension workers and others.

3.7.2.1 Raw material supply

In order to attain constant supply of oil seeds raw materials to the factory, the consultant has documented two major methodologies of attaining the suppliers as below;

6 Establishing an outgrower system and contract farming for the supply of lulu, peanuts and sim-sim.

6 Establishing an estate farm on the 2,050 Feddans of land available.

3.7.2.2 Future availability and access to raw materials

The overall sustainability of this project depends on the government of South Sudan and the private investor on whom the harvesting, processing and eventual sale of the vegetable oil depends. The sustainability of out-grower and smallholder participation in the project will hinge on the level of benefits realized through oil crop harvests and there is every prospect that the harvests will be successful. However, their participation will also require continued extension advice to small holders and improved trust and cooperation between out-growers and the Yirol oil mill factory management.

The programme must address concerns about declining soil fertility and farmer training must be provided in the use of fertilizers and other agro-chemicals, conservation agriculture and other related activities. There must be support for mechanization and value addition activities, as well as post handling and group marketing. The government of South Sudan and the Bureau of Standards must support the development of food standards and codes of practice for the vegetable oils sector.

In order to ensure availability and access of raw materials in future, a nucleus estate of 2,000 Feddans is planned in the two agricultural areas allocated by the county administration, together with 3,000 Feddans of small holder development. The agricultural land and the small holder land should be able to support the growing of groundnuts and sesame as plans are made in future to start planting of sunflower within the agricultural land, the out-grower and small holder farmers land.

3.7.2.3 Establishing of an out grower system and contract farming

The overall goal of this feasibility report is to increase household cash income of small holders by revitalizing and increasing vegetable oil production within the lakes state and South Sudan as a whole using the Yirol oil mill. This in turn necessitates that we setup a plantation that will supply oil seeds to the mill and also come up with ways to help small holder farmers be able to supply the oil seeds like peanuts and sim-sim to the factory. In this section, we highlight steps for the setting up of a nucleus farm for both peanuts and sim-sim.

Out-grower systems are schemes that provide production and marketing services to farmers on their own land. For Glover and Kusterer (1990), these generally connote a government scheme with a Parastatal enterprise, purchasing crops from farmers, either on its own or as a joint venture with a private firm.

Contract farming refers to a system whereby a central processing and exporting unit purchases the harvests of individual farmers, and the terms of the purchase are arranged through contracts. It’s a range of initiatives taken by private and public firms to secure access to smallholder produce. The terms of the contract vary and usually specify how much produce the contractor will buy and at what price. The contractor often provides credit inputs and technical advice. Contracting is a way of allocating the risks between producer and contractor; the farmer takes the risk of production and the contractor the

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risk of marketing. The basis of such arrangement is the commitment of the farmer to provide a specific commodity in quantities and at quality standards as determined by the purchaser and the commitment of the company to support the farmer’s production and to purchase the commodity. The intensity of the contractual arrangements varies according to the depth and complexity of the provisions in each of following three areas:

Market provision:The grower and buyer agree on terms and conditions for the future sale and purchase of the crop or livestock;

Resource provision:In conjunction with the marketing arrangements the buyer agrees to supply selected inputs, including on occasions land preparation and technical advice;

Management specifications:The grower agrees to follow recommended production methods, inputs regimes, and cultivation and harvesting specifications.

Out-grower systems should be seen as a partnership between Yirol oil mill as a firm and farmers. To be successful it requires a long-term commitment from both parties. Exploitative arrangements by the oil mill are likely to have only a limited duration and can jeopardize agribusiness investments. Similarly, farmers need to consider that honouring contractual arrangements is likely to be to their long-term benefit. It must be stressed that the decision to use the out-grower system modality must be commercial. Out-grower systems that are primarily motivated by political and social concerns rather than economic and technical realities will inevitably fail.

Figure 134 shows diagrammatically a hypothetical contract/out-grower farming system framework. It sets out those aspects that must be considered when planning and implementing a venture.

Advantages and problems of the out-growers

Out-grower systems have significant benefits for both farmers and agro-industrial firms (investors). However, it can also cause certain problems. This section of the document looks at both advantages and problems from the perspective of the farmers and of the agro-industrial firm.

FARMERS

The advantages for farmers include:

6 Markets are known and more or less secured.

6 The agro-industrial firm usually provides inputs and production services, often on credit.

6 Out-grower system often introduces new technology and also enables farmers to learn new skills.

6 Farmers’ price risk is often reduced as many contracts specify prices in advance. (pre-planting price)

6 Out-grower system opens new markets, which would otherwise be unavailable to small-scale farmers.

6 A central buying place close to the out-growers.

6 Donors use out-growers as a tool for targeting vulnerable groups of farmers.

The problems that may be faced by farmers include:

6 Particularly when growing new crops, farmers face the risk of both market failure and production problems.

6 Agro-industrial firms may be unreliable or exploit a monopoly position.

6 The staff of an agro-industrial firm may be corrupt, particularly in the allocation of quotas.

6 Farmers may become indebted because of production problems and excessive advances.

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6 Out-growers may be made dependent on the agro-industrial firm, after which exploitation can occur.

6 If production of the same crop is on the estate as well, first preference will be given to the estate production, resulting in later buying, transportation.

Yirol oil mill factory as an Agro-industrial firm

The advantages include:

6 Out-grower system with small-scale farmers is more politically accepted than, for example, production on estates.

6 Working with small-scale farmers overcomes land constraints.

6 Purchase is more reliable and sustainable compared to an open-market purchase and the company faces less risk by not being responsible for production.

6 A strong business relation can be build up through the earlier mentioned services.

6 More consistent quality can be obtained compared to purchases made on the open market.

6 Significant quantities can be purchased.

The problems that may be faced by oil mill factory include:

6 Contracted farmers may face land constraints due to lack of security tenure, thus jeopardizing sustainable long-term operations. This is especially a problem when organic production and certification is involved.

6 Social and cultural constraints may affect farmers’ ability to produce to managers’ specifications, e.g. in some communities it is not accepted to use pig manure on the fields.

6 Adequate research, staffing finance and management skills are required. Poor management and lack of consultation with farmers may lead to farmer discontent and results in a long and expensive learning process for the firm.

6 Farmers may sell outside the contract (extra-contractual marketing) there by reducing processing factory input.

6 Farmers may divert inputs supplied on credit to other purposes, thereby reducing yields.

6 Poor recovery rates and problems with defaulters.

6 Entrepreneur needs better motivated field staff to attend to the out-growers.

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An outgrower system framework

FARMERS YIROL OIL MILL FACTORY

THE CONTRACT

Management and Administration

Production

Production & Performnace

Monitoring & evaluation

FEEDBACK TO FARMERS AND OIL MILL

Price adjustments and contract ammendments, innovations and adaptations, quota allocation and

Precondition: Market environments (physical,social) land tenure financing infrastructure, material & communication

System components: crop schedule , pricing policies, extension services, contract formulas, field service, technical inputs, farmers advances, research and trials, staff/farmer training, farmer forums

Government support:

Political stability, general legislation, community services, quarantine controls, plant pathology, enironment and land tenure

Figure 134: An out grower framework

A well-managed out-grower system through contract farming is an effective way to coordinate and promote production and marketing in agriculture. Nevertheless, it is an agreement between unequal parties: companies, government bodies or individual entrepreneurs on the one hand and economically weaker farmers on the other. It is, however an approach that can contribute to both increased income for farmers and higher profitability for agro-industrial firms. When efficiently organized and managed, out-grower system through contract farming reduces risk and uncertainty for both parties as compared to buying and selling crops on the open market.

Critics of out-grower system tend to emphasize the inequality of the relationship and the stronger position of agro-industrial firms with respect to that of growers. Out-grower system is viewed as essentially benefiting firms by enabling them to obtain cheap labour and to transfer risks to growers. The advantages, disadvantages and problems arising from out-grower system will vary according to the physical, social and market environments. More specifically, the distribution of risks will depend on such factors as the nature of the markets for both the raw material and the processed product, the availability of alternative earning opportunities for farmers, and the extent to which relevant technical information is provided to the contracted farmers. These are likely to change over time, as will the distribution of risks.

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3.7.2.4 Preconditions for out-grower system establishment

No out-grower system should be initiated unless some basic preconditions are met. The primary precondition for any investment in an out-grower system is that it must be likely to be profitable. Having identified a potentially profitable market just as the consultants have done, the Yirol oil mill factory needs to assess whether out-growers in a particular location can profitably supply that market. This involves an assessment of the social and physical environment of the proposed contract area as well as the potential support likely to be provided by the government or the factory.

A profitable market

The firm must:

6 Have identified a market for the production.

6 Be sure that such a market can be supplied profitably on a long-term basis.

And the farmer must:

6 Find potential returns more attractive than returns from alternative activities/enterprises and must find the level of risk acceptable.

6 Have potential returns demonstrated on the basis of realistic yield estimates.

The physical and social environments

The success of any agricultural investment requires that two multidimensional preconditions be met:

6 The general suitability of the topography, location of the out-growers, climate, soil fertility and water availability.

6 The suitability of the physical environment for the specific plant genotype for which there is a market demand.

The extent to which all these factors interact determines production yields, quality and profitability.

Many rural communities are wary of modern agribusiness and strongly influenced by traditional practices. There are often great disparities in cultural attitudes towards work. Before beginning such a venture, firms need to develop an understanding of the cultural attitudes of whom they are working with.

Factors that fall under physical and social environments are:

6 The physical environment must be suitable in general and in particular for the product to be produced.

6 Sufficient utilities and communications must be available, this includes feeder roads and for agro-processing water and electricity.

6 Land availability and tenure–contracted farmers require unrestricted access to the land they farm.

6 Input availability–sources of inputs need to be assured.

6 Social considerations–cultural attitudes and practices should not conflict with farmers’ obligations under the contract, and firms must develop a full understanding of local practices.

Government support

The government has to play an important role if contract farming is to be successful. The government role is to establish a legal framework that captures the conditions for the legal agreement in the out-grower system. A relevant legal framework and an efficient legal system are preconditions. Out-grower systems depend on either legal or informal agreements between the contracting parties. An informal agreement is not a reliable out-grower system and should not be encouraged. In this system nobody

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has any rights; there is no formal agreement on paper hence making it difficult for the parties to count on each other. The legal agreements, in turn, have to be backed up by appropriate laws and an efficient legal system. Governments need to be aware of the implications of all laws and policy decisions on agribusiness development and how those policies influence out-grower system.

It is however unfortunate that many governments, including South Sudan, do not have this legal framework to back up the legal system of the out-growers. Experience has learned that the establishment of such policies and legal frameworks by the government is usually done after noticing the ill and unfair management of out-grower system. While it may not be considered a precondition it is desirable that the government plays an arbitration or dispute resolution role.

Two roles of the government and their local agencies are identified:

The enabling and regulatory role

6 Suitable laws of contract and other laws are required as well as an efficient legal system.

6 Government needs to be aware of the possible unintended consequences of regulations and should avoid the tendency to over-regulate.

6 Government should provide services such as research and extension.

The development role

6 Government can take steps to bring together agribusiness and farmers. The government needs to develop the infrastructure within the out-grower area. This includes the structuring of good roads for easy transactions of both the producers and the agro-industrial firm.

3.7.3 ESTABLISHING OF A NUCLEUS ESTATE In the nucleus estate model the YOM will own an estate plantation of 2,050 Feddans, which is close to the processing plant in the two agricultural areas given i.e. Nyaliel Area and Mangarguop Area. The estate will provide some guarantee of input for the oil processing plant. A common approach is that the factory starts with a pilot estate and then, after a trial period, introduces the technology and management techniques of a particular crop to interested farmers. Out-growers will be included to enlarge the production potential of the processing plant of the estate. This involves a dependency on both sides, for the nucleus estate and the out-growers. The nucleus estate has a small area to provide raw materials single handedly, and thus, the oil mill will depend on the supply of raw materials from the out growers, in future it will be advisable for the estate to act as a pilot estate.

Farmers in the surrounding area of the estate will produce crops on their own land and sell their crops to the estate for further processing. Beneficial aspects for farmers are that the estate will be providing inputs, training, transport and social and medical benefits.

The facilities required on this nucleus farm include;

6 A workers quarters (for those working in the fields)

6 A storage for inputs and produce

6 A well stocked clinic

6 A groundnut decorticator

There are two oil seed crops to be planted within the two agricultural areas allocated to the oil mill factory i.e. sesame (sim-sim) and groundnuts (Peanuts)

Using Linear programming modeling to determine the number of feddans for each seed crop to grow with the constraint of the 2,050 feddans and the capacity attained by each seed crop as given below;

It is estimated that as of 2005, the yields of groundnuts in South Sudan (based on data mainly from the

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equatorial region) were found to range between 1.20 to 1.30 Mt per ha, or around 500kg/feddan6 and as of 2005, costs of production per hectare were calculated to be between 26%-52% (average of 41%) of the farm gate or market price depending on where and when the peanuts were sold7

It is also estimated that the yields of sesame in Uganda were found to range between 500- 800 kg/ha or around 3500kg/feddan based on Uganda’s NARO (1996) DATA on sesame growers guide. It is also estimated thatcosts of production per hectare were calculated to be between 20%-45% (average of 33%) of the farm gate or market price. If the linear programming model is to be based on maximizing profits using the farm gate price profit.

It was found that a kilogram of peanuts cost 3.00 SSP, while a kilogram of sesame costs 5.00 SSP

This then means that every feddan of peanuts grown makes a profit of

(500kg/feddan*59%fgp*3.00SSP)= 885 SSP

For every feddan of sesame grown, there is a profit made of

(200kg/feddan*67%fgp*5.00SSP)= 670 SSP

The model can then be as follows with the objective function of maximizing profits;

Let the number of feddans for growing peanut be X

the number of feddans for growing sesame be y

Table 39: Linear programming model for the 2 raw materials growing area

Max z = 885x + 670y Feddans Objective function

s.t x + y ≤ 2050 Land constraint

x ≤ 500 Kg/ feddan (peanuts)

y ≤ 350 Kg/feddan (sesame)

x ≥ 0 Sign restriction for peanuts

y ≥ 0 Sign restriction for sesame

From the analysis of this LP Model, the consultant therefore recommends that 1500 feddans of peanuts and 550 feddans of sim-sim should be planted in order to attain a profit of 1,696,000 SSP.

3.8 QuAlity reQuireMents For the oil crops to Be plAnteD

In order to ensure quality of the raw materials to be supplied to the factory, the consultant has documented the farming processes to be used in the planting and harvesting of particularly raw materials like peanuts and sesame to be used in the first phase of the project. This is to make sure that procedures are followed promptly. This project is based on entirely plants that have been cultivated in the area like peanuts, sim-sim and shea nuts. Whereas sunflower is an oil crop with a lot of potential, it was found not to be grown within the area studied and therefore there is need to find out its potential as a viable raw material for the oil mill within the area in future.

6 Jagwe and Abele (2005)

7 Jagwe and Abele

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3.8.1 PEANUTS

3.8.1.1 Peanuts planting

Introduction

Peanuts (Arachis hypogaea L.) belong to the leguminosae family and to the sub-family of papilionoideae. It is a herbaceous, annual type of plant that grows to a height of 20-60 cm. Depending on the species, the plants may grow upright and sideways with their side wards shoots to a breadth of 30-80 cm. The main stem usually remains upright. The taproots penetrate to a depth of 90-120 cm, creating branches within the upper soil levels that are then populated by rhizobia and mycorhiza. Arachis hypogaea does not grow in the wild, the wild species are perennial. The blossoms open up in the morning time, usually after self-pollination has taken place. The blossoming period usually begins 3-4 weeks after sowing, and can last for up to 2 months. All of the species are geo-carpy reproducers, i.e. they sink a stalk-like structure called a peg into the ground after fertilisation, in order to grow the peanut seeds there.

Groundnut is designated by its type or variety (used in this sense as a generic term descriptive of a physical type, rather than a synonym for ‘cultivar’), and the size of the seeds. There are three main varieties of groundnuts cultivated in South Sudan. The first, called Jang, is indigenous to the area and is a spreading, long maturing variety (4 – 4.5 month), with comparatively low oil content. The second variety, called Mr. Lake, or Mathalek in local dialect, was introduced to the area in late 1940s during the colonial era by a British government official from whom the locally produced variety took its name. Mr. Lake is a short-maturing variety (60-90 days) with bunchy growth habit and high oil contents. It is said that it was introduced to the area for purposes of oil production. The Mr. Lake variety is very popular because of it early maturity characteristics which also means that it covers the hunger-gap when other crops like sorghum, cowpeas, pumpkins etc. are not yet ready for harvest. This variety can be planted twice per year (April – June and July – October). The third variety, Red Beauty, which is similar to Mr. Lake except that it matures earlier (45-60 days), but has a slightly higher oil content, and is not as drought resistant.

3.8.1.2 Peanut uses and contents

Peanuts are one of the most important food crops in the tropics and subtropics. The lion’s share of the production is consumed locally in the producer countries. In many countries, farm systems which provide for daily needs generally have a very low yield. Any changes made to the cultivation systems in order to extract higher yields e.g. cultivation for the purpose of selling, have – if at all possible – social consequences, which must also be taken into consideration. The peanut has a very useful protein and fat composition and therefore represents a valuable source of food for humans. The seeds are eaten raw, cooked or roasted, and also processed into peanut butter, sweets and snacks, or used to make soups and sauces. 40% of the world yield is used to make oil. A cake contains 40-50% easily digestible protein; peanut flour is won from it, and used to enrich foodstuffs with protein, for example manioc flour. Foliage and pressed cakes are used as protein-rich fodder. The pods are used for fuel, as raw fibres in fodder, as raw material for light construction boards, to obtain cellulose and for composting.

Peanuts seed contents

Table 40: Peanuts seed content

Contents %

water 5.0

protein 30.0

fat 48.0

carbohydrates 15.5

Raw fibres 3.0

ash 2.0

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3.8.1.3 Aspects of plant cultivation

Site Requirements

The peanut is very adaptable, and is cultivated in continental areas with hot summers from the 45° northern to the 40° southern latitude.

CLIMATIC REQUIREMENTS

Temperature

The rate of growth and vegetation period of the peanut are highly influenced by temperature. 30-34°C is optimum for germination (max. 45°C, min. 15°C). Under 20°C, the capacity to germinate, the rate of growth and development are rapidly reduced, and at around 14°C they cease altogether. 25-30°C is optimum for vegetative growth. Temperatures above 34°C can damage the flower formation. The optimum temperature influences the net rate of photosynthesis, the flower formation and the growth of the pods, and is therefore responsible for the greater yields outside the hot tropics. Night-time temperatures should not sink below 10°C during the fructification process. Frost will always kill off the plant.

Light

The peanut can tolerate shades, it poses no problems when cultivated with trees or with other, mixed crops. When placed in shade, the leaves get bigger, and the number of reproductive organs lessens (there are too many of these anyway), meaning that the yield will only be reduced if the plant is subjected to extremely shady conditions. When the light is very intense, the peanut (a C3-plant) achieves a comparable level of photosynthesis as C4-plants. Arachis hypogaea is in a photoperiodic sense, practically neutral, although photoperiodic sensitive and insensitive varieties also exist.

Water

The optimum time to sow, which corresponds in many places with the rainy season, depends largely on the rain, as the yield sinks rapidly when the plants are sown outside the optimum planting time. The germination process requires enough air in the soil. A grown peanut plant can tolerate flooding conditions for up to a week, providing the water then flows away completely without leaving behind any stagnant pools. In case of regular heavy rain fall during the vegetation period, the ground must be well drained, or the peanuts planted on ridges. Peanut is more resistant to drought than cotton, yet less so than sorgo. Nitrogen fixing can be influenced by drought. 500-1000 mm of rainfall during the growth period will produce good yields among the late ripening varieties (up to 145 days vegetation period). 300-500 mm permits the planting of early ripening varieties (up to 100 days vegetation period). 250-400 mm of rainfall, when evenly spread, is sufficient for varieties that ripen extremely early. The type of soil, and its capacity to retain water after it has been saturated with water before sowing also play an important role. At least 300 mm of rainfall should be available between the plant’s appearance and the main flowering period, in order to ensure sufficient vegetative growth, because there is a direct correspondence between the number of branches and flowers, and the eventual number of pods. Moist soil allows the pegs to penetrate into the ground more easily.

Precise information on the average spread of the rainfall to be expected at the site is useful in choosing the correct variety, which will then ripen before the dry season. Stress due to drought during the ripening period of the seeds could lead to an infection by Aspergillus flavus.

SOIL REQUIREMENTS

The ideal soil for peanuts is a well-drained, light, loose, finely grained, sandy loam with plenty of lime and sufficient organic matter. It is also possible to achieve good yields on soils which neither harden nor crust over, nor create water-logging. During germination, the quite large cotyledons must be able to shoot

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upwards, and after flowering, the pegs must be able to penetrate the soil in order for the pods to expand.

The disadvantages of hard and heavy soils are:

6 More difficult harvest – especially manual (can be alleviated with the appropriate tools and by planting on ridges);

6 Possibility of malformed pods;

6 Harvest losses through pegs breaking off;

6 Pods become dirty and discoloured due to the soil sticking to them (might affect sales).

6 Peanuts grow best in a weakly acidic pH value (6.0-6.5); a pH value of 5.5-7.0 is still acceptable, and local can adapt themselves to pH values up to 7.8. Peanuts are sensitive to a high salt content in the soil (max. 4m2/cm).

Seeds

On Farm Seed Production And Seed Preparation

Seed production requires great care during the harvest. The seeds should be harvested separately, preferably manually, whereby the pods should also be removed from the plant by hand to avoid damage. In order to avoid mould developing, and to maintain the germination potential in extremely wet regions, it may be necessary to apply drying substances. One simple solution is to store the well-dried peanuts in two sacks and then to add calcium chloride as a drying substance. The seeds are only removed from the pods shortly before sowing, because once opened, they rapidly lose their germination potential. The seeds coats should remain intact, in order to prevent diseases penetrating. It is advisable to thoroughly sort the seeds before sowing. Inoculating with rhizobium bacteria can increase the yield at certain sites, due to the difference in the effectiveness of rhizobium strains.

3.8.1.4 Cultivation systems and diversification possibilities

Crop Rotation

Peanuts should only be planted in a three year crop rotation, at least, for otherwise soil-borne diseases can accumulate, and humus be lost due to excessive soil loosening during the harvest. The amount of nitrogen fixed in the upper soil layers by peanuts should not be over-estimated. Additional sources of nitrogen fixing should be planned within the crop rotation system. The nutrient content of the soil is especially depleted when not only the foliage, but also the weeds are used as fodder, thereby leaving little residue to be worked back into the soil. Nevertheless, peanuts possess good soil enrichment potential for non-leguminosae, and act as an excellent crop prior to planting grain. The previous crop should leave little in the way of weeds behind, and be harvested early, to allow plenty of time to work over the soil to permit early sowing to take place.

Mixed Crops

Planting peanuts in mixed crop systems is very widely spread and is more the rule than the exception on small farm units in India, Africa and Latin America.

SOME ADVANTAGES ARE:

6 Avoidance of the total failure of a crop;

6 Greater total production per area (despite the losses caused by overshadowing of

6 the peanuts as opposed to monoculture);

6 Reduction of transpiration especially in alley-cropping;

6 Greater diversity of diet;

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6 Better regulation of erosion and weeds;

6 Reduced susceptibility to pests.

Due to their tolerance of shading, peanuts are especially suited to mixed cultivation together with tall-growing crops such as pearl barley, sorgo, maize, cotton, hibiscus (Hibiscus sabdariffa), manioc and sunflowers; and as an undersown crop together with such other crops as bananas, pigeon peas (cajanus cajan), gliricidia sepium, castor beans (ricinus communis), sugar cane or permanent crops such as e.g. coconut palms, oil palms, rubber and cocoa. When their vegetation periods are similar in length, other crops cultivated together with peanuts will benefit by a gain in yield (in contrast to monoculture sites, e.g. peanut and pearl barley). Even greater increases in yield have been observed for some crops – e.g. cotton –which have a vegetation period which is up to 3 months longer. The success of cultivating in a mixed system, or in agro forestry systems, is dependent largely upon choosing site appropriate crops, the way the combination gels and from the correct placement of the peanut in the chronological order of the various species. For example, cultivation in an agro forestry system must always be at the beginning of a cycle (planting within the first 3 years may be possible.

3.8.1.5. Supplying nutrients and organic fertilisation management

NUTRIENT REQUIREMENTS

The amount of nitrogen gained from symbiotic N-fixing is difficult to evaluate; it lies between 30% and 80%, meaning that the balancing out of a supply of nitrogen can be either negative or positive. If both foliage and pods are harvested, then around 90 % of the total nitrogen will be leaving the field. Nutrient demands of peanuts (kg/ha) (results are from conventional cultivation methods):

Table 41: Nutrient demand of peanuts (kg/hr)

Plant part Yield N(Kg) P (kg) K (kg) Ca (kg) Mg (kg) S(kg)

Pods 3t/ha 120 11 18 13 9 7

Foliage 5t/ha 72 11 48 64 16 8

Total 192 22 66 77 25 15

FERTILISER

An additional of nitrogen as a fertiliser is largely unnecessary for peanuts. The rhizobium-bacteria’s capacity to fix nitrogen is increased by adding sulphur and calcium, and decreased by using a nitrogen-rich fertiliser. Peanuts generally react better when the previous crop is fertilised than to a direct addition of fertiliser, yet direct fertilisation can be an advantage in the case of the light, sandy soils – that are, after all, often used to grow peanuts. Due to their symbiotic relationship with the mycorrhiza-fungus, peanuts are very efficient in their use of phosphorous. If the foliage is to be harvested as hay, both calcium and potassium can be particularly strongly depleted. Yet the availability of calcium in upper layers of soil is a very important nutrient requirement. Lime should be uniformly worked in 8 cm around the stem, as not only the roots take on nutrients, but also the pods as they grow – and these would remain empty in the case of a calcium deficiency.

3.8.1.6 Biological methods of plant protection

Many forms of resistance by peanuts against pests and diseases are already known, and new, resistant strains are continually being developed. The international research institute ICRISAT Centre is devoted to this topic, and regularly publishes its results, as well as those of various other countries.

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DISEASES

The most important ways of avoiding diseases are:

6 Crop rotation

6 Choosing the right variety

6 Sufficient supply of nutrients

6 Uprooting infesting plants to stop the disease spreading

6 Destruction of any infested plant parts after the harvest

Table 42: Peanut Diseases and preventive measures

Important diseases/infestation Preventive measures

Anthracnose (Cercospora spp.) infestation by harvest residues and spore dispersal

Crop rotation; remove all infested harvest residues. Plat resistant varieties

Rust (Puccinia arachidis) rapid spreading, infestation by ‘wild’ peanuts

Plant resistant varieties

Fungus growth (Aspergillus Flavus) Plant resistant varieties

Root and wilt diseases sclerotium rolfsii, rhizoctonia spp

Crop rotation; transmitted by seeds

Pseudomonas solanacearum bacterial wilt Many host plants

Plant resistant varieties, crop rotation with paddy rice

Peanut mottle virus, peanut stripe virus, rosette virus, vector: aphis craccivora; seed borne disease

Plant resistant varieties

Tomato spotted virus. Vector: thrips; remove host plants

Also mechanical transmittance. Mixed crops with grains

PESTS

Cultivation measures to prevent infestation by pests include:

6 Mixed crops and diversification of the plantation

6 Provide alternative food sources (nectar/blossoms) for parasitic insects

6 Integrate habitats for natural enemies (e.g. selective weeding)

6 Include hedges and trees within the system

6 Plant different varieties in strip form, e.g. alternate resistant with other types

The following preventive measures are not intended to offer a general all-round recipe for success, they represent examples of solutions which have been tested on certain sites. Yet if problems with pests re-occur on the site, the cultivation system itself should be inspected, and if necessary, changed.

Table 43: Peanut pest and preventive measures

Important pests Preventive and combative methods

May bugs, termitesDeep ploughing is practised at some sites which is not advisable in organic farming at tropical sites.

Insect (Hilda Patruelis) Often together with cashew

Stem borer (Elasmopaplpus Lignosellus) Irrigation and early sowing offer protection

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Cucumber beetle (Diabrotica) Plant resistant varieties

Thrips, vectors for TSWV/BNV-viruses Plant resistant varieties

spodoptera Mainly caused by use of insecticides

Groundnut leafminer (Biloba subsecivella)Mixed caltivation with maize millet, keep apart from soya, irrigation helps

Hairy Caterpillars Working the soil kills off the pupa

Aphis craccivora, vector for various viruses e.g peanut mottle virus

Plant resistant varieties or plant during times of low vector population, mixed with maize, millet sorgum.

Jassids cicadidae Mixed caltivation with maize, millet, sorgum

3.8.1.7 Crop cultivation and protection

WEED MANAGEMENT

The slow growth of the peanut’s early phases, with accompanying lack of ground coverage, can lead to a massive growth of weeds in the plot. This needs to be taken into account when planning the crop rotation. Before the shoots emerge, around 7 days after sowing, the soil can be curried with a light harrow (eventually even against the direction of sowing). As soon as the roots have taken hold, the soil can be curried again, this time longitudinally, with a spike-tooth harrow. The best time for this is the hottest time of day, when the plants are limp, and less likely to be damaged. After this, it is usually sufficient to hoe the ground twice (on the 14th day, and before the 60th day after sowing). Actually, hoeing could be reduced to once on the 40th day. After the main flowering period, no more mechanical work is necessary, as this harm the roots, leading eventually to white-rot, whereby the pegs and young seeds could be damaged. In general, tractor usage will lead to damage being caused and a higher risk of infection.

At least three phases are necessary for good yields when the soil is only to be hoed by hand, if this is to be reduced to two times, then this should take place between the 21st and the 42nd day after sowing. Upwards of 10% ground coverage by weeds during the sensitive beginning and middle growth phases will lead to a reduction in the yield. When hoeing by hand, fertiliser can be added between the 30th and 40th day. To reduce the amount of weeds that grow, ridges can be gradually formed so that only so little soil needs to be moved to prevent covering up the lower branches and buds, or the main stem being scraped, which could raise the risk of infection by stem and collar rots.

IRRIGATION

Apart from reducing the buildup of aflatoxin, well co-ordinated irrigation will also produce higher yields. The use of mineral rich well water can lead to the pods becoming extremely hard and difficult to open, due to an over-abundant mineral enrichment. Irrigation is usually stopped before the harvest as soon as two thirds of the pods have ripened. After two more weeks, the harvesting can begin, when the soil is sprinkled directly beforehand in order to loosen it, and ease the work. If the temperatures allow it, peanuts can also be planted during the dry season when irrigated, so that eventually, two harvests are possible per year.

3.8.1.8. Harvesting And Post Harvest Treatment

TIME OF HARVESTING

Because the leaves of some varieties are still completely green when the pods are already ripe, occasional uprooting must be performed, in order to ascertain the optimum harvesting date. Bush varieties mature in 110-130 days after sowing, branching varieties in 130-150 days. The individual seeds are ripe when:

6 The structure of the pods is easily recognisable,

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6 These have been largely filled by the seeds within,

6 The inner wall of the pods has taken on a darker colour (brown). The testa may have then attained the typical colour for their variety.

As soon as 60-70% of the pods are ripe, any further delays in harvesting will result in losses. The optimum period for harvesting is very short. If this is not kept, and harvesting is begun either 5-10 days before this time or after, then up to 25-50% of the production may be lost. Harvesting too late, especially in hard and dry soils, will result in the pegs breaking off, as they will already have become quite brittle. The pegs often stay stuck in the soil when the plant is pulled out. In order to precisely determine the correct time to harvest, four different criteria have been adopted in the United States. When at least one of the criteria has been fulfilled, and is then confirmed by another one being fulfilled, then the time is ripe to commence the harvest: Number of days after sowing the sum of the units of warmth Relative Colour-Evaluation (e.g. the inside of the pods, the oil of a methane oil extract).

The following method has proved its worth for branching varieties: The outer layer of the pods (exocarp) is scraped away with a penknife to reveal the mesocarp. The colour is then evaluated using a special colour chart.

6 Weight ratio of the seeds and pods

6 Measurement of a specific ingredient (Arginine Maturity Index).

6 If the soil is moist when the harvest reaches maturity, then the seeds will quickly begin to germinate, without a dormancy period (especially bush types).

HARVESTING METHODS

The pods from freshly harvested plants still have a moisture content of around 35-50%, and need to be rapidly dried to a moisture content of around 20-25% so that can easily be separated from the plants. The best method is to pre-dry them in windrows for 2-3 days. After the tap roots have been cut away, the plants are stacked on their leaves with the pods facing downwards.

The advantages of this are:

6 Rapid drying

6 Avoidance of contact with the soil

6 A reduction of attacks by insects and the risk of infestation by Aspergillus spp.

6 The quicker the pods are dried after being uprooted, the less aflatoxin is created.

Nevertheless, care must be taken not to dry them too quickly, as this could result in a weakening of the testa, which protects the seeds from decay. Manual harvesting is still widely practised in many countries where it is more profitable, because fewer pods are left in the soil, and they are also less likely to be damaged. Planting on ridges, especially in hard soils, can make the harvest easier. The plants can be extracted by hand with a hoe; this can be made easier still by cutting below all of the rows with special uprooting blades (pulled either by tractor or animals). In light soils, harvesting machines, similar to those used for potato crops, can be used, and for heavy soils, special peanut uprooters. Purely mechanical harvesting is also often carried out in two stages, with the peanut plants being dried first in windrows in order to reduce the amount of drying necessary in the artificial drying processes. The first machine uproots the plants, shakes off the soil and lays them on the ground upside-down, similarly to manual harvesting. In the second stage, a threshing machine picks up the pre-dried windrows.

POST HARVEST TREATMENT

Making hay

Foliage from peanut plants provides excellent, protein-rich fodder, with similar nutritional values as lucerne (alfa alfa), and is therefore often also harvested. It can be cut down just before the uprooting

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takes place and dried into hay. One method of carefully drying after the whole plant has been harvested is to dry the foliage on hay racks, or upright poles, after it has been left to wilt for a short while on a windrow. Otherwise, the valuable leaf parts can get lost.

Threshing

After being dried out in the field, the pods are separated from the plants. The best results are gained when the moisture content is between 20-25 %, because then the pods can be separated easily and completely. If the content is lower, then the pods and seeds will be more susceptible to damage. By far the best method is to separate them by hand. Sometimes, the pods are carefully beaten off with a stick, or, stationary threshing and pick-up threshing machines are used.

Drying

Directly after being threshed, the pods are dried, either artificially or in the sun, until they attain a moisture content of 6-7 %. Delays must be avoided at all costs to reduce the risk of infestation by Aspergillus flavus, which rapidly increases. Under 9%, the creation of aflatoxin is retarded, but protection against storage pests, whose activities create aflatoxins, is only attained at levels under 7 %. For this reason, a moisture content of 6-7% is necessary. Problems can often occur when the harvest is carried out during wet weather, and the produce insufficiently dried afterwards. Only at less than 6% will the seeds become damaged (they break during shelling). In cases of extreme sunshine and heat, it may be advisable to carry out the drying process under a roof. The weight loss during drying is compensated for by an increase in quality and a reduction of the risks involved. In regions where insufficient sunshine is available to dry out the seeds after harvesting, possibilities need to be created to artificially dry the produce, in order to reduce any post-harvest losses and the risk of toxicity problems (e.g. mobile dryers).

Sorting

Because usually only a few seeds are infected with aflatoxin, sorting is an effective and important preventative measure after the harvest. Strongly infected pods and seeds are either highly discoloured, or will have shrunk. They can either be sorted manually or mechanically; electronic colour sorting has made it possible to sort out practically all of the aflatoxin infected and bad seeds.

Storage

The main factors which need to be observed in storing is a low moisture content of the seeds and low ambient temperatures. High seed and/or room moisture content, coupled with high temperatures, are the main reasons for the creation of aflatoxins.

Prevention is achieved by:

6 Sufficient air circulation

6 Regulation of the relative air humidity

6 Suitable cooling

Sorting out the damaged and discoloured pods before they are stored unshelled peanuts are far easier to store than shelled, because the protective testa remains intact. If they are not to be sold in the pods, they should be shelled only immediately before being sold.

Storage pests

Most storage pests reach the seeds through a broken pod or testa, which means that careful sorting provides good protection. One exception to this rule is Attagenus fasciatus, one of the few storage pests that bore into the pods. Some varieties have formed a special resistance against storage pests due to protective substances in their pods and testa. Adding clay powder (0,5% attapulgite) helps against some pests e.g. Corcyra cephalonica. Most storage pests cease their activities at a moisture content of the

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seeds below 7 % and below 20 % air humidity.

3.8.1.9 Product specifications

THE AFLATOXIN PROBLEM

Peanuts are extremely susceptible to infection by the fungi Aspergillus flavus. All cultivation measures should be well-planned, to take this aspect into consideration. Aflatoxin in food can affect the health of both man and animal. The poison aflatoxin is created by fungi of the species Aspergillus flavus and Aspergillus parasiticus, which are widely disseminated in tropical and subtropical soils. Countries have set maximum tolerance values for the presence of aflatoxin in foodstuffs, in order to protect consumers. For consumers in the producing countries, the risks due to the poison are more difficult to ascertain, because the larger part of the peanut harvest is consumed or sold on local markets. Thereby, there are also no “dilution” effects caused by large quantities, meaning that both humans and animals can be subjected to high doses of aflatoxin. Additionally, malnutrition leads to immune systems being weakened. In addition to the huge health risks involved, it also stimulates the growth of a whole row of chronic diseases, first and foremost of which is cancer of the liver. By heeding the preventative measures outlined, economic or health problems regarding an aflatoxin infection should not even arise.

INFECTION BEFORE THE HARVEST

The fungi penetrates the pods during their growth period whilst still in the soil, this takes place in two ways:

Infection through invisible damage to the pods or seeds:

Mechanically damaged or bitten pods will quickly be infected by the fungi, which feeds primarily on dead and dying tissue. A hot, dry soil condition abet attacks by termites, which are vectors for the fungi’s spores. Alternating phases of rain and drought causes the pods to split open, and producing high aflatoxin values in the seeds.

Invisible infections of the pods:

Many pods are infected after the pegs have been pushed down into the soil. Yet when the plant enjoys good growing conditions, the fungi may remain inactive and no significant amounts of aflatoxin are produced; this is because peanut plants have a natural protection mechanism: The growing plant produces immune substances (phytoalexin), which have a anti-microbe and fungus-suppressing effect (arachidin). All cultivation measures that encourage healthy, natural growth in effect support this protection mechanism. The production of phytoalexins sinks towards maturity, as well as due to water deficiency, and ceases altogether if a drought continues. In contrast, the fungi A. flavus is still able to proliferate and create aflatoxin at much dry conditions, before it also finally ceases all activity. It is encouraged at average temperatures of 26-30°C in the upper 5 cm of the soil. In dry periods, the peanut plant folds its leave together, meaning that the ground receives even less shade, so that soil temperatures rapidly increase. In hot, dry conditions, A. flavus grows very rapidly, this is possibly due to its enemies dying off, for they breed best in hot, humid conditions, when they can keep A. flavus under control. Sufficient irrigation is an effective way prevent the production of aflatoxin (especially during the final 4-6 weeks of the vegetative period), even when the soil temperatures are perfect for A. flavus, and 50% of the pods are infested.

Production of aflatoxin after harvesting

When the fungus has actually penetrated, it can create aflatoxin during the drying process, and transport and storage periods. Humidity and temperature are the two main factors. Even manufactured goods, such as peanut flour, are at risk. Although detoxification methods exist, the best approach is always prevention.

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3.8.2 SESAME

3.8.2.1 Sesame planting

Introduction

Sesame e sesame um indicum L. (S. orientale L.) belongs to the double-cotyledon pedaliaceae family. It is an annual plant, which grows either bush-like or upright, depending on variety, to a height of 1-2 m. Its vegetation period is generally around 3-4 months. The oil plant has been grown since the beginning of arable cultivation, and originates from the dry bush savannah of tropical Africa, and spread from there to India and China, where it is still widely cultivated. The sturdy tap roots, which attain a depth of around 1 m, and the plant’s dense network of fibrous roots – which are interwoven with mycorhiza fungi acting in symbiosis – provide a plentiful supply of nutrients and water. The square stem can either have many branches or none at all – depending on the variety. Usually only the middle of the three flowers that form in the leaf axils develop to form between 4 and 10 capsules. The ripe, dry capsules open up to reveal their seeds, nestling along the inner walls, so that they may be carried away by the wind. One thousand corns weigh (TCW) between 2.5-3.2 g. The seeds can be either white, yellow, red, brown or black. The vegetation period is only 80-130 days short. The blossoming and ripening phases take place over several weeks, starting at the bottom of the plant and progressing upwards.

3.8.2.2 Uses and contents

In many of the countries in Africa and Asia, the cultivation of sesame plays hardly any role in cash products, because sesame here is one of the staple, daily foodstuffs. Throughout wide regions of Africa, the cultivation of staple-food crops – including, for example, peanuts – is seen as a woman’s chore. The cultivation of cash crops such as, e.g. cotton, is seen as a male duty. Therefore, cultivating sesame as a cash crop is accompanied by changes in cultural and social traditions.

In West Africa, the shoots and young leaves of the varieties S. alatum and S. radiatum are eaten as a vegetable. Sesame seeds are either consumed directly as a highly nutritious foodstuff, or processed by the confectionery and bakery industries. The seed hulls, which are bitter due to their oxalic content, can be removed with the use of steam. Ragouts and soups are often prepared with crushed sesame seeds. Sesame hay, if carefully dried, can be used as fodder.

A large proportion of the world‘s sesame production goes towards producing edible oil. The plant’s oil content lies around 40-60%; protein content ranges between 17-29%. The oil won during the first, cold pressing is one of the costliest produced. The oil is light yellow, does not dry out, and can be used with strong heat. The quality of the oil depends largely in its essential linoleic acid content (35-41% of all the oils). The oil resists oxidative rancidity, due to its anti-oxidants sesamin and sesamolin.

The press cakes contain 40-70% protein and also 12% fat, and are an excellent supply of fodder. Purely white sesame seeds are in just as much demand on conventional as on ecological markets, because of their higher oil content than pigmented varieties. Sesame oil obtained from the second, warm pressing and extraction has a lower quality than cold-pressed. It is generally used in the manufacture of soaps, paint, cosmetics and pharmaceutical products.

3.8.2.3 Aspects of plant cultivation

SITE REQUIREMENTS

The cotton cultivation zone at the cross-over between the tropics and the sub tropics also provides the best growing conditions for sesame. It lies between the oil palms and soya cultivation regions.

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CLIMATE REQUIREMENTS

Warmth

Sesame needs a constant high temperature, the optimum range or growth, blossoms and fruit ripeness is 26-30°C. The minimum temperature for germination is around 12°C, yet even temperatures below 18°C can have a negative effect during germination. Pollination and the formation of capsules is inhibited during heat-wave periods above 40°C. In regions visited by strong, hot winds, the plants only form smaller seeds with a lower oil content. For these reasons, sesame is cultivated in cooler regions as a summer crop, and in warmer climes during the cooler season. Sesame is frost-susceptible. Depending on the climate, sesame can be cultivated at altitudes up to 1600 m.

Water

Good harvests can be expected when rainfall of 300-600 mm is optimally spread throughout the vegetation period. Optimum distribution means: 35% before the first cusps are formed, 45% during the main blossoming period, 20% during the ripening period and drought, if possible, during harvesting. During each of its development stages, the plant is highly susceptible to water-logging, and can therefore only thrive during moderate rainfall, or when irrigation is carefully controlled in drier regions. Due to its tap roots, the plant is highly resistant to drought, and can provide good harvests even when only stored soil water is available.

SOIL REQUIREMENTS

A wide range of soils are suitable for sesame cultivation; optimum are well-drained, loose, fertile and sandy alluvial soils that have a pH value between 5.4 and 6.75. Very low pH values have a drastic effect on growth, whereas some varieties can tolerate a pH value up to 8. When irrigated, or during summer rain spells, sesame grows better in sandy than in heavy soils. This is due to its sensitivity to high soil moisture contents. It is not recommended to plant sesame on sloping ground, due to the fact that its need of weed-free seed beds and its slow rate of early development can lead to erosion. Heavy, water-logged soils, as well as soils with high salt contents are not suitable; salt contents which would hardly affect cotton or sunflower can already kill off sesame plants. Shallow soils (less than 35 cm) with impermeable sub soils are also unsuitable.

OTHER FACTORS

Sesame needs long periods of sunshine, and is generally a short-day plant – whereby varieties exist which are unaffected by the length of the day. Sesame is sensitive to strong winds when the main stem is fully grown. Tall varieties should not be planted in regions which have strong winds during the harvesting season (and, if necessary, hedges to protect against the wind should be planted).

SEEDS

SECOND GENERATION AND SEED PREPARATION

In order to avoid cross-fertilisation of second generation crops using single-variety seeds, care should be taken to ensure that no other field is being cultivated with other varieties within a 400 m radius. During harvesting, the planting seeds should not be allowed to come into contact with the ground to avoid an infestation of soil borne diseases. The seed shells must remain intact to protect the seeds from infection, and to maintain their ability to germinate.

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3.8.2.4 Sowing methods

SEEDBED PREPARATION 1

Because the seeds are so small (TCW 2.5-3.2g), and the rate of growth during the early phases is so slow, sesame seeds require a seed bed with firm, fine crumbs and sufficient moisture, in order to ensure their rapid, uniform germination and subsequent growth. The seed bed should be made level and free of weeds by appropriate soil preparation, the previous crop planted and the whole system of crop rotation. This is not intended as a fixed rule, for when machines are not to be used; the following cultivation methods come into play (they are also of interest regarding their protection against erosion):

6 Direct sowing in holes, with stick for support

6 Sowing after narrow strips have been prepared

6 Sowing while ploughing with an ox: a row is sown in the opened furrow from a bottle of seeds with a perforated lid, and then covered over again with a branch.

If the field is to be mechanically cultivated, then it should be ploughed to a depth of 20-30 cm (if the soil contains little organic substance, then appropriately shallower), and harrowed 2-3 times afterwards, whereby the weeds should be allowed to grow again between each stage. Several phases will probably be necessary if the soil is to be worked with animals or manually with a hoe. A wooden beam can be dragged along afterwards as a leveler during the last stage of harrowing. Heavy rainfall can badly affect

the germinating seeds, make the finely-crumbed seed bed muddy and flush away the seeds.

SOWING

The optimum depth to sow at is around 1.5-2.5 cm. It is important to sow at an even depth to ensure simultaneous and uniform growth of the crop. In order to ensure that the seeds have access to water, it is far better to use a roller than to sow them deeper – whereby, of course, the seeds should not be damaged in the process.

Manual sowing: Small-hold farmers will often sow by hand. 2-3 weeks after they have been sown, the plants are singled. This method requires 5-10 kg/ha of seeds.

Mixing them together with sand, soil, ash or dried, sieved manure or compost will help make growth more uniform, and also save on seeds.

Mechanical sowing: Drilling machines for finer vegetable seeds are best suited, although normal grain-sowing machines can also be used when fine, dry sand of the same grain size is mixed in with the seeds. Drilling seeds need 2.5-3 kg/ha; when mixed crops are sown, only 1.5 kg/ha is required. Crop density: high yields normally require high densities

Table 44: Peanut Crop Density

Non-branching varieties: Branching Varieties:

250,000- 350,000 plants/ha 150,000-200,000 Plants/ha

Distance between rows: 30-45 cm Distance between rows:50-60 cm

Distance within the rows;7.5 cm Distance within the rows: 10-15 cm

Nevertheless, when planning the crop density, site conditions also need to be taken into consideration. For example, when using dry-land farming, the distance between the rows should be expanded to 75-100 cm, and the distance within the rows to 10-15 cm, each time, depending on the available moisture in the soil.

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SINGLING

In order to achieve an optimum crop density, branching varieties should be singled out to 6-10 cm, or definitely less than 15 cm distance within the rows.

Table 45: Optimum Crop Density

Non-branching Varieties: Branching Varieties:

Single out to 12-15 plants per meter Single out to 8-10 plants per meter

Larger distances stimulate branching, even with single stem varieties. This makes harvesting more difficult, without increasing the yield. When the correct amount of seeds are sown, no singling is necessary.

3.8.2.5 Diversification strategies

CROP ROTATION

When cultivating sesame, the following aspects should also be considered when planning the crop rotation:

6 Do not cultivate directly following a fallow period (uneven soil, weed proliferation),

6 As weed-free seed beds as possible (important when selecting the previous crop),

6 Previous crops with few demands on the soil,

6 Sesame is also a good preliminary crop (it loosens the soil with its tap roots, and provides a dense network of roots in the upper layer),

6 Well-suited as a second crop (short vegetation period, use of water stored in the soil in a similar way to sorgo, as well as being resistant to drought),

6 Resistant against root nematodes,

6 Keeps the wire worm (larvae of the beetles belonging to the family of elateridae) under control in the crop rotation.

6 Typical crop rotation partners include cotton, grain legumes (peanuts, varieties of beans, soya etc.), maize, dry rice and sorghum.

