1

Presentation on Industrial Processing Bamboo

11/11/11

Addis Ababa, Ethiopia

Khalid M. DURI

2Overview

3Agenda

• Objective

• Bamboo Market

• Bamboo in Ethiopia

• Current Status

• Supply Chain

• Industrial Processing of Bamboo

• International Market for Bamboo Products

• Stakeholders

4

Key success factors:

• Tubes of Ethiopian highland bamboo are more straight, contain less starch and more fibre than the Chinese Moso varieties, making it very suitable for outdoor applications.

• Lower labour costs & raw material price (-20%) than China

• Incentives Ethiopian government: profit tax holiday and zero import tax

• Technical assistance secured

• Experienced international Staff 20 Germans and 5 Chinese

• High certified quality (EN350-2; E1, EN-350-Part 1, EN 335, CEN/TS 15083, EN 113, EN ISO/IEC 17025:2005, ISO 14000; ISO 9001)

• Cooperation and market access through Elephant Bambusprodukte GmbH.

Objective & strategy

Fortune Enterprise will become an African exporter of compressed panels and decking material produced from domestically grown bamboo, thereby providing the world market with a highly competitive alternative for hardwood composites and bamboo products from China.

5

Specific company objectives:

1. Source bamboo splits through an outgrower scheme and own plantations in Ambo and Sidama

• outgrower scheme: 2,000 ha, 4,000 farmers organized in some 30 coops, 30 collections centres

• 1,500 ha plantation, 500 ha established per year from own nursery (cuttings)

• at full capacity, factory requires 2,2 mio culms annually

• first four years, raw material supply solely through outgrowers

• first harvest plantation in yr 4 (8%), full productivity yr 12

2. Establish industrial bamboo production in Ethiopia consisting of two regional pre-processing plants (Tikur Inchini , Ambo and Titicha, Sidame) and a main factory in Welmera producing compressed panels destined for the export market.

3. Produce 245,000 m2 of compressed bamboo panels during first year of production (2013) worth Eur 3.9 Mio, increasing to 500,000 m2 per year from year 3 onwards (2016) worth Eur 15 Mio.

4. To lay the ground for further investments in the Ethiopian bamboo sector. Investing in more private plantations and product diversification.

Objective & strategy

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• Bamboo Task Force

• In October 2009, Public Private Partnership worth € 400,000. Main activities:

- analysis into competiveness of Ethiopia bamboo

- numerous feasibility studies to determine technology and product

- market & technology investigation in Europe and China

- Initial inventory and assessment of standing bamboo culms in Ambo and Sidama

- prototypes development from Ethiopian Bamboo species for testing and certification at Fraunhofer Institute for Wood Research

- establishment of outgrowers scheme in Ambo, encompassing over 250 farmers organised in 5 Coops

What has been done ( 2009-2011)

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• Commercial contract with Elephant Bambusprodukte GmbH for the first 750,000m2

valued at EUR 18.75m annually for next five years.

• Profound technical assistance secured during the start up phase of the project.

• Land secured for plantation development ( 1,500 ha at two different regions), nursery site ( 1 ha each, at two locations), pre-processing plants ( 5 ha each, at two locations), and main factory ( 10 ha).

• Finalization of proforma based machinery and equipment list.

• Finalized production planning and flow chart.

• Award of highly competitive grant programme in June 2011 to Elephant and FE partnership, funded through the Dutch Private Sector Investment Programme (PSI). The total project budget is € 1.5 mio of which 50% is a result-based grant.

• Raised debt totalling Eur 7Mio, raised Eur 5M in Equity, total Project Budget Eur 12M

What has been done ( 2009-2011)

8Bamboo Development 2011 - 2013

PPP with GIZ

AcquiringThird Party Funding

Strategic Alliance

Private Sector Investment

Long Term Loan

International Climate Initiative

EU Energy Facility

9Bamboo Development 2009 - 2011

PPP with GIZ

Market Development

10Bamboo Development 2009 - 2011

PPP with GIZ

11Bamboo Resource in Ethiopia

• Ethiopia has 1 million ha of bamboo

• It accounts to 67% of African‘s bamboo resource

• 30% being high land bamboo and

• 70% is low land bamboo

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Status quo of Bamboo in Ethiopia

+ ETH accounts for 67% of Africa's Bamboo resource

+ 1 Mio. ha Bamboo coverage in total (estimation)

+ 30% highland, 70% lowland bamboo

+ Bamboo is one of the fastest growing plants on earth

with great potential for reducing pressure on forests

+ a quickly-renewing and sustainable source of biomass

+ vital role in environmental amelioration, bio-diversity

preservation, soil and water conservation

+ can serve as substitute for traditional woods which are

mostly imported from abroad due to their scarcity in

Ethiopia

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Status quo of Bamboo in Ethiopia

