AVOCADO OIL EXTRACTION; TO GENERATE EXTRA INCOME FOR COCOA FARMERS

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AVOCADO OIL EXTRACTION; TO GENERATE EXTRA INCOME FOR COCOA FARMERS

Ghana
Project Summary
Elevator Pitch

Concise Summary: Help us pitch this solution! Provide an explanation within 3-4 short sentences.

DEVELOP AN EFFECTIVE OIL EXTRACTIVE PROCESS TO ADD VALUE TO FRESH AVOCADO FRUITS WHICH PRESENTLY GROWS WELL AS VOLUNTEER CROP IN COCOA GROWING AREAS IN GHANA. PROMOTING THE RESULTS THROUGH ADVOCACY AND TRAINING OF STAKE HOLDERS TO DEVELOP THE DOWNSTREAM INDUSTRIES TO GENERATE ECONOMIC EMPOWERMENT

About Project

Solution: What is the proposed solution? Please be specific!

IT WILL FOR THE FIRST TIME SERVE AS AN ALTERNATIVE INCOME GENERATION CHANNEL FOR THE POOR COCOA FARMER IN WHAT HE KNOWS TO DO BEST (FARMING) BY WORKING SMARTLY. THIS IS CONTRARY TO OTHER INTERVENTIONS LIKE RECEIPT OF MEAGER BONUSES, GOVERNMENT PENSION SCHEMES, ETC WHICH PROMISES HOPE AT A FUTURE DATE OR TERMINAL AGE. A field survey conducted as part of the feasibility study revealed that seventy-five percent (75%) of respondents were aged between 31 and 60 years, 20% were female, with 86% married and 98% having attained formal education. The ability and willingness of cocoa farmers to collect and supply fresh avocado fruits as raw material under a cooperative scheme has been established on the assumption of good price and trading practices on the part of the project management. The financial and commercial viability indices are positive and provide confidence for support and implementation. The social and economic benefits are immense and range from direct provision of income and alternative livelihood through contributing to alleviation of poverty and unemployment to contributing to the local and national economy.
Impact: How does it Work

Example: Walk us through a specific example(s) of how this solution makes a difference; include its primary activities.

It is expected that the avocado extraction project should produce the following economic and social benefits: 1 Stimulate the level of economic activity in the cocoa producing districts of the Ashanti Region. 2 Directly contribute to the national tax revenue (i.e. VAT, Excise duties) and indirect contribution through PAYE deductions. 3 Contribute towards alleviating unemployment in the Ashanti Region by providing 42 direct jobs and about 300 indirect jobs within the operational areas. 4 Potential for generating foreign exchange from oil exports. 5 Import substitution from the local production of avocado oil. 6 Production waste would be incorporated into animal feed and used for land system enrichment. 7 The technology transfer activities in other regions would replicate all the above benefits for a wider impact. The project could potentially impact on 150,000 people directly and indirectly related to the cocoa system in the Ashanti Region alone. Currently, the oil retails at about US$5.00 per bottle (250ml) on the New Zealand market and at a comparable price in Australia. Extra virgin olive oil sells anywhere between US$2.00 and US$10.00 for 250 ml depending on whether it is imported or locally produced. The latter oil only has a two percent market share of the total bottled vegetable oil market. Bulk avocado oil sales are at US$10.00 per litre, US $180 - US$300 per tonne and are increasing as overseas users become aware of the reliable supply. The season 2000-2001 saw approximately 1,200 tonnes of fruit processed yielding around 160 tonnes of oil (giving a yield rate of 13%). After one season, the avocado growers in New Zealand have already seen the positive effects of extracting oil as an alternative to supplying the domestic market with low-grade fruit. Table 1: Survey of Competing Oils Prices over 3 years Type of oil Prices ($/ Mt) 2005 2006 2007 Avocado oil 1600-3025 1800-3200 1800-4560 Olive oil 2419-4501 2380-4680 2190-4850 Sunflower oil 550-750 550-750 633-640 Cotton seed oil 110-172 151-230 181-338 Almond oil 122-300 132-330 150-390 Palm oil 250-580 300-680 540-766 Groundnut oil 680-1550 680-1950 690-2235
About You
Organization:
Newmas Company Limited
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About You
First Name