MIXED CROPS

With annual crops: Sesame is cultivated in many countries as part of a mixed crop with cotton, maize, sorghum, millet, peanuts, soya or Phaseolus-species. In the case of mixed cultivation with cotton and sesame, each yield is less than it would be if planted alone, although the ‘Land Equivalent Ratio = LER’ is nevertheless higher. In the process, sesame is placed somewhat under pressure by the taller-growing cotton.

With perennial crops: Cultivation between the rows with young perennial crops is also possible, e.g. cashew (Anacardium ocidentale), young forest trees, as well as mixed cultivation with coconut palms. Contour-line planting with pineapples or legume hedges between the strips can help to prevent erosion, and thereby reduce the loss of nutrients, organic substances and of soil acidification – thereby helping to improve the yield.

BEE-KEEPING

Furnishing bees during the main pollination period can be a simple yet rewarding investment. Sesame’s blossom structure facilitates cross-pollination, even though the crop is usually viewed as self-pollinating. The rate of cross-pollination lies between 0.5% and 65%. Experiments by the Central Bee Research Institute in Poona (India) resulted in an increase in yield of 21% for sesame using Apis c. Indica bees to

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pollinate. In addition to increasing the yield, cross-pollination also helps to raise quality through a more unified ripening period and an earlier harvesting time.

3.8.2.6 Supplying nutrients and organic fertilization management

NUTRIENT REQUIREMENTS

The nutrient content of 1000 kg of sesame seeds is: (Given in kg)

Table 46: Nutrient Requirement for Peanuts

N P K

50 6 50

The individual plant parts contain at harvesting time (kg/ha)

Table 47: Nutrient Contents of Individual Parts of the Peanut Plant

Plant part TM N P K

Roots 779 2.84 0.95 4.33

Stems 2846 10.24 7.94 42.98

Leaves 2058 34.98 12.3 16.74

capsules 4429 71.74 10.63 72.42

Total 10429 119.80 31.82 136.47

These values correspond to a very high yield from a conventional plantation of 2200 kg/ha; yet they demonstrate the high content of nutrients in the foliage, that should then be returned to the field as mulch (or well-composted in the case of disease).

The nutrient requirements are distributed over the vegetation periods in the following way:

Days after sowing Nutrition requirements0 - 29 3%

30 - 47 10%48 - 81 58%

82 - 110 29%

ORGANIC FERTILISERS

The most important methods of applying fertilizer on organic sesame cultivations are:

6 The use of green manure, inclusion of legumes in crop rotation, and

6 The use of organic manure and compost manure.

Direct application of fertilizer to sesame is not always necessary; if the soil contains plenty of humus, then fertilizer may already be provided by the previous crop. If fertilizer is to be applied directly, then it is sufficient to do this one month before sowing, as the seed bed is being prepared. When using ripe compost, around 3 t/ha (ca.7 m³/ha) suffice when applied to the seed furrows, or after singling.

The supply of phosphorous can be a limiting factor for high sesame yields.

Phosphorous deficiency can be alleviated with rock phosphate and bone meal, which should then be applied before the soil is prepared. The amount and type of phosphate made available to the plants can be improved by the symbiotic relationship with mycorhiza, As this has the effect of increasing the surface area of the root system. By excreting a variety of substances, e.g. phosphatase, it can even make organically bound P available to the plants.

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Mycorhiza growth can be stimulated by:

6 Applying small quantities of phosphate fertilisers10 on soil poor in phosphate

6 Compost fertilising

6 The returning of foliage and mulch to the field

6 Crop rotation

Small amounts of nitrogen-rich organic fertilizers, such as liquid manure, will stimulate the mineralization of organic substance. When the plants have reached a height of 20 cm, then 20 kg N/ha can be applied. The supply of potassium is usually not a problem. Calcium and Magnesium are of greater importance, as the plants require large quantities of them, and e.g. can be supplied with magnesium-rich lime (Dolomite).

LEAF FERTILIZERS

Organic foliar spraying can provide a large proportion of the fertilisers necessary, and help balance out deficiencies. They are applied in two lots: After singling and as blossoming commences.

6 Animal liquid manure is diluted 1:5 with water.

6 Cattle manure is dissolved in water.

6 Plant extracts: green, chopped legume leaves (e.g.: Crotolaria) and other nutrient-rich plant parts (Lepotea aenstuans, “Chichicaste”) are left in water fro a few days to ferment.

6 A watery compost extract: the best way is to apply amounts weekly in low concentrations.

GREEN MANURE

When utilizing green manuring plants, their water requirements must be considered so that sufficient moisture remains available for the main crop. They can fulfill several tasks simultaneously, if managed properly, making cultivation of them worthwhile, even when the main reason for planting them is not to harvest them. Some of them are capable of suppressing thick bush growth and 3 m high grasses, leaving behind only a small residue which is easy to work with (alternative to burning down). They create humus in a labour-saving way.

3.8.2.7. Biological methods of plant protection

DISEASES AND METHODS OF PREVENTION AND COMBATING THEM

Moist conditions are especially conducive to fungi and bacterial growth. In order to prevent this, sites should be chosen which are well-drained, levelled and which have deep, loose soil – in order to avoid water-logging

Table 48: Sesame diseases and methods of combating them

Fungus germs Regulation measures

Phytophthora BlightCrop rotation, use of resistant varieties, use healthy seeds, spray Bordeux-mixture (3:3:50) 3x at intervals of 7 days against secondary infection and proliferation

Macrophomina phaseolina and Rhizoctonia bataticola (stem and root rot)

Infection from seeds or soil. Use green manure and encourage nesting of antagonists (ripe compost), use of resistant or less resistant, varieties (e.g red shelled varieties)

Fusarium oxysporum (Fusarium wilt)Infection from seeds or soil. Non-opening varieties are not as susceptible. If the soil is strongly infected at least a 5 year pause

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Alternaria (leaf spot, leaf fleck)Infection from seeds, use resistant varieties. Varieties totally coverd with hair seem to be resistant. Bordeaux-Mixture (0.1%)

Cercospora sesame (white spot)Infection from seeds and plant residues in the soil. Burn plant residues, dress seeds in hot water: 30min at 530c use resistant varieties

Powder mildew

Four germs

Oidium eysiphoides

Sphaerotheca fuliginea

Leveilulla taurica

Erysiphe cichoracearum

Use resistant varieties. Late ripening varieties are less susceptible. Wettable sulphur (0.2%) or use of sulphur dust 20 kg/ha on the 45th and 65th day after sowing

Corynespora Blight Dispose of plant residues, use clean seeds

Table 49: Bacteria germs and regulation measures

Bacterial germs Regulation measures

Pseudomonas syringae pv sesame (bacterial leaf spot)

Dress seeds in hot water 10 min at 520c transmission by seeds possible for 11 months. Use resistant varieties. Cultivate at low humidity and temperature (change sowing date)

Xanthomonas campestris pv. Sesame (Bacteria blight)

Dress seeds in hot water: 10 min at .identify resistance by infecting seedlings. Transmission through the soil, only for 4-6 months, via seeds for up to 16 months. Also transmitted via fiels weed acanthospermum hisdidum. Cultivate at low humidity and temperature (change sowing date)

Viruses Regulation measures

Nicotiana 10 virus (leaf curl)Use resistant varieties. Has many host plants e.g. tobacco, tomato, papaya and is also transmitted by white fly bemisia tabaci

Phyllody ‘mycoplasma- like organism ’(MLO)

Select sowing date at lo vector population. Vectors: leafhoppers (Homoptera), Orosius albicintus. Use resistant varieties, which blossom within 40-50 days

PESTS AND METHODS OF COMBATING THEM

Important measures to prevent a massive infestation of pests

6 Encourage natural antagonists (e.g. create an eco-system with trees, hedges, mixed crops, avoid slash and burn).

6 Crop rotation – which excludes host plants.

6 Mixed cultivation to diversify the agroeco-system, This will disorientate some pests and encourage antagonists. Example: In a mixed crop system with sesame and mungo or Phaseolus beans, the beans will be infected by bugs, leaving the sesame capsules relatively untouched.

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6 Sow yellow flowers near to the sesame field, e.g. sunflowers and calendula. The colours will attract pests, which can then be dealt with.

Remove harvest remains and host plants (also in the vicinity of the field) such as:

i. Common amaranth Amaranthus retroflexus

ii. Wax bean Phaseolus ssp.

iii. Ipomoea spp.

iv. Bidens pilosa

v. Thitonia rotundifolia

Storage pests

Table 50: Sesame Storage Pests and Cures

Pest Cures

RatsLemon verbena (aloysia triphylla) produces lethal high blood pressure in rats

Tribolium castaneumTurmeric curcum domestica and mint menthe spicata as powder or essential oil

Togoderma granariumStorage below 200c prevents development of larvae, calamus, garlic, neem

Strong, aromatic plant preparations can have an effect on taste, and should therefore only be used to protect seeds.

3.8.2.8 Crop cultivation and maintenance

CROP MONITORING

One foundation of the crop control is discerning which pests can affect the plants in which stage of development. Before blossoming commences, these are mainly the leaf-eating caterpillars, during the blossom and capsule development stage, mainly the sucking types of insects. Yet many species also feed off of some bugs parasitically (e.g. predatory bugs). By regularly controlling the crop, disease-carrying and pest insects’ nests can be discovered in time before they spread and damage the crop.

WEED MANAGEMENT

Young sesame plants only grow very slowly during the first 25 days, due to the small seed size, and are not yet strong enough to compete against weeds. Natural weed resistance sets in when growth rapidly accelerates, after the plants have attained a height of 10 cm. For this reason, the field should be kept as weed-free as possible during the first 20-25 days after being sown, this is usually achieved through 2-3 lots of hand-tillage.

Before sowing:

Most of the weeds can already be combated before sowing commences. They are left to grow in the pre-prepared seed beds for 8-10 days (until they have formed 2-3 leaves). Then, the soil should be shallowly worked, only in the uppermost 2-3 cm, e.g. by very lightly harrowing. Care should be taken not to disturb weed seeds lurking in the lower layers, bringing them to the surface, and thus giving them reason to being germination. Shallow harrowing can be carried out 1-3 times before the sowing begins. This intensive working of the soil coupled with sesame’s slow rate of growth means that there is an increased risk of erosion taking place until the plant density is sufficient.

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Further measures include:

6 Early working in of the weeds and harvest residues from the previous crop,

6 The planting of rapidly-growing varieties,

6 Setting the distances between plants so that the crop can close ranks quickly and thus compete with the weeds,

6 Include plants in the crop rotation that cast strong shadows, or are good ground coverers (e.g. green manure plants). In Turkey, wheat and barley are grown in crop rotation with sesame because of their ability to compete with weeds.

Bottom crop: Ground-covering legumes can be sown between the rows to suppress weed growth, e.g. peanuts, mungo, bonavist bean (Dolichos Lablab), Canavalia ensiformis.

After sowing: Only hoe very shallowly, in order not to damage the upper nutrient roots.

Manual: Careful preparation of the soil can reduce the amount of tilling necessary (hoe, machete, ripping). Eventually, the number of times needed can be reduced – optimally down to one time when blossoming begins.

Mechanical: Sowing in rows makes mechanical hoeing possible (it also makes manual hoeing easier). The first weed control stage takes place 15 days after sowing, at the same time as singling, the second after another 15 days. Manual hoeing is necessary within the rows.

3.8.2.9 Harvesting and post harvest treatment

TIME OF HARVEST

Varietal purity will facilitate harvesting as most of the crop ripens at the same time. Two to three harvests may be necessary if ripening times vary. The plants are cut or ripped down at a height of 10-15 cm, and harvested before the capsules are fully ripened, otherwise, huge losses will result as the capsules spring open. The optimum time for harvesting (physiological ripeness) has been reached when:

6 The first, lowest capsules turn brown and begin to pop open,

6 The stem turns yellow,

6 The leaves begin to fall off,

6 Blossoming has finished,

6 The leaves have turned yellow.

DRYING IN THE FIELD/THRESHING

Sesame is generally harvested by hand, and then left to dry for the first 2-3 days after cutting in a windrow. The leaves dry out quickly there, making it easier to bundle them into sheaves. The sheaves should be positioned so that the sun can shine down directly onto the capsules. The sheaves should be small (diameter of 15cm, bottom: 45-80 cm).

In this way, the following can be achieved:

6 Drying takes less time

6 Better heat and air circulation

6 Avoidance of fungi infection because through little moisture

6 Easier to turn when being shaken out

6 More extensive shaking/threshing, fewer losses

The sheaves should not need to be dried for longer than 15 days.

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Shaking out the sheaves and threshing: When the sheaves have dried out fully, they are tipped out onto sturdy cloths or canvases and threshed with sticks. The cloths/canvases should be at least 6 m², to avoid contamination with stones and soil. In this way, quality and preservability can be retained, and an infection by soil-borne diseases avoided. In some cases, shaking out occurs after 10-12 days, and a second time after another 5 days. Mechanical harvest is better, as the unripe plants are cut, and then the pre-dried sheaves threshed out. This reduces the amount of seeds lost, and the hay makes better fodder. Most threshing machines with a sheaf pick-up function are suited to the task. Varieties that open are easier to thresh mechanically than those that remain closed, as less force is needed. It is very important to carefully adjust the thresher, as even slight damage to the seeds will adversely affect their germinating capabilities. Well-threshed loads with slight contamination are better than clean, yet broken yields, because sesame is easy to clean.

DRYING AND CLEANING SEEDS

Directly following the harvest, the sesame seeds are sieved of leaves, stems and capsule residues, and then dried out to a moisture content of 6% as rapidly as possible – which can be done on a clean, sun-drenched concrete base. Where the critical 6% cannot be reached only using the sun, artificial methods must be employed. High levels of humidity can cause sesame to take on moisture again and go mouldy; it should therefore only be stored for a short while, or in air-tight.

POST-HARVEST HANDLING - STORAGE

The storage sacks must be free of insects. Removal of the bitter seed hulls which contain oxalic acid is accomplished with steam treatment. Sesame seeds are not permitted to be treated with methyl bromide or ethylene oxide, and also not irradiated with ionising rays.

3.8.3 SHEA NUTS

Introduction

The shea tree (Butyrospermum parkii or Vitellaria Paradoxa) - commonly known as karité in the Wolof and French languages, grows wild in the equatorial belt of central Africa between Gambia and Sudan and also in Uganda. The oil extracted has a relatively high melting point and is used in rural areas in the making of foods, soap manufacture and cosmetics. Shea is mainly exported as kernels and can be used as an extender in chocolate as its properties are similar to cocoa butter. Most small-scale processing to extract the oil is carried out by women and provides an important source of income.

Cultivation

Shea trees are not cultivated but grow as wild plants. A shea-tree will bear fruit at between 8 and 15 years but reaches full capacity for several decades after this. A tree can yield of 15 to 20 kg of fresh fruit that will produce 3 to 4 kg of dry kernels. The kernels contain 42 to 48% oil (butter).

3.8.3.1 Harvesting

Women and children collect the fallen fruit and take them back to their villages for processing into Shea butter, an edible fat.

3.8.3.2 Processing

The green pulp exterior is removed. One method is to bury the fruit in the ground so that the pulp ferments and falls off. This takes 12 days or more. The nuts are parboiled or sun dried and then dried by smoking over an open fire for 3 to 4 days. The dried nuts can then be stored for long periods without significant losses. Decortications’ is done by crushing the outer shell to remove kernels. Shea nuts are mainly exported as smoked kernels. The kernels will be further dried before any additional processing is carried out.

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3.8.3.3 Shea nut butter

Traditionally wet processing by hand is a slow and laborious process that uses large quantities of wood as fuel for roasting. Nuts are shelled by hand by being pounded individually using the end of a pestle. The resulting kernel particles are aggregated and roasted on a metal sheet over a fire. The kernels are then pounded in a mortar to produce a coarse paste and then ground between two stones to produce a smooth paste. A small amount of water is added to the paste and the mixture agitated by hand using a “paddling” motion. The quantity of water added is not measured but judged by experience. The mixture is continuously stirred for anything up to 4 hours. The length of time depends on the quality of the nuts. At the end of this time the mixture becomes lighter in colour and more water is then added. The white shea butter then floats to the top of the mixture. At this point the stirring action is carried out much less vigorously. The resulting oil is decanted off the dark brown residue using a spoon and is washed repeatedly with warm water until clean. The remaining water is removed by heating. Impurities settle out and the butter can be left to cool and solidify. The butter is then boiled over an open fire until clear. The oil is left overnight and the next day is stirred with small sticks when it becomes solid. The resulting shea butter is then ready to be used. Using this traditional technique, the fat obtained is between 25 and 40 % of the dry kernel weight.

The introduction of equipment may improve upon traditional methods of production by reducing the effort and time involved and by increasing the yield. Instead of pounding by hand, a motorised mill can be used. Oil can be extracted using a mechanical or hydraulic press. An important consideration is that any introduced technology must be at least as technically efficient in terms of yield as well as being a financially-viable operation.

SHEA BUTTER EXTRACTION

Attempts have been made to introduce small-scale technology to extract shea butter, especially the use of a bridge press with marginal yield increases over the manual method. The resulting press cake provides a useful fuel wood substitute. A fully-motorised method mimicking the steps involved in the manual rural butter extraction methods was developed by the Technology Consultancy Centre of Kumasi University of Technology, Ghana but the equipment is costly and, depending on the shea butter value, may not cover capital and operating costs. Commercial expellers are used to extract the butter from shea nuts due to economies of scale.

FOOD

Used as baking fat and to substitute cocoa butter in chocolate manufacture and chocolate confectionery products.

COSMETICS

Shea butter is used as a base for cosmetics including skincare products and moisturising cream

SHEA NUT BUTTER IN GENERAL

Generally referred to as “THE GIFT OF GOD”, Shea nut trees grow naturally in most parts of Southern Sudan. Information collected from the agricultural department revealed existence of about 20,000 trees in Yirol West County. An additional 10,000 trees are also estimated to exist in Rumbek County. As it has been mentioned, shea trees start bearing fruits after 15 to 20 years at the beginning, after which they continue producing fruits every season every year for the rest of trees’ lifespan, which is about 300 years. It is estimated that 15-20kg of nuts are harvested from each tree per annum. This brings a total of about 600,000kg or 600 tonnes per year.

The nilotica variety of shea nut tree (called lulu in Arabic) grows mainly in a narrow band of savannah extending from Senegal to Ethiopia. Lulu trees grow abundantly on the ironstone plateau and the alluvial plains of South Sudan. This medium sized deciduous tree rarely exceeds 15m, and is estimated to live between 200 to 300 years, with 15 to 20 years of growth required before fruiting. The tree has a rich bounty of nutritious lulu nuts and yields at the exact time of the seasonal hunger. The lulu tree is famous in

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South Sudan as a vital natural resource. The economic value of lulu nuts is also extremely high, providing families with income and household food security. The Nilotica variety of sheanut produces pure oil that needs no bleaching and or deodorization before processing into oils and skin care products. Nilotica oil has a naturally pure and mild flavor that requires little processing, it is a highly coveted additive for natural skin and hair care products. Rich in olein, nilotica oil from South Sudan is superior in cosmetics and is known in South Sudan and around the world for its positive effects on the digestive system, the hair and skin. In South Sudan, the tree thrives in the Bahr el Ghazal and Equatorial regions, where it has been used for centuries for oil and foods. (Lulu Life Sudanese Shea Butter Project document 2010)

The consultant noted lack of plantations for this crop and no organized cooperative society has invested in setting up and organizing cooperatives for the harvesting and storage of this natural growing tree. Where trees exist, farmers will collect the nuts and sell to the oil mill. The Management of Yirol Oil Mill project will therefore foster programs to educate farmers on how to harvest, store, preserve and eventually sell the nuts from this natural tree, a strategy that has worked well and a good success story for Guru Nanak, in Uganda.

3.9 estABlishing oF An oil Mill

3.9.1 OIL EXTRACTION PROCESSOil is extracted from several seeds, nuts and fruits for use in cooking and soap making, cosmetics, detergents, or as an ingredient in other foods such as baked or fried goods.

Table 51: Oil extraction for Different Seeds

Moisture content (%) Oil/fat content

Seeds & Beans

Cotton

Rape

Mustard

Sesame

Sunflower

Saf flower

5

9

7

5

5

5

15-25

40-45

25-45

25-50

25-50

30

Nuts

Coconut (fresh)

Copra

Groundnut(shelled)

Palm kernel nuts (shelled)

Shea nut

Shea nut

40-50

3-4.5

4

-

-

-

35-40

64-70

28-55

-

46-57

-

Fruits

Oli palm

Avocado

Olive

-

69

50-70

56

11-28

-

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3.9.1.1 Raw material preparation

Oilseeds and nuts should be properly dried before storage, and cleaned to remove sand, dust, leaves and other contaminants. Fruits should be harvested when fully ripe, cleaned and handled carefully to reduce bruising and splitting. All raw materials should be sorted to remove stones and mouldy nuts. Some moulds, especially in the case of groundnuts, can cause aflatoxin poisoning. When storage is necessary, this should be in weatherproof, ventilated rooms which are protected against birds, insects and rodents. Some raw materials (for example groundnuts, sunflower seeds) need dehusking (or decorticating).

Decorticating is important to give high yields of oil and reduce the bulk of material to be processed.

However, expellers normally require a proportion of fibrous material in order to work and, particularly with groundnuts; some husk is normally added to allow oil to escape more freely from the press. Coconut is dehusked and split manually by skilled operators. Most oilseeds (e.g. copra, palm kernels and groundnuts) need grinding in mills before oil extraction to increase the yield of oil.

Some seeds (especially groundnuts for example) are conditioned by heating to 80-90oC using a seed scorcher (Figure 135 shows a typical small-scale example – a separate heat source is necessary beneath the scorcher). All oil-bearing materials need to have the correct moisture content to maximize the oil yield. Using small-scale expellers, oilseeds and nuts are usually processed “cold” (i.e. without additional heating).

Figure 135: a Typical seed scorcher

3.9.1.2 Expeller

The basic steps involved in processing oilseeds by expeller are shown in the flow diagram below.

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Flow diagram

Storage

Cleaning

Decortication

Milling Grinding

Oil expelling

Crude oil Cake

Deodorising

Neutralising

Filtering

Figure 136: Flow diagram for oil processing

Figure 137: Rosedowns Maxoil press Figure 138: Typical view of cage or barrel for Rosedown expeller

Description of an expeller (reference to Rosedown maxoil)

An expeller consists of a helical thread (worm assembly) which revolves concentrically within a perforated cylinder (the cage or barrel). The barrel is usually formed by a series of axially-placed lining bars contained within a robust frame. Heated oilseeds enter one end of the barrel through the feed inlet and are conveyed by the rotating worm assembly to the discharge end. With any power-driven equipment, it is important to consider how the equipment will be repaired as it becomes worn. Local refurbishment is normally cheaper than importing spare parts.

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3.9.1.3 Solvent extraction

Solvent extraction plants use hexane as a solvent to extract oil from oilseed cake. These plants are expensive and only suitable for large volumes which justify the capital cost of equipment. Where large amounts of oilseed cake are available, solvent extraction becomes a commercially viable option to extract the residual oil left in the cake and leave an almost oil-free powder known as oilseed meal. Both cake and meal are incorporated in animal feeds.

3.9.1.4 Clarification of oil

There is always some finely divide material expelled with the oil and this is termed foots. Foots are collected on a sieve which is continuously scraped and the foots re-processed in the expeller. Oil is transferred to a holding tank prior to filtration under pressure through special filter cloths.

Figure 139; A typical filter press

3.9.1.5 Refining

In many local markets further refining is not required as the flavours of unrefined oils may be readily acceptable. However these stages are carried out in large-scale operations and for international markets which tend to prefer a less-coloured and odourless product.

These refining steps are:

6 Neutralisation; Fatty acids can be neutralised by adding a sodium hydroxide solution, also known as caustic soda, or by stripping, which is a similar process to de-odorising.

6 Bleaching; Some oils have a very dark colour which can be unpopular with consumers. The appearance of the oil can be lightened by bleaching.

6 Deodorising; Volatile compounds that produce odours can be eliminated through the process of sparging, i.e. bubbling steam through the oil, under a vacuum.

6 Degumming; Degumming is a way of treating oils that have a high phosphotide content. The phosphotide, which makes a gummy residue, is removed by mixing the oil with 2 or 3 % water. This hydrated phosphotide can then be removed by settling, filtering or centrifugation.

6 Winterisation; Allowing the oil to stand for a time at low temperatures so that glycerides, which naturally occur in the oil, with higher melting points solidify and can then be removed from the oil by filtering. This step is usually carried out with palm oil to separate the oil into two separate products: a solid fat (stearin) and liquid oil (olein).

These materials are removed by clarification – either by letting the oil stand undisturbed for a few days and then separating the upper layer, or by using a clarifier. This consists of an oil drum placed above a fire. The oil is boiled to drive off water and destroy naturally occurring enzymes and contaminating bacteria. The oil is allowed to stand and contaminants the separate out. The oil is filtered through a cloth and heated briefly to 100°C to boil off any remaining traces of moisture. This is usually sufficient at the small scale to meet the quality needs of customers and give a shelf life of several months when correctly packaged.

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3.9.1.6 Packaging and storage of oil

If incorrectly stored, some types of oil rapidly go rancid and develop an unpleasant odour and flavor. The main factors that cause rancidity (in addition to moisture, bacteria and enzymes above) are light, heat, air and some types of metals. To obtain a shelf life of several months, oils should be stored in lightproof, airtight and moisture-proof containers in a cool place. Tin coated cans, glazed pottery, glass and food-grade plastics are all suitable when properly sealed. Great care is needed to remove all traces of oil from re-useable containers, and to thoroughly dry them before re-filling, because any residual moisture or rancid oil on the inside will rapidly spoil fresh oil. The materials used to make processing equipment and containers should not contain copper as it promotes rancidity.

3.9.1.7 Use of by-products

All oilseed cakes can be used as livestock feed ingredients with suitable pre-treatments where required. Often, when low-temperatures are used for oil extraction, the cake can be incorporated into food. However, all oil extraction businesses need to identify markets for their by-products to maximize income.

3.9.1.8 Quality assurance

The main quality checks concern raw materials, processing conditions, product quality (conformity to the standards applicable in the market into which the oil is sold) and packaging and storage conditions. Raw materials should be checked to ensure that there is no mould growth, and that they are correctly dried, cleaned and sorted so no other seeds or contaminants are present. During processing, the temperature and time of conditioning, the moisture content of the raw material, and the yield of oil should be routinely checked. Quality checks on the product include correct color, flavor, odour, clarity and fill weight.

3.9.2 FLOW PLAN FOR OIL PROCESSING The section describes the flow plan for production line 1 and 2 and the plant layout which is detained in Appendix IV

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3.9.2.1 Production line 1 flow

Figure 140: Proposed Production line flow 1

3.9.2.2 Peanuts/sesame refining process

Figure 141: Proposed refinery flow for line 1

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Comments for production line 1:

In the first phase as indicated above, the oil that will be produced from the mill will be targeted for the local market, this then does not necessitate refining of the oil at this stage. When operations have expanded and the target is intended for the international market, then refining of oil will be done as shown in figure 141 since the product will be competing with products which are less coloured and odourless.

3.9.2.3 Production flow for production line 2 flow

Figure 142; Proposed production line flow 2

Figure 143: Oil Fractionation for shea nuts

Source: USAID, (Lovett, P.) The Shea Butter Value Chain (Nov. 2004) pg.4

Comments on production line 2

In this line there will be both mechanical extraction of oil and refining.

3.9.3 PRODUCT DESCRIPTION AND APPLICATIONGroundnut oil, sim-sim oil and shea nut oil is used for cooking food. The country’s requirement of all the vegetable oil is met through import and domestic production. However, the market is fully dominated by imports. According to the market review done within places of Kaya and Nimule, the highest share that could be achieved by domestic manufacturers was 1% in 2011, while the average for the same period was estimated to be 5 %. The data also revealed that the importation of cooking oil at the same entry points mounted to 11.21 million litres of vegetable oil, this summed up with an addition of 20% of informal trade which is not recorded, thus making 13.5 million litres within a year. Despite availability of raw materials like groundnut, shea nut, sesame, sun flower in the country, packed edible oil of foreign sources from Uganda, Kenya, Egypt are flooding the market.

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Groundnuts

Ground nut kernel contains 50-55% of oil. The oil obtained from the kernel is yellow to greenish yellow in color with chief constituents of glycerides of oleic and linoleic acids with lesser amounts of the glycerides of palmitic, stearic, arachidic, behenic, and lignoceric acid. The oil is used as a substitute for olive oil and other edible oils, soaps, salad and cooking oil, mayonnaise and margarine. The meal is an important component of feeds for poultry and cattle.

Sesame

Sesame seeds contain 35-50% of oil. Sesame oil is pale yellow bland semi-drying. Oil has a particularly good fatty acid distribution being high in the relatively stable unsaturated acids, oleic and linoleic, 35-49% and 37-48%, respectively. Refined sesame oil is exceptionally good edible oil. It is used directly as a bland salad oil and for cooking purposes. It is also used in making margarine. Sesame oil compares very favourably in these uses with olive oil and this often leads to sesame oil being used as an adulterant of olive oil rather than straight forward substitution. Because of its high stability compared with other vegetable oils, sesame oil also has some specific end-uses in the pharmaceuticals industry, which employs the oil as a vehicle for medicaments which are required to be administered subcutaneous or intramuscularly. It may also be used in the preparation of liniments, plasters, ointments, and special soaps and small quantity in perfumery as a fixative.

Shea nut

Shea nut kernels contain 34-44% of oil. Crude shea oil can be used as cooking oil either directly or fractionated to yield stearin and olein. The stearin is valued too highly on domestic and international cosmetic markets to be used as a cooking fat. However, shea olein has yet to find a substantial international market and therefore could be sold as cooking oil on the South Sudan market. It is golden coloured oil, of which the quality has tentatively been compared with olive oil (Maranz and Wiesman 2000).

According to FAO, the potential production of shea in Africa is approximately 1,760,000 mt of Shea nuts. Only 35% of these nuts are gathered and 85% of this harvest is locally processed, to make 100,000 mt of local butter. Approximately 65,000 mt are exported, mostly to the food industry and it is estimated that 3000 mt per annum is used by the international cosmetics industry.

The project needs to take advantage of the existence of wild lulu tree that is spread all over South Sudan. An average fruit yield per tree was conservatively estimated at 15-20 kg / year, (Ruyssen 1957) and later more optimistically at 25-55 by Fleury (1981). Schreckenberg1996, calculated an average annual yield of 5 kilograms dried kernels per tree. There is limited information about lulu tree yield and number in South Sudan but the same varieties and conditions were studied in Benin. Estimating an average of 2 million trees, and taking the most recent study, of 25-55kilograms per tree, the annual estimated yield would be 50,000,000 kilograms of shea tree kernels per tree. If 70% of the kernels are collected an estimate of 35,000,000 would be available for processing which translates into 7,000,000 of dried kernels. With other competitors like LULU works taking like 50% (since it’s more established), this brings the amount of dried kernels to 3,500 tonnes estimated to 1,260,000 litres of lulu oil.

Production expansion of Shea nut trees

The typical production system involves no clearing of forests or natural habitat as do many bulk traded commodities. As mentioned before, the shea tree is found in the wild, and the nuts fall from the trees and are collected by the women of the local villages and then produced. According to Dr. Lovett, there are approximately 500 million productive trees, with a production capability 2.5 million MT throughout the Sahel region. However, even though there is a lack of infrastructure, the shea butter industry is sought to grow rapidly in the years to come because of the demand of it by the cosmetic companies and individuals.

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3.9.4 MARKET STUDY, PLANT CAPACITY AND PRODUCTION PROGRAMME

3.9.4.1 Market study

Based on the market study, there is enough demand for vegetable oil in South Sudan, the market is being flooded by imported oil yet there are raw materials for the production of oil within the country. According to the market survey done at the two entry points in Kaya and Nimule, the oil imported in 2011 amounted to 11.21 million litres and in addition of the 20% from informal trade makes the demand of cooking oil amount to 13.5 litres per year.

The data obtained from imports is in aggregate, it does not show information by type of the oil seeds. On the other hand, the survey reveals that of the total quantity of edible oil imported to the country about 70% is palm oil and about 18% linseed and vegetable oils. The remaining 12% is the share of ground nut, sunflower, sesame and the shea nut. Hence, only 9% of the total unsatisfied demand is assumed to be the current unsatisfied demand for ground nut and sesame oil while the rest of the 3% is shea nut oil. Accordingly, current unsatisfied demand for ground nut oil and sesame oil is calculated at 1.215 million litres and demand for shea nut oil is calculated at 405,000 litres.

3.9.4.2 Plant capacity

Since the demand for both the ground nut oil and sesame oil is estimated at 1.215 million litres, it is therefore eminent that the capacity of the machinery be based on the total available land and future supply of raw materials from the different area neighbouring the factory. The 2,050 feddans owned by the oil mill and the 3,000 feddans for the out-growers and small farmers can be able to provide 1,0508 tonnes of groundnuts seeds and 3009 tonnes of sim-sim seeds in a season. Since there are two seasons in the region, it is estimated that 2000 tonnes of groundnuts and 600 tonnes of sesame can be attained per annum from the available and the outgrowers land.since our study concentrated on a few areas i.e. one third of the ground nut and sesame growing areas, we can therefore estimate 6,000 tonnes of ground nuts and 1,800 tonnes of sesame to be produced in the entire area per annum depending on our assumption of growing patterns. Assuming that only 60% of the produce reaches the production flow in the first phase, 3,600 tonnes of groundnuts per annum and 1,080 tonnes of sim-sim per annum will be processed. It has also been estimated that 3,500 tonnes of shea-nuts can reach the production flow per annum.

The consultants therefore propose two production lines for the vegetable oil processing, one production line of capacity 25 tonnes10 of seeds per day to process both groundnuts and sim-sim (in the ratio of 60: 40 of groundnuts: sim-sim)and another production line of capacity 10 tonnes11 of seeds per day to process shea nuts/ lulu. Thus production line 1 is to have a capacity of 7,500 tonnes of seeds per annum and production line 2 of 3,000 tonnes per annum for shea nut seed though in the first years they will be producing at a low capacity.

Therefore the oil produced for line one is estimated 10 tonnes per day (for 45% oil content in seeds)and 4 tonnes of shea nut oil per day, all at full capacity. Therefore at full capacity, the YOM will be able to produce an aggregated amount of 4,200 tonnes of oil per year, which can be estimated to be 4.59 million litres at full capacity.

This plant will be able to supply 34% of the market share at full capacity (two12 years construction 8 Its assumed that each feddan produces 500kg of groundnuts according to Jagwe and Abele (2005).

9 Its assumed that each feddan produces 200kg of sim-sim according to NARO (1996)sesame growers guide.

10 This capacity also puts into mind the future increment in tonnages reaching the production flow.

11 Shea nut capacity is based on present and projected future supply of lulu by the farmers.

12 From the experience of the consultants and other considerations like construction materials supply

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period and three years at full capacity attainment). This is based on 300 working days and three shift of 8 hours per day. In actual sense, production line 1 will be processing up to a capacity of 1,800 tonnes of oil (1,967,40013lt) per annum of ground nuts oil and 1,200(1,311,600lt) tonnes of sesame oil and production line 2 up to a capacity of 1,200 tonnes (1,311,600lt) per annum of shea nut oil.

Note: When specifying machinery and equipment, when a manufacturer stipulates 25 tonnes per day, this means that machinery will be processing within 24 hours for the seeds and NOT oil, but this project is targeted at 8 hours for the first phase and thereafter will go back to the three shifts stipulated by the manufacturer.

3.9.4.3 Plant programme

At the initial stage of the production period, the plant would require some years to penetrate into the market and develop production skill. Therefore, in the first, second and third year of production, the capacity utilization rate will be 60%, 80% and 100%, respectively. In the fourth year and thereafter, full capacity (100%) production shall be attained. Table 53 shows the production programme of the project. This is therefore to note that below a capacity of 50% the plant should not start since it may not be a profitable venture.

Table 52: Production programme line 1(groundnuts) for 40% Oil content

No. Product Production year

1 2 3 4-10

1 Edible oil 1080 1440 1620 1800

2 Expeller cake* 1620 2160 2430 2700

3 Capacity utilization (%) 60 80 90 100

Table 53: Production Programme line 1(sesame) at 40% oil content


1 2 3 4-10

1 Edible oil 720 960 540 1200

2 Expeller cake 1080 1440 1620 1800

3 Capacity utilization (%) 60 80 90 100

*The plant will generate income by the sale of the expeller cake for animal feed (the price of a tone of expeller cake is to be determined using data within South Sudan region)

Shea nut production line 2 in tones

Table 54: Production programme for line 2 for 40% oil content


1 2 3 4-10

1 Edible oil 720 960 1080 1200

2 Expeller cake 1080 1440 1620 1800

3 Capacity utilization 60 80 90 100

The ground nut seed gives 44.5-50% oil, 50-55% meal, the sim-sim seeds give 35-50% oil, 60-40% meal and the shea nut gives oil greater than 45%. All the raw materials like shea nuts, groundnuts and sim-sim are grown and collected locally.

13 For 1 kg of seeds translates to 1.093 litres of oil

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3.9.5 MATERIALS AND INPUTS

3.9.5.1 Raw and auxiliary materials

The principal raw material required for the production of the vegetable oil is groundnut seed, sim-sim seeds and shea nuts/ lulu seed which are produced or collected locally in different regions such as Yirol West County, Yirol East County, Rumbek County and other areas like Shambe, Bahr el Ghazal, in Terekeka and parts of the Upper Nile e.t.c.

For production line 1, the proposed capacity is 25MTPD of seeds and the raw materials required are peanuts and sesame which are got locally. These raw materials are grown twice in a year depending on the region. For production line two of capacity 10MTPD of shea nut seeds, the principle raw materials are the shea nuts collected locally by the farmers and the only auxiliary raw materials like caustic soda, bleaching earth and phosphoric acid are imported , the refining chemicals and packing materials

requirement of the envisaged plant is indicated in Table 55.

GROUNDNUTS RAW AND AUXILIARY MATERIALS REQUIREMENT AND COST (AT FULL CAPACITY)

The groundnut seed gives 44.5-50% oil, 50-55% meal. The cost of 1 kg of peanuts is taken at 3.00 SSP.

Table 55: Proposed Raw and Auxiliary Materials for Peanuts

Sr. No. Raw & Auxiliary Materials Unit of Meas. Qty/consumption

1 Shelled groundnut Tonnes 45001

2 Packing container 1lt, 0.5lt e.t.c. Pcs 1,000,000

The plant can generate some income from the sale of oil cake.

SESAMES RAW AND AUXILIARY MATERIALS REQUIREMENT AND COST (AT FULL CAPACITY)

The main raw material required by the sesame oil plant is the oil bearing sesame seed. The Lakes State region, especially in the Yirol West and East there is very high potential for this seed. All raw materials are locally available. Annual requirements and cost of raw & auxiliary materials are depicted on Table 57.

Table 56: Proposed Raw and Auxiliary Materials for Sesame

Sr. No. Raw & Auxiliary Materials Unit of Meas. Qty

1 Sesame seed Tonnes 30002

2 Plastic containers 1 lt, 0.5 lte.t.c. Pcs 500,000

SHEA NUT RAW AND AUXILIARY MATERIALS REQUIREMENT AND COST (AT FULL CAPACITY)

Table 57: Proposed Raw and Auxiliary Materials for Shea nut

Sr. No. Raw & Auxiliary Materials Unit of Meas. Qty

1 Shea nuts Tonnes 3000.00

2 Caustic soda Kg 790.00

3 Bleaching earth Tonnes 14.00

4 Phosphoric acid Tonnes 2.89

5 *Packing containers Pcs 500,000

Packing sizes and types shall have to be finalized beforehand and necessary prior arrangements shall

have to be made.

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3.9.6 UTILITIES

Utilities required for the envisaged oil mill include: electricity, water and fuel oil. Annual requirement and their costs at full operation capacity of the mill are only estimated depending on what has been analyzed on the location, technology to be used and the plant capacity. This therefore should not to be taken as the real required utilities, and the utilities required can be detailed by the supplier of equipment. Table 59 shows the utilities that may be required. The total cost of utilities is to be analysed after selection of real machinery has been done, the table shows what should be put into consideration.

Table 58: Proposed utilities used in the factory

Sr. No. Utility Unit of measure Qty Unit price Cost

1 electricity kwhr1/day 1575 582.75

2compressed air

m3/week 1920

3 water litres/day 50,400Total

It can also be noted that Yirol oil mill is located in Lakes State where access to Hydro-electric power is not possible and therefore there is need of diesel generators to supply the mill. Appendix VIII gives guidelines of selecting a generator set for the factory.

3.9.6.1 Electricity requirements

The consultant proposes that for lighting conditions of the plant, the oil mill management should resort to use of solar energy to light the whole plant and the offices. It can be stated that Yirol West County has 6 hours of uninterrupted sunshine and thus can be tapped for lighting at the time it is required most in the night. The total installed capacity is dependent on the tonnage that is being processed ranging from 40-45 KW Hr/tonne of material into the press. Therefore a generator of capacity 45-50KVA ( is a stand by requirement)

3.9.6.2 Water requirements

The water that will be used by the factory will be got from the nearby river Yirol, and thus will require a cleaning plant so that it can be acceptable for use in the factory. Since the water cleaning plant may be expensive, the consultant suggests that, suppliers of equipment should provide equipment that use water in a closed circuit. This will avoid extra costs of ensuring that quality of water is adhered to at all times. The required capacity of water is 50,400 litres per week at minimum. To reduce wasted water, it would be advisable to introduce a water recycling plant.

3.9.6.3 Fuel requirement

The consultant recommends the use of the generator of capacity 45-50KVA for running the equipment and machinery in this area since the place is not connected to the electricity network. The generator will be running on diesel or any other fuel that may be seen fit. Therefore, when calculating costs for running the production line, fuel costs are supposed to be put in mind depending on the consumption rate of the generator and the hours of use. The consultant recommends a generator known as P50-2S of Engine make & model: Perkins 1104c-44TG2/3.

3.9.7 TECHNOLOGY AND ENGINEERING

3.9.7.1 Production process

Edible oil technology can be grouped into two: mechanical pressing and solvent extraction. Sometimes the latter compliments the former. For oilseeds with high oil content such as groundnut and sesame, first mechanical pressing will be applied and over 85% of the oil will be extracted. The remaining oil in the expeller cake will then be extracted with solvent. For some other oilseed with low oil content, solvent

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extraction is generally considered as the best alternative.

However, the initial investment cost of solvent extraction is much higher than mechanical pressing. In addition, solvent extraction is more appropriate for large scale processing than small scale edible oil plants. The minimum capacity recommended for solvent extraction process is 150-200t/day feed stock. Therefore, in this study the mechanical pressing technology has been selected due to the advantage of reduced capital cost, no danger of fire from combustible solvent, simpler process control and small number of skilled staff over solvent extraction process.

Vegetable oil production process, based on mechanical pressing technology, can be grouped into three stages: seed preparation, pressing and crude oil refining. The seed requires undergoing a thorough cleaning process to remove sand, stalk, plant debris and any other foreign matters by rotary or table sieve. Usually, the screening process is assisted by air aspiration unit. After cleaning, the seeds have to be prepared for efficient oil recovery by pressing.

The stages involved are size reduction of the seeds by breaking them and then conditioning the seeds by adjusting their moisture content and temperature while keeping the seeds hot (say 90-95ºc) for a period of 30-60 minute. Then, the prepared seed shall be conveyed to the screw pressing machine where it is pressed by the action of worm and outer shell. The crude oil so obtained from the pressing will be first clarified in a settling tank and then shall be pumped through the filter press.The filtered crude oil will either be packed or pumped to the refinery where it shall pass through three stages of refining; neutralization, bleaching and deodorization.

To reduce the level of Free Fatty Acid (FFA) in the oil, caustic soda will be mixed with the crude oil. The neutralized oil may have trace of soap which is a by-product of the neutralization process. Therefore, the oil will be washed with water. It will then be pumped to the bleacher in which it will be mixed with bleaching earth to improve the colour of oil by the process called adsorption. The bleached oil, after being filtered, will be pumped to the deodorizer to avoid substances which are responsible for the odour of edible oil. In some small plant the three stages of refining crude oil are executed in a single vessel. The plant requires a containment vessel for the collection and treatment of wastes to be generated in the process.

In this study, the consultant recommends mechanical pressing technology due to its advantages, whereas production line 1 will not be having a refinery plant in the first phase, production line 2 is proposed to have a refinery plant immediately because of other processes required like Fractionation.

3.9.7.2 Machinery and equipment

Equipment retailers and manufacturers include various accessories with their processing equipment. It is important to consider exactly what equipment is included when comparing offers. The following is a list of basic equipment, components used for oilseed processing when using the mechanical extraction process without refining (i.e. oil mill)

6 Seed store

6 Seed conveyor

6 Pre-washer (if necessary)

6 Intermediate seed container (storage silo)

6 Vegetable oil presses

6 Press cake storage unit

6 Unpurified oil tank

6 Filter system

6 Pure oil tank

In addition to the oil mill equipments and machinery, the plant is to have a bottling plant of 14MTPD of oil.

The vegetable oil production plant is to be operated in a continuous process which essentially consists of the following three parts;

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Part 1

As a first step, the raw material is transferred into the processing plant by a conveyor system. After being cleaned and dried, it reaches the distributor via an existing elevator and is then carried to the trough chain conveyor.

Part 2

After being removed from the distributor, the trough chain conveyor carries the seed material to the three 3600 m3storage silo (3 storage silos volume that can accommodate production for six months and if possible reduce the silo storage to 600m3 for a month, each silo for the raw material seeds) this ensures that the oil presses are continuously supplied with seed material. In addition, these intermediate containers allow the seed temperature to be brought in line with that of the press.

From the storage silo, the seed material passes into a cleaning unit. The cleaning process uses a vibrating screen and achieves a throughput of 1500kg per hour for line 1 and 1000kg for line 2.

Part 3

This is where the actual pressing and filtering process takes place. The 100 series sterling full press type attains an hourly throughput of approximately 1,100kg of seeds which yields around 440Kg of oil per hour. The oil then flows into the unpurified oil tanks (capacity of 32,000 litres for peanuts, a capacity of 21,200 litres for sesame and a capacity of 21,200 of shea nut oil), which can hold a 5 day production of pressed oil. Using an agitator that prevents the particles from sinking to the bottom, the oil is transported to the filter system by a pump.

A fully automated chamber filter system will be used for initial filtration. The unpurified oil enters the chamber filter press through a drill hole. The filter plates are forced under pressure, at the same time, the solid content in the oil suspension is squeezed against the filter cloths from the inside out at between 10-20 bar pressures. Filtration proceeds until the chambers are completely filled with filter cake. The filtration cycle is then complete; the filter cake is removed automatically, thus allowing the admission of more filtrate. Following initial filtration, the oil passes over the control filter where fine filtration takes place.

After the filtration process, the oil passes into three separate pure oil tanks with a capacity of 35,000, 22,000 and 22,000 respectively. The oil is removed via stainless steel pipes from the separate tank chambers, which merge into single extraction conduit to the bottling section.

The list of machinery and equipment of the first production line is indicated in table 59. The total cost of production line one equipment as quoted by DesmetBallestra (Rosedown Presses) is 675,000 GBP. The entire quotation can be seen in Appendix V.

NOTE

Small scale oilseed processing equipment is often sold without seed storage bins, meal collection bins, and oil storage tanks. It may be possible to utilize bins and tanks already owned to reduce the capital costs but since they do not exist then there is need to fabricate them locally or buy them, or If possible to use local fabricators to provide them.

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Table 59: Machinery and Equipment for Production line 1

S. No. Description Quantity Capacity

1 Peanut Decorticator 2 500kg/hr

2 Sesame Decorticator 2 300kg/hr

3 Sesame Cleaning Unit 1 1000kg/hr

4 Peanut Cleaning Unit 1 1500kg/hr

5. Raw Material Storage Silo 3 36000m3

6. Delivery Train To The Oil Mill Pressing Unit LS (same capacity as press)

7. Weighing Machines 3 Flow capacity of the press

8. Vertical Stack Cooker 1 Flow capacity of the press

9. Full Press Machine 1 25MTPD

10. Vibrating Screen With Stainless Steel Wedge 1 Flow capacity

11. Screened Oil Tank 2 2000 litres & 3500 litres

12. Pressure/Vertical Tank Filter 2 500 litres/hr

13. Crude Oil Storage Tanks 4 3000 litres

14. Agitator 02 Requirement

15 Filter Press Feed Pump 02 Requirement

16. Heel Tank 02 3000 litres

17 Filtered Oil Tank 02 3500 litres

18 Set Of Level Switches Sets Requirement

19 Filtered Oil Pump 02 Requirement

20 Set Of Manual Valves & Fittings Set Set

21Compressor Air Station Including Compressor & Receiver

01 Set

22 Set Of Access & Supporting Steel Works Set Requirement

23. Set Of Thermal Insulation Materials Set Requirement

24. Set Of Electric Cables Set Requirement

25 Set Of Oil Filling Plant 02 10 and 5 MTPD

Total cost of entire equipment and machinery Varying Supplier

The consultant was able to contact two of the companies listed in the equipment list, Desmet Ballesttra from UK and HENAN KINGMAN M&E COMPLETE PLANT CO. LTD from china were able to quote for production line 1 as can be seen in Appendix V. Items. The supplier of such machinery will be able to provide the plant layout that will suit the machinery supplied.

