PULP AND PAPER MILL COMPANY IN AMHARA REGION

1. PULP AND PAPER MILL COMPANY IN AMHARA REGION GAFAT ENDOWMENT/2010

2. TECHNICALS OF PULP & PAPER PULP- refined plant fibre • Wood and other plant materials contain three main components (apart from water): • cellulosefibres (desired for papermaking), • lignin (a three-dimensional polymer that binds the cellulose fibres together) and • hemicelluloses, (shorter branched carbohydrate polymers).

3. CHIPPING

4. Pulps

5. BACKGROUND World Wide Paper Consumption • In 1961 =78 million tones. • In 2005 =365 million tones • Projections show by 2020 – will reach 494 million tones • Average growth rate of 2 per cent a year. Ethiopian Consumption • In 1996= 54,000 tones/yr • In 2007= 80,000 tones/yr • Average growth rate of 6 per cent a year

6. Per-capita consumption = 1kg/p/y (Lowest)

7. FUTURE TREND IN ETHIOPIA AND WORLD WIDE • Little can happen in modern life without paper • It's almost impossible to imagine development without paper. • The ongoing economic development and livelihood improvement in Ethiopia inevitably would create huge demand of pulp and paper products. • Expansions of schools and universities • Increasing of Manufacturing sectors that needs packaging and wrapping • Household consumption will increase THE CONSUMPTION AND DEMAND WILL INCREASE !!

8. Current status of Pulp and Paper industry in Ethiopia • Ethiopia doesn’t produce pulp • There are over 22 companies involved in paper making and trading businesses in Ethiopia, • only ‘Wonji’ and ‘Barguba’ plc uses imported pulp for their paper mills • while others import already produced paper rolls for further processing • 10,000 tones/yr pulps imported at a cost of 8 million USD • Only some 30% of the country’s paper demand is produced in the country. • Every year the country spend 72 million USD/yr Pulping and paper making industry in Ethiopia is at its infant stage !!

9. The proposed Mill and Production Type General System Unless and otherwise there is a capital constraints, the most advisable is to establish an Integrated production system. This is an installation in which the production of paper is directly connected with the production of pulp proposed pulp mill would have a capacity of 100 tones/day=30,000 tones/yr

10. RAW MATERIAL RESOURCE BASE IN THE REGION The fiber source for the proposed pulp mill in the region : 1. Currently available and already developed sources 2. Potentially to be available in near future

11. 1. Currently available and already developed sources Eucalyptus and Bamboo are known for their quality pulp in the world market. Strength Brightness High Opacity

13. Strategies of fetching the existing resources A. Outgrowers scheme B. Concession of state forests C. Own plantation

14. A. Outgrowers Scheme • Unseen and underestimated forest resources in the region. • The trend is more lands including farmlands has been and will be converted to wood lots (mainly eucalyptus spp. • Framers once they are librated from subsistence farming, they prefer to invest on forestry for the following reasons: • The fertility of the land is decreasing that become more preferable for crops than trees • Environmental risk mainly erratic rainfall is more series for crops than trees • more market is created for woods than ever before • Outgrowing forests are mainly developed by: • Communities and their institutions (municipalities, Pas, cooperatives, churches, etc) • smallholder investors, • Individual farmers, on shelterbelts, home gardens, woodlots and a diverse range of agroforestry systems.

15. a. Eucalyptus globules Among the many Eucalyptus species E. globules is the best pulping species. In Amhara region almost all zones and woredas are rich with this species. But from easy accessibility and marketing the following focal areas are very attractive: • DebereTabor-Gashena and its vicinity • Dessie and its vicinity • DebreBrihan and its vicinity • Tarmaber-Menze and its vicinity • DebreMarkos and its vicinity • Enjibara and its vicinity are potential areas of well developed outgrowers’ scheme for this species.

16. Start up catchments for E.globules i. Debre Tabor to Gashena 20,700 ha Eucalyptus woodlot currently. ii. Dangela to Addis-Alem 15,000 ha Eucalyptus woodlot currently. iii.10 km radius of Debremarkos town 2500 ha Eucalyptus woodlot currently. These three woodlot catchments with a maximum distance of 280 km from Bahirdar, currently there is nearly 38,200 ha with estimated wood volume of 3,056,000 m3 with MIA of 10m3/ha owned by out growers.

17. b. Eucalyptus camaldlusis The second important eucalyptus species for pulp making. In Amahra, region this species is found in a mid altitude areas (1700-2400 masl). The major potential areas for this species in respect to this project are: • Bahirdar-Dera-Fogera-Estie • Bahirdar-Marawi-Dangela • Awi(Adds- Alem)- Bure- Fenoteselam • Engibara-Chagni • Gondar town and its vicinity In all these areas with a maximum distance of 200 km from Bahirdar currently there is 20,000 ha with estimated wood volume of 1,500,000 m3 owned by outgrowers.