Newton

Last Name

Amaglo

Website

http://Not Applicable

Your Organization

Newmas company Limited

Country

, AS

About Your Organization
Organization Name

Newmas Company Limited

Organization Phone

00233 244 858 258

Organization Address

P. O. Box 327 UP, Kumasi, Ghana

Organization Country
Organization Type

Private Institution

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Your solution
Country your work focuses on

, AS

If multiple countries, please list them here. If your solution targets an entire region, please select it below

Ghana but later it will be replicated in West Africa

Region(s) your solution focuses on:

Africa.

Range of turnover in your target firms, in USD

$6-10 Million.

Average turnover in USD of your target firm

5-6 million

Number of employees in your target firms

5-24.

Average number of employees of your target firm

7

Specify the size, average and range of expected loans or investments in each target firm

A feasibility study has been done at a cost of US$5,000 since 2007 and has been accepted as positive. We expect to use US$ 178,100 on materials while spending US$ 76,600 on Human resources as salaries. We also expect to spent US$160,000 during implementation.

What stage is your solution in?

Operating for 1‐5 years

Innovation
How does your proposed innovation leverage public intervention in catalyzing private SME finance?

The most abundant Avocado variety in Ghana is the 'Hass' variety which has been found to be the most compatible with cold-press oil extraction procedures due to its high oil content in the flesh. These varieties which are already growing as volunteer crops already available will be isolated and propagated as the bases for establishing new avocado oil plantations. During the isolation process various varieties suitable for various purposes will also be selected, propagated to start an entirely new plantation development process for avocado fruits in Ghana and west Africa.
The development of high oil yielding cost effective extraction procedure as an appropriate technology will affect its ease of acceptability and replication. Then the method of extraction will be effectively disseminated and marketed among the targeted stakeholders. This is expected to attract public interest and participation thus affecting public policy at large.
Depending on the location, oil content in the flesh of these fruit can range from 16-17% in September to 25-30% in April. Not only is there more oil in the fruit from the late season, but also the oil is also easier to extract from the fat containing 'idioblast' cells. The refined oil has a high stability and smoke point and makes it a general-purpose oil for frying and baking, similar to pure olive oil. It is a most appropriate oil for barbecues since most common vegetable oils such as soya and canola tend to oxidize and polymerize on hot surfaces and open flames used in much of the southern hemisphere cuisine.

What barriers does your proposed solution address?

Lack of financial capacity, Lack of SME access to skills / knowledge / markets, Unavailability of financial products tailored to SME needs, Lack of institutional capacity of financial intermediaries, High transaction costs for financial intermediaries to serve SMEs, General barriers to SME development related to investment climate, Specific barriers to fragile and weak states.

If you checked any of these barriers, describe how your solution addresses them

Cocoa growing is seasonal providing income from September to December. Avocado fruiting season in Ghana is in March –April and allows the cocoa farmer to get alternative source of income working on avocado. Our survey indicates that volunteer avocado crops already along cocoa plantations and require minimal care. Currently only a small fraction of the produce is utilized as fresh fruit (nutritional benefits with. Over 90 percent of produce go waste. The project seeks to utilize this otherwise wasted ninety percent fruits to produce oil that has a lager usage in the cosmetic and cookery or food industries. The refined oil from the avocado has a high stability and smoke point thus making it a general-purpose oil for frying and baking, similar to pure olive oil. The refined bleached deodorised oil makes an ideal constituent of hand creams and sunscreens thus making an otherwise wasted produce valuable to the farmer and community at large.