Spare parts

Although the consultant will recommend maintenance and servicing of machinery and equipment as per the requirements of the equipment/machinery supplier, it can also be noted that machinery will at one point fail. The supplier will therefore be tasked to also provide spare parts and mostly the consumables for the factory to last for 2-3 years in order to keep the plant in operation. The importance of correctly identifying essential spare parts, the quantities required and the available nearby suppliers cannot be overemphasized because often the reason for project failures is due to lack of essential spare parts. It is therefore pertinent to include 15% in the initial investment as initial working capital. In most equipment purchases, the suppliers also provide set of tools essential for maintenance of the equipment. The flow diagram below in figure.144 show the industrial shea butter extraction plant and refinery

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Fig 144 Indistrial Shea Butter Extraction Plant and Refinery

COSTS ESTIMATES FOR THE EQUIPMENT AND MACHINERY FOR LINE ONE

Table 60: Cost Estimates for the Equipment and Machinery for Line One

MACHINERY & OR EQUIPMENT CAPACITY ESTIMATED TOTAL COST USD

Storage silos (02) 3600m3 120,000

Peanut decorticator (04) 500kg/hr 24,000

Sesame decorticator (04) 500kg/hr 26000

Peanut cleaning unit (01) 1000kg/hr 12,000

Sesame cleaning unit(01) 800kg/hr 15,000

Delivery train system LS 20,000

Oil extraction system(01) 25MTPD 1,215,000

Oil storage tanks (05) VARIOUS 10,000

Set of level switches VARIOUS 5,000

Steel structure construction LS 20,000

Weighing machines (04) Up to 1000kg 10,000

Set of thermal insulation SET 5000

Set of electrical cables SET 5000

Packaging/filling system 10MTPD of oil 35,000

Spares and parts Set 10,000

Installation and training LS 15000

commissioning LS 8000

Generator set 45-50KVA 53,000

Total (FOB) 1,640,400

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Table 61: Machinery and Equipment for Production line 2

Sr. No. Description quantity Capacity

1 Seed cleaning unit/ pre cleaner 01 500kg/hr

3 cyclones Set Requirement

5 Screw conveyor Set process flow

6 Bucket elevator 02 process flow

7 Roller crusher 01 process flow

8 Screw press 1 10MTPD

9 Filter press for bleached oil 01 process flow

10 Filter press for refined oil 01 process flow requirement

11 Holding tanks 3 2000litres

13 Neutralizer 1 process flow requirement

14 Bleacher 1 process flow requirement

15 Vacuum pump 1 process flow requirement

16 Condenser 1 process flow requirement

17 Deodorizer 1 process flow requirement

19 Boiler 01 process flow requirement

20 A heat exchanger 01 process flow requirement

21 water cooling system 01 process flow requirement

22 Steam boiler 01 process flow requirement

23 A set of access and supporting steel structure Set process flow requirement

24 Agitator 01 process flow requirement

25 Barometer condenser 01 process flow requirement

26 Set of thermal insulation materials Set process flow requirement

12 Pumps 5 process flow requirement

27 Oil filling plant 01 5MTPD

It can also be noted that essentially there are three stages in the mechanical extraction of oil from the raw materials i.e. the seed preparation stage, the extraction stage and the packaging stage. Most suppliers give machinery on the extraction stage which is the core, in order to get machinery that can do the seed preparation and packaging/filling stage, the equipment suppliers will advice on which capacities and makes to buy that suits or works well with the extraction equipment.

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Proposed Production line schematic as shown below in the plant layout shown above

Figure 145: production line schematic

The equipment shown in the picture below does not include a refinery plant which contains equipment like neutralizer, bleacher and deodorizer which is proposed in the second phase when demand for the oil is sought in an international market.

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COST ESTIMATES FOR MACHINERY AND EQUIPMENT FOR PRODUCTION LINE 2

Table 62 Cost estimates for Machinery and Equipment for Production Line 2

MACHINERY & OR EQUIPMENT CAPACITY ESTIMATED COST USD

Storage silos (01) 3600m3 60,000

Shea nut cleaning unit (01) 1000kg/hr 15,000

Delivery train system LS 20,000

Oil extraction system(01) 10 MTPD 120,000

Oil storage tanks (03) VARIOUS 10,000

Set of level switches VARIOUS 5,000

Steel structure construction LS 20,000

Weighing machines (02) Up to 1000kg 5000

Set of thermal insulation SET 5000

Set of electrical cables SET 5000

Refinery plant 5MTPD of oil 76,500

Packaging/filling system 5MTPD of oil 32,500

Spares and parts Set 10,000

Installation and training LS 15,000

commissioning LS 20,000

Total 419,000

Note: Most of the costs are estimated basing on the costs got from the internet

3.9.8 TECHNOLOGY PROVIDERS

3.9.8.1 Equipment for pre-treatment of the seeds

Table 63: Equipment lists for Pre-treatment of Seeds

Company/address Tel /email Address Types of machinery/comments

Cimbria A/S

P.O.box 40, 7700 Thisted DENMARK

Phone +45 9617 9000

Fax +45 96179099

Email: [email protected]

Type: MR 100

Capacity: 6t seed/hr

Price: 2500 USD

Cimbria also produces large scale seed cleaner and screw presses

La Mecanique Moderne

Z.A.C Artoipole

B.P. 42015

62060 Arras Cedex 9, FRANCE

Tel: +33 0321 5536 00

Fax: +33 0321 2404 34

Home page : http://www.la-mecanique-moderne.com

Type: Rotary cleaner with external cyclone

Capacity: up to 1000kg seed/hr

Motor power: 0.37 kw

Price: 12,000 USD

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Goldin India Equipment PVT Limited F-29, B.I.D.C. Industrial, Estate, Gorwa, Vadodara - 390 016- Gujarat, India

Tel: +91 (0) 265 3801 168/380 461, Fax: +91 (0) 265 3801 168/380 461

Screen Air Separator / Grain Cleaners:

Most suited as precleaner before storage of seeds. Variable speed drive ensures accurate quality separations at high capacity. Totally enclosed aspiration system with cyclone provides dust free working in the plant. Food Groups: Cereals/Herbs/spices/Oilseeds/Vegetables Capacity: 100 - 2000 kg/hour.

Power: Battery/Electric

Note: the seed is laid out in a uniform layer and is blown with air. The proportion of light wastes carried away is adjusted by changing the blowing strength. Seeds enter a rotary cylinder whose perforations let the seeds out and retains the large impurities, which exit at the end of the cylinder. The cleaner removes light wastes and separates broken seed and large impurities from the clean seeds. A double action sucking followed by the rotary cylinder effects this operation. Series of screens of different perforations give this equipment an all round application on all types of seeds and for various capacities.

3.9.8.2 Oil Expeller Manufacturers

Table 64: Oil Expeller Manufacturers

Company/address Tel /email Address Types of machinery/ Comments

ABC Hansen A/S

Kirkegade 1

P.o.box 73, 8900 Randers, Denmark

Tel: +45 8642 6488

Fax: +45 8641 3622

Email:[email protected]

Home page:

http://www.infoweb.co.za

Oil expeller-screw press type

Capacity: 300kg seed/hr

(18kw, 380v three phase, shaft speed 50 RPM)

Price: 52,000 USD

Suitable for sunflower, peanuts, soya canola e.t.c.

Extraction rate of dehulled seeds 30-35% depending on the raw material

Electric system provide a semi-automated operation.

Cimbria A/S

P.O.box 40, 7700 Thisted DENMARK

Phone +45 9617 9000

Fax +45 96179099


TYPE KP 15

Capacity: 250kg-330kg seed/hr

Residue oil in cake: 10-15%

Power: 15kw

Weight: approximate 2t

TYPE KP 21

Capacity: 1t seed/hr

Residue oil in cake: 10-13%

Power: 77kw

Weight: approximate 7.5t

Seed requirement

Content of contamination and foreign matter should not exceed 1%.

Seeds should not contain any ferromagnetic particle or stones

Oil content:20-50%

Moisture content :5-7%

Seed temp 15-25 oc

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De smet Rosedowns limited

Cannon street,Hull

HU2 OAD East Yorkshire

Phone: +44 1482 3298 64

Fax: +44 1482 3298 64


Homepage: www.rosedowns.co.uk

Type MINI 100

Capacity: 100-110kg seed/hr

Residual oil cake: 13-16%

Approximate oil yield:32% of seed input

Percentage solids in oil: 6-9% by volume

Water content of oil: less than 0.2%

Power consumed: 4kw

Price:25,000 USD

7.5 kw Electric Motor: 3000 USD

Type mini 200

Capacity: 200kg seed/hr

Approximately oil yield 30%

Residual oil cake: 12-14%

Price :35,000 USD

15KW electric motor: 4000 USD

Full presses

100-800 series

Capacity 15TDP-120TPD

Cage diameter: 200-400mm

Working length: 1500-3200mm

Nominal power: 55kw-300kw

Life of wearing parts

Choke ring 900-1200hrs

Shaft 400-800running hours

Barrel rings 800-1200 running hrs

The press can be powerd by a hatz diesel engine instate of a electrical motor

Moisture content 6-8%

Elecctro magnetic vibrator feeder complete with feede tray and variable speed controller available at 4000USD

set of press wearing parts at 7,000USD

Options : feeder hopper and support steel work at 2000 USD

They have press control system.

They have a range from 15TPD -120TPD(tonnes/day)

Frandsen Ecotec ApS

Aerovej 14

9500 Hobro

DENMARK

Phone: +45-9851 1966

Fax: +45 9851 1909

Email:[email protected]

Type 40-1

Capacity 95-115kg seed/hr

Residual oil in cake: approx.11-12%

Rotation speed control frequently or mechanical: 15-80rpm

Price:190,000 USD

The price includes electric motor and gear, feeder, nozzle heating unit, nozzle set from 5 to 8 mm diameter in o,5mm steps, oil outlet control and tool set.

All parts are from high quality steel and the scre is fully hardened, they also fabricate spare parts for all screw press they also fabricate spare parts for all scew press types

IBG Monforts GmbH & Co

Postfach 20 08 53

41208 Monchegladbach

GERMANY

Phone: +49 2166 8682-0

Fax: +49 2166 8682-44


Homepage: http://www.ibg-monforts.de

Type S120F


Power: 7.5 kw

Price:30,000 USD

The screw presses are deliverable with electric as well as with diesel motor.

Screw rotations are adjustable by a friction ring gear btn 20-100rpm

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Kumar Metal Industries PVT ltd.

Corporate Head Quarters: 101, Kakad Bhavan, 30th Road, Opp. Gaiety Galaxy Cinema, Bandra (West), Mumbai-400050, India. Tel: +91-22-2644 1667 / 74 / 73 / +91-22-2642 7982 Fax: +91-22-2642 8136

Manufacturing Unit: Plot No. 7, Mira Co-op. Industrial Estate, Mira Road, Dist. Thane-401164, India

Tel: +91-22-2845 9100 / +91-22-28458300 Fax: +91-22-2845 6263 Website: www.kumarmetal.com E-mail: [email protected]

MODEL

CAPACITY/24 HRS

POWER

X’PRESS 200

200 TONS (PRE PRESS)

270 HP

X’PRESS 100)

90 - 130 TONS(FULL PRESS

270 HP

Salient Features: • X’ tra Yield • X’ tra Strong • X’ tra Reliable • X’ tra Economical • It X outs the competition • Independent Gearbox

KEK-Egon Keller GmbH & Co.

Anton –kuppers- weg 17

p.o.box 140350

42824 Remsheid, GERMANY

TEL: +49 2191 8410-0

Fax: +49 2191 8628 & 8629


Homepage:// www.keller-kek.de

Type KEK-PO350


Residual oil in cake: 10-12%

Drive power: 22kw

Feeding screw motor: 2.2kw

Cone driver motor: 1.5kw

Price: 80,000 USD

Electric control box: 4500 USD

Requirements for seed: impurities< 1%; no metal pieces and stones; seed humidity 6-8%

Btn screw presses and filter press is an intermediate storage tank recommended without homogenising unit

Filter paper necessary btn the filter membranes to filter the particles>5µm

Nigerian Oil Mills Ltd P.O.Box 264, Atta, Owerri, Imo-State, Nigeria

Milling Machine / Mills and Grinders. Power: Electric/Manual

Oil Expeller:

This machine is used for crushing palm kernels, groundnut seeds and moringa seeds to extract oil. Food Groups: Oilseeds/Nuts/Herbs/spices

This machine is used for crushing palm kernels, groundnut seeds and moringa seeds to extract oil. Food Groups: Oilseeds/Nuts/Herbs/spices. Power: Electric/Manual

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Maschinenfabrik Reinartz GmbH & Co. KG

Postfach 10 09 50

41409 Neuss

Germany

Tel: +49 2131 9761-0

Fax:+49 2131 9761-12


Homepage: http://www.reinartzpressen.com

Model AP 14/30

Capacity: 400-500 kg seed/hr

Gear motor: 30 kw

Price: 90,000 USD

Model AP 14/22

Capacity: 220-300 kg seed/hr

Gear motor: 22 kw

Price: 60,000 USD

Model AP 15/45

Capacity:700-900 kg seed/hr

Gear motor: 45 kw

Price: 170,000 USD

Delivery time for models AP12 &AP14 approximate 3-4 months and 5-6 months for AP 15.

3.9.8.3 Filter press manufacturers

The raw oil is forced through a membrane in the filtration process and the filter media block impurities. The membrane materials are consisting of paper fabric and metal. The membrane pore diameter is chosen to be a little bit bigger by plate, cricket and leaf filters, to avoid fast blocking of the filters. That is why in the first filtering step, bigger particles pass through the filter until the solids build up an extra membrane. This membrane of particles provides a finer filtration. So some filter units operate for a short time in a circle before filtering process starts.

The temperature of the plant oil is very important. Certain amount glycerine will come out of the oil at low temperatures (<100c), and block the filter fast. Also, the flow of the oil through the filter decrease by low oil temperature of atleast 20 and 300. However, it should not be overheated up to 60oc and more because of a higher oxidation and lower storage ability of the cleaned oil.

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Table 65: Filter Press Manufacturers

Company/address Tel/email address Types of machinery Comments

KEK-Egon Keller GmbH & Co.

Anton –kuppers- weg 17

P.o.box 140350

42824 Remsheid, GERMANY

TEL: +49 2191 8410-0

Fax: +49 2191 8628 & 8629


Homepage:// www.keller-kek.de

Type KEK-F0500

Capacity

20 filter frames 500X500 mm and 20 run off taps, cotton filter membrane.

Cake volume: 0.1m3

Price: 14000 USD

Gearwheel pump KEK FO500P, electric control box, electric motor 1.5kw, pipe work, full automatic method, operation pressure 5bar, capacity

PRICE: 3500 USD

Type KEK-F0090

10 filter frames 250x250mm and 10 run off taps, cotton filter mem-brane, gear wheel pump with electric motor 0.12kw, pipe work

Filter cake volume : 0.01 m3

Price: 5500USD

electric control box:

Filter paper necessary btn the filter membranes to filter the particles>5µm

Maschinenfabrik Rein-artz GmbH & Co. KG

Postfach 10 09 50

41409 Neuss

Germany

Tel: +49 2131 9761-0

Fax:+49 2131 9761-12


Homepage: http://www.reinartzpressen.com

Model AP 14/30 (filter) & Model AP 14/22

Gear motor: as of screw press

Price: 68,000USD

Model AP 15/45 (filter)

Capacity: as of screw press

Price: 90,000 USD

Filtration facility with full automatic vertical filter, pipe work, electrical regulation as well as separate fine filter, including feed pump

Delivery time for models AP12 &AP14 approximate 3-4 months and 5-6 months for AP 15.

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Aage Christensen A/S

Skelmosevej 10

2500 Valby

Denmark

Tel: +45 36 44 24 44

Fax: +45 36 44 20 24


Homepage: http://ama-filter.com

Type AMA vertical leaf filter

Capacity 300-400kg seed oil/hr

Filtration temperature: 35-40oc

Moisture content: max o.1%

Solids: max 6-8%

Filtering area: 17.5 m2

Cake holding capacity: 375 m3

Number of filter leaves; 11

Leaf spacing: 70mm

Tank diameter: 1070mm

Empty weight; 1350kg

Price: 30,000 USD

Automatic cleaning of the filter by a vibrator with com-pressed air (6 bar)

AMA filter are widely used for filtering raw vegetable oil.

Pumping of the raw oil in a circle before start to filter in order to build up the needed extra filter membrane from oil particles.

KHS skandinavien APS

Naverland 15

2600 Glostrup

DENMARK

Tel:+45 4345 9477

Fax: +45 4343 1078

Email: filtration @khs-skand.dk

Home page: http://www.begerow.de

Type SF 220

FILTER AREA: 0.076m2

Capacity; approx. 15-20l raw oil/h

Maxr

Differential pressure: 3 bars

Price: stainless 2500 USD

Brass 1800 USD

THE SF 220 is a small removable unit with pump, motor and filter mounted in one place

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Schenk- Filterbau GmbH

Postfach 20

73548 Waldstetten

Germany

Tel: +49 7171 401-0

Fax: +49 7171 401-124


Homepage: http://www.schenk-filters.de

Type module filter MF325-1

flow capacity: 600l oil/hr

Price for filter chasis: 7200 USD

Price for 1 module 2.1 m2 filter area: 250 USD

Type module filter MF325-2

flow capacity: 1260l oil/hr

Price for filter chasis: 8000 USD

Price for 1 module 2.1 m2 filter area: 300 USD

Type plate and frame press KFP 470/40

flow capacity: 200Kg oil/hr

Price for filter area: 15.6 m2

Sludge volume 106l

Price: 26000 USD

Type plate and frame press KFP 630/40

flow capacity: 300Kg oil/hr

Price for filter area: 22.4m2

Sludge volume 254l

Price: 32000 USD

The dirty raw material plant runs after the start of the filter process 1-2min in a circle in order to build up an extra filter filter membrane.

The filter module must be changed after a certain time of use, which depends on cleaness of the plant oil after sendimentation

The filter must be cleaned with compresed air after each use.

Manual cake discharge, moveble frame, lateral plate suspension on bars, compression of filter stack via manual hydraulic or elec-tro-hydraulic

Schenk filter are widely applied in the food industry and specially fore vegetable oil filtration.

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3.9.8.4 Refinery plant suppliers

Table 66: Refinery Plant Suppliers


Kumar Metal Industries PVT ltd.

Corporate Head Quarters: 101, Kakad Bhavan, 30th Road, Opp. Gaiety Galaxy Cinema, Bandra (West), Mum-bai-400050, India. Tel: +91-22-2644 1667 / 74 / 73 / +91-22-2642 7982 Fax: +91-22-2642 8136

Manufacturing Unit: Plot No. 7, Mira Co-op. Indus-trial Estate, Mira Road, Dist. Thane-401164, India

Tel: +91-22-2845 9100 / +91-22-28458300 Fax: +91-22-2845 6263 Website: www.kumarmetal.com E-mail: [email protected]

MACHINERY for chemical refin-ing, physical refining and batch refining processes.

The control, operation and super-vision of the plant can be handled by one operator per shift. All main process parameters, if required, e.g. flow rates, temperatures, liquid levels etc. are automatically maintained from a control panel or, as an option, with the help of PID/PC based controls.

Henan Kingman M&E Complete Plant Co.,Ltd (KMEC)

Address: Suite A, 4/F, Jinhao Business Bld., Renmin Rd. Anyang,Henan,Chi-na

TEL: 0086 372 5080869 FAX: 0086 372 5910386 PC: 455000 Email:[email protected]

Flame and plate filter press Physical refining

SARATECH CONSULTANTS & ENGINEERS

Street Address: PLOT NO. 99, SECTOR-3, INDUSTRIAL AREA

City: KARNAL

Province/State: Haryana Country/Region: India

Zip: 132001

Telephone: 91-0184-3291543

Fax: 91-0184-2220099

Website: http://www.sarat-echkarnal.com

products include

Edible oil refinery machine Indoor

Oil Mill Refinery

OIL EXTRACTION PLANT Inter-nal Look

Palm Fiber Based Oil Extraction Plant

Oil Cake Based Oil Extraction Plant

Suppliers and consultants

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3.9.8.5 Accessories

PUMPS

Table 67: Pump Suppliers


JOHNSON PUMPER A/S

Roskildevej 342 B

2630 Taastrup, DENMARK

TEL: +45 4352 2400

Fax: +45 4352 1577

Type impeller pump

Capacities: 60l oil/h

Pressure: from 1 bar

Price: from 700 USD

TYPE gear pump RB2-02F

Capacities: 360l oil/h

Pressure: 40 bar

Price: 1800 USD

For sludge pumping (E.G by sendimentation system): membrane pumps

TANK STATIONS

Table 68: Tank Suppliers


COGETIL SCANDINAVIA A/S

Hannerupvej 230,Hvilasom

9500 Hobro, DENMARK

TEL: +45 9854 8411

FAX: +45 9854 8153

Complete system, self sucking impeller pump, tube and pistol

Capacity 40/50l/h

Price: 400 USD

Price single pump: 250 USD

FLOW COUNTER

Mechanical counter unit

Filter head

Price: 25 USD

Filter element 10µm

Price: 20 USD

Important for plant oil because of different viscosity to fossil oils

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HAMAG Electronik A/S

6230 Rodekro

DENMARK

Tel: +45 7466 2575

Fax: +45 7466 2611

Hand pumps for oil

Centrifugal pump HR1/HR2

Capacity ; approx.0.21 per rpm, 20l/min

Weight: 3kg

Price: 100 USD

Electrical pumps, complete systems

PGA 60-40

capacity 50l/h

Price: 350 USD

HORNET W80

capacity 80l/h

Price: 400 USD

self sucking pump, 4m tube, pistol

NOTE:

The rest of the required accessories can be got from the companies listed above. Some of these companies may be able to supply a boiler and a generator if specifications are given to them. It is very important to put in mind the lead time i.e. the time a between ordering and supply.

Automated filling machines like the ones presented in figure 146 are available in the market.

Figure 146 .Automatic Filling Machine

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South Sudan.

3.9.9 General advice on the oil mill and refineryIt is most efficient to use gravity for transport of basic raw material and products. For this reason it is advisable to install the whole plant in a building with several floors. The main storage of the seed can be placed outside or inside the oil mill building. Conveying machinery transports the seed up to the buffer silo above the press. There, the seed will be warmed up to room temperature before dropping into the press by gravity. The buffer silo should be the size of the daily processing capacity. A level sensor should control the filling. For economic reasons, automatic operation of the oil mill is only recommended for capacities of over 700kg/hour for sesame and peanuts. Hereby, the filtering process should follow immediately the pressing (with a self cleaning filter). A buffer storage tank directly after pressing with homogenisation unit is recommended if using a semiautomatic or automatic operating filter, in order to have the particles from the raw oil even distributed. The size of the tank should be 1 to 2 times the daily capacities.

For automatic operation of the whole process it is necessary to control the following parameters;

6 Throughput-control on the press cake outlet

6 Temperature control for nozzle and press cake tank

6 Filling level of clean oil tank and press cake tank

3.9.9.1 Land, building and civil works

The total available land for the factory premises is 40,000m2, out of which the built up area 1,730m2. Out of the total built up area, 500m2 will be covered by production line 1 (peanuts and sesame), 250m2 to be covered by production line 2 (shea nut). There shall be stores for the raw materials and cake covering total of 700m2, attached on the factory building are offices for production and maintenance supervisors covering 30 m2, a clearing house of 100m2 and an office block of 150m2. The office block is detached from the factory building. Assuming building construction cost of USD 600 per m2, the estimated cost of the building and the associated civil works will be estimated at USD 1,038,000.

3.9.9.2 Manpower and training requirement

The machine suppliers will be required to train local machine operators, chemists and maintenance personnel for a specified period of time during the plant erection and commissioning. The rest of the job positions shall be advertised within the country and filled up on competitive basis. The remaining vacant positions requiring specialized knowledge, experts from neighboring countries will be hired for a specific period of time as local capacity is being attained. The total cost of training is estimated to be USD 5,000. More details on the workforce requirements are presented in chapter 5 (organisational feasibility) while labour costs are incorporated in costings presented in chapter 6 (financial feasibility).

3.9.9.3 Training and retention of staff

The consultant recommends a better remuneration for workers; this will enable the retention of skillful personnel for the company. The availability of managerial and technical staff has always played a bigger role in the success of any project. For the success of this project it is expected that the oil mill factory will be able to provide housing, medical and recreation facilities for the workers. From the visits done by the consultant, skilled and unskilled personnel would not see it fit to work in such area if better conditions (than other places) are not provided. The consultant was not able to find out the different skills available in Lake State, but considering a few technical institutes in South Sudan, there seems to be a very big skills gap to run the factory. This necessitates getting skills from neighbouring countries and phasing them out slowly within 2 -3 years.

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3.10 proposeD iMpleMentAtion plAn As will be elaborated in chapter 5 (organisational feasibility), the consultant proposes three stages of implementing the oil mill project;

3.10.1 SHORT TERM IMPLEMENTATIONAt this stage the consultant would like to see the design and construction of the factory building for production line 1 section, and a few offices. This will be done in parallel with establishing of the plantation area to be able to grow sim-sim and peanuts. The new management of the factory at this moment will then recruit extension workers to enable the training of farmers who will be supplying raw materials to the factory in the short run. The management can at this point together with the engineering consultants be able to come up with the list of machinery and the costs involved in selection of machinery suppliers, purchasing, transporting of the machinery, installation and supervision. The machinery and equipment to be purchased at this stage will enable the establishment of production line 1 only without the refinery section. This stage is between 1-2 years.

3.10.2 MEDIUM TERM IMPLEMENTATIONAt this stage, the consultant hopes that the factory flow for production line 1 would be complete together with the factory section of that line. The farmers around Yirol will at this moment be supplying sesame and peanuts in higher quantities due to the extension work done for the last two years. At this stage, the oil mill management will be able to design and construct a small housing estate for the plantation workers, purchase machinery for the agricultural area and also be able to acquire more land for the growing of sesame, peanuts and also means of collection of the shea nuts. The extension workers at this stage will be increased in number to incorporate those who are in charge of enabling collection and safe guarding of the shea nut fruits and trees. The management will then be able to come up with production line 2 machinery to enable the production of shea nut oil and butter. As the machinery is being ordered, the construction of the factory section to incorporate production line 2 will be on going according to the factory layout plan given by the machinery suppliers. This stage is between 2-5 years.

3.10.3 LONG TERM IMPLEMENTATIONAt this stage both production lines will be producing oil, the factory will have attained 75% of its capacity for both production line 1 and 2. If the company targets to sale the vegetable oil in a bigger market, then a decision to set up an oil refinery for production line 1 can then be taken. At this stage recruitment and training of the factory staff must have been complete at the medium term stage. The management would now be interested at meeting at least 30 % of the required vegetable oil in the country, be able to establish a seed research centre, and be able to build housing quarters for the skilled and semi-skill work force in order to retain them. The factory location is in a town centre, occupied by many people, and since the factory at one time would like to expand, then management would be looking out for a better location.

3.11 conclusion

The Yirol oil mill project has been found to be a viable one, the agricultural area for the growing of the seed crops like sim-sim, and peanuts is available to support the factory in the short run. The oil mill would be able to produce an estimated 15 mt tonnes of oil per day from both the production lines and an estimated 20 mt of meal per day when the oil expellers have been installed and operation is at full capacity. For the success of this project, it is advisable that the mill management seeks for the provision of consultancy services for carrying out design, bid evaluation, supervision of construction and training of mill personnel in plant operation and maintenance and also seeking for expatriate managerial personnel for the initial operation of the mill and training of the local personnel.

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South Sudan.

3.11.1 AGRICULTURAL PLANTATION 6 The agricultural land given for the project is suitable for the growing of sesame and peanuts,

the 2,050 feddans can be able to provide 20% of the raw materials required for processing of oil. There is need to address the soil fertility problem before starting the plantation.

6 There are people who are willing to work in the plantation area; these people have been working on their farms, growing the same oil crops. This labour force does not require a high skill level since they have experience in growing of the same crops.

6 Cooperatives exist within the area, though there is need to increase the number of people participating in such farmer groups so as to increase the raw materials supply.

6 There are no plantations for lulu/ shea nut, the extension workers have a mandate to make sure that farmers collect and preserve the trees to assure a steady supply of shea nut raw materials.

3.11.2 INDUSTRIAL PLANT 6 The factory area is suitable and available for the processing of oil. The people occupying the

factory land are willing to vacate to create way for the development of the factory

6 There are so many vegetable oil machinery manufacturers and suppliers from China, India, Germany UK, Denmark and other countries that have machinery that is reliable, they provide design of the plant layout, supply of machinery , installation, commissioning and a training component in the use of their technology.

6 The production technology adopted for this project is mechanical extraction as opposed to solvent extraction which is not only expensive but unsuitable for such a location. There are two production lines, one for the processing of both sesame and peanuts and the other for the processing of shea nut oil and butter.

6 In future the plant can be able to install a soap production line, but at the moment cooking oil is the prime objective.

6 The plant will run on generator since the area is not supplied with electricity. The lightings will be powered by solar.

6 There is need to get skilled personnel as suitable local staff may be available, the staff will be got from neighbouring countries and given contracts for a few years as a local work force is being built.

3.12 recoMMenDAtions

AGRICULTURAL PLANTATION

Basing on the findings from the study visit done at the factory and agricultural area and also the secondary documents attained as regards oil plants, it can be concluded that;

6 The agricultural land amounting to 2050 Feddans is available to be starting like a pilot project; this land has all the documentation indicating that it was given to the factory by the county administration. Although this land is available it is so small to supply the raw materials to the factory, this then necessitates the establishment of out growers and cooperative societies which can be able to supply the factory throughout the year. Therefore within 5 years the management should be able to look for more land so as to control a steady supply of raw materials and increase capacity.

6 Before establishing the nucleus estate and out growers, the factory should first address concerns about the soil fertility for both the given agricultural areas and the farmers.

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South Sudan.

6 In order to ensure supply of raw materials in the short term, extension workers should be recruited immediately and also some money availed to support the cooperatives and individual farmers so as to attain the required inputs.

6 There is need to construct a workers estate at the plantation immediately, this will assure a steady supply of plantation workers.

6 Though it has not been analyzed, there is need for the factory to purchase tractors for the planting and harvesting of the various oil seed crops.

6 There is need to procure the services of a plantation and irrigation engineer to study the possibility of irrigating the areas since the lake is a distance away. It can also be concluded that rain water can be channelled to a dam and then use the water for irrigation at the dry season.

6 Lastly there is need for vigorous training of the farmers and cooperatives to provide clean and dry seeds as wet seeds will not be milled, thus leading to shutdown of the mill till dry seeds are provided, this will assure steady supply of oil from the factory.

INDUSTRIAL PLANT

Basing on the findings from the study visit done at the factory, the following can be recommended;

6 The production technology of a mechanical extraction technique suits this oil mill well, the consultant recommends the installation of one production line i.e. for processing of sesame (sim-sim) and peanuts as the extension workers are preparing the farmers to collect and preserve the shea nuts.

6 Although recommendations of the production line machinery has been made, there is need to provide an emergency expeller considering the access and location of the factory. This extra expeller will cater for unexpected failures.

6 The suppliers of machinery and equipments have their own production layout depending on their machinery and equipment supplies. There is no need of any engineering consultant providing a layout yet the machinery manufacturer is not selected.

6 The consultant can be able to provide services like carrying out design of the factory building, bid evaluation, supervision of the construction since he is well conversant with the area and would therefore like to see timely development of the oil mill.

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Chapter: Four

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4.0 ENVIRONMENTAL ASSESSMENTEnvironmental Impact Assessment (EIA) is one of the key management tools provided under the South Sudan Environment Protection Bill, 2010 to manage the environment. Section 29(2) of the bill requires every developer to undertake an EIA by the project proponent. The revamping of the YOM will come with environmental implication both at the factory and at the agricultural land. Factories or industries can cause adverse environmental effects such as contamination of water, air and soil. Factories demand for raw materials which may increase the rate of exploitation of natural resources in ways that impact negatively on the environment. This chapter provides an assessment of the environmental issues on the implementation of the YOM. It contains a description of the existing environmental situation, assessment of the potential effects of the project and details of the mitigation measures as well as the environmental management plan. The chapter also presents an outline of environmental legislation and legal issues to be addressed before the implementation of the project. Specifically the chapter addresses the following objectives:

6 To establish the baseline environmental conditions in the area and assess how these conditions would be altered by the project;

6 To undertake an environmental analysis of possible project alternatives;

6 To establish environmental legal and regulatory requirements of relevance to the project;

6 To assess all possible impacts of the project; and

6 To develop mitigation measures so as to avoid, minimize, remedy or compensate for the potential negative impacts and enhance the potential benefits of the project.

4.1 proposeD project coMponents

The introductory chapter already provides the project description and the previous chapters also contain detailed components of the proposed the project. As elaborated in chapter three, a nucleus estate conceptual design has been adopted for this project. It includes construction of two blocks (a new factory building and an administrative block) at the factory premises. The factory will house two production lines (one for ground nuts and sesame and another for lulu tree fruits) and two stores, one for raw materials and another for other inputs. The administration block will house the estates office, boardroom and sales executive office, a clinic and offices for the managing director, the general manager, the accountants and the engineer. Others include renovation of the managing director’s house, to house even other factory officials and engineers and construction of workers camps at the factory farms. In order to assure a constant supply of raw materials to the factory, an out grower system for the supply of lulu tree fruits, ground nuts and sim-sim shall be established with local communities. Also ground nuts and sim-sim farms shall be established in 2000 feddans of factory land in Nyariel and Mangargoup.

4.1.1 Crop ProductionProduction of ground nuts and sesame will involve soil preparation, seed sowing, crop growing, harvesting and post-harvesting activities, as shown in the figure 147.

Soil preparation

Sowing or planting

Growing phase

Harvest

Figure 147: Crop production cycle

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4.1.2 Oil Production ProcessAs indicated in chapter three, vegetable oil processing involves four main stages, namely extraction, refining, modification and deodorization, as shown below:

Stage 1: Extraction

This stage normally begins with preparation of raw materials using a variety of processes, including cleaning, drying, crushing, conditioning, and pressing. Beans are processed into flakes so that the oil cells are exposed, facilitating oil extraction, and fruits are pressed to extract oil. Oil extraction can be performed mechanically (e.g. by boiling fruits and pressing seeds and nuts) or in combination with the use of solvents. During solvent extraction, hexane is used to wash the processed raw materials, typically in a countercurrent extractor. The extraction is normally followed by skimming (boiled oils) and separation of the crude oil from the solvent-oil mixture (micella). Hexane is removed from the oil through distillation, and from the flakes through steam vapor in a desolventizer, and recovered for reuse after condensation and separation from water.

Stage 2: Refining

The crude oil is refined to remove undesired impurities such as gums, free fatty acids, traces of metals, coloring components, and volatile components. During refining, the free fatty acids are removed to the level of less than 0.1 percent in the refined oil either by chemical or physical refining. Before refining occurs, degumming may be applied to the crude oil. Degumming is an essential step of the physical refining process because the oil entering the final deodorization has to have a low content of phosphatide. Degumming is also used in conjunction with chemical refining. Degumming methods can either be acidic or enzymatic. In acidic degumming, phosphoric or citric acid is added to remove phosphatides, phospholipids, and lecithins. Degummed oil has a phosphorus content of less than 30 parts per million (ppm). Enzymatic degumming uses enzymatic hydrolysis of the phosphatides. Fatty acids can be neutralised by adding a sodium hydroxide solution, also known as caustic soda, or by stripping, which is a similar process to de-odorising. Some oils have a very dark colour which can be unpopular with consumers. The appearance of the oil can be lightened by bleaching.

Stage 3: Hydrogenation

Most installations carry out hydrogenation to produce fats with superior retention qualities and higher melting points. Hydrogenation is usually carried out by dispersing hydrogen gas in the oil in the presence of a finely divided nickel catalyst supported on diatomaceous earth. The resultant hydrogenated fats are filtered to remove the hydrogenation catalyst, subjected to a light earth bleach, and deodorized before they can be used for edible purposes. After hardening, the oil is mixed with an aqueous solution to produce an emulsion. The emulsified mixture is then pasteurized, cooled, and crystallized to obtain the final product.

Stage 4: Deodorization

During deodorization, the bleached oil is steam-distilled at low pressure to remove volatile impurities, including undesirable odors and flavors. Volatile components are removed from the feedstock using steam in a process that may last from 15 minutes to 5 hours. The vapors from the deodorizer contain air, water vapor, fatty acids, and other variables. Before entering the vessel, the vapors pass through a scrubber and a scrubbing liquid is sprayed in the vapor stream. Fatty acids and volatiles partly condense on the scrubbing droplets or alternatively on the packing material. This process produces the fully refined edible oils. After edible oils have been produced, they are bottled and packaged ready for human consumption.

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4.1.3 Machinery and EquipmentProduction line 1 of the factory will have a groundnut decorticator, sesame seed cracker, seed cleaning unit, dust blower, cyclones, hammer mill, 3 screw conveyors, 2 bucket elevators (silo and buffer storage tank), roller crusher, screw press/mechanical extractor with a power source, filter press, 3 holding tanks, 5 pumps, neutralizer, bleacher, deodorizer and a set of boilers. Production line 2 will have a seed cleaning unit, dust blower, cyclones, hammer mill, 3 screw conveyors, 2 bucket elevators, roller crusher, screw press, filter press, 3 holding tanks, 5 pumps, neutralizer, bleacher, vacuum pump, condenser, deodorizer, a set of boilers and a set of generator. Others include seed storage bins and oil storage tanks.

4.1.4 Energy RequirementsThe factory will use solar energy for lighting, a diesel generator to run the plant and boilers to heat water and produce steam for process applications (especially for soap splitting and deodorization) and for cleaning processes.

4.1.5 CapacityAs already presented in the previous chapter, the oil mill would be able to produce an estimated 15 mt tonnes of oil per day from both the production lines and an estimated 20 mt of meal per day when the oil expellers have been installed and operation is at full capacity.

4.2 environMentAl policy AnD legAl FrAMework

This section provides an overview of South Sudan’s environmental legislation of relevance to the rehabilitation of Yirol Oil Mill and use of sites proposed in this rehabilitation. They describe environmental requirements and obligations that need to be considered during the implementation of the project.

4.3.1 Policy Framework

International Legal Framework

Article 24 of the African Charter on Human and Peoples Rights provides that all peoples shall have the right to a general satisfactory environment favourable to their development and states shall have the duty individually or collectively to ensure the exercise of the right to development.

Internationally, Environmental management is increasingly becoming a global concern as the negative impact of activities in one country is felt in other countries. Pollutants generated reach other countries by wind of water. In addition, the protection of some resources such as the high seas, the ozone layer, as well as combating greenhouse gasses, which contribute to climate change, requires international cooperation. Even the conservation of bio-diversity, combating desertification, handling transport and disposal of hazardous wastes have become subjects of international conventions requiring collaborations among all countries of the world.

The Hague Declaration of 1989 declared the right to live in a viable global environment. The Commission on Human Rights 1991 made a resolution that all individuals are entitled to live in an environment adequate for their health and wellbeing. The common law causes of action and remedies are increasingly being used to implement and give effect to various emerging environmental rights and principles.

Therefore there will be a need to put in place mechanisms to control environmental effects that come with the commencement of YOM operations. The above statutary and common law decision clearly show that the law has to be followed for a successful revamping of the YOM.

It is therefore our opinion that legal and policy benchmarks must be observed in the process of revamping of YOM project.

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Draft South Sudan National Environment Policy, 2010

South Sudan has a draft National Environment Policy. It was developed in December 2010 as a framework to provide guidance and direction to all stakeholders in response to huge investments and development activities following the achievement of the comprehensive peace agreement (CPA) in 2005. It seeks to ensure the protection and conservation of the state’s environment and sustainable management of its renewable natural resources, to meet the needs of its present population and future generations.

Among its guiding principles are the prevention principle and the polluter pays principle (Chapter I). The prevention principle encourages individuals, businesses, or other organizations to take action to prevent pollution where as the polluter pays principle holds them responsible for avoiding, mitigating, reversing, decommissioning or compensating for the actions they take that adversely affect the environment.

The policy discusses sector-specific environmental issues and guidance in relation to the impact of the sector’s activities on the environment (Chapter II). In the industry and trade sector, it argues the state to:

6 Develop environmental risk assessment guidelines to ensure that industrial activities do not degrade the environment and natural resources;

6 Enact and enforce legislations and regulations for adequate and safe disposal of industrial and hazardous wastes;

6 Safeguard the health and safety of workers and the local community in the surrounding areas by ensuring that appropriate occupational health requirements are in place at the work place;

6 Develop guidelines to regulate import of goods and technology which may have detrimental effects on the environment;

6 Build capacity of relevant public institutions and private sector in areas of ISO certification, technology transfer and laboratory testing; and

6 Ensure sustainability of natural resources in the extractive and production sectors.

In the agriculture sector, it argues the state to

6 Promote organic farming practices or sustainable agriculture through use of organic fertilizers;

6 Incorporate local knowledge of farmers regarding soil, climate, drainage, plants and animals into the design of agricultural programs through highly consultative and participatory processes;

6 Protection of watersheds and riparian zones, as an integral component of agricultural development plans especially through the creation of corridors of natural vegetation that facilitates the movement of wild animals and provides them with shelter and food;

6 Promote land use planning and zoning to avoid conversion of specific land use to other uses and to ensure appropriate sitting of sector development activities; and

6 Promote integrated pest management practices and use of organic fertilizers in order to reduce the level of contamination of the environment.

In chapter 3, South Sudan proposes a range of policy instruments it will use to implement the environmental policy. One of these policy instruments is Environment Impact Assessment (EIA). Under this policy instrument, the state shall make the EIA process legally binding to all proposed projects and ensure that stakeholder participation is done during the EIA process right from the initial planning stages of the project.

The Transitional Constitution of the Republic of South Sudan, 2011

The Transition Constitution of the Republic of South Sudan is the supreme law by which the independent and sovereign South Sudan shall be governed during the Transitional Period. It caters for the need to

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manage natural resources sustainably and efficiently for the benefit of the present and future generations.

It contains a number of fundamental objectives and guiding principles, some of which are on the environment (Part III-Chapter I). For instance, Article 41(1) provides that every person or community shall have the right to a clean and healthy environment. Article 41(2) provides that every person shall have the obligation to protect the environment for the benefit of present and future generations. Article 41(3) provides that every person shall have the right to have the environment protected for the benefit of present and future generations, through appropriate legislative action and other measures that: (a) prevent pollution and ecological degradation; (b) promote conservation; and (c) secure ecologically sustainable development and use of natural resources while promoting rational economic and social development so as to protect genetic stability and bio-diversity. Article 41(4) requires all levels of government to develop energy policies that will ensure that the basic needs of the people are met while protecting and preserving the environment.

The Transitional Constitution also makes provisions for land ownership and tenure. Article 170(1) states that all land in South Sudan is owned by the people of South Sudan and its usage shall be regulated by the government in accordance with the provisions of the Constitution and the law. Article 171(9) states that communities and persons enjoying rights in land shall be consulted in decisions that may affect their rights in lands and resources. Article 171(10) further states that communities and persons enjoying rights in land shall be entitled to prompt and equitable compensation on just terms arising from acquisition or development of land in their areas in the public interest.

The Environmental Protection Bill, 2010

South Sudan, currently, has no specific law that cover all matters concerned with the environment. It only has The Environmental Protection Bill, 2010. The Bill seeks to a) promote the wise use, development, conservation and recuperation of its natural and environmental resources, ecosystem services and biological diversity; b) integrate environmental considerations into development plans, programs and projects at the community, government and private sector levels; and c) promote effective, widespread public participation when incorporating environmental considerations into development activities, contributing to the resolution and management of conflicts related to the use of natural resources and the environment.

The Bill sets out principles of environment management that needs to be observed. These include: a) to assure all people living in South Sudan the fundamental right to a clean environment for their health and well-being; b) to encourage public participation in the development of policies, plans and processes for the management of the environment; c) to use and conserve the environment and natural resources of South Sudan equitably and for the benefit of both present and future generations, taking into account the rate of population growth and the productivity of the available resources; d) to conserve the cultural heritage and use the environment and natural resources of South Sudan for the benefit of both present and future generations; e) to maintain stable functioning of ecosystems through preserving biological diversity and respecting the principle of optimum sustainable yield in the use of natural resources; and i) to require prior environmental assessments of proposed projects which may significantly affect the environment or use of natural resources.

Article 7(1) states that every person of community in South Sudan shall: a) have the right to a clean and healthy environment; and b) have a duty to safeguard and enhance the environment, including a duty to inform the lead agency of all activities and phenomena that may affect the environment significantly.

Article 29(2) provides that an EIA shall be undertaken by the project proponent where the lead agency is of the view that the project: a) may have an impact on the environment; b) is likely to have a significant impact on the environment; or c) will have a significant impact on the environment. Article 32(3) provides that the owner of the premises or the operator of a project for which an EIA has been made shall keep records and make quarterly and annual reports to the ministry responsible for environmental issues, describing how far the project conforms in operation with the statements made in the Environmental Impact Statement.

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Article 57(1) states that every person has the duty to manage any waste generated by his activities or the activities of those persons working under his direction in such a manner that he does not cause ill health to the person or damage to the environment. Article 83(1) states that any person who carries on any activity which has or is likely to have a significant impact on the environment shall keep records relating to: a) the amount and type of waste, by-products and emissions generated by the activity, or the amount of materials collected for recycling; b) the extent of his activities, indicating the economic value of the activity on the area covered, expressed in the monetary value of the product per year; c) the observable effects of the activity on the environment; how far in the opinion of that person the provisions of this Bill have been complied with; and e) pollution licenses that may have been issued to them.

The Land Act, 2009

The Land Act regulates land tenure and protects rights in land in South Sudan while creating an enabling environment for economic development in the land and natural resource sector. It seeks to: a) resolve land disputes, taking due consideration of the customary practices and interest of the people of South Sudan; b) promote a land regime favorable to investment opportunities and the development of South Sudan as an incentive for investment and economic growth; c) promote a land management system that protect and preserve the environment and ecology for the sustainable development of South Sudan; and d) guarantee a fair and prompt compensation to any person whose right of occupancy, ownership or recognized long standing occupancy of customary use of land is revoked or otherwise interfered with by the Government under this Act or any other law.

The Act vests ownership of all land in South Sudan to the people of South Sudan. It however provides that the usage of land shall be regulated by the Government (Article 7(1)). Article 7(2) provides that land may be acquired, held and transacted through customary, freehold and leasehold tenure system. Article 8(2) states that no right in land shall be expropriated or confiscated save by law in the public interest and in consideration for a prompt and fair compensation.

Article 69 requires “Individuals, communities and organizations to protect land in order to keep it in a productive condition….”. Article 70(1) states that any allocation of land for investment purposes shall be subjected to a social, economic and environmental impact assessment to ensure that the social, economic and environmental implications of the activities on land are taken into account before any decision is made thereon. The process shall involve an analysis of the possible effects on the environment, biodiversity, people and assets (Article 70(2).

Article 73(1) states that RoSS, State Governments and any public authority may expropriate land for public purposes subject to compensation and upon agreement as prescribed by this Act or any other law. The process of expropriation shall be based on a consultative process with the communities or individuals concerned prior to conception of the plan of expropriations (Article 74(1). Article 74(2) states that in the process, the history of the acquisition of the ownership shall be considered, whether community, individual or private. Article 75(1) states that the compensation shall be just, equitable, and shall take into account the following factors: a) the purpose for which the land is being utilized; the land market value; and the value of the investment in it by those affected and their interest. Article 82(1) also states that any person who in good faith occupies land belonging to another person or group of persons may not be deprived of the right therein without compensation. Article 87 provides that where eviction is initiated by a public authority against an unlawful occupant, minimum standard alternative resettlement conditions may be provided by authorities. These provisions need to be considered by the developer when handling the issue of community members on factory land in Yirol Town.