-- Image Problem

• Value of Bamboo has not been recognized yet• Unawareness about high quality of Bamboo

- Weakness of the Economic Environment• State-led and NGO initiatives of the past have promoted the

bamboo sector only on household level• Development of the private sector has been insignificant so far• No industrial use of Bamboo so far

- Lack of Credit and Financing• No microfinance for MSEs like farmers and cooperatives so far• Poor capital endowment and access to credits have prevented

industries from up-scaling their bamboo-related activities

Bamboo resource map of Ethiopia

15

WOOD INDUSTRY

Private sector, SMEs, Investment Agency, Export Promotion

Banks, MFIsMoTI, MoARD

Machinery/Glue manufacturersSub-sectors

INSTITUTES

Ethiopian/International Universities

Cluster of Excellence Student workshopsPractical curricula

Twinning arrangementsFocus areas: machinery,

design, glue

SUPPLY CHAIN

InstitutionalizationSix more locations

Support for CooperativesCommercial FS

Market Assessment Plan

STANDARDS/QUALITYTesting centers

Technical CommitteeAdapt EU+ISO Standards

Produce Quality Manuals Fraunhofer Institute

Ethiopian Standard Authority

MARKET

Import substitutionExport/National Market

Participation in trade fairs Marketing

Fair Trade Certificate

ENVIRONMENT/FORESTRY

Bamboo Baseline InventoryImpact Assessment

Develop carbon credit schemeForest Stewardship Council

Sustainable Participatory Forest Management

Establishment of a Wood Processing

Industry in Ethiopia

Establishment of a Wood Processing Industry in Ethiopia

16Core Areas of Resource

17Characteristics of Yushania alpina

• Yushania alpina is high land bamboo

• Height is 5-19.5 meters(average12 m.)

• The diameter ranges from 5-12.5cm

• The average weight is 8 kgs (oven dry wt)

Supply chain Raw material resource.

1 – From existing farmers bamboo plots (2000 ha)

2- Establishing our own bamboo plantation (1500 ha)

19Supply Chain Model

4,000 Farmers -> 2,000 ha -> 1,000 culms/ha -> 2 Mio culms/year

2 Mio culms/year

30 Regional Collection Centers

21Scope of the involvement

• 4000 farmers

• Average of 0.5 ha

• 30 cooperatives

2000 hectares of

bamboo plots

2 million culms per year at the beginning

22Farmers bamboo plots

23Bamboo Supply Chain

Bamboo Farmer Bamboo Farmer

Bamboo Farmer Bamboo Farmer

Bamboo Farmer Bamboo Farmer

Bamboo Farmer Bamboo Farmer

Bamboo Cooperative

Bamboo Farmer ABamboo Farmer A

Bamboo Farmer BBamboo Farmer B

Bamboo Farmer CBamboo Farmer C

Bamboo Cooperative

Bamboo CooperativeCollection center

Bamboo CooperativeCollection center

Bamboo Pre-Processing Plant in Tikur Inchini

- removal of nods- boiling- carbonizing,- drying- storage- ….

Bamboo Pre-Processing Plant in Tikur Inchini

- removal of nods- boiling- carbonizing,- drying- storage- ….

Bamboo Pre-Processing Plant in Tetecaha - nod removal - boiling- carbonizing,- drying--storage

Bamboo Pre-Processing Plant in Tetecaha - nod removal - boiling- carbonizing,- drying--storage

Main factory at Wolmera

Sidama 70%

Ambo 30%

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Production Calculation and Processing

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General Production Flow Chart of WSBCooperatives Collection centers Pre-processing Main Industry Customer

Aethiopic Alpine Bamboo

 

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Collection Centers

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Pre-processing Plant – Sidama and Ambo

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Industrial Plant until Hot Press

29Industrial Plant After Hot Press

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Overall Material BalanceTon/Year Ton/day Containers/day

Fresh bamboo 40920 205 10

Dry matter 19032 95

Moisture/Water 21887 109

After dry matter loss 20%Total dry 15226 76 4

starch 1066 5

Other than starch 14160 71

After Starch removalFrom 7% to 2%

Total dry 14449 72 4

Starch 289 1.4

Other starch 14160 71

Glue consumption 2102 6 0.3

31 90,144 panel/year 14,016 m³/year 16,118 tons/year 247 panel/day 38 m³/day 44 tons/day

1,442,304 boards/year

9,854 m³/year

3,952 boards/day

27 m³/day

492,691m²/year 11,332 tons/year

1,350 m²/day 31 tons/day

Panel production (2600x1300x46mm)

Final Board production (2440x140x20mm)

Oil 0.039284 l/board 56,659 l/year 155 l/day

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594 Containers/year

≈2 Containers/day

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Production flow and

Machinery Layout

34China study tour

• Fortune Enterprise has done a study tour to China two times to understand the WSB production scheme.

