Rationale and Justifications of the project

Though untapped yet, Ethiopia has unlimited potentials and opportunities in food Processing, in
general and oil meals as well as other related productions, in particular. Considering the suitability
of the country for agriculture, a big leap forward can be made by encouraging potential investors
to bring the capital & technology to the sector. Agricultural inputs to the industrial development
strategy formulated by the government clearly articulated the fundamental principles and
directions in order to ensure accelerated and sustainable industrial development in the country.

The Government of Ethiopia has formulated Growth and Transformation Plan (GTP), to ensuring
faster and enhanced development of the industrial sector with special emphasis particularly to
two major sub-sectors, one of which is agro-processing so that it turns out to be the foundation
and leading sector of the country’s development activities.

Oilseeds and edible oils are two of the most sensitive essential commodities in any economy.
Ethiopia is one of the largest producers of oilseeds in Africa and ranks 6th in the world in exporting
oilseeds (sesame and nigerseed) this sector occupies an important position in the agricultural
economy accounting for an estimated production of --------- million tonnes of six types of oilseeds
during the year ----------. In terms of value realization it has gone up from Birr -------------- to Birr
-------------------- during the same period.

Ethiopia consumes around ----------- million tonnes of edible oil in a year, which includes imports
of nearly --------- million tonnes. The country meets 90% of its edible oil requirements through
import.

With its large population and continued strong economic growth, Ethiopia is
likely to register strong gains in total and per-capita edible oil consumption in the
coming decades. The extent to which increased consumption is met by imports—
and the types of oil imported—will be strongly influenced by Ethiopia’s trade and
domestic agricultural policies. Thus there is a requirement for reduction of
dependence on edible oil imports. Ethiopia has planned to be self-sufficient in edible oil
consumption by year 2020. That could be brought about by increased
domestic oilseed production and amongst others much stronger price incentives,
production and yield improvements appended by stronger marketing strategies
which will lead to efficiency at the industry level.

There are uncommon opportunities to add value to different oilseeds and

oils, which must be fully exploited, which will eventually enhance the
competitiveness and sustainability of these crops (Hegde, 2007). At the
same time, there is a lot of scope for the industry to exploit the by-products
obtained during vegetable oil processing for value addition. The by-products of
vegetable oil processing like gums, soap-stock, spent bleaching earth, crude wax,
deodorizer distillate are rich sources of various value added products like lecithin,
gfycolipids, oryzanol, fatty acids and their esters, tocopherols, tocotriends, sterols,
waxes, long chain fatty acids and fatty alcohols, squalene, steryl esters etc. The
Ethiopian vegetable oil seed industry is now exploring the possibilities of value
addition to these by-products and thus enhancing the returns from the by-products.
• Scope for improving the efficiency of oilseed processing