The Wildlife Conservation and National Parks Act, 2003

The Wildlife Conservation and National Parks Act was formulated with an aim of conserving and protecting wildlife and establishing protected areas in the New Sudan. The Act provides a list of mammals and birds that are completely protected (Schedule I), protected (Schedule II) and protected (Schedule III). Article 25 provides that no person shall hunt or capture any animal listed in Schedule I. Article 26 further provides that no person shall hunt or capture any animal listed in Schedule II, except under a valid hunting license

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or a special permit. This provides for conduct of factory workers, especially in Nyariel and Margogoup, regarding wildlife.

Lakes State Forests and Natural Resources Act, 2010

The Forests and Natural Resources Act was formulated to protect and conserve natural and artificial forests in the Lakes State. Article 15 provides that the Minister responsible for Forestry shall, whenever he/she deems it necessary issue an order: a) to protect any special kind of tree or prohibit the cutting of trees in the reversed forests or in areas where the trees can grow for purpose of protection of roads, bridges, river banks and other means of transport; and to issue orders published locally speculating the cutting of trees in general or cutting of a specific species of trees at a certain age group. Article 16(a) states that no person shall have the right to cut, take, consume or exploit for any purpose any growing or fallen tree in any land under the disposal of the government, outside the reserved areas, or use any tree or its product. Article 16(a), however, states that the director or his/her representative may issue permission or license to cut or exploit trees outside the reserved areas, or use any tree or its product, within the limits indicated in the license or permission. The develop should seek for a license from the Ministry of Agriculture and Forestry in Lakes State before clearing the land allocated to growing of raw materials.

4.3.2 The Land QuestionThe factory is located on 280X200 square metres of land. Part of this land is currently occupied by people who claim ownership of the land. With the feasibility study of revitalizing YOM, there will be need to relocate these people to enable the mill to retake possession of the same. Are there any legal implications on this matter? The YOM has also been allocated 2000 feddans of agricultural land for cultivation, 1000 feddans is located 8 miles North of Yirol Town at Pamliet and the other 1000 feddans is located 9 miles East of Yirol Town at Mangongoup. The revamping of the Factory and cultivation of the agricultural land will come with environmental concerns. Is there a legal remedy on this matter?

The Legal Status of Yirol Factory Land.

The facts on the ground indicate that the land previously used by Yirol Oil Mill is currently occupied by people who claim legal ownership have been allocated the plots in 1983 by the administration from Wau, in the Greater Northern Bahr el Ghazal and later in 2007 by the Lakes State Administration after payment of a fee they were allocated blocks and plot numbers. If the above facts are true, the occupants who are currently resident on the land of the defunct YOM have rights which need to be protected. If the occupants of the land must be relocated then due process of the law should be followed in relocating them to pave way for the reconstitution of YOM Project.

Therefore the only way the RoSS can reacquire this land and reallocate it to YOM is by way of expropriation or buy it from the present occupants. The RoSS will therefore need to weigh whether it is viable to relocate the occupants of this land or to move the factory to another location.

How can Yirol Oil Mill legally reacquire its Land?

Although the right to private property is fundamental, it is not inviolable vis –a- vis the state. Since ancient times the state has always exercised the power to take property for public use without the consent of the owner. This power of eminent domain, as it is especially known in America Jurisprudence, is an inherent Sovereign Power. As Hugo Grotius, The Eighteenth century Jurist, wrote:

“The Project of the subject is under the eminent domain (eminens dominkm) of the state, so that the state or he who acts for it may use or even alienate and destroy such property, not only in the case of extreme necessity … but for ends of public utility…but it should be added that when this done the state is bound to make good the loss to those who lose their property .”

One American jurist/Judge said of the genesis of the eminent domain power, that is the “offspring of political necessity and it is inseparable from sovereignty unless denied to it by its fundamental law.”

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The exercise of this power is justified on the ground that in certain circumstances individual rights might be sacrificed for the public good. It is important to note that this can only be done by providing adequate and prompt compensation to the affected individual.

Article 28(1) of the Transitional Constitution declares that every person has a right to own property – individually or in association with others. There is no provision in the Constitution that expressly confers upon the state the power of expropriation. However, the existence of such a power is implied from Article 28(2) which imposes restrictions on its exercise. The Article prohibits deprivation of any person’s property unless certain conditions are satisfied. In the first place, the “taking of possession or acquisition” must be necessary for public use”. Secondly, it must be authorized by a law which provides for prompt payment of adequate compensation and gives a right of recourse to court for aggrieved parties. These limitations on the power of the state are designed to protect the private owner against arbitrary deprivation of the property.

This part of the feasibility study examines the extent to which article 28(2) of the Constitution and other relevant Provisions protect private property. The main issue under scrutiny is whether the state/RoSS is obliged to comply with the provisions of this Article in all cases of compulsory deprivation of property in the process of revitalizing Yirol Oil Mill. Also considered is the scope of the requirement that property should not be acquired compulsory unless it is necessary for public good and subject to payment of adequate compensation.

Article 170(1) of the Constitution provides that all land in South Sudan is owned by the people of South Sudan and its usage shall be regulated by the Government in accordance with the provisions of this Constitution and the Law. Under Article 170(2) Not withstanding Sub Article (1) above and the provision of Article 28 of this Constitution, the government at all levels may expropriate land in the public interest as shall be prescribed by law. The above position is re-enacted in S. 8(1) of The Land Act , which states that every person shall have the right to acquire and own property as regulated by law and as stipulated by Article 28(1) of the Constitution.

Further S. 8(2) provides that pursuant to Article 28(2) of the Constitution, no right in land shall be expropriated or confiscated save by law in the public interest and in consideration for prompt and fair compensation. It is our considered opinion that the people who are currently in occupancy of YOM land have legal rights on the land, thus can only be relocated after compensation.

The revamping of the project is in line with the spirit of policy provisions of the Government of South Sudan and provision of the Fundamental Objectives and Guiding Principles enshrined in the Constitution under Chapter One to the effect that Article 35(1) all levels of government and their organs, institutions and citizens shall be guided by the Objectives and Principles contained in this Constitution.

Under Article 37(1) The Constitution provides for the economic objective whose principle objective is economic strategy which shall among others be:

6 Eradication of poverty

6 Attainment of the Millennium Development Goals,

6 Guaranteeing the equitable distribution of wealth,

6 Redressing imbalances of income; and

6 Achieving a decent standard of life for the people of South Sudan.

In the present case therefore, if it is true that the occupants of the YOM land have acquired interests on that land, there is no legal bar preventing YOM from requiring the land since the factory has an economic objective. The legal and policy framework support this acquisition. The RoSS however, will need to provide prompt and adequate compensation to the present owners.

Reacquisition if Occupancy is Illegal

There are views that the occupants of the YOM land are on that land illegal and therefore there will be no

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need for compensation. If this position is true, then Section 84(1) provides that proceedings for eviction may be instituted against any person who unlawfully occupied a piece of land in contravention of this Act or any other law. Section 84(3) provides that any public authority or any person who owns or holds land may institute proceedings for eviction of unlawful occupant.

The Need for Acquisition of the Neighbouring Land.

It is important to note that there will be need for YOM to acquire land to allow it carry out its operations adequately, effectively and smoothly without inconveniencing the neighboring communities in the immediate neighbourhood. This will be coupled by the need to acquire to uninterrupted access to Yirol Lake as a source of water to the factory. Therefore the neighbouring communities that will be affected by the operations will need to be relocated. The law allows the government to compulsorily acquire private property for the public good.

There will, however be need to compensate these communities accordingly. Article 28(2) of the Constitution provides that no private property may be expropriated save by law in the public interest and in consideration for prompt and fair compensation. No private property may be confiscated save by an order of a court of law. This Constitutional provision is supported by S. 8 of the Land Act to the effect that, no right in land shall be expropriated or confiscated save by law in the public interest and in consideration for prompt and fair compensation.

It is thus our opinion that government will need to compensate the occupants of this land before acquiring it for the factory expansion.

The Status of the 2000 Feddans Allocated to YOM for Agricultural Purposes

Under Article 170 (1) of the Constitution all land in South Sudan is owned by the people of South Sudan and its usage shall be regulated by government in accordance with the provisions of the Constitution and the law. Article 171(2) provides for the land tenure system in South Sudan which consists of;

6 Public Land

6 Community Land

6 Private Land

For purposes of the 2000 fedans, we shall concentrate on Article 171(3) of the Constitution and S. 90 of the Land Act . Article 171(3) provides that public land shall include but not limited to:

6 All land owned, held or otherwise acquired by any level of government as defined by law; and

6 All land which is not otherwise classified as community or private.

S. 10(1) of the Land Act provides that: Public land is land owned collectively by the people of South Sudan and held in trust by the appropriate level of government. It is therefore our opinion that since the government of South Sudan holds the land in trust of the people, it has the right to allocate this land for public development programmes such as the Yirol Oil Mill for the benefit of the people of South Sudan.

This is supported by The Constitution under Article 37(1) and (2) which provides to the effect that government should provide for the economic emancipation of its people and S. 41(4) of the Land Act which provides that without prejudice to the right of government of South Sudan on Land each state government shall be charged with the management and administration of land within its jurisdiction for the benefit of the people of South Sudan in Accordance with Schedule (C) of the Constitution.

Section 69 of the Land Act provides for the protection of land by individuals, communities and organizations in order to keep it in productive condition in which such problems such as land degradations will be adequately managed.

S. 70 (1) requires environmental, economic impact assessment any allocation of land for investment purposes shall be subject to a social, economic and environmental impact assessment to ensure that the social economic and environmental implications of the activities on the land are taken into account

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before any decision is made thereon.

S.70 (2) provides that the process shall involve an analysis of the possible effects on the environment, biodiversity, people and assets.

As seen above, there is no legal impediment preventing RoSS from allocating the land for agricultural and industrial development of South Sudan. The legal and policy framework support it. It is therefore in order for the government to allocate the 2000 feddans to Yirol Oil Mill for agricultural and industrial development.

Environmental Regulatory Framework.

The revamping of Yirol Oil Mill will come with environmental implication both at the factory and at the agricultural land. Are there any remedies? Factories or industries can cause adverse environmental effects such as contamination of water, air and soil. Factories demands for raw materials may increase the rate of exploitation of natural resources in ways that impact negatively on the environment. Industrial production practices may also adversely affect human health and increase safety hazards.

Article 41(1) of the Constitution provides that everyone or community shall have the right to a clean and healthy environment. Article 41(2) provides that everyone shall have the obligation to protect the environment for the benefit of the present and future generations.

Article 41(3) provides that every person shall have the right to have the environment protected for the benefit of the present and future generations, through appropriate legislative action and other measures that;

6 Protect pollution and ecological degradation;

6 Promote conservation and;

6 Secure ecologically sustainable development and use of natural resources while promoting rational economic and social development so as to protect genetic stability and bio – diversity.

Environmental Impact Statements (Recommendation)

Where a project has been determined to require an EIA study, the developer, after completing the study, is required is required to make an Environment Impact Statement (EIS) in the prescribed form and manner set out in guidelines to be prepared by the South Sudan National Environment Authority (SSNEA). The EIS is treated as a public document and can be accessed for inspection by any person.

S. 29(1) of the Bill provides that a project proponent described in this Bill shall submit a project proposal to the Lead Agency, in the prescribed form and giving the prescribe information.

We therefore opine that although the provisions above are in still in Bill form they will be enacted into law because they are in agreement with regional and international provisions and South Sudan cannot be an exception. For example S. 19 of the National Environmental Act, Cap 153 enacts the provisions providing for the EIA as laid down in the Bill. The project therefore should prepare and submit EIS

Needless to say, the revamping of YOM will have a direct environmental effect on both fauna and flora as indicated in the proceeding section. Mitigation measures should therefore be followed as recommended.

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4.3 iMpAct iDentiFicAtion, evAluAtion AnD MitigAtionProject activities were linked with environmental baseline conditions in the study area to identify the potential impacts. A rating criterion (based on nature, extent, duration, magnitude and probability of occurrence of an impact) was then developed and used to evaluate the significance of the impacts so that relative comparisons between the impacts could be done.

Nature: whether the impact will be;

Negative (a ‘cost’ to the environment), or

Positive (a ‘benefit’ to the environment).

Extent: whether the impact will be limited to the;

i. site (within the boundaries of the site),

ii. local (the area within a 5-km radius of the project site),

iii. County (Yirol County),

iv. Regional (Lakes State),

v. National (South Sudan), or

vi. International (Africa).

Duration: whether the lifetime of the impact shall be;

i. immediate (> 1 year),

ii. short term (1 – 5 years),

iii. medium term (6 – 15 years),

iv. long term (the impact will cease when the operation stops) or

v. permanent (no mitigation measure of natural process will reduce the impact after construction).

Magnitude: whether the impact will be;

i. minor (where the impact affects the environment in such a way that natural, cultural and social functions and processes are not affected),

ii. low (where the impact affects the environment in such a way that natural, cultural and social functions and processes are slightly affected),

iii. moderate (where the affected environment is altered but natural, cultural and social functions and processes continue albeit in a modified way),

iv. high (where natural, cultural or social functions or processes are altered to the extent that they will temporarily cease), or

v. Very high (where natural, cultural and social functions or processes are altered to the extent that they will permanently cease).

Probability of occurrence: whether the likelihood of the impact that will be occur is;

i. improbable (the possibility of the impact materializing is very low as a result of design, historic experience, or implementation of adequate corrective actions),

ii. low probability (there is a possibility that the impact will occur),

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South Sudan.

iii. medium probability (the impact may occur),

iv. high probability (it is most likely that the impact will occur), or

v. definite (the impact will occur regardless of the implementation of any prevention or corrective actions).

Significance: Based on the above information, the potential impacts were assigned a significance weighting (S). This weighting was formulated by adding the sum of the numbers assigned to extent (E), duration (D) and magnitude (M) and multiplying this sum by the probability (P) of the impact as follows: S = (E+D+M)P. The derived significance weighting scale is given below:

i. (<30): Low (i.e. where this impact would not have a direct influence on the decision to develop in the area),

ii. (30-60) : Medium (i.e. where the impact could influence the decision to develop in the area unless it is effectively mitigated).

iii. (>60): High (i.e. where the impact must have an influence on the decision process to develop in the area).

Appropriate mitigation measures were then designed to avoid, minimize or compensate for the adverse environmental and social impacts and inform the Environmental Management Plan.

4.4 Description oF the receiving environMent

This section describes the physical, biological and socio-economic environmental conditions of the project area, which shall be used as a basis for assessment of potential impacts and/or act as a bench mark on which future environmental changes caused by the project shall be monitored.

4.4.1 Physical Environment

Topography

The topography of South Sudan is generally flat with a gentle north ward slope (NDDCU, 2006). This flat plain is fringed by mountainous ranges along its border with Uganda. Some of these include Imatong, Didinga and Dongotona, which rise more than 3,000 metres above sea level.

The project area is a generally flat low plain with an elevation of about 430 metres above sea level.

Geology and Soils

The geology of the project area is of the ancient Basement Complex Formation. This rock has been uplifted and mostly covered by superficial deposits of continental origin with Ruwaba series occupying a basin upon it (NDDCU, 2006). Soils of the area are products of this parent material plus the alluvial deposits of rivers and their tributaries.

Three soil samples were taken from the project area to examine the soil characteristics of the area. One sample was taken from the factory premises at geographical coordinates of latitude N06.55545 and longitude E030.49465, and the other two from the two plots of land in Nyariel (at N06.62263, E030.54748) and Margaguop (at N06.51096, E030.59849) allocated to growing of raw materials for the project. According to the analysis reports (attached in the appendices 1, 2 & 3), the soil was found to be sandy clayey. Most parameters (Organic matter, Nitrogen, Average Phosphorous, Sodium, Potassium, Calcium & Magnesium) showed that soil have normal concentrations. However, it is slightly acidic. Trace elements (Copper, Zinc, Iron and Manganese), including heavy metals (Cadminium, Lead, Chromium and Nickel) were in normal (low) ranges. This indicates that the soil is not polluted.

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South Sudan.

Climate

The climate of the area is predominantly tropical (NDDCU, 2006). The rainy season varies but is generally between April and November. Average annual rainfall in the area ranges between 901m-1812m. Temperatures are moderate but also vary depending on the season.

Figure 148: A map of South Sudan showing average annual rainfall of the project area.

Hydrology and Drainage

River Nile is the dominant geographic feature in South Sudan, flowing across the country. It drains almost the whole of South Sudan. The Nile and its many tributaries provide access to unlimited sources of water which services the land, making it fertile to support diverse vegetation and crops. The Nile however does not pass through the project area, making Lake Yirol and River Payii as the only dominant water resources in the area.

Lake Yirol

Factory Premise

River Payii

Figure 149: A Satellite showing the major water resources in the project area

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South Sudan.

The project area is drained by Lake Yirol. Yirol is a shallow, swamp-fringed lake with a peripheral floodplain. It drains from its south end to the Lau or Yei River (also called River Payii), which eventually pours out in the Sudd, the world’s largest swamp which covers a total area of 30,000 square kilometres. The lake supports a small artisanal fishery and is an important watering point for wildlife.

Two water samples, one from Lake Yirol (at N06.56348, E030.49641) and another from River Payii (at N06.49626, E030.41364) were taken from the area. Results of the water analyses shows that all the water bodies are not polluted. Most parameters (Sodium, Potassium, Calcium and Magnesium) were in normal concentrations. However, Lake Yirol was found to be slightly acidic. The trace elements (Zinc, Copper, Manganese and Iron) were in normal (low) ranges but heavy metals were not detected.

4.4.2 Biological Environment

Flora

The vegetation of South Sudan is generally woodland savanna (NDDCU, 2006). It has dense stands of woody cover with perennial shrubby undergrowth and sparse grasses. The vegetation is dominated by Acacia spp.

The factory area is a built up environment where extensive clearance of natural vegetation for settlements has occurred. The area has only isolated trees and patches of agricultural fields spread between settlements. The common trees in the area include: Borassus aethiopum (Doleib), Butyrospormum niloticum (Lulu), Balanites aegyptiaca (Laloob), Khaya Grandifolia (Mahogany), Senna spectabilis and fruit trees like Mangifera indica (Mango), Carica papaya (Pawpaws) and lemons. The agricultural fields are dominated by Zea mays (Maize). Borassus aethiopum is exploited by the local population for its fruits and timber.

The two plots of land allocated for growing of raw materials are typical woodlands. The land in Nyariel is characterised by dense stands of perennial trees with little shrubby and grass undergrowth where as the land in Mangarguop is characterised by open short tree stands with little grass undergrowth. The land in Nyariel is dominated by Tamarindus indica (Ardeb), Ficus sycamorus (Jemeiz), Acacia albida (Kittr), Acacia mellifera (Kittr), Butyrospormum nilotica (Lulu), Balanites aegyptiaca (Laloob), Azadritcha indica (Neem), Olean African (Olea), Tectona grandis (Sudan Teak), Terminalia glaucoscen (Terminalia) and Combretum molle. The land in Margagoup is dominated by Butyrospormum nilotica (Lulu), Balanites aegyptiaca (Laloob), Cordia Teak (African Teak), Acacia albida (Kittr), Acacia mellifera (Kittr), Vitex domiana (Kurunyok), Combretum molle and Azadritcha indica (Neem).

Fauna

Different species of animals were found in the project area. Within the factory land, there were only domestic animals, a few birds and fish. The domestic animals were mainly cows and goats; the birds were little egret, eagles and vultures; and the fish were Tilapia, Star fish, Dog fish and Mud fish. The fish were mainly got from Lake Yirol. In Nyariel and Margogoup, a number of wild animals were reported. These included: Tragelaphus scriptus (Bush buck), Rhynchotragus guentheri (Dikdik), Otocyon megalotis (fox), Potamochoerus porcus (Bush pig), Hyena hyena (Hyena), Panthera pardus (Leopard), Panthera leo (Lion), Colubus abyssinicus (Colobus monkey). According to the Wildlife Conservation and National Parks Act of 2003, Panthera pardus (Leopard), Tragelaphus scriptus (Bush buck), Colubus abyssinicus (Colobus monkey), eagles and vultures are completely protected by the law their hunting or capturing is totally prohibited. Panthera leo (Lion), Hyena hyena (Hyena) and eagles are protected by the law and their

hunting or capturing requires a license or a special permit.

4.4.3 Stakeholder Perception of the ProjectThis section presents the details of the stakeholder consultation that was undertaken for the Yirol Oil Mill Project. The aim of this stakeholder consultation was to identify and take note of the views and concerns of the stakeholders at an early stage so that appropriate mitigations are incorporated in

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the implementation plan for the project. Specifically, the consultation aimed at achieving the following objectives:

6 Promoting a good understanding of the project among stakeholders;

6 Understanding local expectations about the project; and

6 Enabling affected communities and other stakeholders present their views thereby participating in the formulation and refinement of the project design.

The views of the stakeholders centred on the expected benefits and concerns on the adverse impacts the proposed project may have on the environment. The benefits that were presented by stakeholder include: providing employment to people in the area; providing income to farmers by selling raw materials like ground nuts and simsim to the factory; boosting agriculture in the area, thereby enhancing the development of the area. The concerns that were presented by stakeholders include: displacing people from factory land and deforestation when clearing the two plots of land, in Nyariel and Margagoup, for growing raw materials, which may cause soil erosion and warning of vermin. The detailed views are presented in a consultation log in Annex 3

4.5 AnAlysis oF project AlternAtives

A number of alternatives were considered for this project. The purpose was to ensure that the best option which could achieve the project intended objectives while protecting the environment is selected. The analysis was based on options suggested by technical team. The alternatives included: location, oil refining process and crude oil degumming method. The alternative of not carrying out the proposed project was also considered in order to demonstrate environmental conditions without the project.

4.5.1 The No-Project AlternativeUnder this option, the project would remain in its current state and the rehabilitation would not occur. Not rehabilitating the project would mean that all negative impacts associated with project on the environment and health of people will be avoided. For instance, there wouldn’t be loss of habitat, degradation of the soil, loss of biodiversity, contamination of ground water, generation of noise, generation of waste, generation of wastewater, generation of dust and fumes, creation of new quarries and borrow pits, risk of fire outbreak, injury to workers and oil spillages. People would instead lose all benefits associated with the project like creation of employment, increase on the supply of quality vegetable oil, generation of revenue to material suppliers and government thereby affecting the growth of the country’s economy.

Given that the overall impact of the project is positive and the negative impacts of the project could be minimized to acceptable levels, this alternative was not considered.

4.5.2 The “Location” AlternativeAlternative locations for the oil processing plant were considered. Relocating the plant to either Nyariel or Margagoup would mean that negative impacts on the environment and the community associated with establishing it in Yirol will be avoided. For instance, there would not be displacement of people, pollution of Lake Yirol, rik of fire outbreak and generation of noise, dust, fumes and waste. However, the water needed by the plant would not be easily obtained in Nyariel or Margagoup. This is because these areas at a relatively long dista nce from the two major water sources in the area, particularly Lake Yirol and River Payii. Alternatively, the project would incur extra costs in transporting workers from Yirol to these places every day. As a result of these challenges, the alternative of relocating the plant was not considered.

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4.5.3 The “Oil Refining Process” AlternativeTwo alternatives were considered in the oil refining process. They include physical and chemical refining. Conventional chemical refining involves degumming for the removal of phospholipids, neutralization for the removal of free fatty acids, and bleaching for decolorization and deodorization. In this method, water is added during degumming to hydrate any gums present and the mixture is then centrifuged for separation. Non-hydratable gums are removed using phosphoric or citric acid before water is added and separation takes place in a centrifuge. During degumming, caustic soda is added to the oil, which has been preheated to between 75oC and 110oC to saponify the free fatty acids. This process gives rise to two main outputs, namely semirefined oil and soap stock. The soap stock is removed by precipitation followed by sedimentation or centrifugation and may be further processed into acid oils by splitting. The soap stock is heated to between 70oC and 100oC and reacts with sulfuric acid to reform the fatty acids. The resulting by-products can be sold to the paints and cosmetics sector, as well as to the animal feed industry. The neutralized oil is bleached to remove coloring matter and other minor constituents.

Physical refining, on the other side, is a more simple process in which the crude oil is degummed and bleached, and then steam stripped to remove free fatty acids, odor, and Volatile Organic Compounds (VOCs) all in one step. A physical pretreatment can be used to achieve a low phospholipid content by degumming and using bleaching earth. Following this, free fatty acids can be stripped from the physically pretreated oil using steam in a vacuum at temperatures of around 250oC and refined by the oil flowing over a series of trays countercurrent to the flow of the stripping steam. Previous neutralization stages are not necessary because the neutralization and deodorization are combined. A scrubber is then used to condense the greater part of the fat from the vapors as a water-free product.

Chemical refining results in a better quality product in terms of lower free fatty acid levels, longer shelf life, and a more reliable process. Physical refining, on the other hand, does not involve use of chemicals except bleaching earth which has a lower environmental impact. As a result of the above, preference should be given to physical.

4.5.4 The “Crude Oil Deguming Method” AlternativeDegumming methods can either be acidic or enzymatic. In acidic degumming, phosphoric or citric acid is added to remove phosphatides, phospholipids, and lecithins from crude oil. Degummed oil has a phosphorus content of less than 30 parts per million (ppm). When citric acid is used instead of phosphoric acid, there is a reduction in phosphorus load in the wastewater and a slight reduction in the amount of sludge. Enzymatic degumming uses enzymatic hydrolysis of the phosphatides. Use of enzymatic degumming is associated with a number of environmental benefits like reduction in consumption of phosphoric and sulfuric acid, as well as caustic soda, water, and energy. Comparing the three methods, enzymatic degumming was considered because of its many environmental benefits.

4.6 potentiAl iMpActs AnD MitigAtion MeAsures

This section provides an assessment of impacts, both positive and negative, on the physical, biological and socio-economic components of the environment that may arise from site preparation, construction and operation of the project. It also details mitigation measures that need to be implemented in order to avoid, minimize, remedy or compensate for the potential negative impacts and enhance the potential benefits of the project. The section further provides a prediction of the residual impacts that will remain, assuming that all mitigation measures are implemented.

4.6.1 SITE PREPARATION AND CONSTRUCTION PHASE

Loss of Habitat and Biodiversity

Rehabilitation of the project will involve establishment of ground nuts and sesame fields in 2000 feddans of land in Nyariel and Margogoup. These plots of land are typical woodlands characterized by tree stands

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with little shrubby and grass undergrowth. Establishment of these fields will automatically involve clearing of these plots, thereby destroying completely these unique habitats. Since the survival of species depend on features of local habitats like soil conditions and local climate, habitat loss will automatically lead to biodiversity loss. For instance, a number of mammals, birds and reptiles that use these sites as breeding/nesting or foraging grounds will be affected. Habitat clearing will therefore lead to loss of many plant species and their associated role of carbon sequestration, loss of nesting sites for birds and displacement of reptiles and mammals. However, the fact the sites are surrounded by large areas of natural vegetation with same species, it is anticipated that loss of these habitats will not result in total disruption of the ecological functioning of the area. Given the large scale of the clearance, the significance of the impact is anticipated to be HIGH NEGATIVE. With the implementation of the suggested mitigation measures, the significance of the impact can be reduced to MEDIUM NEGATIVE.

Impact Mitigation

Impact Significance

Nature Extent Duration Magnitude Probability

Loss

of

Hab

itat

and

B

iodi

vers

ity

No Negative 3 4 10 5 85 High

Yes Negative 3 2 6 5 55 Medium

Mit

igat

ion

Mea

sure

s

6 Consult the Ministry of Forestry before clearing these sites and obtain all necessary licenses;

6 Site clearance should be done in phases. This is to enable animals from these sites to move to the neighbouring habitats;

6 A number of important plant species, especially fruit trees like Lulu tree and other species (as may be advised by Ministry of Forestry) should be maintained on the sites;

6 Leave natural vegetation strips between cleared farm components so that they can act as wildlife migratory corridors; and

6 Consider establishing forests in other areas to off-sets impacts that would be caused by clearing these woodlands.

Cumulative Impact

No

Reversibility Yes

Creation of Quarries and Borrow Pits

Sourcing of earth materials (particularly murram, sand and gravel) needed for the construction of new project buildings or rehabilitation of existing buildings may create borrow pits and quarry sites in the neighboring villages. In case these pits and quarries are not adequately restored, they may: impound water becoming breeding grounds for mosquitoes and other disease vectors or pose risk of injury to animals and humans who fall into them. With the implementation of the suggested mitigation measures, the significance of the impact can be reduced from MEDIUM NEGATIVE to LOW NEGATIVE.

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ImpactMitigation

ImpactSignificance


Cre

atio

n of

Q

uarr

ies

and

Bor

row

P

its

No Negative 3 1 4 5 40 Medium

Yes Negative 2 1 2 5 25 Low

Mit

igat

ion

Mea

sure

s

6 Use existing borrow pits and quarries, wherever possible.

6 Carefully select and agree in advance with the Yirol County Authority any new borrow pit sites that are required. Site selection should include consideration of watercourses, forest reserves, agricultural lands and homesteads, amongst other things.

6 Fence off quarries and borrow pits during the construction period to protect livestock and people.

6 Restore borrow pits immediately after construction. This may include: backfilling, contouring and re-vegetating.

Cumulative Impact

No

Reversibility Yes

Generation of Solid Waste

Construction activities may generate significant amounts of non-hazardous and hazardous solid waste. Non-hazardous wastes likely to be generated include excess fill materials from grading and excavation activities, scrap wood and metals, and small concrete spills. Others include office (paper), kitchen (garbage), and dormitory (domestic trash) wastes when these types of operations are part of construction project activities. Hazardous wastes include small amounts of machinery maintenance materials, such as oily rags, used oil filters, and used oil, as well as spill cleanup materials from oil and fuel spills. If these wastes are improperly managed, they may degrade site aesthetics or contaminate the soil. With the implementation of the suggested mitigation measures, the significance of the impact can be reduced from MEDIUM NEGATIVE to LOW NEGATIVE.

ImpactMitigation

ImpactSignificance


Gen

erat

ion

of S

olid

W

aste No Negative 2 1 6 5 45 Medium


Mit

igat

ion

Mea

sure

s

6 Prepare a site waste management plan. This should include the designation of appropriate waste storage areas, collection and removal schedule.

6 Special attention should be given to minimizing and reducing quantities of waste generated.

6 Excess fill material should be used to fill the murram borrow pits or quarry sites.

6 Used oils and other hazardous wastes should be stored appropriately and then be transported and disposed of by companies experienced in handling hazardous waste.

6 Equipment to be used on the sites should be well serviced and in sound mechanic condition to prevent cases of oil and fuel spillage.

Cumulative Impact

No

Reversibility Yes

Occupational Hazards

Construction works will definitely involve activities, operations and machinery that could injure workers when appropriate safety measures are not in place. Major injuries at the sites may result from falling objects, handling steel bars, slips from high elevations, being struck by an object and accidents from moving machinery. These injuries can range from minor ones to possible loss of life. However, if caution and personal protection gear is provided to workers, these injuries and accidents would be avoided. With the implementation of the suggested mitigation measures, the significance of the impact can be

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reduced from HIGH NEGATIVE to LOW NEGATIVE.

ImpactMitigation

ImpactSignificance


Occ

upat

iona

l H

azar

ds



Mit

igat

ion

Mea

sure

s

6 Personnel should be provided with special footwear, clothing, gloves, helmets and other necessary protective equipment, for use.

6 A first aider and first aid boxes should be available on site to handle minor accidents and to administer first aid in case of serious accidents before the victims are transferred to the nearby health facilities for extensive medical attention.

6 The building contractor should ensure that at all time there are quick means of ambulating victims to the nearest health facilities.

6 Workers should be trained in safety matters including accident prevention, proper control and maintenance of equipment and facilities.

Cumulative Impact No

Reversibility No

Generation of Noise

The use of equipment or machinery such as bull dozers, excavators, concrete mixers and a generator during construction is likely to generate noise. If these sources are not carefully controlled, there may be a slight increase in the background noise levels in the area. This would affect people who spend most of their time close to the site. With the implementation of the suggested mitigation measures, the significance of the impact can be reduced from MEDIUM NEGATIVE to LOW NEGATIVE.

ImpactMitigation

ImpactSignificance


Gen

erat

ion

of N

oise



Mit

igat

ion

Mea

sure

s

6 Construction should utilize quiet machinery of efficient mechanical condition.

6 Construction activities that will generate disturbing sounds should be restricted to day-time working hours and put off when not in use.

6 Regular servicing of all equipment to ensure high operation efficiency thus less noise and vibration.

6 Regular measurement and monitoring of noise levels to make sure threshold levels are not exceeded.Cumulative

ImpactNo

Reversibility Yes

Air Emissions

Transportation of construction earth materials and offloading granular construction materials are likely to create dust. This will greatly cause the deterioration of the air quality which can pose a health risk to workers and people in the vicinity. The levels of dust generated would change over time depending on the level of activity, weather and condition of the ground itself. Similarly, construction equipment such as bull dozers, excavators, concrete mixers and generators is likely to cause mobile emissions, leading to an increase in ambient levels of pollutants such as carbon monoxide, sulphur dioxide, nitrogen oxides and particle emissions especially soot. These emissions may cause respiratory infections to workers and neighboring peoples. This impact can be reduced from MEDIUM NEGATIVE to LOW NEGATIVE provided the suggested mitigation measures are implemented.

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ImpactMitigation

ImpactSignificance


Air

Em

issi

ons



Mit

igat

ion

Mea

sure

s

6 Trucks used for ferrying construction materials should be fitted with tailgates that close properly and covered with tarpaulins.

6 The developer should use well conditioned and serviced equipment to ensure high operation efficiency.

6 A speed limit for all project traffic should be introduced and enforced to reduce dust generated by over speeding.

6 Whenever necessary, dusty roads should be sprayed with water in a manner that effectively suppresses dust.

Cumulative Impact

No

Reversibility Yes

Sanitation

Construction sites will have large numbers of people. Inadequate provision of sanitary facilities like toilets for use by workers can inconvenience workers and even lead to improper disposal of human waste. This could increase the potential for spread of faecal-borne and related diseases amongst workers and community members. Provision of adequate sanitation facilities at the site can reduce the significance of the impact from MEDIUM NEGATIVE to LOW NEGATIVE.

ImpactMitigation

ImpactSignificance


Job

Cre

atio

n No Positive 5 1 2 5 40 Medium

Yes Positive 5 1 4 5 50 Medium

Enha

ncem

ent

Mea

sure

s

6 When possible, local labour should be used for construction activities

6 Construction workers should be paid promptly

Cumulative Impact

It is anticipated that job creation could lead to an improvement in the livelihood of the local people.

Reversibility No

Job Creation

Preparation and construction phases of the project will avail short-term jobs to skilled, semi-skilled and casual workers. These may include; architects, engineers, mansons and porters. The workers benefit from the salaries and wage revenue earnings though for a short time. The significance of this impact is anticipated to be MEDIUM POSITIVE, should the recommended enhancement measures be implemented.

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ImpactMitigation

ImpactSignificance

Nature Extent Duration Magnitude ProbabilityJo

b C

reat

ion

No Positive 5 1 2 5 40 Medium


Enha

ncem

ent

Mea

sure

s

6 When possible, local labour should be used for construction activities

6 Construction workers should be paid promptly

Cumulative Impact

It is anticipated that job creation could lead to an improvement in the livelihood of the local people.

Reversibility No

Income Generation

A number of construction materials like sand, gravel, steel bars, timber and cement) will be required during construction. The purchase of these materials from suppliers in the area would have a positive impact on the local economy. The significance of this impact is anticipated to be MEDIUM POSITIVE, once the recommended enhancement measures are implemented.

ImpactMitigation

ImpactSignificance


Inco

me

Gen

erat

ion

No Positive 5 1 2 5 40 Medium


Enha

ncem

ent

Mea

sure

s

6 Whenever possible, construction materials should be bought from local suppliers

6 Suppliers should promptly be paid.

Cumulative Impact

No

Reversibility No

4.6.2 OPERATION PHASE

Soil Degradation

Cultivation of ground nuts and sesame will involve activities that are likely to degrade the soil. For instance, excessive use of farm machinery may lead to soil compaction where as continuous cultivation may expose land to agents of soil erosion, especially heavy rain falls and storms. This may lead to loss of productive capacity of the soil and sedimentation of nearby water bodies. With the implementation of the suggested mitigation measures, the significance of the impact can be reduced from HIGH NEGATIVE to LOW NEGATIVE.

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ImpactMitigation

ImpactSignificance


Soi

l de

grad

atio

n

No Negative 3 4 10 585 High

Yes Negative 1 1 2 28 Low

Mit

igat

ion

Mea

sure

s

6 Practice Integrated Nutrient Management (INM) to avoid nutrient depletion or accumulation;

6 Use appropriate machinery to avoid soil compaction caused by excessively heavy equipment;

6 Avoid the use of saline water for irrigation to prevent salinization;

6 Use plant cover or intercrops and shelterbelts to reduce erosion from wind and heavy rain;

6 Increase the organic matter content in the soil by applying organic matter such as crop residues, compost, and manure to protect the soil physically from sun, rain, and wind and to feed soil biota; and

6 Consider adding lime to soil to compensate for acidification that may be caused by application of fertilizers in order to maintain stable pH levels.

C u m u l a t i v e Impact

No

Reversibility Yes

Use of Hazardous Material

Operation of the project is likely to involve the use of hazardous materials. For instance, cultivation of ground nuts and sesame may involve use of pesticides in order to manage pests and diseases that may negatively affect production. Oil processing may involve the use of bulk quantities of acids, alkalis, solvents, and hydrogen to be used during extraction and refining. The use of these substances without proper precautions may lead to their migration into off-site land or water environments. Their transport, storage, and handling provide opportunities for spills or other types of releases with potentially negative impacts to soil groundwater, or surface water resources. Their flammability and other potentially hazardous characteristics also present a risk of fire and explosions. With the implementation of the suggested mitigation measures, the significance of the impact can be reduced from MEDIUM NEGATIVE to LOW NEGATIVE.

ImpactMitigation

ImpactSignificance


Use

of

haza

rdou

s

mat

eria

l



Mit

igat

ion

Mea

sure

s

6 Design and implement an Integrated Pest Management (IPM) strategy, giving preference to alternative pest management strategies, with the use of synthetic chemical pesticides as a last option: a) Use beneficial organisms, such as insects, birds, mites, and microbial agents, to perform biological control of pests; b) Protect natural enemies of pests by providing a favorable habitat, such as bushes for nesting sites and other original vegetation that can house pest predators; c) Use mechanical controls such as traps, barriers, and light to kill, relocate, or repel pests;

6 If pesticides are to be applied: a) Train personnel to apply pesticides; b) Review the manufacturer’s directions on maximum recommended dosage or treatment and apply the minimum effective dose; c) Avoid the use of pesticides that fall under the World Health Organization Recommended Classification of Pesticides by Hazard Classes 1a and 1b; d) Avoid the use of pesticides subject to international bans or phase outs;

6 Avail appropriate Personal Protective Equipment (PPE) to personnel involved in hazardous substance handling;

6 Clearly label, segregate and protect hazardous material from general access and store it on pallets to prevent the contamination of runoff;

6 Locate suitable fire-fighting equipment close to hazardous material storage areas;Cumulative

ImpactNo

Reversibility Yes

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South Sudan.

Loss of Agricultural Biodiversity

Cultivation methods, if not properly managed, may lead to adverse impacts on biodiversity resources at farm level (agricultural biodiversity). For instance, tillage during soil preparation may affect the soil ecosystem leading to loss of vital soil organisms. The significance of the impact is anticipated to be MEDIUM NEGATIVE. However with the implementation of the suggested mitigation measures, it can be reduced to LOW NEGATIVE

ImpactMitigation

ImpactSignificance


Loss

of

A

gric

ultu

ral

Bio

dive

rsit

y



Mit

igat

ion

Mea

sure

s

6 Where possible, maximize reuse of residue from the previous crop on the soil surface;

6 Reduce soil preparation to maintain the structure of soil ecosystems (e.g., promote low-till and no-till strategies); and

6 Ensure protection of the natural enemies of pests by providing favorable habitats, such as hedges to house pest predators.

Cumulative Impact

No

Reversibility Yes

Contamination of Ground Water

Excessive application of nutrients, such as fertilizers or manure, during cultivation may lead to contamination of groundwater resources and eutrophication of surface water resources. Contamination of ground water may result from leaching of excess crop nutrients where as eutrophication may be from runoff. The periods of greatest risk for runoff and leaching may be during and immediately after spreading if the nutrients are not incorporated into the soil, or during heavy rains that may cause rapid runoff. Contamination of soils or groundwater may also be caused by accidental spills of these nutrients during transfer, mixing, and storage of crop nutrients. With the implementation of the suggested mitigation measures, the significance of the impact can be reduced from HIGH NEGATIVE to LOW NEGATIVE.

ImpactMitigation

ImpactSignificance


Con

tam

inat

ion

of

Gro

und

Wat

er No Negative 3 4 6 5 65 High


Mit

igat

ion

Mea

sure

s

6 Design and implement an Integrated Nutrient Management (INM) strategy. This should evaluate the need for crop nutrient application, crop nutrient application plan, and handling and storage of crop nutrients.

6 Reduce the use of crop nutrients by use of: a) reduced soil tillage techniques, nutrient recycling, one-pass soil preparation and sowing; b) using crop rotation methods to enable cultivation of leguminous plants with nitrogen fixation capabilities; using plants to cover the soil, especially during a fallow period and in wet regions; incorporating organic waste materials into soils rather than burning; avoiding excess fertilization by analyzing soil before the growing season to estimate how much additional plant nutrient will be needed for the crop to be produced.

6 If the application of crop nutrients is warranted; a) apply organic matter, such as manure, to replace chemical fertilizers to the extent practical; b) incorporate manure into the soil or apply between growing crops to improve plant utilization of nutrients and thereby reduce nutrient loss and contamination; c) time the application of crop nutrients using meteorological information to avoid, where feasible, application during or close to precipitation events;

6 Fertilizers should be stored in their original packaging and in a dedicated location that can be locked and properly identified with signs, and with access limited to authorized persons.

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South Sudan.

Cumulative Impact

No

Reversibility Yes

Introduction of Genetically Modified Organisms (GMOs) and Invasive Species

New species of ground nuts and sesame with unique traits, like high productivity and drought resistant, may be introduced after some time. However some of these may be Genetically Modified Organisms (GMOs) or invasive species. Introduction of GMO crops may lead to the transfer of introduced genes to other species (possibly weedy or invasive), unanticipated impact on beneficial insects, or increased pest resistance where as invasive species may spread into the neighboring nature vegetation, thereby destroying those ecosystems. Another concern related to the introduction or import of plants and plant products is the potential for introduction of pests. With the implementation of the suggested mitigation measures, the significance of the impact can be reduced from HIGH NEGATIVE to LOW NEGATIVE.

ImpactMitigation

ImpactSignificance


Intr

oduc

tion

of

GM

OS

an

d In

vasi

ve

spec

ies No Negative 5 5 10 5 100 High


Mit

igat

ion

Mea

sure

s

6 Undertake a risk assessment for all species from other countries to be introduced on the farm, paying

specific attention to the potential for invasive behavior.

Cumulative Impact

No

Reversibility Yes

Waste Generation

Operation of the project is likely to generate significant quantities of waste. The amount of waste that may be generated depends on the quality of the raw materials and the use or reprocessing of the discarded materials into commercially viable by-products. Wastes likely to be generated the agricultural farms include: crop residues, pesticide containers and obsolete or expired pesticides. Organic solid wastes likely to be generated at the factory include hulls (empty bunches) and waste kernels. Others include soap stock and spent acids from chemical refining of crude oil; spent bleaching earth containing gums, metals, and pigments; deodorizer distillate from the steam distillation of refined edible oils; mucilage from degumming; and spent catalysts and filtering aid from the hardening process. Implementation of the suggested mitigation measures can reduce the significance of the impact from HIGH NEGATIVE to LOW NEGATIVE.

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South Sudan.

ImpactMitigation

ImpactSignificance

Nature Extent Duration Magnitude ProbabilityW

aste

G

ener

atio

n



Mit

igat

ion

Mea

sure

s

6 Recycle crop residues and other organic materials by leaving the materials in the fields, plowing, and / or composting;

6 Hulls and empty fruit bunches should not be incinerated. They should be returned to the plantations where, together

with the trimmings from trees, they are valuable as soil amendment and a source of carbon;

6 Waste kernels should be used in boilers as fuel for steam and power generation at refinery;

6 Spent bleaching earth should be used as a feedstock for brick, block, and cement manufacturing, use as fertilizer, if not

contaminated with heavy metals such as nickel, pesticide residues, and other contaminants; and

6 Install a waste treatment facility to treat hazardous waste stream from the factory;

6 Properly store hazardous solid waste in clearly marked containers; and

6 Contract companies with experience in handling hazardous waste to dispose of hazardous solid waste material. Cumulative

ImpactNo

Reversibility Yes

Air Emissions

Operation of the project is likely to be associated with a number of atmospheric emissions. These emissions may be generated during soil preparation, raw material transportation and oil processing. Emissions likely to be generated during soil preparation include those of fuel combustion by-products including carbon dioxide (CO2), sulfur dioxide (SO2), nitrogen oxide (NOx), and particulate matter (PM), resulting from the operation of mechanized equipment or from combustion by-products from the destruction of crop residues. Principal emissions associated with oil processing include Particulate matter (dust) and Volatile Organic Compounds (VOCs). Dust may be generated during the processing of raw materials, including cleaning, screening, and crushing, whereas VOC emissions may be caused by the use of oil-extraction solvents, normally hexane. Solvent emissions may also arise from several sources within oil processing plants, including the solvent-recovery unit, the meal dryer and cooler, and leaks in piping and vents. Emissions related to the operation of steam energy may consist of combustion byproducts such as NOx, SOx, PM, volatile organic compounds (VOCs), and greenhouse gases (namely CO and CO2). Odor emissions may also arise from multiple sources (like soap splitting). With the implementation of the suggested mitigation measures, the significance of the impact can be reduced from HIGH NEGATIVE to LOW NEGATIVE.

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South Sudan.

ImpactMitigation

ImpactSignificance


Air

Emis

sion

s No Negative 3 4 6 5 65 High


Mit

igat

ion

Mea

sure

s

6 Recovery solvents by distillation of the oil from the extractor and solvent vapors through the use of countercurrent flow desolventizer–toaster in oil extraction;

6 Use a reboiler and a gravity separator to treat condensates with high solvent content, to reduce solvent emissions;

6 Install cyclones and / or fabric filters or electrostatic precipitators on selected vents, including meal dryers, coolers, and grinders, to remove odor emissions;

6 Reduce odor emissions (e.g. from soap splitting and cookers in the extraction process) with a caustic, alkaline, or ozone scrubber system or incinerate the gas in a boiler plant;

6 Reduce particulate matter emissions by avoiding burning straw and other organic material in the field and by maintaining organic matter to protect soil against wind erosion during and after soil preparation activities; and

6 Use well conditioned and serviced equipment to ensure high operation efficiency.Cumulative

ImpactNo

Reversibility Yes

Occupational Hazards

Operation of the project is likely to be associated with a number of occupational hazards. Hazards associated with production of ground nuts and sesame include accidents due to the use of machines and vehicles, including tractors, harvesting machinery, and a variety of other machines on the farm. Others include impacts associated with the noise of operating machines, exposure to pesticides caused by spray drift and exposure to air emissions from open burning of crop waste. Hazards associated with oil processing facilities include the falls caused by slippery floors and stairs; accidental contact with conveyor systems, such as those used in the crushing plants and for the removal of spent earth; exposure to hazardous chemicals by inhalation; and eye or skin exposure to acids or bases. Implementation of the suggested mitigation measures can reduce the significance of the impact from HIGH NEGATIVE to LOW NEGATIVE.

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South Sudan.

ImpactMitigation

ImpactSignificance

Nature Extent Duration Magnitude ProbabilityO

ccup

atio

nal

haza

rds No Negative 3 5 6 5 70 High


Mit

igat

ion

Mea

sure

s

6 Provide employees with the necessary personal protective clothing and equipment, when specified as part of the job safety analysis and safety data information;

6 Train employees in chemical handling (e.g. the correct interpretation of material safety data sheets, international chemical safety cards, and first aid procedures). Seasonal and other temporary workers should be fully trained before they work with chemicals;

6 In oil extraction areas, ensure that there is adequate air circulation to reduce the concentration of solvents;

6 Provide ventilation, especially at workstations related to raw-material handling, milling, handling of bleaching earth, and use of solvents;

6 When feasible, use hot water, rather than solvents, to facilitate cleaning.

6 Train personnel to apply pesticides and ensure that personnel have received the necessary certifications, or equivalent training where such certifications are not required;

6 Avoid the aerial application of pesticides whenever feasible;

6 Open burning of residual organic crop waste should be avoided;

6 Ensure hygiene practices are followed by workers in the farms to avoid exposure of family members to pesticides residues.