• Some of the WSB production factories visited in china were: 1. Werner flooring

2. Anhui Fengtian Bamboo Manufacturing

3. Wuxi Senda Bamboo & Wood Products CO.LTD.

4. Xingli ( Everjade) Bamboo Products Co

5. Three WSB factories in Anji province

6. DASSO flooring …etc

35China study tour

• Fortune Enterprise after visiting some WSB factories in China , has selected the below stated machines for its production of WSB outdoor decking.

36Source of Bamboo

• 30 Bamboo Co-operatives

• 2 million bamboo culms

37 Collection Center

Manual Cutting

Manual splitting

38

Pre-Processing plant ( bamboo culm processing machine)

Cutting machine

Splitting machine

Node remover

Slicing machine

Crushing machine

Blade glinder

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Pre-processing plant (starch removing process)

Bleaching tab Carbonizer

Drying tunnel

40Pre-Processing (Transportation)

Trolley

Motor bike

Tractor

forklift

Pallet carrier Trailer

truck

41Pre-Processing (supplementaries)

Gen set Steam Boiler

transformers Sewer purification Air compressor

42Main Industrial Plant

Crushing machine

Drying tunnel before glue

43Main Industrial plant (Glue )

Glue MixerGlue reactor

Glue Immersing pool and

electric hoist

Glue drying tunnel.

44Main Industrial plant (hot press)

45

Main Industrial plant ( after the press machineries)

Length cutting

Width cutting and plank dividing machine

Four side planning and

slicing machine

Curing chamber

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Main Industrial plant ( after the press machineries)

Top bottom sanding

Width Endgrooving (tongue and

groove)

Riffiling, profiling, Length

grooving

Universal Tool Grinder

47Main Industrial plant ( oiling)

Oiling machine Drying tunnel

48Main industrial plant ( packaging)

Pack

agin

g m

achi

ne

pallets Wrapping machine Strapping roll

cartons

49Main Industrial Plant ( Transportation)

Truck

forklift

Pallet carrier

50Main Industrial plant (supplementaries)

Gen set Boiler

Transformers Air compressor

51Main Industrial plant (supplementary)

Waste gas treatment

Dust extraction

Weighing scale

Weighing bridge

52Machinery supplier visited

• Fortune Enterprise has visited many bamboo making machinery companies

• Some of the companies visited are:1. Qingdao Guosen

2. Anji Yukang Machinery

3. Hangzhou Garden Corporation

4. Shanghai Wood Based Panel Machinery - Dieffenbacher Group

5. Fujian Jinmen

6. Changshan hot Press manufacturer .. etc

53Machinery supplier selected

• Form the companies visited Guosen, Anji Yukang and Garden corporation has provided quotation for the full line machineries.

• From the information gathered Guosen presses are currently big in the market.

• They have provided us reasonably better specification of the machineries compared to the other two manufacturers.

• even if Also Guosen is a bit expensive in price, compared to the other two they have helped us with our production flow, machinery requirement and factory design.

• Finally after considering the above selection criteria's, We have decided to buy the full line machineries from Qingdao Guosen.

54

Design and Construction

55Design & Construction

1. Design & Construction of the Plant Collection Centers Pre-processing Plant Main industrial factory

56Collection Center Plan

Total Area of the collection Center =1762 m2

Total Built Up Area=338 m2

57Collection Centers…

58

• The two Pre-Processing plants are located

1. Sidama Zone, Tetecha Wereda,355 km from Addis Ababa.

Total Area allocated=50,000 m2

2. West Shewa Zone,Tikur inchini,147 Km from Addis Ababa.

Total Area allocated=50,000 m2

Pre-Processing Plant

59Pre-processing Plant site at Tetecha

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61Locations of the proposed plants

Tetecha

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• The construction of the pre-processing plants

Can be categorized in to two:

1. Sub-structure-Mainly includes, Excavations, earth works and flooring either with concrete or cobble stone.

2. Super structure-Mainly includes Construction of bamboo columns, beams and trusses.

Construction of the preprocessing plants

63Proposed bamboo structures

64

• The Main industrial plants is located

1. West Shewa Zone, Wolmera Wereda,20 Km from Addis Ababa.

Total Area allocated=100,000 m2

Main Industrial Factory

65Main industrial Factory Google Map

66

67Plan of the main Industry at Wolmera

68Bamboo Development 2011 - 2013

Private Sector Investment

69 • Thank you for your attention

Fortune Enterprise PLCPhone: +251-115-51-38-62 Fax: +251-115-51-77-05Office: FinFinne Building, Meskel Square,

Addis Ababa, Ethiopia