18. Bamboo (Highland + Lowland) The major Fetching catchments for highland Bamboo are: • Awi zone : Banja, Guagusa, Shkudad, Injibara town adminstartion, FagitaLekoma and AnkashaWoredas • West Gojam- Sekela, Degadamot and Quarit • East Gojam- Sinan and Bibugi • South Gondar-Fartaand Eastern Estie The major Fetching catchments for Lowland Bamboo are: • Awi zone- Jawi, Guangua and Ankesha • North Gondar- Quara, Metema, West and TachArmachiho and Adiarkay.

19. Summary of the resources by the out-grower scheme and Indications • Remarks • * all the available resources are not expected to come to solely to the company. There are others like • own utilization • other users • Environmental reason • ** Conversion rate is 1 tone of dried pulp = 4 tones of green wood log=6 m3 of green wood log • 0.6 tones of green wood=1m3 of green wood • Average 6-8 years of age eucalyptus wood lot would have 80m3 of wood/ha • *** the proposed pulp mill would have a capacity of 100 tones/day=30,000 tones/yr . This would require 120000 tones of wood=200,000 m3 of wood = needs to harvest 2500 ha

20. B. Concession Already established state forests Up to 25000 ha!

21. 2. Potentially to be available in near future • Bagasse is a sugarcane fiber • After the sugar is sacked the remaining cellouse is source of fiber. • Most sugar factories use this by product as a source of energy for the factory, however there is always excess products that can be used for pulping. • In near future Tana_Beles and Tendaho sugar factories will be established.

22. Why Pulp and Paper Mill in Amhara Region? Opportunities • There is already the resource base for pulping industry in the region in different forms that enables to begin pulping industry: • Extensive Eucalyptus spp with trend of expansion • Extensive Bamboo spp which are one of the priority species among the hard woods for pulping • Compared to others wider and suitable ecological basis for growing variety of tree species with short rotation period for pulp industry both for long and short fibre species. • The ongoing economic development and livelihood improvement in Ethiopia inevitably would create huge market of pulp and paper products

23. Cont… • The range of possible uses for pulp and paper products are almost limitless that gives wider market possibilities : • Writing and publishing materials • Wrapping and Packing materials • Sanitation materials • Decorating materials • Paper boards • Raw material for further products (e.g. pencil)

24. Cont… • The size of trees that could be used for pulping is much lower than any other forest industrial products which in turn reduces the gestation period of forest investment and financial return periods both for the subsistence farmers and investors • Untapped resources from used paper and pulp products that could be recycled

25. Alternatives uses of woods

26. 350 306 287 284 300 277 278 271 242 250 200 US $ 150 100 50 0 Indonesia Brazil China Ethio-1 Ethio-2 Ethio-3 Ethio-4 Wood Chemicals Energy Labor Other Delivery PRICE COMPETITIVNES Major determining factor of competitiveness in pulping industry is the cost of wood !!

27. BreakEven Analysis Scenario 1- Current situation

28. Scenario 2- Worst situation

29. PROPOSED SITEPulping and Paper Mill Plant Criteria • Huge water supply (3million lit/day (34 lit/sec) • Effluent stream with minimum environmental harms (Diluting effect) • Optimal distance to the wood supply • Easy transport • Labor availability • Land availability for mill and accessory establishment • Workers’ accommodation facility • Infrastructure mainly telephone, electricity and other health and education facility

30. Accordingly BahirDar-TisAbay along the Abay river • Abay has a discharge of 9.7 billion lit/day (113,300 lit/sec) ,which offers • reliable fresh water and • 1:3320 diluting effect for waste water • Little downstream effect • Optimal distance to major wood sources North Gondar, North Wello, South Gondar, Awi, West Gojam and East Gojam zones.

31. Socio-Economic Benefits • Brings Economic transformation through creating backward and forward linkage: • Subsistence Farmers and Farmers based institutions (PAs, Cooperatives, Schools, Religious institutions ) • Commercial forest growers • Local traders including transporters • Small and micro enterprises • Intermediate Consumers (Manufacturing industries) • Final Consumers As a result the industry will play pivotal role in creating value chain.

32. Cont. • Plays not only saving foreign exchange but also generates foreign exchange • Creates huge amount of employment opportunity at various level (From Tree planting, harvesting, transporting to processing and marketing) • It is the best alternative to make use of the existing and expanding Eucalyptus resources of the region

33. PROJECT COST Integrated system mill (Pulp + Paper Mill) 30-40 million USD High Initial Investment but profitable !!

34. የካፒታልምንጩከየትይሆናል? • የአክስዮን ማህበር መkkምና አክሲዮን በመሸጥ ከፒታል ማሰባሰብ • የአክሲዮኑ አበላት እነዲሆኑ የታሰቡት • ጥሪት ያላቸው አርሶ አደሮች • የደን ባለቤቶች • የህበረት ስራ ማህበራት • የከተማ መስተዳድሮች • የግል በለሃብቶች • የልማት ድርጅቶች

35. THANK YOU! Let us bring Economic Transformation with farmers !