Cumulative Impact

No

Reversibility Yes

Fire Risk

Inadequate fire safety precautions, equipment or awareness during operation of the factory could cause extensive damage in case of a fire outbreak. The damage could be loss of property or human life. Whereas damage to property is a reversible adverse impact, loss of human life is irreversible. It might not always be possible to avoid all potential sources of fire accidents hence the need to take precautions. With the implementation of the suggested mitigation measures, the significance of the impact can be reduced from HIGH NEGATIVE to LOW NEGATIVE.

ImpactMitigation

ImpactSignificance


Fire

Ris

k No Negative 2 4 10 4 64 High


Mit

igat

ion

Mea

sure

s 6 Install fire detectors, fire alarms and fire suppression system at all levels of the facility.

6 Install a hydrant system of adequate capacity to handle emergencies involving large fires.

6 All floors levels should have at least two extinguishers;

6 Factory workers should have basic training in fire control.

6 Undertake fire drills at the factory, at a minimum once a year.

6 Electrical installation on the factory shall conform to acceptable national safety standards.

Cumulative Impact

No

Reversibility Yes/No

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South Sudan.

Wastewater Generation

Processing of oil is likely to generate significant quantities of wastewater with high content of organic material and, subsequently, a high biochemical oxygen demand (BOD) and chemical oxygen demand (COD). These may be generated during oil washing and neutralization. Vegetable oil facilities require significant amounts of water for crude oil production (cooling water), chemical neutralization processes, and subsequent washing and deodorization. The wastewater may also have a high content of suspended solids, organic nitrogen, and oil and fat, and may contain pesticide residues from the treatment of the raw materials. If this wastewater is not properly treated, it may end up in Lake Yirol thereby destroying the lake ecosystem. With the implementation of the suggested mitigation measures, the significance of the impact can be reduced from HIGH NEGATIVE to LOW NEGATIVE.

ImpactMitigation

ImpactSignificance


Was

tew

ater

G

ener

atio

n



Mit

igat

ion

Mea

sure

s

6 Use emulsion breaking techniques, (e.g. dissolved air flotation [DAF]), to segregate high BOD and COD oils from wastewater;

6 When feasible, replace phosphoric acid with citric acid in degumming operations (this reduces the phosphorus load in the wastewater and also brings about a slight reduction in sludge quantities).

6 Apply techniques for treating process wastewater by using grease traps, skimmers or oil water separators for separation of floatable solids; flow and load equalization; sedimentation for suspended solids reduction using clarifiers; biological treatment, typically anaerobic followed by aerobic treatment, for reduction of soluble organic matter (BOD); biological nutrient removal for reduction in nitrogen and phosphorus; chlorination of effluent when disinfection is required; dewatering and disposal of residuals; in some instances composting or land application of wastewater treatment residuals of acceptable quality may be possible.

6 Contaminated streams should be routed to the treatment system for industrial process wastewater.

6 When economically viable, consider the use of physical refining instead of chemical refining to reduce water consumption;

6 Use heat recovery (e.g. heat from oil processes) to heat incoming oil with the outgoing oil. Up to 75 percent of the heat of the oil can be recovered in this way, reducing the water demand in the steam system;

6 Close the cooling water circuit and recirculate cooling waters.

Cumulative Impact

No


Product Contamination

Industry-specific issues that could affect the community or the public at large may include the potential presence of pathogens and contaminants in processed oil (e.g. pesticide residues). A product recall caused by contaminated products found in commerce that is attributable to a specific company can damage a viable business. If a company can trace its products back to specific lot numbers, then a recall is a matter of removing all products associated with the specific lot numbers. With a product safety program in place, the company can protect itself against product adulteration, contamination, and the impacts of product recalls. Vegetable oil processing should therefore be performed according to internationally recognized food safety standards consistent with the principles of hazard analysis critical control points (HACCP).

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South Sudan.

ImpactMitigation

ImpactSignificance

Nature Extent Duration Magnitude ProbabilityP

rodu

ct

Con

tam

inat

ion



Mit

igat

ion

Mea

sure

s 6 Facilitate tracing of product for easy removal of product from commerce; and

6 Fully institutionalize HACCP prerequisites, including the good management practices, chemical control

and customer complaints mechanism.

Cumulative Impact

No


Pressure on Social Structures

Operation of the project will require a well established work force. The workmanship required may not necessarily be available from the local communities. This will result in workers being sourced from other communities. In addition, there may be a likelihood of migrant workers (including unskilled laborers) moving into the area in search for employment. These workers may place an additional strain on the infrastructure and public services such as health facilities present in the area. The threat of HIV/AIDS and other STDs resulting from an influx of migrant laborers may also have an impact on the local communities. With the implementation of the suggested mitigation measures, the significance of the impact can be reduced from MEDIUM NEGATIVE to LOW NEGATIVE.

Impact AlternativeMitigation

ImpactSignificance


Pre

ssur

e on

Soc

ial

Str

uctu

res

All Alternatives



Mit

igat

ion

Mea

sure

s 6 Develop a strict code of conduct for workers to regulate their behaviour.

6 Provide services like health care services to workers so as not to cause pressure on local services.

6 Create HIV/AIDS and other STDs transmission awareness.

Cumulative Impact

No

Reversibility Yes

Job Creation

Operation of the project will avail long-term employment to skilled and unskilled labor. People likely to be employed include managers, accounts, agronomists, engineers, industrial chemists, technicians and casual laborers. The significance of this impact is anticipated to be MEDIUM POSITIVE, once the recommended enhancement measures are implemented.

220


South Sudan.

ImpactMitigation

ImpactSignificance


Job

Cre

atio

n

No Positive 5 4 4 5 65 High

Yes Positive 5 4 6 5 75 High

Enha

ncem

ent

Mea

sure

s 6 The developer shall also ensure that company staffs have contracts which are designed in accordance with the law; and

6 The developer shall ensure prompt payment of wages and salaries.

Cumulative Impact Yes

Reversibility No

Growth of the Economy

The proposed project will automatically increase the supply of vegetable oil in the country. This will increase the tax base of the country and also contribute to the growth of the economy.

ImpactMitigation

Impact Significance


Gro

wth

of

the

econ

omy

No Positive 5 4 4 5 65 High

Yes Positive 5 4 6 5 75 High

Enha

ncem

ent

Mea

sure

s

6 The developer should ensure regular servicing of the plant so that there is continuous supply of vegetable oil to the market.

Cumulative Impact

Yes

Reversibility No

4.7 environMent AnD sociAl MAnAgeMent plAn

To ensure effective management of all impacts likely to be generated during the construction and operation phases of the project, an Environment and Social Management Plan (ESMP) is provided in the table below. It includes potential impacts identified, mitigation/enhancement measures proposed, timing, desired outcomes, indicators, persons responsible and any capacity building requirement.

4.7.1 Objectives and Purpose of the ESMPThe main objectives and purpose of the Plan are to:

6 Ensure that environmental management is being performed effectively in accordance with technical requirements and relevant laws and regulations;

6 Monitor compliance with national and international regulations;

6 Monitor environmental components predicted to be significantly affected, and to measure the changes that occur; and

6 Assess the adequacy of environmental monitoring such as selected monitoring locations, schedule, monitoring methods, as well as required supervision, and to suggest improvements, if appropriate, in the light of results.

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South Sudan.

Table 69 Presents the Environmental Monitoring Plan for the proposed project.

Ref3 ImpactMitigation/Enhancement Measure

Desired Outcome Indicator (s) Timing ResponsibilityCapacity Building Requirements

8.1 Site Preparation and Construction Phase

8.1.1Loss of habitat and biodiversity

Consult the Ministry of Forestry

Establish a forest in another to offset the impacts

No loss of biodiversity Area clearedDuring site preparation

Project Management

None

8.1.2Creation of quarries and borrow pits

Restore quarries and borrow pits

Few quarries and borrow pits

Number of quarries and borrow pits

Throughout the construction period

Contractor None

8.1.3Generation of solid waste

Develop a construction waste management plan

No litterWaste collection facilities


Contractor Waste management practices

8.1.4Occupational hazards

Use personal protective equipment

Safe working environment

Record of injuriesThroughout the construction period

Contractor

Occupational health and safety measures

8.1.5Generation of noise

Use well conditioned equipment.

Zero noiseRecord of complaints


Contractor None

8.1.6 Air EmissionsUse properly serviced machinery

Minimal emissionsRecord of complaints


Contractor None

8.1.7 Air EmissionsProvide adequate sanitary facilities

No odor OdorThroughout the construction period

Contractor None

8.1.8Creation of Jobs

Pay workers promptlyLocal people benefit from the employment opportunities

Proportion of local people employed


Contractor None

8.1.9Income Generation

Purchase from local suppliers

Local suppliers benefit from the construction

Proportion of local suppliers engaged


Contractor None

8.2 Operation Phase

8.2.1 Soil degradation

Practice Integrated Nutrient Management

No loss of productive capacity

YieldThroughout the operation period

Project management

Soil conservation practices

8.2.2Use of hazardous material

Design and implement an Integrated Pest Management Strategy.

Avail protective gear to personnel involved in hazardous waste handling.

Protection of workers and residents

Record of poisoning cases

Throughout the operation period

Project management

None

8.2.3 Loss of agricultural biodiversity

Promote low-till and no-till strategies

Maintain biodiversity at farm level

Agro-biodiversityThroughout the operation period

Project management

None

8.2.4 Contamination of ground water

Design and implement an Integrated Nutrient Management (INM) strategy.

No contaminationGround water quality


Project management

None

8.2.5

Introduction of GMOs and invasive species

Undertake a risk assessment

Maintain ecosystem health

Record of GMOs and invasive species


Project management

None

8.2.6Waste generation

Develop a waste management plan

No litterAvailable of waste collection facilities


Project management

None

8.2.7 Air emissionsUse properly serviced equipment

Controlled emissionsRecord of complaints


Project management

None

8.2.8Occupational hazards

Provide employees with protective gear

No accident, injury and disease

Cases of accidents, injuries and diseases


Project management

Occupational health and safety practices

8.2.9 Fire RiskDevelop a fire prevention and response plan

No fire outbreakNumber of fire outbreaks


Project management

Fire prevention and control

8.2.10Wastewater generation

Apply techniques for treating process wastewater

Discharge wastewater with acceptable parameters

Wastewater quality


Project management

None

8.2.11Product contamination

Fully institutionalize HACCP prerequisites

No contaminationRecord of product recall due to contamination


Project management

HACCP

8.2.12Pressure on social structure

Develop a strict code of conduct for workers

No strain on social infrastructure

No of migrant workers


Project management

None

8.2.13Creation of jobs

Ensure prompt payment of wages and salaries to employees

Local people getting jobs

Number of local people employed


Project management

None

8.2.14Boost of the economy

Ensure regular servicing of the plant

Production of quality vegetable oil

Production capacity


Project management

None

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South Sudan.

4.8 conclusion

The proposed project will have significant positive impacts on the people and economy of South Sudan. It is expected to create jobs to the people, generate revenue to material suppliers, increase the supply of quality vegetable oil and increase the country’s tax base thereby contributing to the growth of the country’s economy.

However, like any other development, there are likely to be negative impacts on the environment during site preparation, construction and operation phases of the project. The major potential negative environmental impacts include: loss of habitat, degradation of the soil, loss of biodiversity, contamination of ground water, generation of noise, generation of waste, generation of wastewater, generation of dust and fumes, creation of new quarries and borrow pits, fire outbreak, injury to workers and oil spillage. In this report, specific measures have been developed in order to avoid, eliminate, minimize or compensate for these impacts.

When the mitigation measures and the environmental monitoring plan proposed are implemented, the adverse environmental impacts of the project could be minimized to acceptable levels.

6 Taking 45% oil from the peanuts

6 Taking 50% oil from sesame

6 Ref: refers to the corresponding section / chapter in the main report.

223

Chapter: Five

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South Sudan.

5.0 ORGANISATIONAL FEASIBILITY The Yirol Oil Mill (YOM) investment will be a Public-Private Partnership (PPP). The project aims at addressing rural poverty by involving the small-holder farmers in crop production and improving the local population nutrition through increased vegetable oil intake, as well as ensuring food security through the growing of vegetable oil crops for income generation. This section presents the institutional collaboration arrangements, the factory organizational set-up, the farmer organizational arrangement and Monitoring and Evaluation (M&E) framework.

The preliminary framework for this chapter was drawn from the findings of market, technical and environmental feasibility studies that were conducted in phase I of the project. The consultant reviewed the key sectors’ constitutions, policies and papers to generate the preliminary framework for the organisational feasibility, which was later used for sector consultations.

An organisational chapter Technical Working Group established with the guidance of the Director General of MCII met with the consultant and identified the key officials and offices to consult. Later, sector consultations were held with each of the key ministries, departments and agencies that were determined to be pivotal in the implementation of the YOM. This offered opportunity to test the draft YOM organizational framework and upon which key issues were clarified and emerging issues rectified.

5.1 institutionAl collABorAtion FrAMework

In order to steer the YOM Study from concept to reality, this chapter presents the organisational feasibility using the following key drivers:

5.1.1 The YOM Steering CommitteeA YOM Steering Committee will be established and be constituted by Under-Secretaries from key Ministries, Departments and Agencies both at the Central Government and State Government, whose mandates enable enhanced performance of the primary growth sector (in this case the crop sub-sector). Key stakeholders include MCII, Finance and Economic Planning, Agriculture and Forestry, Cooperatives and Rural Development, Works, Energy, Water and Environment. For instance, it would be important for the Ministry of Works to be aware of the medium term priority needs of passable access roads to transport agricultural produce to the factory from the production zones and it would be expected that through its involvement on the Steering Committee the prioritization of such an intervention would be captured for further budgeting as an enabler at the sector level. The Steering Committee, Chaired by the Under-Secretary Ministry of Commerce, Industry and Industrializations, will meet periodically as and when determined to channel information on YOM through Ministries, Departments and Agencies

through Cabinet and the Parliament.

5.1.2 The YOM Technical Committee

A YOM Technical Committee will be established and constituted by Director Generals (DGs) of key sectors linked to the YOM implementation with the Director General of Industry as Chair. The key DG members include Ministry of Finance and Economic Planning, Agriculture, Forestry (Seeds/Research Centres, Mechanization Unit), Cooperatives and Rural Development, Environment, Roads, Electricity, Lands and Physical Planning, Information, Rural Microfinance Institutions, Agro-inputs Dealers, Stockists, National Farmers Cooperatives or Unions, etc.

5.1.3 Project Management Unit (PMU)During the YOM Project preparation and implementation phases, coordination will be managed by the Project Management Unit (PMU) under the Ministry of Commerce, Industry and Investment and headed by the Director General MCII with the Under Secretary, Ministry of Commerce, Industry and Investment (MCII) as the Accounting Officer.

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South Sudan.

At a minimum, the following key professionals will be engaged at the PMU:

6 Project Coordinator (seconded from MCII)

6 Agricultural Extension Officer (seconded from Ministry of Agriculture)

6 Land management Officer (seconded from Ministry of Lands)

6 Cooperative Officer (seconded from Ministry of Cooperatives and Rural Development)

6 Credit and Finance Officer (seconded from Ministry of Finance and Economic Planning)

6 Monitoring and Evaluation Officer (seconded from Bureau of Statistics)

6 Procurement Officer (seconded from Ministry of Finance & Economic Planning)

6 Communications Officer (seconded from the Ministry of Information)

6 Environment Officer (seconded from the Ministry of Environment)

6 The support staff will include Assistant Coordinator and Drivers.

The PMU will among other responsibilities, include:

6 Work with the State and local authorities for small-holder oil seed and shea nut development.

6 Continue the intermediary role on behalf of ROSS and the private sector, including the facilitation of land reclamation for the nucleus estate and provision of the title deeds, purchase of inputs to be provided to Out-growers and Cooperatives.

6 Coordination of the preparation of legal documents for investors, contractors, farmers’ groups, for signature.

6 Work with the Ministries responsible for Energy (rural electrification) and that of Works and Transport for infrastructural development particularly the access roads and electrification of the factory over the medium term.

6 To constitute a contracts committee for the project in line with Procurement regulations and giving it delegated authority to undertake procurement review and selection in order to forestall procurement delays.

226


South Sudan.

Fig. 150: YOM Institutional Arrangements at National, State, County and Community Levels

CO

UN

TY/

PA

RIS

H/

BO

MA

LEV

ELS

LEV

EL

STA

TE

LEV

EL

NA

TIO

NA

L

LEV

ELN

ATI

ON

AL

LE

VEL

OFFICE OF

THE MINISTER MCII

OFFICE OF

THE DEPUTY MINISTER MCII

Steering Committee (Under -Secretary)

Techinal Committee (Director General)

State level offices that houses the following subject area specialists:

• Crop Sub-sector

• Irrigation Engineer

• Extension Services

• Seeds

• Agricultural Implements

• M&E

• Service providers

Specialized local organizations

• NGOs

• Consultants

• Other partners

Community Based Organizations

• Cooperatives

• Associations

• Individual Farmers

UNDER SECRETARY MCII

Source: Yirol Oil Mill Feasibility Study - Field Findings

227


South Sudan.

5.2 FActory orgAnizAtionAl FrAMework

a. Legal Status

The YOM is structured as a public-private partnership investment between the ROSS and the successful investor. The issue of whether it is a Rehabilitate, Operate and Transfer (ROT), or Build, Operate and Own (BOO) or Build, Operate and Transfer (BOT) will be decided in the post-feasibility study phase.

b. Auditing

Since there will be a contribution to the investment capital by public funds on the YOM enterprise, a Government’s appointed agency will perform the audit function on the enterprise.

c. Corporation Secretary

The YOM shall recruit a qualified lawyer eligible to practice in the Republic of South Sudan, who will serve as the corporation secretary as well as the Board Secretary.

d. Board of Directors

To foster corporate governance, the YOM will be governed by a Board of Directors (a Chairperson and Six other Members) whose composition and terms of appointment will be negotiated between ROSS and the successful investor.

In addition to providing the firm’s oversight, the Board of Directors shall (a) serve as a “sounding board” to hone YOM’s Vision and Mission; and (b) provide strategic guidance through setting policies and decisions. Thus, the Board should include respected, “high visibility” individuals drawn representing the interests of Central Government, the Investor, the Lake State, the farmers, agriculture sector and other minority groups, such as women.

5.3 MAnAgeMent AnD stAFF

The management team of YOM will consist of the following Management and Staff Positions. A Consultant may be contracted to prepare and produce Job and Person Specifications for each of the job positions listed hereunder:

a. Managing Director

The Managing Director will be appointed by the Board of Directors. The Managing Director will report to the Board of Directors and he/she will be an individual holding a first degree in Engineering, Business Administration and at least 5 years in senior management, preferably in a food related factory or a Masters Degree in Business Administration or relevant qualifications and experience to perform the responsibility of Chief Executive Officer for the YOM. Qualifications and or experience in management of a food related factory would be an added asset. The Managing Director should have the intellect to raise the organization’s profile and visibility for creation of a vibrant coalition to harness efficiency, production, and markets for the YOM produce and products. The Managing Director will be deputized by a Deputy Managing Director with similar competencies and experience.

b. Finance Department

This department shall be headed by the Finance Manager.

i. Finance Manager (1) who should possess relevant qualifications with vast experience of not less than 5 years in a factory setting. Possession of ACCA or CPA Professional qualification is an added advantage.

ii. Internal Auditor (1) who will be accountable to the Board although administratively he/she will be located in Finance department as YOM grows up until such a time that there is an Audit Department). The Officer should have a higher Diploma in Audit/Accountancy or ACCA or CPA with extended experience in a factory setting.

iii. Accountant (1) should have a minimum of a Diploma in Accountancy and at least 3

228


South Sudan.

years experience in similar position.

iv. Accounts Assistant/Cashier (1) should have at least a Diploma in Accountancy or related discipline.

c. Human Resources Department

This department will be headed by a Human Resources Manager with a degree in Human Resources Management or Personnel Administration or Personnel Management and at least 3 years experience in management of at least 50 work-force. The Manager will handle all matters relating to the Human Resource Management and Development supported by:

i. Human Resources Officer (1) with relevant experience and qualifications in Human Resources Management and Development, and

ii. Human Resource Assistant (2) with relevant experience and qualifications in Human Resources Management and Development.

d. Production and Maintenance Department

The Department will be headed by a Production and Maintenance Manager. This department will consist of three sub departments, the factory production department, farm production department and maintenance department.

i. The Factory Production Department will include Production Supervisor Line 1 and Production Supervisor Line 2. These will be in charge of four (4) Machine Operators on each of the Lines. (For three shifts per day, there will be twelve workers per Line per day).

ii. Farm Production Department will include Farm Managers (2) for Nyaliel and Mangargoup areas. Each Farm Manager will have at least a Diploma in Agriculture with experience in the management of a commercial farm and will each be in charge of farm workers as will be deemed fit.

iii. Maintenance Department will include; Mechanical, Civil and Electrical Supervisors, each having two (2) Technicians and one (1) Trainee Technician.

e. Marketing and Sales Department

This Department will be headed by a Marketing and Sales Manager and include the Sales Officer; Transport and Distribution Officer, and the Inventory and Stores Officer. The Department will also have the Drivers, Sales Agents, Distribution Agents, Security and Verification Officer, and a Records Assistant.

The above workforce positions proposed is presented in the organization chart in Fig. 151 below.

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South Sudan.

Fig. 151 Yirol Oil Mill Organisation Chart

230


South Sudan.

Notes:

6 While the organogram is modest, to contain escalating costs, the workforce will be recruited gradually in tandem with the production growth of the factory.

6 The Environment Officer’s responsibility is catered for with the provision of an Environment Officer nominated by the Ministry of Environment onto the Technical Committee. He/She will be performing the routine tasks of compliance monitoring.

6 The workforce for the YOM nucleus estate is not reflected in the chart.

Table 70: Workforce Requirements

No Position/Post Required No.Senior Management

1 Non-Executive Board of Directors 7

2 Managing Director 1

3 Deputy Managing Director 1

4 Corporation Secretary 1

5 Finance Manager 1

6 Production & Maintenance Manager 1

7 Marketing & Sales Manager 1

8 Human Resources Manager 1

9 Internal Auditor 1

Staff

Accountant 1

10 Human Resources Officer 1

11 Factory Production Officer 1

12 Farm Production Officer 1

13 Maintenance Officer 1

14 Sales Officer 1

15 Transport & Distribution Officer 1

16 Inventory & Stores Officer 1

17 Accounts Assistant/Cashier 1

18 Human Resources Assistant 2

19 Production Supervisor L1 1

20 Production Supervisor L2 1

21 Farm Managers 2

22 Civil Supervisor 1

23 Mechanical Supervisor 1

24 Electrical Supervisor 1

25 Sales Executives 10

26 Distribution Agents 10

27 Drivers 5

28 Records Assistant 2

29 Security and Verification Assistant 1

30 Machine Operators L1 4

31 Machine Operators L2 4

32 Farm Workers (Nyaliel) 50

33 Farm Workers (Margogoup) 50

34 Factory Chemist 1

35 Security Guards 6

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36 Drivers 5

37 Cleaners 6

38 Receptionists 4

39 Nurses (2-YOM; 2-Nyaliel; 2-Margogoup) 6

Nucleus Estates (Nyaliel and Margogoup)

40 Headman (Nyaliel) 1

41 Permanent Labourers – Nyaliel 50

42 Casual Labourers – Nyaliel 50x4months

43 Stores Clerk – Nyaliel 1

44 Security Guard – Nyaliel 4

45 Headman – Margogoup 1

46 Permanent Labourers – Margogoup 50

47 Casual Labourers – Margogoup 50x4months

48 Stores Clerk – Margogoup 1

49 Security Guard – Margogoup 4

Notes:

6 Board of Directors meet 4 times a year and get a lump-sum of USD1,000 per sitting

6 There are 50 permanent workers at either of the 2 nucleus estates in concert with the available farm mechanization that will be mobilized

6 There are 50 Causal labourers at either of the 2 nucleus estates and will be recruited to work during peak periods with 2 seasons (clearing + planting = 2months; then weeding + harvesting=2months)

6 The permanent staff will be accommodated at a dormitory like facility at either of the 2 farms

6 The factory management and staff are entitled to family type of accommodation facilities

6 Rates are for an upcountry medium sized factory

5.4 trAining reQuireMents

a. Farmers

The major focus on training will be on best agronomic practices for sesame and groundnuts farming including post harvest handling as indicated in the technical section.

The farmers will have to be enlightened and their approach to oil seed growing will have to be reoriented providing them with the adequate training in modern methods of cost effective field management. This will be an ongoing program conducted by qualified and experienced personnel.

b. Technical Staff

Lack of training and exposure on the part of the processing and engineering staff results into poor production and machinery maintenance standards. This can be rectified by providing them with appropriate in-house training and conducting periodic refresher courses by qualified and experienced trainers. It is also our understanding that the suppliers of machinery will train operators and maintenance teams on how to produce quality oil and preserve the life of machinery.

c. Management Personnel

It is important to ensure that professional and in-house training of all management and support staff in addition to the farmers themselves should be made as they are the backbone of the industry, who will determine the success or failure of the enterprise.

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5.5 FArMer orgAnizAtionAl FrAMework

The cardinal objective of the project is to increase the domestic production of vegetable oil and its by-product, thus raising the rural incomes for the small-holder producers and ensuring the supply of affordable vegetable oil products to the people of South Sudan including the neighbouring regional markets. The project will achieve this by supporting farmers to increase their production of raw materials, both shea nut and oilseed crops (sesame and groundnuts).

As elaborated in chapter 2-Market Feasibility, the estimated 2,050 feddans owned by the oil mill and the estimated 3,000 feddans for the out-growers and small scale farmers can be able to provide the 1,050 MT of groundnuts and 300 MT of sesame per season as per the linear programming model in the technical section. Since there are two seasons in the region, it is estimated that 2,000 MT of groundnuts and 600 MT of sesame can be attained per year. It is also estimated that 600 MT of Shea-nuts can reach the production flow per year.

a. The YOM Nucleus Estate

The 2050 feddans of agricultural land given to the project is suitable for growing sesame and groundnuts. Mobilisation of the nucleus estate will need to be urgently done in readiness to commence supply to factory in 2 years time period. To minimize logistical challenges posed by each crop, YOM could dedicate the entire 1000 feddans at Nyaliel estate to Sesame crop and the other 1,000 at Margogroup to groundnuts crop. Each estate would be headed by a Farm Manager supported by a farm supervisor. He will recruit permanent labourers who will be reinforced by casual labourers during peak periods (land preparation, planting, weeding, and harvesting).

b. The Cooperatives/Out-Growers Scheme

Once the Cooperative Extension workers at both the RoSS and State levels are sensitized and reoriented toward the YOM project, efforts will be directed at the re-orienting any existing agro-based Cooperatives at State level (for Sesame; Groundnuts; and Lulu) where they exist, as well as forming new ones where they are inexistent. There are 4 levels of the Cooperative Model.

Level 1: There will be three National Cooperative Societies established for each of the three clusters - Sesame, Groundnuts, and Shea nuts entities.

Level 2: There will be Primary Cooperative Societies constituted by 50 farmer groups at the State level for each of the three clusters (sesame, groundnuts, and shea nuts).

Level 3: There will be at County level farmer groups constituted by 20 individual farmers for each of the three clusters (sesame, groundnuts, and shea nuts).

Level 4:There will be individual farmers at Payam and Boma levels who form the pyramid base and typically grow the crops or collect the shea nuts.

The Consultant recognizes that establishing out-grower schemes using the Cooperative model as in marketing or technical section is an effective vehicle of provision of inputs and commercial services at the farm level. Essential preconditions for a successful scheme include:

6 Supply of input planting seed with potential to increase the hectarage to the Cooperative farmers so that they enjoy economies of scale;

6 While the provision of fertilisers is seen as costly, their provision would improve the yields of the Cooperative farmers;

6 Availability and access to additional land to facilitate the expansion of hectares for crop production.

6 The Cooperative farmers should have access to financial resources to facilitate the procurement of oilseed and storage of the seed for longer periods beyond the farming season when farmers would not like to keep of crop at their farms. This helps the YOM to

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level out the operations of the oil mill beyond the period in which farmers normally want to sell the product;

6 The Cooperative structures in collaboration with YOM, RoSS, and State structures should provide regular extension services to the Cooperative farmers to improve on their yields;

6 To ensure all year round production, availability of standard storage facilities is an important ingredient to the success of the Cooperative scheme.

6 The distance between the out-grower and the YOM promoter/buyer is one of the key success factors in the framework, the closer they are, the greater the ease of supervision while the further apart they are, the higher the likelihood of side selling and default rates.

Fig. 152: The YOM 4-Tier Cooperative Model

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5.6 procureMent process For the puBlic privAte pArtnership ArrAngeMent

On approval of the YOM Feasibility Study Report by the client and the Government the PMU will embark on the process of preparation of the prospectus to invite, identify and select the investor.

5.6.1 Recruitment of a PPP Transaction AdvisorAt this point the Feasibility Study Consultant will work with the client to develop and produce the Job Specifications and Person Specifications to enable recruitment of a Transaction Advisor. Together with backstopping by the Consultant, the Transaction Advisor will immediately work to have in place the following expertise:

6 Technical Advisors

6 Legal Advisors

6 Financial Advisors

6 Project Bank Lenders

6 Equity Capital Investors (private investor)

The coming on board of the investor will then lead to the finalization of detailed engineering designs, cost estimations, covering both operational and non-operational buildings and services. For YOM Project where ROSS has chosen a P3 for implementation of the Project, selection of the right private partner is most important. ROSS will be guided by the Transaction Advisor to establish the following: Who the potential partner should be; selection process; partner selection criteria; review of potential partner submissions.

With full participation of the investor, the next phase will be preparation of all specifications and tender documents, bid analysis, contractor negotiations will be made, followed by site supervision of construction, equipment installation and plant commissioning. The following procurement services will be applied to various components of the YOM under the ROSS procurement and disposal of assets Act:

6 Preparation of specifications and tender documents (mechanical, civil and structural, electrical, instrumentation).

6 Detailed comparative evaluation of offers.

6 Pre-contract negotiations.

6 Advice on the selection of the most suitable bidder for each activity/case.

6 Assistance to the client in contract finalization.

6 Contract Supervision, inspection and testing of machinery and equipment at manufacturers’ premises.

6 Co-ordination of plant construction as per manufactures’ specifications, installation of machinery and equipment.

6 Training of machine operators and maintenance

6 Testing of production line and commissioning of the plant.

6 Procurement of Training Providers for Training Government Staff and farmers and Cooperatives).

6 Preparation and Production of company Manuals (Operations, Human Resources, Finance, HIV/AIDS Manuals).

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5.7 yoM iMpleMentAtion plAn (Blue print For Action)The project shall be implemented in three phases;

Phase I: Establishment Phase

This phase will cover the first three years of the program, it will include opening up of the nucleus estates, recruitment of extension workers, organizing farmers into cooperatives, construction of the factory and nucleus buildings, establishing management and technical staff, procurement, installation and commissioning of machinery, establishing of marketing infrastructures and centres. This phase will also cover initial production testing at about 40% of the full potential.

Phase II: Mechanism Development

This phase will cover 3-6 years of the program, there will be continued organizing of farmers into cooperatives, hiring of more human resources, development of market infrastructures and feeder road network.

This is a critical phase where the manufacturing activity as well as Raw material production will be taking place at the same time. It is in this phase that about 75-80% of the production will be realized. This phase will require close monitoring by the MCII and other management teams.

Phase III: Optimal Manufacturing

This phase is expected to occur after six years of the production and manufacturing. It will be attained when the mid-term evaluation of the project will have taken place but the end of the second phase. During this phase, consolidation of project activities will take place. It is at this phase that outward market research for the project will take place. This phase will also require exploring expansion areas in the other States to boost oil production for the ROSS. Specific activities are detailed in the implementation matrix in Table 72 below.

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Table 71: YOM Implementation Blue Print

No Component Activity Estimated Time TakenResponsible Agency/Centre

Yrs 1-3

Yrs 4-6Yrs 7-10

1

Feasibility Study Completion and Client’s adoption of the Final Report

PMU and Cabinet approved the Final Feasibility Study Report and Recruitment of the Project Transaction Advisor

MCII/ROSS

2 Prospectus Development for investor invitation

Publications in relevant media channels for seeking prospective investors

MCII; ROSS; Finance

Selection and signing of MoU between ROSS and Investor

ROSS; MCII

3 Resource Mobilisation

Negotiate Capital Finance (Grants, Loans, and Technical Assistance)

Sign Financial Agreements with Financial Institutions

YOM; Transactional Advisor; Finance

4

Procurement of Factory Machinery and Equipment and Key Manuals

Bid preparation and management (Civil, Structural, Electrical, Plant Tenders)

Customs; SDD Agricultural Mechanization; MCII; Finance

Manufacture and Shipment of Plant and Machinery Construction phase

Installation of Plant and Machinery YOM - PMU

Testing and CommissioningYOM – PMU; Bureau of Standards

5Recruitment of Factory Management and Staff

Preparation of Human Resource Manual YOM - PMU

Preparation of Financial Regulations Manual YOM – PMU

Audit Manual, Marketing Manual, Manual YOM – PMU

Preparation of Operations Manual YOM – PMU

Preparation of Job Description YOM – PMU

Preparation of Person Specifications YOM - PMU

Job Advertisement in relevant media outlets YOM - PMU

Recruitment short-list YOM - PMU

Interviews, Selection and Appointment YOM - PMU

6Environmental Infrastructure Development

Develop Environmental, Health and Safety Management Plans (Developing a construction waste management plan (Developing a factory waste management plan; Developing an occupational health and safety plan; Develop an integrated nutrient management (INM) plan; Develop an integrated pest management (IPM) strategy and Develop a fire prevention and control plan)

YOM - PMU

Developing Environmental Monitoring Plans YOM - PMU

Setting up environmental management related facilities (Hazardous waste storage containers; Burrow pits/quarry fence; Fire prevention and control system (fire detectors, alarms and suppression/fighting equipment; First aid box; Noise meter; Air quality meter; Cyclones and

Effluent treatment facility)

YOM - PMU

Conducting an Environmental Audit YOM - PMU

7Raw material mobilisation for production Line 1 and Line 2

Identification and establishment of potential oil seed farmers (cooperative, contract, out-growers)

Ministry of Cooperatives and RD

Registration and mobilisation of oil seed farmers Extension Workers

Identification of existing farmer groups Extension workers

Registration and mobilisation of existing farmer groups

Extension workers

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No Component Activity Estimated Time TakenResponsible Agency/Centre

Establishment and equipping of Training Centres Extension Workers

Training of Trainers External Consultant

Training of FarmersTrained Extension Farmers

Establishment of model farmers’ villagesState Ministry of Agriculture

Farmer visits and knowledge sharingTrained Extension Workers

Formation of Farmer Groups External Consultant

Capacity Building of Farmer Groups External Consultant

Formation of Primary Cooperatives External Consultant

Capacity Building of Primary Cooperatives External Consultant

Formation of Cooperative Societies External Consultant

Establishment of Collection Centres

Trained Extension workers/State Ministry of Agriculture

Establishment of a warehouse at Yirol for Oil seeds Contractor

Facilitating establishment of multiplication, breeding and disease control centres

Ministry of Agriculture

Procurement of Packaging MaterialsMinistry of Commerce

Branding the packaging materialsMinistry of Commerce

Quality Assurance Project staff

Establishment of distribution channels Project Staff

8 Product Development

Recruitment of marketing staffMinistry of Commerce

Product launching Project Staff

Launch of sales promotions Project Staff

Developing local media advertisements Project Staff

Developing outdoor advertisements Project Staff

Developing strategic international partnersMinistry of Commerce

9Market infrastructure development

Opening access roads

Ministry of Commerce and National Roads Authority

Procurement of transport facilitiesMinistry of Commerce

Construction of warehouse for products Contractor

Improvement and maintenance of major access roads

National Roads Authority

Continuous Project MonitoringMinistry of Commerce

Quarterly Project Evaluation External Consultant

Assess functionality of Farmer CooperativesMinistry of Cooperatives

10Monitoring and Evaluation

Assess Farmer linkages for financial institutionsMinistry of Commerce

Establish MIS Ministry of ICT

Coordination and MeetingsMinistry of Commerce/PMU

Mentoring Group Leadership and Governance External Consultant

Impact assessment of project to local environment External Consultant

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5.8 risk MAnAgeMent AnD MitigAtion MeAsures

The following are useful guidelines relating to effective Project Implementation and Management Plan

The risks in implementing the YOM project will arise from mainly two causes: a) internal and external or controllable and uncontrollable. Internal causes mostly are controllable such as managerial incompetence or lack of coordination or lack of coordination and cooperation on the part of the team members. Whereas the external causes often are uncontrollable such as natural calamities, political pressures and changes in the competitive market situation.

5.8.1 RisksThe following are some of the risks that may occur at the various phases of the project cycle.

a. Managerial Risks

6 Lack of timely coordination amongst project team and inability to cope with pace of project plans and schedules.

6 Lack of dynamism and dedication on the part of the team members and exercising poor leadership styles by project authorities.

6 Poor feedback system on costs and schedules from time to time.

6 Selecting a contractor on rigid notions of lowest quotation bidder basis ignoring the financial soundness of contractor.

6 Poor monitoring and expediting project implementation.

b. Financial and Cost Risks

6 Unrealistic estimates and budgets based on incorrect interpretations of past budget figures.

6 Cost estimation performed by inexperienced estimators.

6 Inability to anticipate future financial crunch and manage funds accordingly

6 Too many financial commitments simultaneously without resorting a priority criteria.

6 Inability to get timely release of funds from the sources (either by management or financial institutions).

6 Poor working capital management and cash flows

6 Choosing costly sources of funds where interest on borrowings occupies significant portion in the total project cost.

c. Design Risks

6 Frequent changes in design specifications

6 Poor design based on faulty engineering and specifications

6 Employing an untested design process

6 Lack of coordination amongst technical team, managerial team and contractors while executing the project.

d. Contractual Risks

6 Ambiguous contractual agreements

6 Deliberate attempt of contractors in underrating costs to bag the contract

6 Changes of sites and locations frequently

6 Susceptible to wrong or inappropriate equipment and insufficient supplies.

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e. Political and Environment Risks

6 Changes in the inflationary trends due to fluctuating trade cycles

6 Changes in the exchange rate of basic currency

6 Changes in political framework and priorities due to change of leaders

6 Vested interests by political leaders

6 Unforeseen actions of God such as untimely floods, storms, prolonged drought near the project site and catchment.

f. Agronomical related risks

6 Dwindling parent seeds fertility

6 Unreliable rains that can leads to crop failure

6 Declining soil fertility

6 International competitive pressures from other rival products

g. Environmental related risks

Please refer to the Environmental feasibility (chapter four) that highlights the risks and mitigation/enhancement measures

5.8.2 Mitigation MeasuresIn order to forestall all the above mentioned controllable risks, there is need to

6 Have in place an experienced, qualified, efficient and dedicated project management team who will sincerely and faithfully look into ways and means of preventing the causes of overruns and effect efficient management and timely completion of the project.

6 Construction of the factory, installation, commissioning of machinery and training of operators on a turnkey basis.

6 It is preferable and will be economical in the long-run to entrust the project to be executed on a turn-key basis by a contractor, under proper supervision, in order to avoid cost overrun and to have all the jobs complete on time.

5.9 Monitoring AnD evAluAtion

Establishment of an effective and efficient Monitoring and Evaluation (M&E) System with effectively set performance indicators will help achieve the project goals. Table 73 below presents the key milestones for M&E System that the project shall further develop.

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Table 72: Identified Project Milestones for developing a M&E System

No Component ActivityEstimated Time Taken

Responsible Agen-cy/Centre

Means of Verification

Yrs

1-3

Yrs

4-6

Yrs

7-10

1

Feasibility Study Comple-tion and Cli-ent’s adoption of the Final Report

PMU and Cabinet approved the Final Feasibility Study Report and Recruitment of the Project Transaction Advisor

MCII/ROSSFeasibility Study Report Approved and Adopted

2Prospectus Development for investor invitation

Publications in relevant media channels for seeking prospective investors

MCII; ROSS; Finance Prospectus Printed

Selection and signing of MoU between ROSS and Investor

ROSS; MCIIInvestment Agree-ment in place




3Resource Mobilisation

-Negotiate Capital Finance (Grants, Loans, and Techni-cal Assistance)

-Sign Financial Agreements with Financial Institutions

YOM; Transactional Advisor; Finance

Financing Agreement signed and is in place

4

Procurement of Factory Machinery and Equip-ment and Key Manuals

Bid preparation and man-agement (Civil, Structural, Electrical, Plant Tenders)

Customs; SDD Agri-cultural Mechaniza-tion; MCII; Finance

-Procurement Plan in place

-Bid documents pre-pared and produced

Manufacture and Shipment of Plant and Machinery Construction phase

YOM - PMUConfirmed orders and Proforma Invoices in place

Installation of Plant and Machinery

YOM - PMUCertificate of comple-tion issued

Testing and CommissioningYOM – PMU; Bureau of Standards

Certificate of comple-tion issued

5

Recruitment of Factory Management and Staff

Preparation of Human Resource Manual

YOM - PMUManual Produced and in place

Preparation of Financial Regulations Manual

YOM – PMUManual Produced and in place

Audit Manual, Marketing Manual, Manual


Preparation of Operations Manual


Preparation of Job Descrip-tions and Person Specifi-cations

YOM – PMUJob profiles in place

Job Advertisement in rele-vant media outlets

YOM - PMU Print media adverts

Recruitment short-list YOM - PMU Recruitment Short list

Interviews, Selection and Appointment

YOM - PMUEmployees’ Appoint-ment Letters issued

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Develop Environmental, Health and Safety Manage-ment Plans (Developing a construction waste man-agement plan (Developing a factory waste management plan; Developing an occu-pational health and safety plan; Develop an integrated nutrient management (INM) plan; Develop an integrated pest manage-ment (IPM) strategy and Develop a fire prevention and control plan)

YOM - PMUPlans produced and in place

Developing Environmental Monitoring Plans

YOM - PMUPlans produced and in place





Setting up environmental management related facilities (Hazardous waste storage containers; Burrow pits/quarry fence; Fire prevention and control system (fire detectors, alarms and suppression/fighting equipment; First aid box; Noise meter; Air quality meter; Cyclones and Effluent treatment facility)

YOM - PMUCertificate of comple-tion and installations

Conducting an Environmen-tal Audit

YOM - PMUEnvironmental Audit Report

Identification and estab-lishment of potential oil seed farmers (cooperative, contract, out-growers)

Ministry of Coopera-tives and RD

Numbers of Coop-eratives, contract farmers

Registration and mobilisa-tion of oil seed farmers

Extension WorkersNumber of Registered Oil Seed Farmers per County, State

Identification of existing farmer groups

Extension WorkersNumber of Validated Registered Farmers List per County, State

Registration and mobili-sation of existing farmer groups

Extension WorkersNumber of Registered Farmers’ list per County, State

Establishment and equip-ping of Training Centres

Extension WorkersNo. of Fully fledged Training Centres Established

Training of Trainers External Consultant Training Reports

7

Raw material mobilisation for production Line 1 and Line 2

Training of FarmersTrained Extension Farmers

Training Reports

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Establishment of model farmers’ villages

State Ministry of Agriculture

No. of Model Farms established

Farmer visits and knowl-edge sharing

Trained Extension Workers

No. of trips conducted

Formation of Farmer Groups

External ConsultantNo of farmers groups in place

Capacity Building of Farmer Groups

External ConsultantCapacity Building Reports

Formation of Primary Coop-eratives

External ConsultantNo of Primary Cooper-atives registered

Capacity Building of Prima-ry Cooperatives

External ConsultantCapacity Building Reports

Formation of County and National Cooperative Societies

External ConsultantNo. of County and National Cooperatives per crop registered

Establishment of raw mate-rials Collection Centres

Trained Extension workers/State Min-istry of Agriculture

No. of Collection Centres at Boma and County levels




Establishment of a ware-house at Yirol for Oil seeds

ContractorConstruction comple-tion certificate

Facilitating establishment of multiplication, breed-ing and disease control centres

Ministry of Agricul-ture

No. of centres oper-ational

7

Raw material mobilisation for production Line 1 and Line 2

Procurement of Packaging Materials

Ministry of Com-merce

Procurement Plan in place and Delivery Notes

Branding the packaging materials


Consultancy contract and new designs in place

Quality Assurance Project StaffQuarterly Assurance Reports

Establishment of distribu-tion channels

Project StaffNo. of channels identi-fied and approved

8Product Devel-opment

Recruitment of marketing staff


Appointments and Induction Reports

Product launching Project Staff

No. of products launched on the local and international markets

Launch of sales promotions Project StaffSales promotion plan and records of prod-ucts launched

Developing local media advertisements

Project StaffMoUs with local me-dia advertisers

Developing outdoor adver-tisements

Project StaffContacts with select-ed outdoor firms

Developing strategic inter-national partners


No. of international market partners identified and in part-nership

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9Market infrastructure development

Opening access roadsMinistry of Com-merce and National Roads Authority

No. of new access roads opened

Procurement of transport facilities


Procurement plan; Proforma invoices, delivery notes

Construction of warehouse for products

Contractor Construction comple-tion certificate

Improvement and main-tenance of major access roads

National Roads Authority

No. of access roads opened

Continuous Project Moni-toring


Periodic Monitor-ing and Evaluation Reports

Quarterly Project Evalua-tion

External Consultant Quarterly Reports

Assess functionality of Farmer Cooperatives

Ministry of Cooper-atives

Assessment Report




10Monitoring and Evaluation

Assess Farmer linkages for financial institutions


No of farmers’ groups assessed

Establish MIS Ministry of ICTMIS in place and functional

Coordination and MeetingsMinistry of Com-merce/PMU

Minutes and Resolu-tions

Mentoring Group Leader-ship and Governance

External Consultant Mentoring Reports

Impact assessment of proj-ect to local environment

External Consultant Assessment Report

5.10 conclusions AnD recoMMenDAtions

In this chapter, the consultant has analysed the organization feasibility of the YOM Project and affirmed RoSS efforts to increase domestic vegetable oil production; address rural poverty through involvement of smallholder farmers in oil crop production and processing; improve the health of the population through increased vegetable oil intake at the community level; and address food security through provision of markets for the crop produce. The project will expand production of oil-bearing crops in RoSS with particular emphasis on the participation of smallholder farmers in partnership with the revamped YOM.

The consultant has further established that the YOM is consistent with the RoSS development plan and the Constitution of the Ministry of Commerce, Industry and Investment which are engaged in identification of priority flagship projects within an economic and social development framework for South Sudan.

In conclusion, the consultant recommends that the client ensures it collaborates and networks with key players in order to lay a fertile ground for the successful implementation of projects as this enhances the success of the project at the all levels.

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Chapter: Six

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6.0 FINANCIAL FEASIBILITY This chapter presents the financial and economic analysis of the Yirol Oil Mill project. The objective of the financial analysis is to establish and measure the project’s financial feasibility taking account of the financial cost of the investment and the financial profits to be generated by the investment. The consultant worked with technical working group that was established with guidance of the Director General of MCII. The team identified and coordinated the key officials and offices to consult. Officials and documents from the Ministries of: Commerce, Industry and Investment, Finance, Agriculture and Labor were consulted. Other consultations were done with financial institutions such as Agriculture Bank of South Sudan, and African Development Bank, insurance companies such as South Sudan Insurance Company and Customs department.

The consultant used both qualitative and quantitative approaches in the feasibility. The purposively selected respondents were interviewed as well as obtaining other information from documented sources such as manuals, pamphlets, policy documents and electronic sources. Guide questions/questionnaire, and observations were some of the tools used in data collection and Microsoft excel to process the information. The consultant used Net Present Value (NPV), Internal Rate of Return (IRR), financial ratios and payback period in appraising and evaluating the project.

6.1 estiMAteD costs

6.1.1 Estimate of Production CostThe estimated production cost is based on the cost of raw materials both from the nucleus farms and additional purchased from out growers, and other direct costs such as water, lubricating oil, furnace oil, electricity, bleaching agents, caustic sodas, and depreciation of machinery. Production cost is based on the production programme presented in the previous chapters. The production cost per litre of edible oil shall range from 3.4 SSP/litre in the first year to 5.1SSP/ litre in the tenth year of project life.

6.1.2 Installation CostThe total installation cost is estimated is inclusive in the cost of machinery.

6.1.3 Transportation CostTransportation cost is inclusive in the raw material purchase cost. The raw materials were estimated at market price.

