Establishment of a soybean meal processing factory in Ethiopia offers an opportunity for investors with expertise in the animal feed, soybean and livestock industries. Here we feature an example of a local business on the ground today seeking an investment of $1-5 million to expand capacity to process 6,600 tons of soybeans per year, with a NPV of $USD 3 million and an IRR of 25-35% for an investment of $1.2 million.
There is high potential for demand for both soybean meal as an input to animal feed and other soy consumer products.
In terms of the animal feed market, we conservatively estimate that there is at least a demand gap of over 120,000 metric tons for poultry production alone in 2015, representing a >$150 million market without even considering the cattle and other livestock sectors as demand sinks for feed. There is opportunity to install agro-processing capacity for the soybean sector in the production of soybean meal. Soybean meal fills the gap in the demand for high protein feed, with soy containing 2.5 times the protein content of wheat and 4 times the protein content of maize.
Furthermore, there is significant potential for soy-based consumer products such as soymilk and soy-based protein and meat substitute products to increase market share in the Ethiopian market. Ethiopian Orthodox culture requires over 200 days per year of fasting, or vegan consumption, including a 55-day period, Tsom, in March/April.
WHY INVEST IN ETHIOPIA?
Ample soybean supply due to suitable climatic conditions: Ethiopia’s production in soybean has increased by over 100 fold in the last decade, with a compound growth of 46% in the last 3 years. Ethiopia has favorable climatic and soil conditions for production in South and Western Ethiopia; therefore, soybean can be easily produced both for commercial purposes as well as for subsistence farming.
Soybean is a natural choice for inter cropping and crop rotation with maize, which grows abundantly across Ethiopia. As Ethiopia has no winter, it offers the unique opportunity for double-cropping and year-round production. Although Ethiopia produces significantly less soybean than South Africa, Ethiopia has managed to achieve higher yields in recent years.
Get in touch
The Agricultural Transformation Agency is an initiative of the Federal Government of Ethiopia Off Meskal Flower Road, across from Commercial Graduates Association