Impact
Provide empirical evidence of your proposed solution's success/impact at present. If your project is in the idea phase, please provide evidence that speaks to its potential impact

Potential Farmer Population
It is estimated that 25% of the rural population in cocoa growing regions of Ghana already have volunteer avocado trees on their cocoa plantations. Below is the target population for avocado harvesting and collection;
Rural Population in Ashanti Region – 439,971
Rural Population in Brong Ahafo Region – 284,157
Rural Population in Eastern Region – 344,695
Rural Population in Volta Region
(Jasikan District only) – 22,261
Rural Population in Western Region – 306,534
Total – 1,397,618
The total number of potential cocoa farmers who may participate in the collection of avocado from volunteer trees is approximately 1,400,000.
Assumptions for Value Chain Analysis
• Harvesting and Collection of Avocado Fruits: Each farmer will collect an average of 450 avocado fruits. Therefore the potential supply of raw avocados is 1,400,000 x 450 = 315,000 tonnes of raw avocado fruit.
• Drying of Avocado Fruits: The Processing plants will receive 315,000 tonnes of avocado fruits for processing that is, peeling, slicing, drying and storage.
• Milling and Mixing will yield 31,500 tonnes of avocado oil at the average estimated international price of US$ 3,180 per tonne. Thus, the total expected value of avocado oil is US$100,170,000.00.
• Local Consumption on the local market is estimated at 10% of the total output by the food industry, cosmetics and pharmaceutical industries.
• Export for Foreign market: Ninety percent (90%) of Avocado Oil produced locally will exported to the West African sub-regional and international markets such as the US and European Union.

Generate extra income to the cocoa farmer, generate employment, mitigate the social impact of poverty cycle in the cocoa growing area in Ghana, and impact local and national economy positively.

How many firms do you expect to reach?

Regional Gratis firms in three regions(equipment fabrication)and Five Cosmetic industries

What is the volume of private SME finance you aim to catalyze?

Four million dollars

What time frame will be required to reach these targets?

Five years maximum. The first years is most critical after which i expect the multiple effects to spring up.

Does your solution seek to have an impact on public policy?

Yes

What would prevent your solution from being a success?

a) lack of finance; b) Withdrawal of a major partner due to financial insolvency

Sustainability
List all the funding sources that are required for the sustainability of this solution

self-in gene
Speed Ghana(gtz)- 100% granted in paying for the cost US$ 5,000 in conducting the feasibility study
G-20-anticipated to be able to scale through the most critical stage

Demonstrate how your proposed solution has the capacity to graduate from dependence on public finance. What is the time frame?

We have observed that in Ghana we have avocado fruits all year round but these are only volunteer crops. They will be selected and propagated in our nursery to support a strong plantation development for the fresh fruit market. Varieties that are suitable for the export market will also be identified and selected. Supplying nursery seedling will be a quick way to graduate from dependence on public finance.

Demonstrate how your proposed solution will survive a potential loss of its largest private funding source

Should that happen then we will take advantage raise funds through the sale of grafted seedlings of avocado serving different purposes. For example we have observed that we have avocado fruits all year round in Ghana and these volunteer crops will be selected and propagated in our nursery to support a strong plantation for the fresh fruit market. Varieties that are suitable for the export market will also be identified and selected. Selling grafted seedlings will be able to raise funds to keep the project running.

Please tell us what kind of partnerships, if any, could be critical to the greater success and sustainability of your innovation

Technological partnership that will allow us the have the most appropriate and efficient avocado oil extract technology suitable for our use in Ghana. Although we have done a lot of research on this subject we are still open to new ideas that will help us conclude that we have the best technology and most appropriate equipment suitable for the oil extraction under our rural settings.

Are there non-financial issues that could threaten the sustainability of your proposed solution?

Ethnic unrest as well as struggles over ownership of volunteer avocado trees. This is to be overcome quickly by taking scions from identified good variety in the open and grafting it for sale. this should create a drive towards new plantations.

Please tell us if your proposed solution aims to scale up through a high growth sector, expand immediately to multiple sectors, and/or scale up geographically

Ghana and Ivory Coast are the leading cocoa growing areas of the world. This technology has these two countries as our major target. A strong avocado nursery will be established in Ghana to serve as a bedrock for the development of avocado fresh fruit and oil industry. While coordinating the collection of fruits from volunteer crops in Ghana and Ivory Coast our nursery will be a bedrock from which plantations will be established for a stronger future of the industry.