6.1.4 Raw Material Purchase CostThe purchase price of raw materials was estimated at market prices as follows: Ground Nuts at 3 SSP, Sesame at 5 SSP and Shea Nuts at 2.5 SSP. Table 74 shows the projected cost of raw materials

Table 73: Raw Material Purchase Cost

Materials Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10

in SSP

G/nuts 7500000 7875000 8268750 8682188 9116297 9572112 10050717 10553253 11080916 11634962

Sesame 5000000 5250000 5512500 5788125 6077531 6381408 6700478 7035502 7387277 7756641

Shear nuts 875000 918750 964688 1012922 1063568 1116746 1172584 1231213 1292774 1357412

Total in SSP 13375000 14043750 14745938 15483234 16257396 17070266 17923779 18819968 19760967 20749015

Total in USD 4458333 4681250 4915313 5161078 5419132 5690089 5974593 6273323 6586989 6916338

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6.1.5 Operation and Maintenance CostOperations and Maintenance Cost for this project was projected as labour costs of 14 persons that shall be needed in operations and maintenance. These shall include 1 Factory Production Officer, 1 Maintenance Officer, 1 Production Supervisor for Line 1, 1 Production Supervisor for Line 2, 1 Mechanical Supervisor,4 Machine Operators for Line 1, 4 Machine Operators for Line 2 and 1 Factory Chemist. The operating time shall be 8 hours a day. Two rotations of staff shall be done for position of machine

operators. The work’s cost shall be 588SSP/day/man.

6.1.6 Depreciation CostInvestment Costs shall be depreciated on straight line basis over useful life of 10 years.

6.1.7 TaxesAny tax applicable in Republic of South Sudan for the procurement of engineering services, construction of the buildings, installation of plants and equipments and other activities shall be inclusive of the costs estimated in each pay items. Tax from this project is deemed to be 15% of net profit for the first 8 years of project life because turnover is below USD 25(equivalent of 75SSP) and 20% for the last two years in the 10 year period because turnover is above USD 25.

6.1.8 DividendThe dividend rate is estimated at 10% of the capital contribution and payment commences in the fifth year of the project life.

6.1.9 Total Required Cost for the projectThe total required cost for the project is estimated at USD 24,372,703(SSP 73,118,109). This total is comprised of the initial capital investment Cost of USD 13,285,655 (SSP 39,856,965), Core Man Power Cost of USD 1,354,249 (SSP 4,062,747) and Working Capital costs of USD 9,732,799 (SSP 29,198,397).

The project will require USD 7,480,319 (SSP 22,440,957) in the first year of investment for buildings, other civil works and setting up the waste management facility; USD 7,159,585 (SSP 21,478,755) in the second year for procurement of factory machinery, office equipment and other equipment and additional USD 9,732,799 (SSP 29,198,397) for working capital in year 3, 4 and 5 of investment.

6.1.10 Operating Capital Requirement for the first 6 MonthsThe required operating capital for the first 6 months is broken down in the table below:

247


South Sudan.

Table 74: Operating capital requirement for the first six months

ITEMS REQUIRED COST USD COST IN SSP

Labor 799,400 2,398,200

Office equipment 70,552 211,656

Insurance for equipment and Buildings 664,283 1,992,849

Raw material inputs at nucleus farms 538,125 1,614,375

Environmental monitoring 600 1,800

Administrative costs 345,376 1,036,128

Marketing & Sales 241,763 725,289

Cost of material purchases 1,395,833 2,791,666

Cost of consumables 1,060,050 3,180,150

Total 5,115,982 15,347,946

Table 75: The Cost of Fertilizers and Materials to out growers

ITEMS Cost in USD Cost in SSP

DAP fertilizer 102,500 307,500

NPK fertilizer 68,333 205,000

G Nuts seed 512,500 1,537,500

Sesame seed 341,667 1,025,000

Total 1,025,000 3,075,000

6.2 investMent

To facilitate achievement of the planned project, GoSS and the identified Investor will make adequate investment in assets and other infrastructure to support expanded operations as well as processing activities.

248


South Sudan.

6.2.1 Capital InvestmentTable 76 : Capital investment items

Descriprtion No. Unit

Unit cost(USD)

Unit costs(USD) Total Cost(USD)

Civil Works

Factory buildings 659,167

Office Block 243,699

Clearing House 121,850

Stores 365,549

Sub-total 1,390,265

20% Consultants fees 278,053

50% price changes factor 834,159

Total factory costs 2,502,477

Parking spaces and Acess Factory Roads 1,145,833

Staff quarters

Senior & middle management 24 126,332 1,515,984

Other staff at Yirol 14 63,166 442,162

Staff at the 2 farms 8 31,583 252,664

Labourers at the 2 Farms 200 7,896 1,579,200

Total quarters costs 3,790,010

Total Civil Works costs 7,438,320 7,438,320

Machinery

Production Line 1 1,640,400

Production Line 2 419,000

Sub-total 2,059,400

Estimated 10% CIF Yirol 205,940

Cost including IF 2,265,340

Estimated taxes at 8% total machin-ery cost

181,227

Total Estimated Machinery Cost 2,446,567 2,446,567

Irrigation costs(Estimate) 1,145,833 1,145,833

Other equipment

Water tank 1 2,917 2,917

Double cabin pick-ups 3 35,417 106,250

6 Trucks 300,000

3 Generators 150,000

2 Tractors 110,118

Spare parts 1,091

Furnace oil tank 3,750

1 Cartepillar bull dozer 350,464

2 caterpillar escavators 550,594

2 sampo harvestors 322,108

1 thresher 21,113

1 trailer 19,056

1 ridger 18,220

2 planters 31,558

249


South Sudan.

Rear mounted scrapper leveler 10,834

Disc plough 8,380

Sub Total 2,006,453

Transport cost 5% of the total cost 100,323

Total other equipment Cost 2,106,776 2,106,776

Office equipment

i. Air conditioning 36,750

ii. Furniture & fittings 42,254

(chairs ,tables, shelves ,safes ,cupboard setc)

iv. Computers, printers, and their accessories 38,938

v. Photocopiers 8,333

vi.Telephones hand sets and networks 2,083

vii. Computer soft ware 8,333

Viii. Other softwares for office management 5,000

Sub-total 141,104

Transport (5% of the total cost) 7,055

Total office equipment cost 148,159 148,159

Total Capital cost 13,285,655

6.2.2 Financing Plan for InvestmentThe financial viability analysis based on the assumption that capital expenditure will be financed by government and private investor.

Table 77: Financing plan

Pay items to be financed Government & Dividend Funding Conditions

Private Investor All the pay items except Land Total Investment costs Estimated at 10% Restricted to the Projects

acquisition and operational costs Per Annum Costs

6.3 eXpecteD revenues

The major revenue derived from this project will be from edible oil. Based on the estimated production and operational costs of the project and the current trend of edible oil prices in South Sudan market which ranges from 7 SSP and 11 SSP, the consultant estimated selling price of edible oil by the project at 8 SSP. This price shall increase by the inflation factor of 10% in year 4 and the subsequent years.

The expeller cakes that are a by-product shall generate revenue for the project as well. The projected price for expeller cakes shall be 1.4 SSP per Kg. This price shall increase by the inflation factor of 10% in year 2 and the subsequent years. Sales are based on projected production indicated in chapter 3 (technical feasibility).

Table 79 shows the expected sales revenue in 10 years of the project life

250


South Sudan.

Tabl

e 7

8 :

Exp

ecte

d S

ales

Rev

enue

Tota

l Pro

ject

ed

Sal

esY

r 1

Yr2

Yr

3Y

r 4

Yr

5Y

r 6

Yr

7Y

r 8

Yr

9Y

r 1

0

No.

of L

ts o

f ed

ible

oil

2,8

60

,20

03

81

36

00

3,6

77

40

04

76

70

00

47

67

00

04

76

70

00

47

67

00

04

76

70

00

47

67

00

04

76

70

00

Pri

ce p

er L

t in

S

SP

88

.89

.71

0.6

11

.71

2.9

14

.21

5.6

17

.11

8.9

Val

ue o

f sto

ck2

2,8

81

,60

03

3,5

59

,68

03

5,5

97

,23

25

0,7

59

,01

65

5,8

34

,91

86

1,4

18

,40

96

7,5

60

,25

07

4,3

16

,27

58

1,7

47

,90

38

9,9

22

,69

3

% o

f sto

ck

sold

60

%6

0%

60

%8

5%

85

%8

5%

95

%9

5%

95

%9

5%

Edib

le o

il so

ld1

3,7

28

,96

02

0,1

35

,80

82

1,3

58

,33

94

3,1

45

,16

44

7,4

59

,68

05

2,2

05

,64

86

4,1

82

,23

87

0,6

00

,46

27

7,6

60

,50

88

5,4

26

,55

8

No.

of K

gs o

f C

akes

3,7

80

,00

05

,04

0,0

00

5,6

70

,00

06

,30

0,0

00

6,3

00

,00

06

,30

0,0

00

6,3

00

,00

06

,30

0,0

00

6,3

00

,00

06

,30

0,0

00

Pri

ce p

er K

g in

S

SP

1.4

1.5

1.7

1.9

2.0

2.3

2.5

2.7

3.0

3.3

Val

ue o

f sto

ck5

,29

2,0

00

7,5

60

,00

09

,63

9,0

00

11

,97

0,0

00

12

,60

0,0

00

14

,49

0,0

00

15

,75

0,0

00

17

,01

0,0

00

18

,90

0,0

00

20

,79

0,0

00

% o

f sto

ck s

old

60

%6

0%

60

%8

5%

85

%8

5%

95

%9

5%

95

%9

5%

Expe

ller

cake

s so

ld3

,17

5,2

00

4,5

36

,00

05

,78

3,4

00

10

,17

4,5

00

10

,71

0,0

00

12

,31

6,5

00

14

,96

2,5

00

16

,15

9,5

00

17

,95

5,0

00

19

,75

0,5

00

Tota

l S

ales

(SS

P)

16

,90

4,1

60

24

,67

1,8

08

27

,14

1,7

39

53

,31

9,6

64

58

,16

9,6

80

64

,52

2,1

48

79

,14

4,7

38

86

,75

9,9

62

95

,61

5,5

08

10

5,1

77

,05

8

Tot

al s

ales

in

US

D5

,63

4,7

20

8,2

23

,93

69

,04

7,2

46

17

,77

3,2

21

19

,38

9,8

93

21

,50

7,3

83

26

,38

1,5

79

28

,91

9,9

87

31

,87

1,8

36

35

,05

9,0

19

95

% o

f sal

es

colle

cted

du

ring

the

yea

r5

,35

2,9

84

7,8

12

,73

98

,59

4,8

84

16

,88

4,5

60

18

,42

0,3

99

20

,43

2,0

14

25

,06

2,5

00

27

,47

3,9

88

30

,27

8,2

44

33

,30

6,0

69

5%

of s

ales

ou

tsta

ndin

g at

ye

ar e

nd2

81

,73

64

11

,19

74

52

,36

28

88

,66

19

69

,49

51

,07

5,3

69

1,3

19

,07

91

,44

5,9

99

1,5

93

,59

21

,75

2,9

51

6.4

pr

oje

cti

on

s

6.4

.1 C

ash

Flow

Sta

tem

ent

The

next

tab

le s

how

s th

e pr

ojec

ted

cash

flow

ana

lysi

s. In

- flo

w o

f cas

h un

der

this

pro

ject

con

sist

s of

(a) E

quity

for

the

Initi

al in

vest

men

t, (b

) Sal

e of

Edi

ble

Oil

and

(c) S

ale

of e

xpel

ler

cake

s. T

he m

ajor

out

flow

s ar

e pu

rcha

ses

of s

tock

of r

aw m

ater

ials

, pro

cure

men

ts o

f cap

ital i

tem

s su

ch a

s ci

vil w

orks

, mac

hine

ry (p

roce

ssin

g

251


South Sudan.

equi

pmen

t), I

rrig

atio

n in

stal

latio

ns, o

ther

equ

ipm

ent

such

as

vehi

cles

, tru

cks,

tra

ctor

s an

d ot

her

farm

too

ls a

nd in

puts

, offi

ce e

quip

men

t su

ch a

s fu

rnitu

re &

fit

tings

, air

con

ditio

ning

, com

pute

rs a

nd th

eir

acce

ssor

ies,

pri

nter

s, p

hoto

copi

ers,

and

sof

twar

e, o

pera

ting

expe

nses

, fin

anci

ng c

osts

and

loan

rep

aym

ents

. The

de

taile

d ca

sh p

roje

ctio

ns a

re s

how

n in

the

App

endi

x X

: Cas

h flo

w p

roje

ctio

ns.

Tabl

e 7

9: S

umm

ariz

ed C

ash

Flow

Pro

ject

ions

Des

crip

tion

Yo

Y0

Yr

1Y

r 2

Yr

3Y

r 4

Yr

5Y

r 6

Yr

7Y

r 8

Yr

9Y

r 1

0

Cas

h In

flow

53

52

98

48

09

44

75

.29

00

60

80

.88

17

33

69

22

.51

93

09

06

02

14

01

50

82

61

37

86

92

87

93

06

73

17

24

24

33

48

99

66

0

Cas

h O

uflo

w7

48

03

19

71

59

58

5.3

95

43

51

7.5

10

47

70

04

11

14

08

18

12

96

17

50

.31

39

26

12

01

50

43

53

11

67

29

77

91

82

48

26

01

99

91

68

32

19

57

43

7

Bal

ance

-74

80

31

9-7

15

95

85

-41

90

53

3.5

-23

82

52

9.3

-21

34

73

7.2

43

75

17

2.1

25

38

29

40

63

57

97

6.8

94

08

09

01

05

44

80

61

17

32

56

01

29

42

22

3

6.4

.2 P

roje

cted

Inco

me

Sta

tem

ent

The

chan

ges

in t

he P

roje

cted

Inco

me

Sta

tem

ent

will

mai

nly

be in

fluen

ced

by r

even

ue g

ener

ated

from

sal

es o

f edi

ble

oil a

nd e

xpel

ler

cake

s, o

pera

ting

expe

nses

an

d fin

anci

ng c

osts

. Th

e pr

ojec

t w

ill c

ontin

ue t

o ex

plor

e w

ays

of in

crea

sing

its

capa

city

util

izat

ion,

agg

ress

ive

mar

ketin

g st

rate

gies

to

incr

ease

sal

es a

nd

cont

rolli

ng e

xpen

ditu

re. T

he s

umm

ary

is s

how

n in

the

tab

le 8

1 b

elow

. For

det

ails

ref

er t

o A

ppen

dix

XI:

Pro

ject

ed In

com

e st

atem

ents

.

Tab

le 8

1: S

umm

ary

of In

com

e S

tate

men

t (in

US

D)

Des

crip

tion

Yr

1Y

r 2

Yr

3Y

r 4

Yr

5Y

r 6

Yr

7Y

r 8

Yr

9Y

r 1

0

Net

Rev

enue

48

80

44

64

57

51

72

-78

23

21

76

53

60

18

42

69

60

14

96

63

46

16

86

56

94

21

71

00

66

24

29

95

03

27

09

14

43

Ope

ratin

g co

sts

40

06

65

24

65

76

85

49

82

76

06

74

21

97

73

57

45

78

10

99

88

94

13

01

51

05

25

76

71

18

45

31

41

33

65

60

9

Net

Pro

fit/

Loss

be

fore

tax

87

37

94

-82

51

4-5

06

09

92

10

91

14

04

10

69

50

26

85

63

59

74

52

67

91

11

84

29

91

24

54

19

01

37

25

83

4

Taxa

tion

13

10

69

00

16

36

71

11

60

42

51

02

84

54

11

17

90

21

67

76

45

18

68

12

82

05

88

75

Pro

fit a

fter

tax

74

27

25

-82

51

4-5

06

09

92

92

74

69

49

09

07

75

82

79

05

63

34

77

79

50

66

54

10

58

60

61

11

66

69

59

Div

iden

d pa

y-m

ent

00

00

-88

87

79

-88

87

79

-88

87

79

-88

87

79

-88

87

79

-88

87

79

Ret

aine

d Ea

rn-

ings

/lo

ss y

ear

74

27

25

-82

51

4-5

06

09

92

92

74

69

41

79

78

56

67

16

68

47

22

35

56

10

39

54

33

11

47

48

40

12

55

57

38

The

proj

ect

indi

cate

s an

incr

easi

ng n

et p

rofit

from

US

D 8

73

,79

4 in

yea

r 1

to

US

D 1

3,7

25

,83

4 in

yea

r 1

0 o

f the

pro

ject

life

. Ret

aine

d ea

rnin

gs a

lso

indi

cate

a

corr

espo

ndin

g po

sitiv

e pe

rfor

man

ce in

crea

sing

from

US

D 7

42

,72

5 in

yea

r 1

to

US

D 1

2,5

55

,73

8 in

yea

r10

.

(a) S

ourc

es o

f R

even

ue

252


South Sudan.

The

mai

n so

urce

s of

rev

enue

will

con

tinue

to

be s

ales

of e

dibl

e oi

l and

exp

elle

r ca

kes

over

the

10

yea

rs o

f pro

ject

ion.

Tabl

e 8

2: S

umm

ary

Com

posi

tion

of

Inco

me.

Sou

rces

of

Rev

enue

Yr

1Y

r 2

Yr

3Y

r 4

Yr

5Y

r 6

Yr

7Y

r 8

Yr

9Y

r 1

0

Edib

le o

il1

37

28

96

02

01

35

80

82

13

58

33

94

31

45

16

44

74

59

68

05

22

05

64

86

41

82

23

87

06

00

46

27

76

60

50

88

54

26

55

8

Expe

ller

cake

s3

17

52

00

45

36

00

05

78

34

00

10

17

45

00

10

71

00

00

12

31

65

00

14

96

25

00

16

15

95

00

17

95

50

00

19

75

05

00

Tota

l Rev

enue

in

SS

P1

69

04

16

02

46

71

80

82

71

41

73

95

33

19

66

45

81

69

68

06

45

22

14

87

91

44

73

88

67

59

96

29

56

15

50

81

05

17

70

58

Tota

l Rev

enue

in

US

D5

63

47

20

82

23

93

69

04

72

46

17

77

32

21

19

38

98

93

21

50

73

83

26

38

15

79

28

91

99

87

31

87

18

36

35

05

90

19

Less

cos

t of

pr

oduc

tion

-75

42

74

36

48

76

49

12

54

78

-11

96

20

10

96

29

33

65

41

03

69

51

58

85

72

09

92

17

57

23

32

79

67

57

6

Net

Rev

enue

48

80

44

64

57

51

72

-78

23

21

76

53

60

18

42

69

60

14

96

63

46

16

86

56

94

21

71

00

66

24

29

95

03

27

09

14

43

The

prop

ortio

n of

edi

ble

oil,

whi

ch a

ccou

nts

for

81

.2%

of t

otal

ope

ratin

g re

venu

e, w

ill in

crea

se o

ver

the

peri

od a

s a

resu

lt of

cap

acity

util

izat

ion

and

aggr

essi

ve

mar

ketin

g st

rate

gies

.

The

cons

ulta

nt c

onsi

dere

d re

venu

e ge

nera

ted

from

tot

al s

ales

for

the

prod

uced

typ

es o

f pro

duct

s. S

ince

the

pro

ject

is fi

nanc

ially

via

ble,

ope

ratio

nal d

etai

ls t

hat

incl

ude

prod

uct

mix

at

pack

agin

g le

vel b

y co

ntai

ner

size

s an

d pr

ice

of e

ach

prod

uct

mix

can

be

hand

led

bett

er b

y th

e tr

ansa

ctio

n m

anag

er w

ith h

is/

her

team

.

(b) O

pera

ting

Exp

ense

s

Des

pite

the

ant

icip

ated

gro

wth

pla

n, t

he p

roje

ct s

how

s th

at t

he r

atio

of o

pera

ting

expe

nses

to

oper

atin

g in

com

e w

ill fi

rst

rise

but

con

tinue

to

impr

ove

beca

use

of t

he in

crea

sing

pro

duct

ion

capa

city

and

impl

emen

tatio

n of

the

cos

t cu

ttin

g. D

etai

ls o

f the

se e

xpen

ses

over

the

pro

ject

life

are

in t

he n

ext

83

:

Tabl

e 8

3: O

pera

ting

Exp

ense

s

Ope

ratin

g C

ost

Yr

1Y

r 2

Yr

3Y

r 4

Yr

5Y

r 6

Yr

7Y

r 8

Yr

9Y

r 1

0

Adm

inis

trat

ive

Cos

ts5

92

07

48

64

34

39

49

22

11

86

72

08

20

37

86

42

25

95

00

27

71

87

13

03

90

83

33

48

97

63

68

38

74

Mar

ketin

g &

Sal

es4

14

45

26

05

04

06

64

45

51

30

70

46

14

26

50

51

58

16

50

19

40

31

02

12

73

58

23

44

28

32

57

87

12

Hum

an C

apita

l exp

ense

s1

59

88

00

17

58

68

01

93

45

48

21

28

00

32

44

72

03

28

14

28

43

23

64

26

38

83

71

24

66

04

54

55

92

54

5

Wor

k m

en’s

com

pen-

satio

n5

25

03

19

86

35

18

43

87

01

42

57

04

89

54

56

29

66

47

39

77

68

49

32

19

Insu

ranc

e fo

r eq

uipm

ent

& B

uild

ings

66

42

83

66

42

83

66

42

83

66

42

83

66

42

83

66

42

83

66

42

83

66

42

83

66

42

83

66

42

83

Envi

ronm

enta

l Mon

i-to

ring

60

06

60

72

67

99

87

89

66

.30

61

06

2.9

41

16

9.2

31

28

6.1

53

14

15

253


South Sudan.

Envi

ronm

enta

l Aud

it1

50

00

16

50

01

81

50

19

96

52

19

62

24

15

7.7

26

57

32

92

31

32

15

43

53

69

Dep

reci

atio

n to

was

te

man

agem

ent

faci

lity

42

00

42

00

42

00

42

00

42

00

42

00

42

00

42

00

42

00

42

00

Dep

reci

atio

n of

Equ

ip-

men

t7

11

99

37

11

99

37

11

99

37

11

99

37

11

99

37

11

99

37

11

99

37

11

99

37

11

99

37

11

99

3

Tota

l Ope

ratin

g C

osts

40

06

65

24

65

76

85

49

82

76

06

74

21

97

73

57

45

78

10

99

88

94

13

01

51

05

25

76

71

18

45

31

41

33

65

60

9

6.4

. 3 P

roje

cted

Bal

ance

She

etTh

e pr

ojec

t will

mai

ntai

n a

satis

fact

ory

capi

tal s

truc

ture

with

liab

ilitie

s to

equ

ity r

atio

of 0

.49

initi

ally

. Ta

ble

84

sho

ws

the

proj

ecte

d su

mm

ary

bala

nce

shee

t for

th

e pr

ojec

t. B

oth

curr

ent a

nd q

uick

rat

ios

duri

ng th

e an

alyz

ed p

erio

d of

10

yea

rs o

f the

pro

ject

life

wer

e ab

ove

2, w

hich

indi

cate

sat

isfa

ctor

y w

orki

ng c

apita

l for

th

e pr

ojec

t. F

or d

etai

led

bala

nce

shee

t st

atem

ent

refe

r to

App

endi

x X

II.

Tabl

e 8

4 :

P

roje

cted

Bal

ance

She

et f

or 1

0 Y

ears

Des

crip

tion

YR

IY

R2

YR

3Y

R4

YR

5Y

R6

YR

7Y

R8

YR

9Y

R1

0

Ass

ets

Tota

l Non

Cur

rent

Ass

ets

14

53

31

15

13

79

54

14

13

08

00

28

12

38

91

89

.21

17

25

35

11

10

91

21

41

04

89

74

8.3

10

13

69

58

93

98

22

68

91

57

16

Tota

l Cur

rent

Ass

ets

19

59

39

67

16

88

68

64

62

70

16

12

35

07

46

82

19

10

97

23

09

10

60

64

36

27

41

25

36

63

34

76

43

32

52

77

60

15

38

9

Tota

l Ass

ets

34

12

70

82

30

68

22

78

19

35

01

90

35

89

66

57

33

63

63

23

42

00

18

20

54

11

71

60

63

80

03

05

73

73

07

53

84

93

11

05

Equi

ty a

nd L

iabi

litie

s

Tota

l Equ

ity2

29

62

19

52

21

36

95

61

71

58

47

83

14

94

16

42

40

17

32

62

89

36

15

42

94

43

02

63

26

14

90

33

36

94

31

03

47

75

20

8

Tota

l Lia

bilit

ies

11

16

48

88

85

45

32

22

19

17

12

44

02

49

49

61

89

97

13

06

56

66

24

67

41

34

31

18

54

02

40

03

64

43

50

15

58

97

Tota

l Equ

ity a

nd L

iabi

litie

s3

41

27

08

23

06

82

27

81

93

50

19

03

58

96

65

73

36

36

32

34

20

01

82

05

41

17

16

06

38

00

30

57

37

30

75

38

49

31

10

5

6.5

Fin

An

ciA

l r

isk

s A

nD M

itig

Ati

on

MeA

su

res

Ris

ks in

cide

nces

are

pro

ne t

o al

l lev

els

of Y

irol

pro

ject

impl

emen

tatio

n. T

hese

incl

ude

coun

try

leve

l, st

ate

leve

l and

pro

ject

leve

l as

inhe

rent

ris

ks, a

s w

ell a

s at

, bu

dget

ing,

acc

ount

ing,

inte

rnal

con

trol

, fun

ds fl

ow, f

inan

cial

rep

ortin

g an

d au

ditin

g le

vels

, as

cont

rol r

isks

. Ris

k ra

ting

coul

d be

hig

h, s

ubst

antia

l med

ium

and

low

de

pend

ing

on t

he a

ntic

ipat

ed d

amag

e an

d lo

sses

the

ris

k co

uld

caus

e to

the

pro

ject

out

com

es. A

ll th

ese

and

othe

r ri

sks

occu

rren

ces

may

con

stra

in p

roje

ct

impl

emen

tatio

n an

d ha

ve to

be

mili

tate

d ag

ains

t. In

ord

er to

mili

tate

aga

inst

the

antic

ipat

ed fi

nanc

ial r

isks

, the

follo

win

g w

ould

be

nece

ssar

y fe

atur

es o

f a s

tron

g fin

anci

al m

anag

emen

t sy

stem

for

Yir

ol O

il M

ill p

roje

ct:

6

Yir

ol O

il fa

ctor

y m

anag

emen

t sh

ould

hav

e ad

equa

te n

umbe

r an

d a

mix

of s

kille

d an

d ex

peri

ence

d FM

sta

ff;

6

The

inte

rnal

con

trol

sys

tem

sho

uld

ensu

re t

he c

ondu

ct o

f an

orde

rly

and

effic

ient

pay

men

t an

d pr

ocur

emen

t pr

oces

s, a

nd p

rope

r re

cord

ing

and

254


South Sudan.

safeguarding of assets and resources;

6 The integrated information system should support Yirol project requests for funding and met the reporting obligations to fund providers;

6 The system should be capable of providing financial data to measure performance when linked to the output;

6 An adequate internal and external audit mechanism supported by the National Auditing Office in collaboration with MCI;

6.6 AssuMptions i. The major assumption is that the project will fund its operations through shareholding

of GoSS, the private investor and surplus revenue.

ii. The current political and economic stability, with the accompanying government support will prevail and improve over the project period of 10 years.

iii. The project will able to build the Board, Management, Staff and other institutional capacity to desired levels

iv. Good will from suppliers of raw materials will improve

v. The institution will be able to manage the main risks highlighted

vi. The inflation rate will be maintained at 10% per year

vii. The exchange rate is 1USD equal to 3 SSP

viii. The unit prices for raw materials will remain at; Ground nuts 3SSP, Sesame 5SSP and Shea Nuts 2.5 SSP in year 1 of project life and only increase by inflation factor of 10% in subsequent years.

ix. Selling price of edible oil will be 8SSP per litre, and expeller cakes 1.4 SSP per kg and will increase by inflation factor of 10% per year. For more details refer to appendix IX.

x. Manufacturing at 60% in the first phase, 85-95% in the second phase and 95-100% in the third phase.

6.7 FinAnciAl ApprAisAl MethoDs

Under this analysis, the financial viability of the project was evaluated on the basis of the revenue and cost derived from 10 years of project life.

Four methods for appraisal were applied, namely; Net Present Value, Rate of Return in particular the Internal Rate of Return and payback period for viability, Gross margin, and Net margin for profitability, and Current Ratio and Quick Ratio for Liquidity.

6.7.1 Net Present ValueThe projected Net Present Value over 10 years while selling a litre of edible oil at 8SSP is USD 4,154,705. This is greater than zero which means the project inflows can be able to finance its outflows.

6.7.2 Rate of ReturnThe projected Internal Rate of Return (IRR) for the project life of 10 years while selling edible oil at 8 SSP is 15% which is above 12% lending rate( discount factor) prevailing in RoSS. This shows that the YOM project can utilize its cash inflows to finance the Cash outflows.

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South Sudan.

6.7.3 Pay Back Period

Yirol Mill Oil is projected to pay back in a period of 8 years of investment. This means the project can recover the initial capital injected before the expiry of the desired project period.

6.7.4 Ratios

The projections on profitability indicate fluctuations in the first 5 years of project life.

The average gross margin in the first 5 years is 35% rising steadily thereafter to 78% by the end of the tenth year.

The Net Margin is projected at 19% in the year 1, and improves in the subsequent years, to 42% in tenth year. The project shows improving performance over the project period.

Projections on liquidity show that current ratios will be at more than 2 in all years of the project. Quick ratio is on average above 2 throughout the project life. Both ratios during the analyzed period indicate satisfactory working capital for the project

6.7.5 Financial Sensitivity Analysis In order to reassure viability of the project, the consultant conducted a financial sensitivity analysis based on 4 scenarios. The first 3 scenarios considered changes in price of the edible oil –the main product of the factory. Scenario 4 considered if line 2 is not operational.

Table 85 : Main Scenarios Indicators

Main Scenarios Internal Rate of Return Net Present Value in USD

Pay Back Period in Years of investment

Scenario 1

Selling Price at 7.5 SSP per litre of Edible Oil, while other factors remain the same

11.80% -167,874 9

Scenario 2

Selling Price at 8 SSP per litre of Edible Oil while other factors remain the same

15%

4,154,705 8

Scenario 3

Selling Price at 8.5 SSP per litre of Edible Oil while other factors remain the same

18.60% 9,045,972 8

The sensitivity analysis shows that at selling price 7.5 SSP per litre of edible oil, the project has a negative NPV, IRR which is below the lending rate and the longest payback period. Therefore the project cannot be viable selling at that price.

At selling price of 8 SSP and 8.5 SSP respectively, the project has positive NPV, and IRR is above the prevailing lending rate. In both scenarios, the payback period is 8 years.

Using the criteria of NPV and IRR, the selling price of 8.5 SSP can be recommended. However, according to the market study, the prevailing market price for edible oil in South Sudan ranges between 7 SSP and 11 SSP. Given that edible oil produced by YOM shall be a new product in the market, there is need for market penetration. Based on reasons given above and the consultant’s regional experience, selling price of 8 SSP is recommended.

The factory will break even at a point when it produces 12,231,697 litres of edible oil at a price of 8 SSP per litre.

256


South Sudan.

Scenario 4

6 The consultant further analyzed a scenario where line 2 is not operational.

6 Capital investment will reduce by 1,257,000 SSP.

6 Labor cost saved 144,000 SSP

6 Sales will reduce by 28.5%

6 If line 2 is not introduced a lot of sales will be lost.

6.8 MAjor conclusions AnD recoMMenDAtions

The project has positive financial profitability in two scenarios. This position will continue to improve as a result of capacity utilization, aggressive marketing and implementation of the cost cutting strategies to ensure increased profitability.

6 The Net Present Value (NPV) is projected at USD 4,154,705 (SSP 12,464,115) at real price of 8SSP per litre. This shows that the project inflows can adequately finance its outflows, hence viable.

6 The Internal Rate of Return (IRR) over a 10 year period of the project life is 15% which is above the discount factor of 12 % (lending rates prevailing in South Sudan). This again proves that the project is viable.

6 Both lines 1, and 2 should be introduced for the project to be financially sustainable.

6 The importance of the required financing, the presence of important externalities, and the payback period of 8 years, confirms the relevance of Government financing of 60% and the other investor 40% after the kick off of the project.

Based on the financial analysis indicators, the project is worthwhile to undertake by the Government of RoSS.

257

Chapter: Seven

258


South Sudan.

7.0 MACROECONOMIC AND DEVELOPMENT IMPLICATIONS FOR YIROL OIL MILL PROJECT

This chapter analyses the economic appraisal of Yirol Oil Mill project and acknowledges that the South Sudan sound macroeconomic management strategy focuses on pursuing seven key objectives, notably, i) achieving and maintaining low inflation; ii) achieving and maintaining high and stable GDP growth; iii) supporting private sector growth; iv) prioritizing poverty reduction; v) increasing non-oil revenue as a percentage of total revenue; vi) ensuring overall fiscal sustainability by living within our means, and; vii) saving sufficient foreign exchange reserves to protect the economy from external shocks14.

The Government of Southern Sudan Growth Strategy stresses the importance of agricultural development through vital extension services, training, seed distribution and agricultural research, to achieve broad-based economic growth. The YOM is one of the strategic investments that aims at addressing the key objectives of agricultural production and will remain important in the South Sudan economy because agriculture sector employs 80% of the work-force and contributes a third of GDP. The aftermath of two decades of civil war, the lack of basic infrastructure in large areas, and reliance by much of the population on subsistence agriculture has relegated much of the population at or below the poverty line for years despite rapid rises in average per capita income.

The Yirol Oil Mill will provide several economic development benefits to the economy of South Sudan through increased incomes of the farming households, ensuring household food and nutrition security, creation of on-farm and off-farm employment opportunities, promote value-addition to agricultural produce, and promote domestic and external trade in agricultural related products, hence increasing non-oil revenue avenues. The key economic benefits accrued to the project include:

7.1 MAcroeconoMic stABility

The South Sudan economy relies heavily on the crude oil exports that have recently been vulnerable to international prices fluctuations and political instabilities. The Government development and investment strategy is therefore to diversify the export base and ensure value addition for the primary growth sectors such as those in agriculture. Diversification will mitigate the negative effects of fluctuations in global volatilities on the country’s crude oil export performance. For instance, South Sudan total revenues at the end of September 2010 stood at SDG 4.47 billion. Of this amount, oil revenue accounted for SDG 4.37 billion, whilst non-oil revenue accounted for a paltry SDG 106 million (which is only 2.4% of total revenues).

Currently, South Sudan is a net importer of edible oils. Therefore, the revitalization of the Yirol Oil Mill will generate additional stream of foreign exchange revenue flows to the country besides the crude oil. This will reduce the prevailing large trade deficit the country is facing.

The foreign exchange earnings on exports of YOM product lines will also contribute to building reserves of the country’s Central Bank hence ensuring stability of the financial account of the Balance of Payments (BoP). Also, stability in exchange rate and availability of the edible product lines has implications for price stability and inflation.

The Government will also benefit from tax revenue flows from the YOM product lines along the entire oilseeds and lulu seeds value chain. This will improve the ratio of domestic revenue to GDP and ultimately reduce the country’s reliance on foreign assistance to support both the national and state budgets.

7.2 contriBution to overAll BAlAnce oF pAyMent position

Agricultural exports continue to represent only a small percentage of total production in South Sudan. Even for the few that are exported to the growing international markets, much of them are unprocessed and exports remain dependent on heavily fluctuating world market prices. The YOM product lines are a high potential for domestic, regional and international markets for its product lines. The latest 14 See H.E David Deng Athorbei on. Minister of Finance and Economic Planning, 2011 Speech to South Sudan Legislative Assembly

259


South Sudan.

developments of admitting South Sudan to the regional and international bodies such as IGAD, AU, COMESA, EAC, will expose it to the international markets. Lulu oil, especially, has an export potential for western premium markets.

The development of complete oilseeds crops value chain for both domestic and export markets is extremely important to the South Sudan economy. The focus here is both on aspects of production as well as marketing. As stated in the Technical feasibility chapter, the aim is to maximize the profitability of the abundant lulu crop and oilseeds in order to achieve the highest impact for poverty reduction and economic development.

The YOM will transform the agriculture and rural development sector into one where farming is seen as a business, rather than a subsistence activity. Through the multi-sectoral linkages it will generate, the YOM shall propel a sector that uses its comparative advantage, for example in labour‐intensive, large unskilled rural population/workforce, high‐value crops, to compete in regional and international markets. The focus on developing an agribusiness sub-sector that not only supplies inputs, but also adds value through processing for both domestic and export markets will contribute to the country’s healthy Balance of Payments position over the medium term.

7.3 contriBution to eMployMent

The YOM investment estimated at over US$23,347,703 will spur production of the raw materials at both the nucleus estate and through the out-grower scheme thereby providing seamless employment opportunities to the majority of the economically active population, majority of them being the youth who are settling after the protracted 2-decade old civil war. In the out-grower arrangement, participating farmers will derive incomes from the sale of their oilseeds produce and lulu seeds to the manufacturing factory.

The Ministry of Transport and Roads provides services which are identified in the Government of South Sudan Growth Strategy as essential to the development of the economy of South Sudan. This involves construction of roads infrastructure linking production areas to markets. Investments linked to the agro-production rural areas where oilseeds crops production will take place will generate local employment for the rural population. Of equal importance under the Growth Strategy is that the oilseeds production areas and markets will be linked to good, reliable connections to South Sudan neighboring countries to promote external trade and commerce which YOM product lines stand to benefit from.

Being seasonal crops, farmers will be assured of continuous incomes and subsequently, their purchasing power will stimulate supply side investments in the economy. Also, the associated investments will trigger employment opportunities through both private and public investments especially at the YOM factory as well as in the supporting infrastructure particularly access roads to the factory hinterland, logistics for raw materials collection, storage and preservation facilities and export hubs for finished products. The YOM, therefore, will cause a fundamental shift from a predominantly humanitarian assistance-based economy to that of an earning population, over the medium term.

7.4 increAseD householD incoMes

The South Sudan Development Plan (2011) shows that fifty-one percent (51%) of South Sudanese are poor (with 55% in rural areas and 24%in urban areas). Moreover, 80% of poor households depend on agriculture for their livelihood. The YOM strategy of mobilising raw materials through the nucleus farm and the organised farmer group identification, resourcing and capacity building will result into increased producer capacity of farmers in the Lakes State over the short-term and other States over the medium to long-term. At sector level, the YOM investment strategy will permit households to increase commercialization, raise oilseeds crop subsector output and have a significant impact on agricultural incomes in the medium and long term. This will also translate into positive benefits for the community through increased household incomes and consequently improved quality of life for the population that has been ravaged by effects of conflicts for over two decades.

260


South Sudan.

7.5 the oilseeDs crop suBsector contriBution to gDp Promoting agricultural production is crucial for Southern Sudan’s economic development to the extent that it commenced being a focus of government activity since 2010. The Ministry of Agriculture and Forestry has purchased and distributed two hundred tractors along with three hundred and twenty metric tonnes of agricultural seeds to farmer groups and communities. Already selected staff and farmers have been trained on crop production in the ten States using field demonstration plots and nurseries have also been established at State level.

The YOM presents a two-sector model (agriculture and industry) that will stimulate agricultural growth and support agricultural infrastructure investments, which in turn will require increased public expenditure. YOM provision of market access and premium prices for farmers produce will generate a positive impact on the efficient allocation of resources on small, medium and large holdings, thereby increasing overall productivity and sector contribution to the GDP.

The YOM will produce edible oils for domestic and export human consumption. Equally important, is the forward linkages to the livestock sub-sector through the use of the factory by-products (bakery fats, cooking fats, oil seed cake, poultry feeds, fertilizers) in making animal and poultry feeds to generate more spin-offs in employment and other economic activities.

Given that the main source of tax revenue for governments in less developed economies such as South Sudan is the industrial sector, faster industrial growth - such as the YOM - will increase government tax revenues through the statutory deductions along the oilseeds value chain such as income tax, increase public investment in agricultural infrastructures and remove the agrarian barrier. Therefore, combined domestic and foreign capital investments on YOM will have a positive impact on agricultural and manufacturing sectors’ contribution to the GDP.

7.6 contriBution to iMport suBstitution AnD eXport proMotion

For South Sudan to succeed in this global and regional economic environment, investments such as YOM provide a dual advantage of the much needed import substitution that saves foreign exchange and export promotion that generates the foreign exchange. The YOM provides an investment opportunity that addresses these foreign exchange challenges present to the economy and offer economic opportunities that spur growth, accelerate social and economic transformation; and ensure economic prosperity for the small-holder poor farmers of South Sudan. Over the medium term, strategic import substitution investment in the oil industry value chain will result is a significant reduction of the large trade deficit that the country is currently facing. With volatility in domestic exchange rate market, foreign exchange savings arising from reduced imports of edible oil will stabilize the exchange rate.

7.7 DoMestic resource MoBilisAtion For investMents

Resource mobilisation is one of the areas of macro-economic management where the Government of south Sudan faces significant challenges. There is a need for the country to mobilize domestic resources from non-oil revenues sources for funding economic and social development programmes and investments. For instance, the South Sudan total available resources for 2011 National Budget stood at five thousand seven hundred and nineteen million Pounds (SDG 5,719 million). Oil revenues during 2011 stood at an estimated five thousand six hundred and eight million Pounds (SDG 5,608 million), and accounted for 98% of the estimated resource envelope. Meanwhile non-oil revenues were estimated at one hundred and eleven million Pounds (SDG 111 million).

The YOM project will stimulate domestic savings amongst participating households through its rural finance institutional linkage to facilitate purchase of farm inputs and financing post-harvest activities as well as development of a savings culture. The reliability of farm produce productivity and reliable market of oilseeds produce will lead to production for the household and the market. The increase in disposable income will boost farmers’ propensity to save and such savings could consequently be borrowed by the private sector and government to facilitate other critical, long-term investments.

261


South Sudan.

7.8 FooD AnD nutrition security, heAlth AnD risk reDuction

YOM investment in the production of the oilseeds crops will immensely contribute to food security at the household and national levels. Not all the raw materials produced by farmers will be bought-up by the factory. There is likelihood of farmers generating a surplus production that families will preserve for household consumption and additionally for the market, hence bringing residual income to the households. In addition, the YOM products will be readily accessed by the people of South Sudan as a locally made product thereby constituting part of their regular food menu hence improving their nutritional status.

In the project areas both surrounding the nucleus estates and out-grower schemes, the application of proper agricultural practices and environmental control regimes such as planting trees, application of efficient by-product disposal methods, will result into improved raw material productivity and minimize air pollution to preserve peoples’ health and reduce the Government of Sudan health bill.

7.9 countering the chAllenge oF cliMAtic vAriABility to sustAinABle Agriculture output

When the project-supported investments in agronomic practices and irrigation schemes are implemented in the medium term, the YOM will indirectly contribute to improved food security at the household and national levels through reduction in production variability. In the absence of water harvesting and irrigation systems, many farmlands in the agro-based States that will be suppliers to the YOM are still used for production of rain-fed crops. Because rain-fed production is directly affected by climatic variability (droughts and floods), yields of rain-fed crops grown in South Sudan fluctuate considerably from year to year. This variability is to a large measure, likely to increase in future on account of global warming. Therefore, a further emphasis will be on counteracting these effects, through strategic investments such as in irrigation and crop insurance.

7.10 inFrAstructurAl DevelopMent

The factory will help set up infrastructure in the states of Lakes and Equatorial where major road net facilities will be constructed, piped water expected good housing from the factory premises and then individuals who earn from employment will also save for construction purposes and in the end multiplier effect will come from oil to construction sector. Communication in those states will be boosted as major activities will need proper communication avenues therefore telecommunication companies will enhance services and in the end government will collect revenue through taxing the profit of telecom companies.

7.11 conclusion

In conclusion, most South Sudanese are engaged in agriculture and grazing activities while oil and the public sector dominate the formal economy. Unemployment and underemployment are very high with little formal sector employment. Oil provides 98% of public sector revenue and almost all foreign exchange earnings, thus making the South Sudanese economy extremely vulnerable to changes in oil prices and oil production levels. Furthermore, oil production has peaked and is projected to decline sharply over the next ten years. While this oil production provides much-needed revenue, the extreme dependence on the oil resource presents a major challenge for macroeconomic and fiscal management and the pending sharp decline in oil income aggravates this socio-economic situation.

Fiscal sustainability and stable public expenditures are the cornerstones of macroeconomic stability. The South Sudan Government Economic Growth Strategy and the 2011 National Development promotes efforts to diversify the economy, develop other sources of public revenue and expand employment and livelihood opportunities. A core component of this Economic Growth Strategy will be the building of Government’s non-oil revenues over the medium and long term and the Yirol Oil Mill is a significant leap in this direction.

(Footnotes)1 According to the world Bank,2011, the unit cost of electricity is 0.37USD per Kwh.

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APPENDICES

APPENDIX I: Referencesa. Porter. M.E (1980), ‘Competitive Strategy: Techniques for Analyzing Industries and Competitors

187

b. Caves R and Porter M (1978), ‘Market Structure, Oligopoly, and Stability of Market Shares’ Journal of Industrial Economics 289.

c. Government of South Sudan (2011), ‘Trade and Investment Policy for South Sudan’.

d. Government of South Sudan (2009), ‘The Investment Promotion Act’.

e. Ministry of Commerce and Industry (2011), ‘Fostering Innovation and Competitiveness in South Sudan (FICSS) Sector Growth Strategies’

f. Government of South Sudan (2010), ‘Statistical Yearbook for South Sudan 2010’, South Sudan Center for Census, Statistics and Evaluation

g. Chamber of commerce, Industry and Agriculture Constitution 2010

h. Ministry of Agriculture and Forestry (2011), ‘Plant Protection Policy’

i. Ministry of Agriculture, Forestry and Cooperatives (2003), ‘The Cooperative Societies Act’.

j. Ministry of Rural Development and Cooperatives (2004), ‘Policy Document 2003/2004’ Government of New Sudan

k. Bitran Gabriel (2002). ‘An Overview of Pricing Models for Revenue Management’

l. The Investment Promotion Regulations (2011).

m. Nakyagaba N.W et al. An Overview of the Agronomic Constraints to Simsim Production in Uganda

n. Turiho-Habwe Godfrey (1992). ‘The Accomplishments and Constraints of Sunflower Research in Uganda’

o. Okello D. K etal. ‘Overview of Groundnuts Research in Uganda: Past, Present and Future’

p. Bukenya O J (2007), ‘Birmingham Public Market Study Market and Financial Feasibility Prepared for: Jefferson County Truck Growers Association and Alabama Farmers Market Authority’ Birmingham.

q. Special Report (2010), FAO/Crop and Food Security Assessment Mission to South Sudan

r. United Nations High Commission for Refugees; (UNHCR) (2009). ‘Factsheet’.

s. Ali Faisal M. (1989). ‘Sunflower Agronomy, Summer Season. Annual Report 1989-90’, Gezira Research Station, ARC, Wad Medani.

t. Mann F. A (1959). ‘Outlines of a History of Expropriation 75 lqr 188, 189 et seq’

u. Harrison D (1968). ‘The Law of Economic Development in Africa: The Law of Eminent Domain, 68 Colum.L.REV.1286,1286-87’

v. De Jure Belli et Percis, Lib III.C. (1625)

w. Amankwah. H.A (1989). ‘The Legal Regime in Land Use in West Africa: Ghana and Nigeria’, Pacific Law Press, Hobart, Tasmania Australia.

x. Government of South Sudan (2011). ‘The Transitional Constitution of the Republic of Southern Sudan

y. Government South Sudan (2010).‘The Environmental Protection Bill’.

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APPENDIX II: Consultation Log for Environmental Analysis

Person Consulted Views

Mr. Victor WurdaloTombe

Director General, Ministry of

Environment

The Director General said that the Ministry of Environment is the coordinator of all development programs in the country as regards to environmental issues. He cautioned that if the country is to have sustainable development, we have to address environmental issues of all development programs. He also said that currently they a draft environment policy and an environmental protection bill which require such a project to undertake an environmental impact assessment, that shows potential environmental problems and how those can be mitigated. He further requested the Ministry of Industry to keep them appraised with the development.

1. Isaac Manyuon - Director General

2. ManassenMaaisew - Food Security Coordinator

Ministry of Agriculture and Forestry, Lakes State

They began by saying that people in Lakes State grow mostly ground nuts and simsim. They further said that the farming system is still at subsistence level, where people cultivate the quantity they are able to consume. They said that the project from the Ministry since it is organizing farmers into farming group (of 7-15 people) to help change their farming system from subsistence to commercial. They however said that when clearing the two plots of land, in Nyariel and Margagoup, for growing raw materials, all the trees should not be cut down. They said people from forestry sector should be consulted on which trees to cut and those to retain

Lt. MakuluKulang Commissioner, Yirol West County

The Commissioner showed keen interest in the project. He explained people currently occupying the factory land were put there because of lack of accommodation. He said that if we want back the land, they can move those people out or if we want another land, they can give the project any other land in the County.

1. Maj. John Maker Rieth - Chief Inspector of Controlled Areas

2. James AcholAgan - Security Personnel for Wildlife Department of Wildlife, Greater Yirol.

They welcomed the development because it will provide employment to people in the area, who normally spend most of the time playing cards. They also said that the project will not affect wildlife since they are not going to kill animals. But cautioned that monkey and livestock may interrupt the project as they will feed on factory raw materials like ground nuts. They also suggested that the factory should be relocated away from the town. According to them, when it was being put there, the population in the town was very small. But now the population is high.

1. James AcholAleti - Deputy Senior Inspector

2. James AparMakaal - Rate Collector

3. Daniel ChienMajang - Rate Collector Department of Agriculture and Forestry, Yirol west County

4. Mary AdengMajak - Administrar, Yirol Town Council

They supported the development as it will provide income to farmers by selling raw materials to the factory. They said the market for crop grown in the area like ground nuts and simsim that will the project will boost agriculture in the area. The further the project can also use seeds of lulu trees which are common in the area.

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1. Eng. SantinoBantir - Supervisor for Survey for Greater Yirol

2. Moses MaborAnchuar - Land Registrar

3. AkoiMajakRuei - Finance Officer

4. AcholAluongNyithou - Senior Surveyor

Directorate of Lands and Survey, Yirol West County

They began by saying that currently land in South Sudan is owned by the community. They also said that a few years ago, there wasn’t a land law in the country. They said people would settle randomly where they want provided the community there had no problem with it. They further said that the factory land is in the middle of the town and it is not enough for the factory, suggesting that it should be relocated. They further said that in 2007, landing Yirol was surveyed and part of the factory land was allocated to people that were staying there. They said that three quarters of people that were allocated the land were those who used to use in the factory and when it closed, they claimed that they didn’t have where to go. They further to reestablish the factory where it was, these people need to be compensated.

1. AbolichMakoiAdut

2. Williamson AnchiemJok

3. Rose NyanditDol

4. AjakAkotAcinnyin

5. Lou Nek Puou

Members, Yirol Women Group

1. AbolichMakoiAdut

2. Williamson AnchiemJok

3. Rose NyanditDol

4. AjakAkotAcinnyin

5. Lou Nek Puou

Members, Yirol Women Group

1. Mr. Daniel Deng - Bishop of YirolDiocease, - Episcopal Church of Sudan

2. Mary AcholMachal

3. Adol Abut

4. AdolNyariel

5. Abraham Machal

6. Monica Adut

People on the factory land

Bishop said that the land they are occupying was first surveyed in 1983 and was allocated to people after paying some money. The survey and allocation was done by surveyors from Wau in the Greater Bahel Gazel. But these plans were lost. The land was again surveyed in 2007 by Lakes State officials and people paid again. The Bishop however said that public interest comes first and individual interest later. So if the government them to leave the land, they shall leave. Mary said that she has stayed on that land since 1982 because her husband was working at the factory. She said that the land she is on was the factory’s garden with a few houses as workers’ residences. She further said that she has been in Khartoum and that factories should be far away from people since they produce smoke and noise which may affect people. She also said if they want us to go, they will go provided they compensate us (government gives her money she has used on the land).Abraham said that they should make the building that used to house factory machinery only offices or house for employees of the factory and put the factory away from people. Monica said if they tell them to go, they will go because they know the land was initially for the factory. However they will go when government refunds their money (about 1,600 South Sudan Pounds) which she paid for her plot.

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APPENDIX III: List of Some Key Informants Interviewed

No. Name Position

1 Hon. Kengen Jakor Beyo Deputy Minister-MCII

Under Secretary MCII

Martin Yongo Moi Acting Senior Inspector- Private Sector

2 Alphonse Joseph Inspector Administration

3 Kuot Madhor Kuot Ag. Director of External Trade

4 Mr. Malua lKuir Ajak Director of Planning, Research & Statistics

5 Jacob Ayuiu Apech Director General Industrialization

6 Dr. Daniel A. Mamer

7 David Bol Inspector of Agriculture

8 Mr. Gabriel Ganda Director of Cooperatives Rumbek

9 Mathew Namakuei Planning

10 Ater Gai Marketing

11 Samuel Manyang Director of Commerce

12 Joseph Lueth Ag. Deputy Director Administration

13 Paul Kuot Ater Secretary General Farmers Union

14 Isaac Dhieu Mapoth Chairpersons Farmers Union

15 Isaac Manyuon Director General Ministry of Agriculture & Forestry

16 Wol Amuk Guot General Secretary Chamber of commerce- North Bahr El Gazel

17 Stephen Doctor Matatia Director for Trade Ministry of Commerce & Industry

18 Taban Charles Director Crop Protection Ministry of Agriculture, Forestry and Cooperatives

19 Mr. Victor WurdaloTombe Director General, Ministry of Environment

20 Mr. Daniel Deng Bishop of Yirol Diocese, Episcopal Church of Sudan

21 James Achol Aleti Deputy Senior Inspector

22 James Apar Makaal Rate Collector

23 Daniel Chien Majang Rate Collector

24 Mary Adeng Majak Administrar, Yirol Town Council

25 Maj. John Maker Rieth Chief Inspector of Controlled Areas

26 James Achol Agan Security Personnel for Wildlife Department of Wildlife, Greater Yirol

27 Lt. Makulu Kulang Commissioner, Yirol West County

28 Isaac Manyuon Director General

29 Manassen Maaisew Food Security Coordinator, Ministry of Agriculture and Forestry, Lakes State

30 Mr John Pangech Director of Cooperatives (Planning and Budgeting)

31 Mr. Lino Lumori Ananias Acting Director Cooperatives and Marketing and Credit

32 Mr Anthony Agiem Akot Director Research and Planning and Training

33 Dr. Elias Leonardo Agricultural Expert YOM Team Member

34 Mr. Ajak Akuei Riak Dep. Director Taxation/DG

35 Mr. Felix Lasu John Baba Head of Return Processing and Revenue Accounts

36 Ms. Jean Lubega-KyazzeSenior IFC Advisory Services in PPPs (Nairobi Office) Operations Officer, Investment Climate, IFC, World Bank Group, Juba

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37 Mr. Michael Opagi Head of Return Processing and Revenue Accounts

38 Mr. Morris Research Centre – Seeds Trials

39 Mr. Jeremiah Mutonga Resident Representative African Development Bank

40 Mr. Adam Abdalla Nguak Director for Labour and Industrial Relations

41 Mr John Maciekn A Acol Deputy Chairperson National Statistics Bureau

42 Mr. Simon Aban Ag. Director Economic Statistics Department

43 Mr. Felix Lasu John Baba Head of Return Processing and Revenue Accounts

44 Dr Erneo Balasio Director of Agric Mechanization/MAF

45 Mr Rual Makuir Managing Director, Agriculture Bank of South Sudan

46 Mr.Samuel Akani Chief Procurement Officer GOS

47 Mr. Willis Onyango Olwalo Procurement specialist -IGAD

48 Mr.Moris Moga Officer for seed distribution

49 Ms. Achalo Lucey Procurement Officer

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Appendix IV: Plant Lay Out

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Appendix V: Equipment Quotation by Desmet Ballestra

De Smet Rosedowns Ltd Cannon St, Hull, HU2 0AD, United Kingdom Tel: +44 (0)1482 329864 Fax: +44 (0)1482 325887 www.Rosedowns.co.uk [email protected] Registered in England: Number 0040051 ~ Registered Office: Cannon St, Hull, HU2 0AD, United Kingdom

The specifications contain proprietary information of DE SMET BALLESTRA GROUP and is handed over to the client under the restriction of DE SMET’s Standard Secrecy agreement.

PC122 / Document2 QUOTATION No: 10375 - BUDGET For : Godfrey S. Sudan

ONE DE SMET ROSEDOWNS 100 SERIES STERLING FULL PRESS MILL

To Process:

10 TONNES PER 24 HOURS OF

GROUNDNUTS OR SESAME SEED

HULL, 03-05-2012

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QUOTATION / REV. N°: Page n° 3 10375

Appendix V Equipment Quotation by Desmet Ballestra.doct10229 RT

PART I . PRICES, COMMERCIAL AND FINANCIAL CONDITIONS

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A PRICES The prices are quoted in Sterling (GBP)

Section 1 : FULL PRESS OIL MILL EQUIPMENT 1 100 Series Sterling Press Mill 579,750.- GBP Total Price Section 1 579,750.- GBP

Section 2 : Optional Items 1 Services of Supervisory Commissioning Engineer 18,000.- GBP Total Price Section 2 18,000.- GBP TOTAL PRICE (SECTION 1 to 2) 597,750.- GDP

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The prices are for equipment delivered EXW UK, not off loaded as per Incoterms 2000 definition. The prices exclude all taxes, customs duties, import charges, dues and levies imposed by the Government or any other Authority in the country of destination and arising from the importation of the equipment or related to services rendered. They are based on the payment conditions defined hereafter. Bank charges in the UK are for DE SMET ROSEDOWNS account. Bank charges in the country of the Buyer are for Buyer's account.

B VALIDITY OF THE QUOTATION 60 days

C DELIVERY The equipment will be ready for shipment in ten months from receipt of deposit payment and finalisation of all technical and commercial details enabling us to proceed.

D PAYMENT CONDITIONS De Smet Rosedowns Standard terms of Payment : DOWNPAYMENT 30 % by electonic transfer to DE SMET ROSEDOWNS nominated bank

account, within 10 days of the order. PAYMENT ON DELIVERY 70 % against shipping documents at first presentation, through an

irrevocable and transferable Letter of Credit, issued by a first class Bank and confirmed by a London Bank. The Letter of Credit subject to extension, if necessary, shall be opened by BUYER's banker, together with the transfer of the down-payment and shall be valid for 21 days for negotiation of documents.

ALTERNATIVELY Payment Terms to be agreed between BUYER and SELLER For DE SMET ROSEDOWNS Ltd. R. Taylor D. Bedford

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Area Manager General Manager

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PART II . PROCESS DESCRIPTION

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1. PROCESS DESCRIPTION

The client is responsible for cleaning, drying & storing the raw material & for delivering it to the oil mill pressing plant at a uniform rate. Seed is metered from the client’s storage silo & conveyed (by others) to the oil mill building. The oil mill is designed to efficiently mechanically extract by full pressing the oil from 10 tonnes per 24 hours of groundnuts or sesame seed. The efficiency and performance of oil extraction with screw presses is highly dependent on the condition of the raw material. The seed is weighed at entry into the plant then broken (groundnuts) before cooking in a vertical stack cooker. As well as controlling seed moisture, the cooking process weakens cellular structure of the seed to allow easy release of oil in the press. Seed is then transferred to a 100 series Sterling full press to produce the maximum amount of oil of a high quality. Inside the press a specially designed worm configuration compresses the seed allowing the controlled release of oil. Oil is allowed to drain from the bottom of the press while the cake is conveyed from the discharge end of the press. It is worth mentioning, at this point, that the press may be fitted with a Barring motor (optional extra) – this is very useful in the event of power failures as it allows the press to be emptied of material before the power is restored. (An auxiliary power supply such as a small standby generator by others is required) This reduces the need to ‘open-up’ the press cages manually to remove the solidified feed material & reduces down time once the mains power is restored. The crude oil from the press contains coarse & fine solids. The coarse solids are removed using a Vibrating Screen which is fitted with a stainless steel wedge wire screen prior to the oil falling into a Screened Oil Tank. This tank is agitated to keep the solids in suspension. The screened oil is then pumped to a Vertical Tank Filter for secondary separation of the finer solids from the crude oil. The filtered oil from the vertical tank filter is fed into the filtered oil tank. This tank is fitted with level switches for pump operation/control. The oil can then be pumped to the client’s crude oil storage tanks, or direct for further processing. The necessary piping, valves and fittings within the mill are included in our offer up to the discharge outlet of the filtered oil pump. Cake from the discharge end of the press can be directly conveyed to storage, although the client may require bagging and / or storage of press cake, although not essential these items allow the cake to be reduced in size and cooled to allow the cake to be bagged. The mechanical handling system for the mill is designed using full bladed screw conveyors and chain & bucket elevators. Chain & bucket elevators are supplied with 15,000lb chain, flame hardened chainwheels and a chain speed of 1.3m/sec. The system is generously sized using only 30% cross sectional area loading on the conveyors & only 60% of the rated capacity on elevators. This helps reduce any down time for cleaning of the screws and buckets due to build up of solids.

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PART III . EQUIPMENT LIST

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1. FULL PRESS EQUIPMENT

2725 1 100 SERIES STERLING FULL PRESS The 200 Series Sterling Full Press is made up of the following: Press Frame The press frame is a fully welded construction of heavy carbon

steel plate. It incorporates an oil trough and screw conveyor which enables the discharge of oil or fat. As standard the frame is manufactured for the Gearbox to be positioned in Left hand orientation. Right hand orientation is available on request.

Orientation : Left Hand Oil Conveyor Drive : Geared Motor Unit

Feeder Assembly The feeder assembly mounts on top of the press and can be

rotated through 360 degrees. Its orientation and dimensions are selected to suit the plant layout (subject to size restrictions). The Feeder Assembly is made up of : - Horizontal Feeder

In order to give the press the correct volume of material the horizontal section of the feeder assembly has variable speed and is designed to meter accurately without blocking.

Construction : Stainless Steel screw & trough.

Drive : Geared Motor Unit Length : To suit plant layout (size restrictions

apply) Worm Assembly The pressing section of the machine consists of a worm

assembly, which turns inside a drained barrel or cage. The worm assembly is carried on a high tensile shaft, which is supported between a coupling at the material feed end and a bearing at the cake discharge end. The low compression worm assembly is designed to minimise operating costs by using energy efficiently and resisting wear.

Design : Multiple stage, low compression Material : Hard Faced Weight : 0.5 Tonnes (including worm shaft) Drainage Cage

The two halves of the cage open to the horizontal to provide easy access for maintenance of the cage linings and the worm assembly. The cage linings are hard faced for long life and have a specially designed cross-section to minimise blocking.

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Working Length : 1600mm (5 fields of 300mm lining bars) Bore Diameter : 200mm Construction : Cast SG Iron Weight (Fully Lined) : 0.9 Tonnes (per half cage)

Thrust Bearing & Housing A thrust bearing is housed between the frame and gearbox to

carry the axial load generated by the worm shaft. The thrust housing contains a driving sleeve which connects the wormshaft to the gearbox output shaft and also carries the thrust bearing and it's support bearing. To allow easy maintenance of the drive end of the press the thrust housing is designed for removal with the bearings and driving sleeve as a unit.

Thrust Bearing : Spherical Taper Roller Support Bearing : Spherical Roller Housing Lubrication : Oil Housing Seals : Labrynth & Double Lip Oil Seals Weight (dry) : 0.50 Tonnes Gearbox The proprietary gearbox is of standard helical multi-reduction design with a generous service factor and is located at the feed-end of the press. A water cooling coil is fitted into the base of the gearbox as standard.

Design : Helical Gear Lubrication : Oil Manufacturer : David Brown Textron Weight (dry) : 1 Tonne Discharge End Bearing A bearing housing is bolted directly to the discharge end of the press frame. The bearing supports the discharge end of the worm shaft, preventing it from moving and causing damage. Discharge Bearing : Spherical Roller

Housing Seal : Seal Plate & Double Lip Oil Seals Covers

The press includes stainless steel covers which are designed to enable safe inspection of the working area of the machine while it is in operation. The covers are also fully removable to allow access for maintenance.

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2725T 1 SET OF TOOLS ESSENTIAL FOR PRESS MAINTENANCE Maintenance tools include: Shaft Tensioning Equipment To pre-load the worm assembly allowing hand tightening of the

main nut. Including: - Manually Operated Hydraulic Pump Unit. - Hydraulic Nut.

- Associated Pipes and Fittings. Worm Removal Equipment To assist in the removal of the worms from the worm shaft. Including:

- Hydraulic Jacks - Jacking screws - Mountings, fittings & plate - Hydraulic jack, used in conjunction with the hydraulic

pump unit from the shaft tensioning equipment. - Connection rods for worm extraction holes

Cage Lifting Equipment To raise and lower the cages of the screw press. Including: - Mechanical Hoist, with hook attachment. - Cage Lifting Supports. Pneumatic Wrench For tightening and loosening drainage cage clamping bars.

Wrench is fitted with trigger control and is supplied complete with: - suitable sockets to fit the clamping bar nuts. - 150 mm long extension bar. - triple braid, heavy duty air hose with standard B.S.P.

connections. Set of Hand Tools To carry out essential maintenance.

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2725P 1 CONTROL CABINET WITH ‘COMPRESS V’ CONTROL A steel enclosure designed to IP54 and for floor mounting in the

plant control room (subject to environmental requirements). The Panel is fitted with an internally mounted isolator and includes all equipment for running and controlling the press. It is supplied fully tested.

Control Cabinet Features: - Star-Delta Starter for Main Drive Motor. - Direct on Line Starters for Feeder and Base Conveyor

drives. - Main Motor Overload protection.

- Frequency Inverter for Horizontal Feeder. Compress IV Control Features: - PLC Control Logic, based on Industry Standard

Equipment. - Graphical display providing Press Mimic and operational

control. - Automatic 'one touch' sequenced motor Start-up and Shut

Down. - Automatic Load Control and Monitoring of Main Drive and

Vertical Feeder (if fitted) linked to the variable speed horizontal feeder to ensure optimum Press operation without the risk of Press overload.

- Low Feed Detection and automatic start-up after loss of Press feed.

- Easy to use menu driven system set-up, to allow optimisation of control system to actual plant conditions.

- Facilities for data logging of Press operation, (additional equipment required).

- 2700 1 SET OF ELEVATORS AND CONVEYORS Elevators to be of the vertical chain and bucket style, of mild

steel construction, complete with head and boot, shaft bearings and arranged with drive from geared motor unit to head shaft and chain tensioning at boot shaft. To include inspection section.

Conveyors to be of the full blade style, of mild steel

construction, complete with necessary end and intermediate bearings, cover plate and support stool. Complete with drive from geared motor unit.

2700P 1 MOTOR CONTROL CENTRE Comprising of the starters and associated control and power

equipment for the press mill motors i.e. push-buttons, contactors, overloads, internal isolation devices, interlocking devices and alarm devices.

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A mimic will be provided showing running conditions of equipment supplied by DSR.

Panel manufactured in sheet steel, to IP54 and of a dead front

wardrobe type, supplied pre-wired and tested. 2730A 1 WEIGHER FEED BIN (CLIENT SUPPLY) Mild steel fabricated construction. 2786 1 SEED WEIGHER To record the quantity of seed fed into the pressing plant. Semi

continuous dump type operation. Scale with weigh hopper supported by hardened steel replaceable knife edges counterbalanced by interchangeable weights, with interlocked feed and discharged levers. A six figure counter is attached to the scale to record the number of tips.

2730S 1 SET LEVEL SWITCHES Fitted to the weigh bin to indicate the high and low levels. Can

be interlocked with preceding conveying system. 2701 1 PERMANENT MAGNETS Two high intensity fields for the removal of ferrous particles.

Complete with hinged faceplate for easy cleaning. 2703 1 CRACKING ROLLS To reduce the particle size of the seed/nuts prior to further

processing. Fitted with fluted, chilled cast iron rolls, driven at differential speeds to give positive tearing action. Rolls run in self-aligning roller bearings mounted in a heavy-duty stand. Manually adjustable roll gap settings. Adjustable safety devices to prevent the rolls from striking. Fitted with a roll or vibratory feeder.

2744 1 SINGLE DECK VIBRATORY SCREEN For initial separation of solids from crude expelled oil. Inclined

wedge wire stainless steel screen supported in mild steel housing. Unit is mounted on compression springs with anti vibration mountings and is contained within a mild steel fabricated frame. Powered by our of balance motor carrying adjustable weights. Complete with starter.

2782A 1 SCREENED OIL TANK (CLIENT SUPPLY) Having a nominal capacity of 2000 litres. Fabricated from mild

steel plate with supporting feet. Cylindrical tank with conical bottom.

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2782J 1 AGITATOR For maintaining the suspension of the fines in oil. Comprising a

geared motor unit driving a mixing impeller via a steel shaft. Unit fitted with a clamp for mounting on the side of tank or vessel and capable of adjustable angle setting. Complete with motor and starter.

2758A 1 FILTER PRESS FEED PUMP Single stage centrifugal model with cast iron impeller and

casing. Complete with motor and starter. 2782A 1 HEEL TANK (CLIENT’S SUPPLY) Conical bottomed tank of carbon steel construction. Having a

nominal holding capacity of 3000 litres. 2758B 1 TRANSFER PUMP Single stage centrifugal model with cast iron impeller and

casing. Complete with motor and starter. 2716 1 PRESSURE TANK FILTER For the clarification of the crude expelled oil prior to storage or

further processing. The welded construction mild steel tank is designed as a pressure vessel and is complete with supports. Stainless steel filter leaves are mounted vertically and can be removed for cleaning and inspection.

2782B 1 FILTERED OIL TANK (CLIENT SUPPLY) Fabricated from mild steel plate and approx. 2000 litres capacity.

Complete with cover plate. Tank to provide buffer storage of oil after filtration and before crude oil storage.

2730 1 SET OF LEVEL SWITCHES For controlling the on/off condition of a pump. Magnetic

glandless type designed for vertically mounting in a tank and with adjustable ball float mechanism.

2758C 1 FILTERED OIL PUMP For pumping oil from the Filtered Oil Tank to the Client’s Crude

Oil Storage. Single stage centrifugal model 30 metre lift, with cast iron casing and impeller. Complete with motor and starter.

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2753 1 SET OF PIPING MATERIALS For services within the mill building. Comprising of piping for

interconnecting items of equipment with their necessary supply of steam, water and compressed air and with steam condensate return. Also oil piping between items of equipment up to the filtered oil pump. Piping supplied in straight random lengths with flanges, unions, gaskets and bolts. Excluding pipe supports and thermal insulation.

2750 1 SET OF MANUAL VALVES AND FITTINGS For services within the mill building. (Please Note: The above does not include costs for pressure

reduction equipment where the client is supplying the utility requirements i.e. steam, water, air).

2766/7 1 COMPRESSED AIR STATION INCLUDING COMPRESSOR AND

RECEIVER To supply compressed air to “blow down” the filter, remove

entrained oil from the filter cakes and power the pneumatic wrench, where supplied.

2771 1 SET OF ACCESS AND SUPPORTING STEELWORK (CLIENT’S SUPPLY) For the above items within the building. Comprising support

stanchions and beams, access platforms and walkways covered with M.S. chequer plating, handrailing and access ladders. Bolted construction for site erection. Painted with one coat of red oxide prior to shipment and lettered/numbered to enable re-erection.

2777 1 SET OF THERMAL INSULATION MATERIALS (CLIENT’S SUPPLY) For steam, condensate and oil piping. 2773 1 SET OF ELECTRIC CABLES (CLIENT’S SUPPLY)

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OPTIONAL ITEMS (NOT INCLUDED IN BUDGET OFFER) 2702 1 EXPELLED CAKE REDUCER To break the cake into pieces suitable for disposal. Comprising

fabricated frame mounting one pair of rolls. Each roll assembled with multi-toothed cutting discs and with interconnecting gears. Supplied with geared motor direct drive with starter. Complete with cover plates and small feed hopper.

2713 1 CAKE COOLER Comprising:- - Single deck conveyor cooler with fabricated mild steel sections

housing a deck of stationary wedge wire screens. - Feed spreader unit with 0.55 drive. - Drive unit with 1.1 kW motor. - Control panel for motors. - Cooler fan. - Cyclone and rotary valve. 2725Y 1 BARRING MOTOR For use with standby electrical generator (Client’s Supply) when

mains power supply has failed. The purpose of the barring motor system is to turn the worm

shaft a sufficient number of times to ensure that the contents of the cages are emptied. A conventional re-start using the normal system can be made when mains supply is restored.

Unit is supplied complete with motor, drive, starter and over-

running or “sprag” type coupling.

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.

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2. SUPERVISORY ENGINEER

2799C 1 SUPERVISORY COMMISSIONING ENGINEER To supervise BUYERS skilled labour during the commissioning of DE SMET ROSEDOWNS supplied equipment. We estimate, but do not warrant a period of 30 days are required. This includes travel to/from site and training of BUYERS personnel. Any additional days required are charged at 600 GBP per engineer, per day out of De Smet Rosedowns office. NOTE: Air / travel fares , suitable local accommodation and local expenses from the day of departure to the day of return to DSR offices are not included and will be charged to the BUYERS account.

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PART IV . TECHNICAL PERFORMANCES & UTILITIES

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1. PERFORMANCE DETAILS

A PLANT CAPACITY The 100 Series Sterling Full Press mill equipment will be able to process : - 10 Tonnes / 24 Hours of groundnuts or sesame seed. Assuming: - the preparation conditions and raw material specifications defined hereafter.

B RAW MATERIALS Suitably matured ground nuts or sesame with: - Oil content : 48 % - Moisture : 8 % maximum - Impurities content : 2 % maximum – but free of stones and silica

C RAW MATERIALS PREPARATION Seed to be prepared for pressing as follows: - Clean to leave : 0.5 % impurities maximum - Break to give : 5 mm particle size (ground nuts) - Cook to give : 3 % moisture

D QUALITY OF FINISHED PRODUCTS

Oilseed cake with: - Oil content : 8 - 10 % maximum (ground nuts) Crude, unfiltered vegetable oil Assuming: - the preparation conditions and raw material specifications defined above. Any

variations will affect the quality of the finished products. - Oil content analysis of press cake made on a sample taken at the discharge of the

press, on a 10 % moisture basis and by the A.O.C.S. method BA 3-38 using petroleum ether.

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2. UTILITIES CONSUMPTION

A ELECTRICAL - Total Installed Power TBA Press Power Consumption: - For ground nuts or sesame :40 to 45 kW Hr / Tonne of material into the press

B COMPRESSED AIR Required intermittently during maintenance : - To power pnematic wrench : 2 m3 / Min

C ASPIRATION For removal of steam / vapour from : - Cake discharge area of press : 5 m3 / min @ 35 N / m2

- Press Body : 5 m3 / min @ 35 N / m2

D COOLING WATER */ for standard cooling coil /* For cooling of press gearbox oil : - Quantity : 5 Litres / Min - Temperature : 10 degrees C */ for external water cooled unit /* For cooling of press gearbox oil : - Quantity : 30 Litres / Min - Temperature : 30 degrees C

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PART V . ENGINEERING SERVICES

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1. BASIS OF DESIGN

A AMBIENT CONDITIONS - Height above sea level : 1000 m maximum - Ambient temperature : 5 degrees C minimum : 38 degrees C maximum - Relative Humidity : 80 % typical

B UTILITIES DATA Power: - Supply : 3 Phase - Voltage : 380 Volts - Frequency : 50 Hz - Control circuit : 220 Volts Compressed Air: - Pressure : 6 barg / 0.6 Mpa Cooling water: */ for standard cooling coil or water cooled unit /* - Soft water with zero commercial hardness, no suspended solids and

Chloride content <50ppm. For barometric water: Non scaling non aggressive.

C EQUIPMENT FINISH Screw Press is supplied fully primed and finish painted: - Colour : Silver/Grey, Hammer Finish

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2. DESIGN AND ENGINEERING DOCUMENTS

Where DE SMET ROSEDOWNS are not involved with plant layout, the BUYER must supply the following design details at least 12 weeks before sheduled delivery date of equipment: - Length of Horizontal Feeder (Dimension A) - Height of Vertical Feeder (Dimension C) - Position of oil / fat outlet (Dimension B) (Dimensions A, B & C can be found on the press installation drawing) If DE SMET ROSEDOWNS are not supplying the Main Drive Motor, BUYER must provide details of the Motor to be used.

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3. WORK NOT INCLUDED

- Equipment supporting structure - Civil, architectural and structural engineering for supporting structures. - Fixing Bolts - Labour, material and equipment required for positioning on site of the

equipment, such as hoisting equipment, scaffolding, and tools. - Lubricating Oil (unless specified otherwise) - Spare parts (unless specified otherwise) - Additional lifting equipment to assist with press maintenance. - Aspiration fan, ducting and connections - Any safety device of any kind required by local authorities, and/or insurance

companies stricter than regulations. - All equipment not actually mentioned in the present quotation, even if required

by local authorities or insurance companies, but not essential for good operation of the equipment.

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PART VI . GENERAL CONDITIONS OF SALE

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GENERAL CONDITIONS OF SALE 1. Definitions Equipment The goods described in the Quotation; Buyer The company to whom the Quotation is adressed; Seller The company issuing the Quotation; Quotation The document in which the Equipment is offered for sale; Price The amount of money due to Seller for the Equipment, as specified in the Quotation; Site The location where the Equipment will be installed. 2. Seller's Responsibilities 2.1 Seller shall supply the Equipment, which shall be free from defects in design, material

and workmanship. 2.2 Seller shall fully comply with his obligations as specified in the Quotation and these

General Conditions in a timely and professional manner using due care to safeguard the interests of Buyer.

2.3 Seller shall deliver the Equipment in accordance with an agreed-upon time schedule. If

there is no such time schedule, Seller shall deliver the Equipment in the shortest possible time.

3. Buyer's Responsibilities 3.1 Buyer shall obtain all necessary licences, permits and approvals for the import and

installation of the Equipment. 3.2 Buyer shall fully comply with his obligations as specified in the Quotation and these

General Conditions in a timely manner. 4. Price 4.1 The Price excludes all taxes, duties and other charges or fees. 4.2 The money shall be put at Seller's free disposal in the country of Seller's principal place

of business, free and clear of any levies, taxes or fees of any nature. 4.3 If by no fault of Seller or Seller's subcontractors, Seller is delayed in the delivery of the

Equipment, Seller shall be entitled to increase the Price to reflect any actual costs incurred because of the delay.

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5. Payment Terms 5.1 Buyer shall pay Seller the Price in accordance with the payment schedule set forth in the

Quotation. If there is no payment schedule in the Quotation, Buyer shall pay Seller the Price as

invoiced by Seller in accordance with normal and customary practices of the trade. 5.2 Unless otherwise specified in the Quotation, in case of delayed payment, Buyer shall pay

Seller the LIBOR interest +1% on the amount delayed for each month of delay or part thereof.

5.3 Transfer of funds shall be made in accordance with a mutually agreed upon procedure. If

no procedure is agreed upon, then Buyer shall transfer funds as directed by Seller in accordance with normal and customary practices of the trade.

5.4 In the event Buyer does not comply with the terms of payment set out in the Quotation,

Seller may, in addition to any other remedies available to Seller, suspend all performances until Buyer has so complied.

6. Delivery 6.1 Buyer shall be entitled to inspect the Equipment at reasonable times before shipment.

Buyer shall notify Seller of the specific items of Equipment he wishes to inspect, within thirty days' notice.

6.2 Buyer shall bear all costs and expenses of such inspection except those expenses

connected with Seller's personnel. 6.3 Unless otherwise specified, prices shown in the quotation shall be deemed to apply to

Equipment delivered EXW Ex-Works, unpacked. 6.4 Unless otherwise specified, the time for delivery of the Equipment shall start to run upon

the enforcement date of contract. 6.5 Seller's ability to deliver the Equipment timely is expressly contingent on the timely

performance by Buyer of all Buyer's obligations in the Quotation and these General Conditions. If Buyer fails to perform in timely fashion and if Seller is unable therefore to deliver the Equipment in a timely fashion, Seller shall have no liability whatsoever to Buyer for delays incurred.

6.6 If Seller fails to deliver Equipment in accordance with the time schedule, Seller may be

obliged to pay Buyer liquidated damages. Seller's obligation to pay liquidated damages shall apply only if Seller has explicitly guaranteed delivery by a fixed date and failed to do so by reason of Seller's sole fault.

Unless otherwise specified, such damages shall amount to 0.25% of that fraction of the Price attributable to the delayed part of the Equipment for each full week of delay. In no event shall such liquidated damages exceed five percent of such fraction of the Price. Such liquidated damages are Buyer's sole remedy for Seller's failure to supply the Equipment by the date guaranteed.

6.7 If Seller is unable to supply Equipment in accordance with the time schedule due to

Buyer's fault, direct or indirect, Buyer shall nevertheless pay Seller in accordance with the payment schedule.

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6.8 If Buyer is unable or unwilling to accept physical delivery of the Equipment at the time specified in the time schedule, Seller may store the Equipment at Buyer's cost and risk. In such an event, the Equipment shall be deemed delivered as of the date of storage for purposes of payment, property and insurance of the Equipment.

6.9 Unless otherwise stated as part of the Services of Seller, Buyer shall promptly unpack

and inspect the Equipment at the place of delivery. Seller may be present at such inspection, at Seller's option.

Buyer must notify Seller within three days after the inspection of any missing, damaged or defective items of Equipment.

7. Mechanical Warranties on Equipment 7.1 Seller warrants that each item of Equipment is free from defects in design, materials and

workmanship. This warranty also extends to any repairs or replacements of defective Equipment during the warranty period.

7.2 The warranty period on each item of Equipment is twelve months after its installation or

eighteen months after its shipment, whichever occurs first. The warranty period for repairs or replacement parts is twelve months from date of repair or replacement.

7.3 Seller shall repair, replace or, at his option, refund the Price of any item of Equipment

found to be defective during the warranty period. This is Buyer's sole and exclusive remedy for Equipment, which does not meet the above-specified mechanical warranty, or any other mechanical warranty specified in the Quotation. Buyer must notify Seller in writing of the claimed defect, immediately upon the appearance thereof. Replaced item of Equipment becomes the Seller's property.

7.4 Seller shall have no responsibility for damage caused to the Equipment by : - Ordinary wear and tear - Unintended use, misuse, abuse, or improper storage, installation, maintenance,

operation or repairs by Buyer 7.5 Unless otherwise specified, Buyer shall bear the cost and risk of transport of

replacement or repaired parts of Equipment. 8. Performances 8.1 The fulfilment of any Performance shall be proven during testing of the Equipment. The

fulfilment is expressly contingent on the following conditions : - Correct installation of the Equipment, to the satisfaction of Seller; - Correct quantity and quality of raw materials, utilities consumables, staff, and

manpower, to the satisfaction of Seller; - Compatibility and correct installation of equipment not supplied by Seller, to the

satisfaction of Seller. 8.2 The test procedure shall be as agreed by Seller and Buyer, or, failing such agreement, as

deemed reasonably appropriate by Seller and in accordance with custom and usage of the appropriate trade or industry.

8.3 If the Equipment or any portion of the Equipment fails to meet the Performances, Seller

shall at his own cost make any alterations and adjustments to the Equipment, as Seller deems appropriate.

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9. Liability 9.1 Seller shall be liable to Buyer to pay the amount of liquidated damages, if any. 9.2 Buyer's sole remedies for delays in delivery, defective Equipment and failure to meet the

Performance and all other breaches of Seller's obligations are as stated herein. 9.3 Seller shall not be liable for any direct, indirect, special, consequential or incidental

damages, including loss of profit, use, production, raw materials or end products, or for any other claim for damages arising out of the purchase, delivery, installation or use of the Equipment.

9.4 The total aggregate liability of Seller for any loss, damage compensation whatsoever,

including payment of liquidated damages shall never exceed an amount equal to ten percent of the Price.

10. Arbitration 10.1 These General Conditions of Sales and other documents comprising the agreement

between Seller and Buyer shall be governed by the law of the Seller's country. 10.2 One or more arbitrators designated in conformity with those rules shall finally settle any

dispute between the parties not resolved by negotiation in accordance with the Rules of Conciliation and Arbitration of the International Chamber of Commerce.

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Appendix VI: Organization of other Vegetable Oil Producing Companies

A: BIDCO –UGANDA

Established in 1991 primarily as a manufacturing organization, with marketing as a support function, BIDCO has over the years grown in leaps and bounds and established a strong presence both locally and within East and Central Africa. With its strong marketing and technologically advanced manufacturing and distribution systems, the company has attained success under the focused leadership of its CEO, Mr. Vimal Shah, who is renowned as one of the best leader in the region.

BIDCO also promotes the growth of local farmers. The company runs a seed crushing plant in Nakuru at Elianto plant, where they work with 5,000 farmers. It guarantees to buy all their sunflower and Soya beans at the best market rates. Bidco also produces world class animal feeds and has been a champion in agri-business supporting agriculture development in the region. Bidco’s purpose is to serve daily customer needs to enhance Happy Healthy Living by Branding Transforming, Distributing the Goodness of Mother Nature.

A post directing to Bidco’s refinery in masese

To-date Bidco’s products are marketed in 13 African countries in the COMESA and SADC markets. The company has a vision of attaining at least over 51% market share in each of the African Markets it enters and eventually attaining number one status in Africa.

BIDCO’s products

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AGRICULTURAL SECTION

Bidco together with Vegetable Development Project (VODP) introduced a project to increase cash income among small holder farmers to revitalize and increase domestic oil production. Among the objectives was to introduce commercial oil palm production on Bugala Island in Lake Victoria. Bidco started its nucleus farm in 1997 and later in 2006 the small holder farmers followed and this was due to the principle source of funds to help fund the farmers. At the moment Bidco has 25,000 acres of palm trees in Bugala, Kalangala district which it harvests to get the crude oil. Bidco was able to establish an oil mill at Bugala and then transport the crude oil by water to Masese industrial area in Jinja where they have the oil refinery.

The out growers land is managed by OPUL and smallholders grow and manage the oil palm plots on their own land since they have smaller plots that are more scattered

PRODUCTION/MACHINERY SECTION

In June 2006, the farmers were organized to participate in the project, by providing them with loans for plantation establishment and extension advice and generally mediating the interests of the farmers. There is currently a plantation infrastructure in Bugala of 25,000 acres together with an established oil extraction mill on the island; the nucleus estate in Bugala Island is under the management of OPUL (Oil Palm Uganda Ltd). Prior to harvesting the palm, the refinery in Jinja was already operating on the basis of imported crude palm oil from Malaysia.

The entrance of Bidco in Masese

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The oil refinery in the background

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We approached the MD of Bidco about the company’s investment willingness of Yirol oil mill factory and he was very much interested though he said he needed time to analyze the status of such a place and other factors like transport, land, rainfall data, and mostly the market potential.

it was unfortunate that the Director did not give us the authority to move around the oil refinery in Masese. We got some useful information from him that helped in the compilation of this report.

B: MUKWANO INDUSTRIES UGANDA

The Mukwano Group of Companies is the leading manufacturer of Fast Moving Consumer Goods (FMCG) in the Great Lakes region, producing a wide range of high quality and affordable market leader brands in soaps, edible cooking oils and fats, detergents, beverages, personal care products and plastics.

We have proudly been at the forefront of Uganda’s economic resurgence since the 1980s and our products can be found in almost every household in the greater Eastern African region. Our 100% commitment towards meeting the demands of the market and offering satisfaction to our customers through our superlative products and consummate service is rivalled but unmatched in the region.

Mukwano is an equal opportunity provider that employs over 6,000 staff across the region and invests heavily in its human resource through on job-training, workshops, seminars and other capacity building activities that aim at ensuring high productivity and motivation of our staff.


Mukwano works with rural communities in Uganda’s Bunyoro and Lango regions in the development of strategic partnerships in farming, agro processing and farmer out grower schemes. Our activities include agricultural extension services, specialised trainings and model farm visits designed to improve agricultural production and enhance farming skills of rural smallholder farmers.

Today, Mukwano is the largest buyer of cotton seed, sunflower, soya, sesame and green tea from out growers in Uganda with an investment in a modern oil and seed mill in Lira District, in Northern Uganda. We work hand-in-hand with Ugandan farmers to ensure that the fruits of our labour are enjoyed by all in the East African region with maximum benefits for the farmers’ families and friends.


Mukwano Industries has a refinery at the Kampala industrial area, the factory imports crude palm oil from Malaysia and refines it to the required standard. It also has a sun flower refinery for crude oil that comes from its oil mill extractor in lira. They support farmers by providing them with extension services and provision of high quality seeds.

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Filter of desmet type in mukwano

These refining steps are:

Neutralisation, Fatty acids can be neutralised by adding a sodium hydroxide solution, also known as caustic soda, or by stripping, which is a similar process to de-odorising.

Bleaching, Some oils have a very dark colour which can be unpopular with consumers. The appearance of the oil can be lightened by bleaching.

The controls at the mukwano refinery are adequate

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Computerised monitoring system in mukwano

Deodorising, Volatile compounds that produce odours can be eliminated through the process of sparging, i.e. bubbling steam through the oil, under a vacuum.

Degumming, Degumming is a way of treating oils that have ahigh phosphotide content. The phosphotide, which makes a gummy residue, is removed by mixing the oil with 2 or 3 % water. This hydrated phosphotide can then be removed by settling, filtering or centrifugation.

Winterisation, Allowing the oil to stand for a time at low temperatures so that glycerides, which naturally occur in the oil, with higher melting points solidify and can then be removed from the oil by filtering. This step is usually carried out with palm oil to separate the oil into two separate products: a solid fat (stearin) and a liquid oil (olein).

Observations seen in both Bidco and Mukwano

6 These are big manufacturing setups which are either importing crude oil or have plantations supplying them with raw materials. Both of them have an oil mill at site that produces crude oil and then supplies the refinery.

6 These companies are involved in so many products like in vegetable oils, soap making, detergents and so on.

C: GULU NANAK OIL MILLS (GNOM)

INTRODUCTION

GURU NANAK OIL MILLS (GNOM) is the only factory successfully manufacturing Shea butter in East Africa. GNOM has long experience in oil fats and allied industries and has got the expertise, experience and the knowledge of how to produce very high quality Pure Natural Shea Butter Uganda for the world market.


Shea Butter Uganda - is a butter obtained from Shea nut trees. Shea Nut tree is known as ‘moo-yahoo tree’ in the local language of northern Uganda. It is also called Karite Butter or African Shea Nut Butter, but in Uganda and southern Sudan it is well known by the name ‘ mo -yahoo’ or lulu in lakes state.

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Shea nut trees are grown naturally in Uganda, and are considered as God’s gift to Uganda. The trees start bearing fruit after 15 to 20 years in the beginning and continue to do so every year for the rest of its life span. Shea nut trees found in Uganda, African savannah, gives up fruits once in a year. The average life of the Shea nut tree is more than 300 years and that is why it is considered as God’s Gift to UGANDA and Africa at large. In other words it is “NATURE’S BEST GIFT TO UGANDA AND UGANDA’S BEST GIFT TO THE WORLD.

There are two main varieties of Shea Nut called Vitellaria Paradoxa and Vitellaria Nilotica. Vitellaria Paradoxa is produced in West Africa where as Vitellaria Nilotica is produced only in Northern Uganda and Southern Sudan. Unfortunately these areas (Northern Uganda and Southern Sudan), both are currently in states of civil unrest and so generally this variety is not easily available in the market.

For years, Guru Nanak Oil Mills has promoted and supported the Shea butter production in Uganda. The oil mill educates farmers and plays a major role in enhancing the local economy and also educates and encourages the tribal folk to protect this rare species of trees - “The Green Gift from GOD to mankind”.

It can be noted that there are no plantations for the shea nut trees but natural trees where farmers collect the nuts to sell to the oil mills and the only input by the mills is to educate farmers on how to harvest, store, and preserve the natural tree so as to assure raw material supply to the oil mills.


The processes – once collected from the fields, Shea nuts are cleaned, washed, dried in sunshine and are processed at the factory in Lira to produce natural Shea butter. SHEA BUTTER UGANDA, -a very high value product. The production process is 100% free from any kind of chemical treatment. It is a pure, natural and hygienic way of production, hence the name 100% PURE SHEA BUTTER UGANDA. The machinery/equipment present in the oil mills were procured under Agriculture Sector Programme Support (ASPS) for GNOM in lira. The mill has a capacity of 8tons per day, but is currently working at the capacity of 5 tons. The equipment includes;

6 A Raw oil tank

6 Two (2) heavy-duty oil neutralizers

6 A caustic soda dozing tank.

6 A soap stock tank.

6 A heavy duty bleacher assembly.

6 A filter press for bleached oil.

6 A filter press for refined oil.

6 A pressure pump for bleached oil.

6 A water centrifugal pump.

6 A heavy duty vacuum pump.

6 A Bleached oil tank

6 A heavy-duty deodorizer (Stainless Steel)

6 A cooler (Heat exchanger)

6 A pressure pump for refined oil.

6 Two (2) catchalls

6 A barometer condenser (on a 12 metres steel tower).

6 A biomass/firewood heavy duty steam boiler.

6 A pressure feed pump.

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6 A water cooling system.

6 Steel structure and all related assembly units.

A jacketed tubular crystallizer, including agitation system, gear box, and related auxiliary assemblies.

GNOM Factory layout

Biomass furnace, installed in the factory Barometric condenser tower, furnace room on the left and the refinery equipment in the LHS room.

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APPENDIX VII: Analysis of Soil Sample ResultsAnalysis result for a soil sample collected from the factory premises

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Analysis result for a soil sample collected from the factory land in Margaguop

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Analysis report for a soil sample collected from the factory land in Nyariel

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Analysis report for a soil sample collected from Lake Yirol

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Analysis report for a soil sample collected from River Payii

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APPENDIX VIII: Selecting a Generator SetThe first step in sizing and selecting a generator set is to establish project parameters.

6 Minimum generator set load/capacity: Running a generator set under light load can lead to engine damage, reducing reliability. Cummins Power Generation does not recommend running generator sets at less than 30 percent of rated load. Load banks should supplement the regular loads when loading falls below the recommended value.

6 Maximum allowable step voltage dip (starting and running): As you reduce the maximum allowable step voltage dip during initial startup, when loads cycle under automatic controls or when high peak loads operate, you need to increase the size of the generator set specified. Choosing lower allowable voltage dip requires a larger generator set.

6 Maximum allowable step frequency dip: As you reduce the maximum allowable frequency dip, you increase the size of the generator set needed.

6 Altitude and temperature: Based on the site location, the size of the generator set must increase for a given level of performance as altitude and ambient temperature rise.

6 Duty cycle: Generator set size is also influenced by whether the application is for standby power, prime power or utility paralleling. Standby power systems generally have no overload capability. Prime power systems generally have a minimum of 10 percent overload capacity. Generator sets that are intended to operate extended hours at steady constant load should not be operated in excess of the continuous rating.

6 Fuel: The preference for gas, diesel, or LP will affect generator set choices. Often, generator sets running on gas or LP must be oversized due to derating. Emergency systems typically must be supplied by fuel stored locally.

6 Phase: Select either single- or three-phase. The three-phase selection permits single-phase loads but the assumption is that the single-phase loads will be balanced across the three phases.

6 Frequency: Either 50 Hz or 60 Hz.

6 Voltage: Voltage choices are usually a function of selected frequency.

Loads

The next and most important step in sizing a generator set is to identify every type and size of load the generator set will power. In general, when non-linear loads are present, it may be necessary to oversize the alternator.

Following is a general discussion of how various loads and electrical factors affect the sizing of generator sets.

6 Power factor (PF): The inductances and capacitances in AC load circuits cause the point at which the sinusoidal current wave passes through zero to lag or lead the point at which the voltage wave passes through zero. Capacitive loads, overexcited synchronous motors, etc. Cause leading power factor, where current leads voltage. Lagging power factor, where current lags voltage, is more generally the case and is a result of the inductance of the circuit. Power

Factor is the ratio of kW to kVA and is expressed as a decimal figure (0.8) or as a percentage (80%).

Three-phase generator sets are rated for 0.8 PF loads and single-phase generator sets for 1.0

PF loads. Lower PFs require larger alternators or generator sets to properly serve the load. Caution should be used whenever applying generator sets to leading power factor loads. Only slightly leading

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power factor can cause generator sets to lose voltage control.

6 Single-phase loads and load imbalance: Single phase loads should be distributed as evenly as possible between the three phases of a three-phase generator set in order to fully utilize generator set capacity and limit voltage imbalance.

6 Peak loads: Peak loads are caused by loads that cycle on and off—such as welding equipment, medical imaging equipment, or motors. Taking cyclic loads into account can significantly increase the size of the recommended generator set despite painstaking efforts to place loads in a step starting sequence.

6 Motor loads: Calculating specific motor loads is best handled by sizing software which will convert types of motors into load starting and running requirements. For this discussion, however, it is sufficient to broadly characterize loads as high inertia or as low-inertia loads for the purpose of determining engine power needed to start and accelerate motor loads.

6 Low-inertia loads include fans and centrifugal blowers, rotary compressors, rotary and centrifugal pumps.

6 High-inertia loads include elevators, single- and multi-cylinder pumps, single- and multi-cylinder compressors, rock crushers, and conveyors.

6 Motors over 50 HP: A large motor started across the line with a generator set represents a low-impedance load while at locked rotor or initial stalled condition. The result is a high inrush current, typically six times the motor rated (running) current.

The high inrush current causes generator voltage dip which can affect other systems. The manner in which generator voltage recovers from this dip is a function of the relative sizes of the generator, the motor, engine power (kW capacity) and generator excitation forcing capability. Depending on the severity of the load, the generator should be sized to recover to rated voltage within a few seconds, if not cycles. Various types of reduced-voltage motor starters are available to reduce the starting kVA of a motor in applications where reduced motor torque is acceptable. Reducing motor starting kVA can reduce the voltage dip, the size of the generator set, and provide a softer mechanical start. However, these starting methods should only be applied to low-inertia motor loads unless it can be determined that the motor will produce adequate accelerating torque during starting.

6 Variable frequency drive (VFD) motors: Variable frequency drives (or variable speed) are non-linear loads, which are used to control the speed of induction motors, induce distortion in generator output voltage. Larger alternators are required to prevent overheating due to the harmonic currents induced by the VFD and to lower system voltage distortion by lowering alternator reactance. For example, VFD loads on a generator must be less than approximately 50 percent of generator capacity to limit total harmonic distortion to less than 15 percent.

Other loads

6 Uninterruptible power supply (UPS) loads: A UPS system uses silicon controlled rectifiers or other static devices to convert AC voltage to DC voltage for charging storage batteries and are another type of non-linear load. Larger alternators are required to prevent overheating due to the harmonic currents induced by the rectifiers and to limit system voltage distortion by lowering alternator reactance. Past problems of incompatibility between generator sets and static UPS devices lead to many misconceptions about sizing generator sets for this type of load. Most UPS manufacturers have addressed these issues and it is now more cost effective to require UPS devices to be compatible with the generator set than to significantly oversize the generator for the UPS. Use the full nameplate rating of the UPS for determining load to allow sufficient capacity for generator set battery charging and accommodating full UPS load capacity.

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6 Battery charger loads: A battery charger is a non-linear load requiring an oversized alternator based on the number of rectifiers (pulses)—up to 2.5 times the steady-state running load for three pulse; to 1.15 times the steady-state running load for 12-pulse. These loads are typically found in telecommunications systems.

6 Medical imaging loads: These include CAT scan, MRI, and X-ray equipment. The generator set should be sized to limit the voltage dip to 10 percent when the medical imaging equipment is operated with all other loads running in order to protect image quality.

6 Lighting loads: In addition to lamp wattages, ballast wattages and starting and running power factors should be considered.

6 Regenerative loads: For loads such as elevators, cranes and hoists, the power source is often relied upon for absorbing power during braking. That is usually not a problem when the utility is supplying power because it can be considered as an infinite power source with many loads. A generator set, in comparison, is able to absorb far less power, especially with no other loads connected. Generally, the regeneration problem can be solved by making sure there are other connected loads which can absorb the regenerative power. Excessive regenerative load can cause a generator set to over-speed and shut down.

Load step sequencing

In many applications the generator set is sized to pick up all loads in one step. In some applications it is advantageous to start up the loads which cause the largest starting surge first and then the rest in multiple steps—the “largest motor first” rule. Codes may require sequenced load starting to start emergency and life safety loads within as little as ten seconds, while allowing other loads longer periods of time. In general, sequenced startup allows the smallest generator set in relation to the steady state load. When cycling motor loads exist, it will still be necessary to size the generator set to start the largest cycling motor last, with all other loads connected.

Future needs

One last step in the sizing equation has to do with future needs. Power use is not fixed and tends to grow over time. Therefore, any generator set sizing exercise needs to take system expansion into consideration.

Even with sophisticated software solutions, the final decision on generator set size needs to be tempered with judgment. And, the more you know about the parameters that affect sizing, the better that judgment will be.

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Appendix IX: Financial Analysis - Major AssumptionsAppendix IX: Financial Analysis - Major Assumptions

General desciption Quantity

Initial Cost 23,347,703

Civil Works 7,438,320

Machinery 2,446,567

Irrigation Installations 1,145,833

Office Equipment 148,159

Other Equipment 2,106,776

Core Man Power Costs 1,354,249

Working Capital 8,707,799

Operation Time

Operating time per day 8hr/day

Operating day per year 300day/year

Total operating time per year 2400hr/year

Project Period

Period 10 year

Initial Funding of the project

GoSS initial contribution 60%

Private Investor 40%

Cost Price of Raw Materials

Ground nuts 3SSP/Kg

Sesame 5SSP/Kg

Shear nut 2.5SSP/Kg

Selling Price

Edible Oil 8SSP/Litre

Expeller Cakes 1.4SSP/Kg

Exchange Rate

One (1) United States Dollars(USD) 3 SSP

Inflation Rate

Inflation rate 10%

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78

24

43

33

06

06

9

Rev

enue

s co

llect

ed in

the

follo

win

g ye

ar

0

28

17

36

41

11

97

45

23

62

88

86

61

96

94

95

10

75

36

91

31

90

79

14

45

99

91

59

35

92

Tota

l Inf

low

s0

5

35

29

84

80

94

47

59

00

60

81

17

33

69

22

19

30

90

60

21

40

15

08

26

13

78

69

28

79

30

67

31

72

42

43

34

89

96

60

OU

TFLO

WS

Hum

an C

apita

l Cos

ts

26

20

00

15

98

80

01

75

86

80

19

34

54

82

12

80

03

24

47

20

32

81

42

84

32

36

42

63

88

37

12

46

60

45

45

59

25

45

Bui

ldin

gs a

nd c

ivil

wor

ks7

43

83

19

Mac

hine

ry

24

46

56

7

Irri

gatio

n fa

cilit

ies

1

14

58

33

Farm

Equ

ipm

ent

2

10

67

76

Offi

ce e

quip

men

t

14

81

59

70

55

2

Cos

t of

raw

mat

eria

ls a

nd in

puts

at

Nuc

leus

farm

s

10

25

00

01

07

62

50

11

30

06

31

18

65

66

12

45

89

41

30

81

89

13

73

59

81

44

22

78

15

14

39

21

59

01

11

16

69

61

7

Wor

k m

en’s

com

pens

atio

n

52

50

31

98

63

51

84

38

70

14

25

70

48

95

45

62

96

64

73

97

76

84

93

21

91

11

86

1

Insu

ranc

e fo

r eq

uipm

ent

& B

uild

ings

66

42

83

66

42

83

66

42

83

66

42

83

66

42

83

66

42

83

66

42

83

66

42

83

66

42

83

66

42

83

Con

duct

ing

Envi

ronm

enta

l Im

pact

A

sses

smen

t

20

00

0

Envi

ronm

enta

l Mon

itori

ng

6

00

66

07

26

79

98

78

96

61

06

31

16

91

28

61

41

5

Set

ting

up W

aste

Man

agem

ent

Faci

lity

42

00

0

Envi

ronm

enta

l Aud

it

1

50

00

16

50

01

81

50

19

96

52

19

62

24

15

82

65

73

29

23

13

21

54

35

36

9

Adm

inis

trat

ive

Cos

ts

6

90

75

31

00

84

00

11

07

42

51

86

72

08

20

37

86

42

25

95

00

27

71

87

13

03

90

83

33

48

97

63

68

38

74

Mar

ketin

g &

Sal

es

4

83

52

77

05

88

07

75

19

71

30

70

46

14

26

50

51

58

16

50

19

40

31

02

12

73

58

23

44

28

32

57

87

12

Cos

t of

mat

eria

l pur

chas

es fr

om o

ut

grow

ers

27

91

66

72

93

12

50

30

77

81

33

23

17

03

33

93

28

83

56

29

53

37

41

10

03

92

81

55

41

24

56

34

33

07

91

Cos

t of

con

sum

able

s

2

12

01

00

22

26

10

52

33

74

10

24

54

28

12

57

69

95

27

05

84

52

84

11

37

29

83

19

43

13

23

53

32

88

97

1

Tota

l Out

flow

s7

48

03

19

71

59

58

59

54

35

17

10

47

70

04

11

14

08

18

12

96

17

50

13

92

61

20

15

04

35

31

16

72

97

79

18

24

82

60

19

99

16

83

21

95

74

37

Net

cas

hflo

ws

-74

80

31

9-7

15

95

85

-41

90

53

3-2

38

25

29

-21

34

73

74

37

51

72

53

82

94

06

35

79

77

94

08

09

01

05

44

80

61

17

32

56

01

29

42

22

3

Equi

ty G

OS

S C

ontr

ibut

ion

13

33

16

82

Equi

ty P

riva

te P

artn

er

88

87

78

8

Div

iden

d P

aym

ent

-88

87

79

-88

87

79

-88

87

79

-88

87

79

-88

87

79

-88

87

79

Ope

ning

Bal

ance

05

85

13

63

-13

08

22

2-5

49

87

55

10

06

50

3-1

12

82

34

13

03

73

41

17

53

15

02

23

00

07

00

31

52

00

11

41

17

60

38

52

01

98

19

Clo

sing

Bal

ance

58

51

36

3-1

30

82

22

-54

98

75

51

00

65

03

-11

28

23

43

24

69

38

17

53

15

02

23

00

07

00

31

52

00

11

41

17

60

38

52

01

98

19

64

07

32

64

Net

Pre

sent

Val

ue(N

PV

)

4.1

54

,70

5

Inte

rnal

Rat

e of

Ret

urn(

IRR

)

15

%

Dis

coun

t Fa

ctor

(DF)

1

2%

318


South Sudan.

App

endi

x X

I : Y

irol

Pro

ject

ed In

com

e S

tate

men

t fo

r 1

0 Y

ears

Des

crip

tion

YR

IY

R2

YR

3Y

R4

YR

5Y

R6

YR

7Y

R8

YR

9Y

R1

0

Rev

enue

s5

63

47

20

82

23

93

69

04

72

46

17

77

32

21

19

38

98

93

21

50

73

83

26

38

15

79

28

91

99

87

31

87

18

36

35

05

90

19

Cos

t of

Sal

es

Ope

ning

inve

ntor

y Fi

nish

ed G

oods

03

94

71

60

57

62

28

82

37

30

53

32

95

07

33

59

62

30

39

87

35

31

45

88

79

15

99

51

71

76

26

19

.1

Cos

t of

Pro

cess

ing

oil

31

92

88

65

46

38

92

57

36

24

38

02

39

9.8

11

26

40

91

69

32

15

96

98

74

12

73

50

55

97

73

54

34

81

43

83

8.3

Clo

sing

inve

ntor

y fin

ishe

d go

ods

39

47

16

05

76

22

88

23

73

05

33

29

50

73

35

96

23

03

98

73

53

14

58

87

91

59

95

17

17

62

61

91

93

88

81

Cos

t of

Sal

es-7

54

27

43

64

87

64

91

25

47

8-1

19

62

01

09

62

93

36

54

10

36

95

15

88

57

20

99

21

75

72

33

27

96

75

76

.4

Gro

ss P

rofit

48

80

44

64

57

51

72

-78

23

21

76

53

60

18

42

69

60

14

96

63

46

16

86

56

94

21

71

00

66

24

29

95

03

27

09

14

43

Ope

ratin

g C

ost

Adm

inis

trat

ive

59

20

74

86

43

43

.29

49

22

1.2

18

67

20

82

03

78

64

22

59

50

02

77

18

71

30

39

08

33

34

89

76

36

83

87

3.9

Mar

ketin

g &

Sal

es4

14

45

26

05

04

0.2

66

44

54

.81

30

70

46

14

26

50

51

58

16

50

19

40

31

02

12

73

58

23

44

28

32

57

87

11

.8

Hum

an C

apita

l 1

59

88

00

17

58

68

01

93

45

48

21

28

00

32

44

72

03

28

14

28

43

23

64

26

38

83

71

24

66

04

54

55

92

54

4.6

Wor

k m

en’s

com

pens

atio

n5

25

03

19

86

35

18

3.6

38

70

0.9

64

25

70

.06

48

95

4.0

65

62

95

.67

64

73

8.5

37

76

84

.23

93

21

9.0

76

Insu

ranc

e fo

r eq

uipm

ent

& B

uild

ings

66

42

83

66

42

82

.76

64

28

2.7

66

42

82

.76

64

28

2.7

66

42

82

.76

64

28

2.7

66

42

82

.76

64

28

2.7

66

42

82

.7

Envi

ronm

enta

l Mon

itori

ng6

00

66

07

26

79

8.6

87

8.4

69

66

.30

61

06

2.9

37

11

69

.23

12

86

.15

31

41

4.7

68

6

Envi

ronm

enta

l Aud

it1

50

00

16

50

01

81

50

19

96

52

19

61

.52

41

57

.65

26

57

3.4

22

92

30

.76

32

15

3.8

33

53

69

.21

5

Dep

reci

atio

n to

was

te m

aang

emen

t fa

cilit

y4

20

04

20

04

20

04

20

04

20

04

20

04

20

04

20

04

20

04

20

0

Dep

reci

atio

n of

Equ

ipm

ent

71

19

93

71

19

93

.37

11

99

3.3

71

19

93

.37

11

99

3.3

71

19

93

.37

11

99

3.3

71

19

93

.37

11

99

3.3

71

19

93

.33

Tota

l Ope

ratin

g C

osts

40

06

65

24

65

76

85

49

82

76

06

74

21

97

73

57

45

78

10

99

88

94

13

01

51

05

25

76

71

18

45

31

41

33

65

60

9

Net

Pro

fit/

loss

bef

ore

tax

87

37

94

-82

51

4-5

06

09

92

10

91

14

04

10

69

50

26

85

63

59

74

52

67

91

11

84

29

91

24

54

19

01

37

25

83

4

Taxa

tion

13

10

69

00

16

36

71

11

60

42

5.3

10

28

45

41

11

79

02

16

77

64

51

86

81

28

20

58

87

5.1

Net

Pro

fit/

loss

aft

er t

ax7

42

72

5-8

25

14

-50

60

99

29

27

46

94

90

90

77

58

27

90

56

33

47

77

95

06

65

41

05

86

06

11

16

66

95

9

Div

iden

d P

aym

ent

00

00

-88

87

79

-88

87

79

-88

87

79

-88

87

79

-88

87

79

-88

87

79

Ret

aine

d Ea

rnin

gs7

42

72

5-8

25

14

-50

60

99

29

27

46

94

17

97

85

66

71

66

84

72

23

55

61

03

95

43

31

14

74

84

01

25

55

73

8

Pro

fitab

ility

Rat

ios

Gro

ss P

rofit

Mar

gin

87

.26

57

.79

3.8

69

9.3

64

6.2

07

1.0

56

5.6

77

6.2

87

7.3

97

8.3

7

Net

Pro

fit M

argi

n1

9.5

93

.90

-48

.63

63

.25

10

.10

35

.16

31

.71

41

.64

42

.02

42

.09

Ret

urn

on E

quity

4.2

1.2

-24

.53

4.7

5.5

17

.21

5.7

11

.81

5.8

14

.7

319


South Sudan.

App

endi

x X

II: Y

irol

Oil

Mill

- P

roje

cted

Bal

ance

She

et f

or 1

0 Y

ears

ITEM

S

YR

IY

R2

YR

3Y

R4

YR

5Y

R6

YR

7Y

R8

YR

9Y

R1

0

Non

Cur

rent

Ass

ets

Land

22

31

49

62

45

46

46

27

00

11

02

97

01

21

32

67

13

33

59

38

47

39

53

23

14

34

85

54

47

83

41

05

26

17

51

Bui

ldin

gs7

00

12

18

66

29

30

26

25

73

86

58

85

47

05

51

35

54

51

41

63

84

76

97

22

43

97

80

64

02

58

90

36

53

97

4

Irri

gatio

n Fa

cilit

ies

10

31

25

09

16

66

78

02

08

36

87

50

05

72

91

74

58

33

33

43

75

02

29

16

71

14

58

30

Farm

Equ

ipm

ent

18

96

09

81

68

54

20

14

74

74

21

26

40

64

10

53

38

68

42

70

86

32

03

04

21

35

22

10

67

4-4

Envi

ronm

ent

Faci

lity

37

80

03

36

00

29

40

02

52

00

21

00

01

68

00

12

60

08

40

04

20

00

Mac

hine

ry2

20

19

10

19

57

25

31

71

25

96

14

67

93

91

22

32

82

97

86

25

73

39

68

48

93

11

24

46

54

-3

Offi

ce E

quip

men

t1

33

34

31

18

52

71

03

71

18

88

95

74

07

95

92

63

44

44

72

96

31

14

81

5-1

Tota

l Non

Cur

rent

Ass

ets

14

53

31

15

13

79

54

14

13

08

00

28

12

38

91

89

11

72

53

51

11

09

12

14

10

48

97

48

99

24

22

19

39

82

26

89

15

71

7

Cur

rent

Ass

ets

Sto

ck3

75

64

80

54

82

62

42

26

18

12

31

36

45

13

42

17

46

37

95

42

01

38

85

04

15

22

10

51

67

74

65

18

45

21

2

Deb

tors

28

17

36

41

11

97

45

23

62

88

86

61

96

94

95

10

75

36

91

31

90

79

14

45

99

91

59

35

91

17

52

95

2

Pre

paym

ents

and

con

tinge

nt a

sset

s9

70

43

88

12

30

12

65

90

54

74

31

84

75

85

31

86

47

96

52

27

92

87

82

33

88

32

72

79

07

28

02

95

41

46

03

12

41

18

7

Cas

h5

85

13

63

-13

08

22

2-5

49

87

55

10

06

50

3-1

12

82

34

32

46

93

81

75

31

50

22

30

00

70

03

15

20

01

14

11

76

03

8

Tota

l Cur

rent

Ass

ets

19

59

39

67

16

88

68

64

62

70

16

12

35

07

46

82

19

10

97

23

09

10

60

64

36

27

41

25

38

76

08

36

43

32

52

77

60

15

38

9

Tota

l Ass

ets

34

12

70

82

30

68

22

78

19

35

01

89

.93

58

96

65

73

36

36

32

34

20

01

82

05

41

17

16

06

38

00

30

57

37

30

75

38

49

31

10

5

Equi

ty a

nd L

iabi

litie

s

Equi

ty

Sha

re c

apita

l2

22

19

47

02

22

19

47

02

22

19

47

02

22

19

47

02

22

19

47

02

22

19

47

02

22

19

47

02

22

19

47

02

22

19

47

02

22

19

47

0

Ret

aine

d Ea

rnin

gs7

42

72

5-8

25

14

-50

60

99

29

27

46

94

17

97

85

66

71

66

84

72

23

55

61

03

95

43

31

14

74

84

01

25

55

73

8

Tota

l Equ

ity2

29

62

19

52

21

36

95

61

71

58

47

83

14

94

16

42

40

17

32

62

89

36

15

42

94

43

02

63

26

14

90

33

36

94

31

03

47

75

20

8

Cur

rent

Lia

bilit

ies

Acc

rual

s3

45

38

50

42

05

53

71

93

36

01

01

89

31

12

97

51

38

59

41

51

95

41

67

44

91

84

19

4

Cre

dito

rs1

38

15

20

16

82

21

48

37

34

44

07

57

45

19

05

54

37

60

78

26

69

80

73

67

7

Con

tinge

nt L

iabi

litie

s1

11

16

53

58

47

47

34

21

14

19

24

27

17

89

94

76

34

71

29

07

50

12

44

80

10

33

09

72

66

63

98

02

01

54

98

98

02

6

Tota

l Cur

rent

liab

ilitie

s1

11

64

88

88

54

53

22

21

91

71

24

40

24

94

96

18

99

71

30

65

66

62

46

74

13

43

11

85

40

24

00

36

44

35

01

55

89

7

Tota

l Lia

bilit

ies

11

16

48

88

85

45

32

22

19

17

12

44

02

49

49

61

89

97

13

06

56

66

24

67

41

34

31

18

54

02

40

03

64

43

50

15

58

97

Tota

l Equ

ity a

nd L

iabi

litie

s3

41

27

08

23

06

82

27

81

93

50

19

03

58

96

65

73

36

36

32

34

20

01

82

05

41

17

16

06

38

00

30

57

37

30

75

38

49

31

10

5

Liqu

dity

Cur

rent

rat

io1

.15

2.1

33

.64

4.7

53

.06

3.1

50

.33

3.4

93

.85

4.1

8

Aci

d Te

st r

atio

98

.72

1.4

62

.56

4.0

12

.69

2.8

53

.19

3.4

13

.77

4.1

0

320


South Sudan.

App

endi

x X

III: Y

irol

Oil

Mill

- M

anpo

wer

Cos

t S

ched

ule

SN

GR

OS

S P

AY

Y

RO

iY

RO

iiY

R1

YR

2Y

R3

YR

4Y

R5

YR

6

S

enio

r M

anag

emen

tN

oR

ate

US

$/

Mon

thA

nnua

l In-

com

e U

S $

1N

on-E

xecu

tive

Boa

rd o

f Dir

ec-

tors

74

00

02

8,0

00

28

,00

03

08

00

33

88

03

72

68

42

85

84

92

87

2M

anag

ing

Dir

ecto

r1

6,0

00

72

,00

0

7

2,0

00

79

20

08

71

20

95

83

21

10

20

71

26

73

8

3D

eput

y M

anag

ing

Dir

ecto

r1

5,0

00

60

,00

0

6

0,0

00

66

00

07

26

00

79

86

09

18

39

10

56

15

4C

orpo

ratio

n S

ecre

tary

13

,50

04

2,0

00

42

,00

04

62

00

50

82

05

59

02

64

28

77

39

30

5Fi

nanc

e M

anag

er1

2,5

00

30

,00

0

3

0,0

00

33

00

03

63

00

39

93

04

59

20

52

80

7

6P

rodu

ctio

n &

Mai

nten

ance

m

anag

er1

2,5

00

30

,00

0

3

0,0

00

33

00

03

63

00

39

93

04

59

20

52

80

7

7In

tern

al A

udito

r1

2,5

00

30

,00

0

3

0,0

00

33

00

03

63

00

39

93

04

59

20

52

80

7

8M

arke

ting

& S

ales

Man

ager

12

,50

03

0,0

00

30

,00

03

30

00

36

30

03

99

30

45

92

05

28

07

9H

uman

Res

ourc

e M

anag

er1

2,5

00

30

,00

0

3

0,0

00

33

00

03

63

00

39

93

04

59

20

52

80

7

S

ub-to

tal

35

2,0

00

2

62

,00

03

52

,00

03

87

20

04

25

92

04

68

51

25

38

78

96

19

60

7

S

taff

10

Acc

ount

ant

12

,00

02

4,0

00

24

,00

02

64

00

29

04

03

19

44

36

73

64

22

46

11

Hum

an R

esou

rces

Offi

cer

11

,50

01

8,0

00

18

,00

01

98

00

21

78

02

39

58

27

55

23

16

84

12

Fact

ory

Pro

duct

ion

Offi

cer

11

,50

01

8,0

00

18

,00

01

98

00

21

78

02

39

58

27

55

23

16

84

13

Farm

Pro

duct

ion

Offi

cer

11

,50

01

8,0

00

18

,00

01

98

00

21

78

02

39

58

27

55

23

16

84

14

Mai

nten

ance

Offi

cer

11

,50

01

8,0

00

18

,00

01

98

00

21

78

02

39

58

27

55

23

16

84

15

Sal

es O

ffice

r1

1,5

00

18

,00

0

1

8,0

00

19

80

02

17

80

23

95

82

75

52

31

68

4

16

Tran

spor

t &

Dis

trib

utio

n O

ffice

r1

1,5

00

18

,00

0

1

8,0

00

19

80

02

17

80

23

95

82

75

52

31

68

4

17

Inve

ntor

y &

Sto

res

Offi

cer

11

,50

01

8,0

00

18

,00

01

98

00

21

78

02

39

58

27

55

23

16

84

18

Acc

ount

s A

ssis

tant

/C

ashi

er1

1,2

00

14

,40

0

1

4,4

00

15

84

01

74

24

19

16

62

20

41

25

34

8

19

Hum

an R

esou

rces

Ass

ista

nt2

1,2

00

28

80

0

2

88

00

31

68

03

48

48

38

33

34

40

83

50

69

5

20

Pro

duct

ion

Sup

ervi

sor

L11

1,2

00

14

40

0

1

44

00

15

84

01

74

24

19

16

62

20

41

25

34

8

21

Pro

duct

ion

Sup

ervi

sor

L21

1,2

00

14

40

0

1

44

00

15

84

01

74

24

19

16

62

20

41

25

34

8

22

Farm

Man

ager

s2

1,2

00

28

80

0

2

88

00

31

68

03

48

48

38

33

34

40

83

50

69

5

23

Civ

il S

uper

viso

r1

1,2

00

14

40

0

1

44

00

15

84

01

74

24

19

16

62

20

41

25

34

8

24

Mec

hani

cal S

uper

viso

r1

1,2

00

14

40

0

1

44

00

15

84

01

74

24

19

16

62

20

41

25

34

8

321


South Sudan.

25

Elec

tric

al S

uper

viso

r1

1,2

00

14

40

0

1

44

00

15

84

01

74

24

19

16

62

20

41

25

34

8

26

Sal

es E

xecu

tives

10

1,5

00

18

0,0

00

18

0,0

00

19

80

00

21

78

00

23

95

80

27

55

17

31

68

45

27

Dis

trib

utio

n A

gent

s1

0

4

74

,00

05

21

40

05

73

54

06

30

89

47

25

52

88

34

35

7

28

Rec

ords

Ass

ista

nt2

1,0

00

24

00

0

2

40

00

26

40

02

90

40

31

94

43

67

36

42

24

6

29

Sec

urity

and

Ver

ifica

tion

Ass

ista

nt1

1,0

00

12

00

0

1

20

00

13

20

01

45

20

15

97

21

83

68

21

12

3

30

Mac

hine

Ope

rato

rs L

14

90

04

32

00

43

20

04

75

20

52

27

25

74

99

66

12

47

60

43

31

Mac

hine

Ope

rato

rs L

24

90

04

32

00

43

20

04

75

20

52

27

25

74

99

66

12

47

60

43

34

Fact

ory

Che

mis

t1

90

01

08

00

10

80

01

18

80

13

06

81

43

75

16

53

11

90

11

35

Sec

urity

Gua

rds

68

00

57

,60

0

5

7,6

00

63

36

06

96

96

76

66

68

81

65

10

13

90

36

Dri

vers

58

00

48

00

0

4

80

00

52

80

05

80

80

63

88

87

34

71

84

49

2

37

Cle

aner

s6

70

05

04

00

50

40

05

54

40

60

98

46

70

82

77

14

58

87

16

38

Rec

eptio

nist

s4

80

03

84

00

38

40

04

22

40

46

46

45

11

10

58

77

76

75

94

39

Nur

ses

(2-Y

OM

; 2-N

yalie

l; 2

-Mar

gogo

up)

65

00

36

00

0

3

60

00

39

60

04

35

60

47

91

65

51

03

63

36

9

S

ub-to

tal

36

3,6

00

36

36

00

39

99

60

43

99

56

48

39

52

55

65

44

64

00

26

N

ucle

us E

stat

e (N

yalie

l &

Mar

gogo

up)

40

Hea

d m

an (N

yalie

l)1

1,0

00

12

00

0

1

20

00

13

20

01

45

20

15

97

21

83

68

21

12

3

41

Per

man

ent

Labo

urer

e - N

yalie

l5

02

00

12

00

00

12

00

00

13

20

00

14

52

00

15

97

20

18

36

78

21

12

30

42

Cas

ual l

abou

rere

- Nya

liel

50

X4

mon

ths

30

06

00

00

60

00

06

60

00

72

60

07

98

60

91

83

91

05

61

5

43

Sto

re C

lerk

- N

yalie

l1

25

03

00

0

3

00

03

30

03

63

03

99

34

59

25

28

1

44

Sec

urity

Gua

rd N

yalie

l4

20

09

60

0

9

60

01

05

60

11

61

61

27

78

14

69

41

68

98

45

Hea

d M

an (

Mar

gogo

up)

11

,00

01

20

00

12

00

01

32

00

14

52

01

59

72

18

36

82

11

23

46

Per

man

ent

Labo

urer

e - M

ar-

gogo

up5

02

00

12

00

00

12

00

00

13

20

00

14

52

00

15

97

20

18

36

78

21

12

30

47

Cas

ual l

abou

rere

- Mar

gogo

up5

0X

4m

onth

s3

00

60

00

0

6

00

00

66

00

07

26

00

79

86

09

18

39

10

56

15

48

Sto

re C

lerk

- M

argo

goup

12

50

30

00

30

00

33

00

36

30

39

93

45

92

52

81

49

Sec

urity

Gua

rd M

argo

goup

42

00

96

00

96

00

10

56

01

16

16

12

77

81

46

94

16

89

8

S

ub-to

tal

40

92

00

40

92

00

45

01

20

49

51

32

54

46

45

.26

26

34

27

20

29

3

To

tal P

roje

cted

Man

Pow

er

Cos

ts

1,5

98

,80

01

,75

8,6

80

1,9

34

,54

82

,12

8,0

03

2,4

47

,20

32

,81

4,2

84

322


South Sudan.

Assumptions:

i. All 7 members of the Board will earn an allowance of USD 1000 per quarter

ii. Salaries increase by 10% for three years from the second year, 15% for the next three years and 20% for the last three years to cater for inflation

iii. The senior staff except for the Internal Auditor and the deputy managing director will be recruited in the second year of investment.

323


South Sudan.

Appendix XIV: Market Analysis Tools

A: FARMERS / INPUT SUPPLIERS

1.0 Introduction of the Interviewer

Good morning/afternoon. My name is ………....……….........................................................................................................................................., from Adroit Consult International. Adroit Consult International has been contracted by Government of South Sudan to carry out a feasibility Study on revitalizing the defunct Yirol Oil Mill Project. You have been purposively selected to participate in this exercise. Your views and comments will be appreciated and treated confidentially.

Pre-Interview Information / Location information

Date: ………....……….......................................................................................... Interview Number

State: ……....……….......................................................................................................................................................................... Town:……....………..........................................................................................................................................

Village: ……....………............................................................................................................................................................................................……....………..........................................................................................................................................

Name of interviewer: ................................................................................................................................... Signature ..............................................................................................................................................

Name of supervisor: ................................................................................................................................... Signature ..............................................................................................................................................

FARMERS / INPUT SUPPLIERS

Question Coding Category

101 Sex Male …………….………..…………….........…........……..1

Female………………….....……..……..............…..……..2

102 Age 18 – 34 ………..…………………….........…...….………1

35 – 44………..………………....…...........…..…………2

45 – 54………..………..………..…….........…....………3

55 and Above………..………...…...........………..…..4

103 Level of Education Never went to formal school...……..…..…….1

Primary Level …….………….….…………..............…2

Secondary Level .................................................3

Tertiary Institution ………..……...…...........….……4

University ………..…..........…...….…...................……5

104 Marital Status Single……………..….……..…………...................………..1

Married……..……...………….……..............………....…2

Separated…………..……….…...............……….………3

Divorced…………...………….................…………...……4

Widowed………..…...............………………………..……5

324


South Sudan.

105 Activity engaged in Farmer....................................................................1

Input Dealer..........................................................2

Member of an association.............................3

Others (specify)...................................................9

106 Position in Household Husband……………………….............…......................1

Wife……..…………………….................…….……...….....2

Other (specify)……….....................………….…....…3

Category of the respondent

107 Average monthly Household Income (SSps)

< 10..........................................................................1

10 < 50...................................................................2

0 < 100...................................................................3

100< 300..............................................................4

300 < 600.............................................................5

600 +.......................................................................6

201 Do you own land? Yes

No

202 What is the land tenure system of your land?

Communal ...........................................................1

Freehold……………..................................................2

Leasehold .............................................................3

Others (specify)…................................................4

203 What is the size of the land you own? (in Acres)

Less than 1………………………………………………….1

1To 10………………………………………………………….2

11 to 50……………………………………………………...3

51 to 100…………………………………………….……..4

Above 100………………………………………………..…5

204 How much of this land is under cultivation?

Less than 1………………………………………..………..1

1To 10……………………………………………..…………..2

11 to 50………………………………………………………3

51 to 100……………………………………..…………….4

Above 100…………………………………….…………….5

301 What crops are you growing in your farm?

List the crops

......................................................................................

.......................................................................................

.......................................................................................

.......................................................................................

325


South Sudan.

302 Are you contracted to produce any of these crops?

Yes.............................................................................1

No...............................................................................2

303 IF YES, Who contracts you to engage in this farming?

List the contractors

......................................................................................

.......................................................................................

.......................................................................................

.......................................................................................

304 What are the terms of your contract? List the terms

305 Are you happy with the contractual terms?

Yes.............................................................................1

No...............................................................................2

306 Which of the following Crops do you Grow

Sunflower................................................................1

Sesame....................................................................2

Cotton.......................................................................3

Peanuts....................................................................4

Olives………………………….…………..................………..5

Palm Kernel……………………………………….............6

Grape seeds………………………….…………..............7

Soy beans……………………………………….............….8

Walnut oils……….…………………………….............….9

Coconut……………………………..……….............…....10

307 How much of these crops do you produce per season?

<1 1<3 3<5 5>

Sunflower

Sesame/ simsim

Cotton seed

Peanut/ groundnuts

Olives

Palm Kernel

Grape seeds

Soybeans

Walnuts

Coconuts

401 How much do you sell per kilogram?

Price in SDG

5<10 10<15 15<20 20>

Sunflower

Sesame/ simsim

Cotton seed

Peanut/ groundnuts

Olives

Palm Kernel

326


South Sudan.

Grape seeds

Soybeans

Walnuts

Coconuts

402 Where do you sell these products? Association..............................................................1

Individual traders..................................................2

Take to the market..............................................3

Contractor...............................................................4

Manufacturers......................................................5

Others (specify).....................................................6

403 Where would you prefer to sell your product?

Specify

......................................................................................

.......................................................................................

.......................................................................................

.......................................................................................

404 How much would you be satisfied to sell these products? Prices in SDG/kg

5-10 10-15 15-20 20+

Sunflower

Sesame/ simsim

Cotton seed

Peanut/ groundnuts

Olives

Palm Kernel

Grape seeds

Soybeans

Walnuts

Coconuts

405 Do you belong to any Cooperatives/association

Yes...........................................................................1

No.............................................................................2

406 If yes , how many members 2 to 10..................................................................1

11to 50................................................................2

Above 50.............................................................3

327


South Sudan.

407 What enterprises do the association deal in

Sunflower................................................................1

Sesame....................................................................2

Cotton.......................................................................3

Peanuts....................................................................4

Olives……………………………………….…...................….5

Palm Kernel………………………….............……………6

Grape seeds………………………...........……..………..7

Soy beans……………………………..............……………8

Walnut oils……………………….…..............……………9

Coconut……………………….……..............….…….…..10

Others (specify)………………...........…………….….11

THANK YOU

B: CONSUMERS/END USERS


Good morning/afternoon. My name is ……….................................................................., from Adroit Consult International. Adroit Consult International has been contracted by Government of South Sudan to carry out a feasibility Study on revitalising the defunct Yirol Oil Mill Project. You have been purposively selected to participate in this exercise. Your views and comments will be appreciated and treated confidentially.

Pre- Interview Information / Location information

Date: ………....……….......................................................................................... Interview Number

State: ……....……….......................................................................................................................................................................... Town:……....………..........................................................................................................................................

Village: ……....………............................................................................................................................................................................................……....………..........................................................................................................................................

Name of interviewer: ................................................................................................................................... Signature ..............................................................................................................................................

Name of supervisor: ................................................................................................................................... Signature ..............................................................................................................................................

CONSUMERS/END USERS


101 SexMale …………….………..…………….........…........….…..1

Female………………….....……..……..............…..……..2

328


South Sudan.

102 Age

18 – 34 ………..…………………….........…...….………1

35 – 44………..………………....…...........…..…………2

45 – 54………..………..………..…….........…....………3

55 and Above………..………...…...........………..…..4

103 Level of Education

Never went to formal school...……..…..…….1

Primary Level …….………….….…………..............…2

Secondary Level ................................................3

Tertiary Institution ………..……...…...........…...…4

University ………..…..........…...….…..................……5

104 Marital Status

Single……………..….……..………….....................……..1

Married……..……...………….……..............………....…2

Separated…………..……….…...............……….………3

Divorced…………...………….................…………...……4

Widowed………..…...............………………………..……5

105 Activity engaged in

Farmer....................................................................1

Input Dealer..........................................................2

Member of an association.............................3

Others (specify)...................................................9

Transporter..........................................................4

Wholesaler...........................................................5

Retailer...................................................................6

Consumer.............................................................7

Supermarket Attendant.................................8

Others (specify)..................................................9

106 Position in Household

Husband……………………….............…......................1

Wife……..…………………….................…….……...….....2

Other (specify)……….....................………….…....…3

107 Category of the respondent

108 Average monthly Household Income (SSps)

< 10..........................................................................1

10 < 50...................................................................2

0 < 100...................................................................3

100< 300..............................................................4

300 < 600.............................................................5

600 +.......................................................................6

329


South Sudan.

201 Source of Information about Cooking Oil Products

Radio.........................................................................1

Suppliers..................................................................2

News papers.........................................................3

Television.................................................................4

Retail shops............................................................5

Supermarkets........................................................6

Others (specify).....................................................7

301 Do you use cooking oil?Yes………………………..................................................1

No………………...…………………….......................……….2

302 If yes, Where do you get the cooking oil from?

Retail shops...........................................................1

Wholesale shops................................................2

Supermarkets......................................................3

Others (specify)...................................................4

303 What do you use cooking oil for?

Home use...............................................................1

Business use?......................................................2

Others (Specify)...................................................3

304 What cooking oil products do you use?

Cooking oils...........................................................1

Cooking Fats.........................................................2

Bakery Fats...........................................................3

Others (specify)...................................................4

305 Why do you use that type of cooking oil?

Specify answer

......................................................................................

......................................................................................

......................................................................................

401What are the types and products of cooking oil on the market

Cooking oil...........................................................1

Cooking fats........................................................2

Bakery fats..........................................................3

Oil seed cakes....................................................4

Others (specify).................................................5

402Do you feel satisfied with the cooking oil products on the market?

Yes………………………...............................................1

No………………...…………………...................……..……2

403f yes, What is it that is satisfying about the cooking oil products on the market?

Taste......................................................................1

Color.......................................................................2

Price ......................................................................3

Packaging.............................................................4

Others (specify)..................................................5

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South Sudan.

404If no, Why aren’t you satisfied with the cooking oil products on the market?

Poor Colour.........................................................2

High Price ...........................................................3

Poor Packaging.................................................4

Others (specify).................................................5

405

How often do you buy cooking oil for your use?

Daily .......................................................................1

Weekly...................................................................2

Monthly.................................................................3

Two months and above.................................4

406

What quantity of package of cooking oil do you buy for your use?

Less than ½ a litre.........................................1

Half a litre............................................................2

Litre........................................................................3

One and a half litres.......................................4

Two litres.............................................................5

Five litres..............................................................6

Ten Litres.............................................................7

Twenty litres.......................................................8

Above twenty Litres........................................9

407How much does that quantity cost (SDG)?

< 5...........................................................................1

10 < 20................................................................2

20 < 30................................................................3

30< 40.................................................................4

40 < 50................................................................5

60 >.......................................................................6

408How do you rate the cost of that cooking oil? And why?

Very Expensive..................................................1

Expensive.............................................................2

Fair Price.............................................................3

Affordable...........................................................4

Cheap...................................................................5

501

If I was to introduce new cooking oil on the market , How should it be packaged?

Sachets ..............................................................1

Plastic bottles...................................................2

Jericans..............................................................3

Others (Specify)...............................................4

331


South Sudan.

502 In what quantities should it be packaged?

Less than ½ a litre........................................1

Half a litre..........................................................2

Litre......................................................................3

One and a half litres......................................4

Two litres...........................................................5

Five litres............................................................6

Ten Litres...........................................................7

Twenty litres.....................................................8

Above twenty Litres......................................9

503At what cost should each package be sold? Price in SDG

1<10 10<20 20<30 30<4040<50 50>

Less than ½ a litre

Half a litre

Litre

One and a half litres

Two litres

Five litres

Ten Litres

Twenty litres

Twenty & above

504 Where would you prefer to buy the cooking oil?

Market.....................................................................1

Retail shops...........................................................2

Wholesale shops................................................3

Supermarkets......................................................4

Others (specify)...................................................5

THANK YOU

332


South Sudan.

C: SALES OUTLETS




Date: ……………………………………. Interview Number

State: …………………………………Town: ………………………………………...........................….…..

Village…………………………………..………………………………………………......................…………….

Name of interviewer: …………………………… Signature ……………..…………….….………

Name of supervisor: ……………………………... Signature………………………...……………

SALES OUTLETS


101Sex Male …………….………..……………….….........…..1

Female………………….....……..………........……..2

102 Age 18 – 34 ………..…………………….……...….……1

35 – 44………..………………....…..…..….………2

45 – 54………..………..………..……..…...………3

55 and Above………..………...…..…….…..…..4

201 What is the type of business?

Whole sale shop........................................1

Retail shop....................................................2

Grocery..........................................................3

Supermarket...............................................4

Others (Specify...........................................5

202 How long have you been in Business?

Less than one year...................................1

1to 3 years .................................................2

3and ½ to 5 years...................................3

Above five years.........................................4

203 What is the Legal Status of the business?

Sole proprietorship...................................1

Partnership..................................................2

Limited liability company.........................3

Public company...........................................4

333


South Sudan.

301 Types of cooking oil dealt in

Cooking oils...................................................1

Cooking fats..................................................2

Bakery fats....................................................3

Oil seed cake................................................4

Others (specify)...........................................5

302How much quantity do you sell of oil products per month? Oil in ltrs, fats & oil seed cake in kgs

<20 21-100 100-500 501-1000 1000+

Cooking oil

Cooking fats

Bakery fats

Oil seed cake

Others

303

What are the different packages available on the market?

Oil in litres & fats & oil seed cake in kgs

Less than ½ a ltr/kg.............................1

½ ltr/kg......................................................2

1 ltr/kg.........................................................3

1 ½ ltr/kg..................................................4

2 ltr/kg ........................................................5

5 ltr/ kg........................................................6

10 ltr/ kg.....................................................7

20 ltr/kg.......................................................8

Others (specify)..........................................9

304How much do you buy each of the quantities of the products?

Cooking oilCooking fat

B a k e r y fat

Oil seed cake

< ½ kgs/ltrs

½ kgs/ltrs

1 kgs/ltrs

1 ½ kgs/ltrs

2 kgs/ltrs

5 kgs/ltrs

10 kgs/ltrs

20 kgs/ltrs

Others

305 How much do you sell each quantity Cooking oilCooking fat

B a k e r y fat

Oil seed cake

< ½ kgs/ltrs

½ kgs/ltrs

1 kgs/ltrs

1 ½ kgs/ltrs

2 kgs/ltrs

5 kgs/ltrs

10 kgs/ltrs

20 kgs/ltrs

Others

334


South Sudan.

306Who are Biggest consumers of the different quantities of cooking oil

Hotels.......................................................................1

Companies.............................................................2

Individuals...............................................................3

Others (specify)....................................................4

307 Most profitable quantity Cooking oilCooking fat

B a k e r y fat

Oil seed cake

< ½ kgs/ltrs

½ kgs/ltrs

1 kgs/ltrs

1 ½ kgs/ltrs

2 kgs/ltrs

5 kgs/ltrs

10 kgs/ltrs

20 kgs/ltrs

Others

308 Why is it the most profitable quantity?Give reasons ............................................................................................................................................................................................................................................................................................................................................

309 What is the most fast moving quantity? Cooking oilCooking fat

B a k e r y fat

Oil seed cake

< ½ kgs/ltrs

½ kgs/ltrs

1 kgs/ltrs

1 ½ kgs/ltrs

2 kgs/ltrs

5 kgs/ltrs

10 kgs/ltrs

20 kgs/ltrs

Others

310 Are you happy with the suppliers?Yes......................................................................1

No........................................................................2

311What challenges do you have with the suppliers

Delayed supply...............................................1

Supply less amounts...................................2

Demand immediate payments..............3

Others (specify).............................................4

THANK YOU

335


South Sudan.

D: PROJECT STAFF




Date: ……………………………………................. Interview Number

PROJECT STAFF

Department……………………………………………………………………………........................................................................…………………………

Position of the respondent………… …………………………….………......................................................................……..…………….….……

Years employed with the project……………......................................................................………………………………………………………

Instructions: Fill in the questions with options where they are given and where they are not given fill in the answers

1. How do you rate the following potential problems as being important to the performance of the project?

(No Problem, Slight Problem, Fair, Major Problem, Most important)

Exchange rate instability …………………………………………………………………………………………………………………………..................……

Inflation ………………………………………………………………………………………………………………………………………………….……….....................

The level of interest rates …………………………………………………………………………………………………………….………...….....................

Access to credit ………………………………………………………………….............................................................................………...................

Activities of gangsters and organized crime…………………………………….............................................…….…………...................

Taxation ………………………………………………………………………………………………............................................………….……..…....................

Problems of procuring raw materials…………………………………………...........................................................................................

Your company having high levels of debt ……………….………………………............................................................................………

Late payment by customers…………………………………………..............................................................……………..…...................……..

Other problem(specify)………………………………………………......................................................................………….…...................………

2. How satisfied are you with the following?

(Very Unsatisfied, Unsatisfied, Neither Satisfied, Satisfied, Very Satisfied)

The quality of agricultural products you buy……………………………...................……………..……….............……………..……………..

The reliability of suppliers to deliver on time……………………...........................................................…………………..…………….…

The fulfillment of contracts by suppliers ……………………..............................................................………………………..…………….

The availability of raw materials……………….…………......................................................................……………........………..…………….

3. Do you currently get any incentive from government?

Yes/ No……………………………….......................................................................................................................................................………..

3a. If yes what type of incentives do you get? (Tick appropriately)

336


South Sudan.

Inputs (specify): …………………………………………………….....................................................................................…………........………..……

Technical advice: ………………………………………….....................................................................................……………………........………..…

Credit: ……………………………………………….................................................................................................................……........………..………

Storage: …………………………………..................................................................................……………………………………………........………..…..

Transport:……………………………....................................................................................……………………………………………........………..……

Tillage: ………………………………………………………………………….....................................................................................………........………..…

Training:………………………………………………..............................................................................................................……........………..………

3b. If no what support/incentives would you like to get from government?

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………........………....................................……..

4. What are the Project future plans / Any other comments?

…………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………..................................................……………………

5. What are the main strengths of the project in contracting farmers/ out grower scheme?

………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………….........……

6. What are the main weaknesses of the project to contracting farmers /out grower scheme?

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………..........................................................................……

7. Do you think there is a need for a specialist/dedicated unit/body/agency/company (outside the Government Unit) to be established to deal with all matters relating to farmers and organizing them so as to sustain input supply ? Yes/No ……………………………...............................................................................................……

7a. If yes, what do you think its main responsibilities should be?

………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………..

8. Any additional comments on prospects for contract farming with farmers?

…………………………………………………………………………………………………………………………………………………………………………………………………………………………………………...................................................................................................................................................………………

337


South Sudan.

Appendix XV: MINISTRY OF AGRICULTURE AND COOPERATIVES

Back ground information on Agriculture Systems in GoSS

Institutional and Organizational Systems

How is the Agriculture Systems organized?

What is the structural design of the agricultural Extension Service Delivery Systems in GoSS?

Who does what and what roles do they play?

How do they coordinate with each other?

Who finances the agriculture development and extension systems in GoSS?

Agriculture development Service Policy Framework

Is there any Agriculture development policy in place?

What are the existing Legislations and guidelines on Agriculture development and Extension services in GoSS?

Were there any legislations/policies on Agricultural development before independence?

What was their impact?

Performance of agriculture development Services

What are the main methods and practices that are being promoted in GoSS?

How have households’ responded to these new methods and practices?

How have these new methods contributed to Productivity and Production?

Constraints and Challenges to Extension Service Delivery

What challenges are you facing as a ministry in delivering services?

(Probe for)

6 Adequate numbers of staff,

6 Skills and expertise of staff

6 Attitude towards work

6 Any difficulties as a result of Government Guidelines

6 Difficulties arising out of existing laws

6 Any difficulties in linking with other government departments e.g. sharing information on action plans.

Any Difficulties in accessing and interpreting information on extension services

Are there any problems arising out of the nature of roads, electricity distribution, telephone etc,? If yes, what are they?

How have these problems affected your ministry activities?

What has been done to overcome these problems?

338


South Sudan.

Cross Cutting Issues

What is the level of involvement of the following in Agriculture development systems in South Sudan?

Category Role

Men

Women

Youth

6 Natural Resource Depletion practices (Tree harvesting, swamp reclamation, bush burning etc.).

6 Effect of HIV-AIDS on Persons living with HIV (PLWAs) on household Productivity and production

6 Wider effects on change of weather, rainfall reliability and Seasons (Climate Change)

Opportunities for YIROL OIL MILL PROJECT (probe for the following)

6 Household Access to Land

6 Availability of appropriate Technologies

6 Market Availability (domestic, regional and international)

6 Increased Food Prices (Domestic and foreign)

6 Government Commitment to Transformation of Agriculture

Adroit Consult InternationalPlot 163, Ntinda - Naalya Road, Country Mall 3rd Floor

P.O. Box 36544, Kampala-UgandaTel +256-414 530 988, Mob: +256 772 894 794

E-mail: [email protected]

feasibility study yirol oil mill report ,south sudan

Documents

financial feasibility

production of oil seeds

oil crops

organisational feasibility

technical feasibility

market feasibility

south sudanoctober

agriculture production