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Table of Contents
LIST OF FIGURES .................................................................................................................... V
LIST OF TABLES ...................................................................................................................... V
EXECUTIVE SUMMARY ........................................................................................................... 1
1 BACKGROUND AND DESCRIPTION OF THE BUSINESS ...................................................... 6
TYPES OF PRODUCTS ............................................................................................................. 6
LOCATION OF THE BUSINESS ................................................................................................... 6
TYPE OF BUSINESS ................................................................................................................ 7
RECENT OPERATIONAL HISTORY .............................................................................................. 8
LONG- AND SHORT-TERM GOALS OF THE BUSINESS .................................................................... 8
INDUSTRY SYNOPSIS .............................................................................................................. 9
PURPOSE OF THE BUSINESS .................................................................................................. 10
2 ORGANIZATION AND MANAGEMENT PLAN .................................................................. 11
KEY MANAGERIAL PERSONNEL .............................................................................................. 11
ADVISORY AND TECHNICAL SUPPORT...................................................................................... 11
TRAINING REQUIREMENTS ................................................................................................... 12
ORGANIZATIONAL STRUCTURE .............................................................................................. 12
3 MARKETING PLAN ........................................................................................................ 14
GLOBAL SPECIALTY MARKET STATUS ...................................................................................... 14
PLANNED MARKET SHARE FOR ABOL COFFEE EXPORT PLC......................................................... 15
COMPETITORS OF ABOL COFFEE EXPORT PLC .......................................................................... 15
SPECIALTY MARKET STUDY ................................................................................................... 16
3.4.1 Demand and Supply .................................................................................................. 16
3.4.2 Specialty Coffee Market in Ethiopia .......................................................................... 18
3.4.3 Projected Demand..................................................................................................... 20
POTENTIAL CUSTOMER BASE MARKET SEGMENT ...................................................................... 21
COMPETITIVE STRATEGY ...................................................................................................... 21
COMPARISON WITH COMPETITORS ........................................................................................ 22
MARKET ENTRY BARRIERS.................................................................................................... 24
BUSINESS MARKETING PLAN ................................................................................................ 24
3.9.1 Promotions ................................................................................................................ 24
3.9.2 Advertising ................................................................................................................ 24
3.9.3 Marketing Budget ..................................................................................................... 25
SALES FORECAST ................................................................................................................ 25
SALES PRICING AND COMPETITOR COMPARISON ...................................................................... 26
3.11.1 Analysis of Price Trends......................................................................................... 26
3.11.2 Price Structure & Justification ............................................................................... 27
SALES PERSONNEL .............................................................................................................. 27
TARGET MARKET................................................................................................................ 28
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5
SERVICE PLAN FOR COFFEE EXPORT PROJECT ............................................................... 30
DESCRIPTION OF THE SERVICES.............................................................................................. 30
DIFFERENCES FROM COMPETITOR PRODUCTS/SERVICES ............................................................ 31
PRODUCTION PROCESS AND MACHINERY/EQUIPMENT REQUIRED ............................................... 32
4.3.1 Production Process of Specialty Coffee ..................................................................... 32
4.3.2 Machinery & Equipment Required ............................................................................ 34
HUMAN RESOURCE REQUIREMENT ........................................................................................ 36
4.5.1 Required Personnel and Roles ................................................................................... 37
4.5.2 Labor Market and Availability .................................................................................. 39
4.5.3 Human resource estimated cost ............................................................................... 39
PRODUCTION SYSTEM AND LAYOUT ....................................................................................... 41
4.6.1 Decentralized Production Flow ................................................................................. 41
4.6.2 Facility Layouts and Components ............................................................................. 42
4.6.3 Benefits of the Decentralized System........................................................................ 43
SERVICE UTILIZATION CAPACITY AND PLAN .............................................................................. 43
4.7.1 Service Utilization Capacity ....................................................................................... 43
4.7.2 Specialty Coffee Production Program ....................................................................... 44
BREAKDOWN OF PRODUCTION COSTS .................................................................................... 44
4.8.1 Abol Supporting Costs, Cost Structure, and Costs Per Item ...................................... 45
4.8.2 Coffee Farmers' Production Cost ............................................................................... 46
RAW MATERIALS, UTILITIES, AND OTHER INPUTS ..................................................................... 46
4.9.1 Raw Materials and Input Requirements ................................................................... 46
4.9.2 Packaging Materials ................................................................................................. 48
4.9.3 Utilities for Administration........................................................................................ 48
4.9.4 Training Cost for the Farmers ................................................................................... 48
DELIVERY METHODS ........................................................................................................... 49
STOCK MANAGEMENT SYSTEM ............................................................................................. 50
FINANCIAL PLAN .......................................................................................................... 52
ABOL COFFEE EXPORT TOTAL INVESTMENT BREAKDOWN ........................................................... 52
ABOL COFFEE EXPORT, PLC FINANCIAL STRUCTURE .................................................................. 54
PROJECT FINANCIAL & PRODUCTION ASSUMPTIONS ................................................................. 55
CONTINGENCY FINANCING ................................................................................................... 56
THE LOAN REQUIREMENT ..................................................................................................... 56
ABOL COFFEE EXPORT-FINANCIAL PLAN AND ECONOMIC ANALYSIS.............................................. 57
ABOL COFFEE EXPORT PLC-FINANCIAL PROJECT ...................................................................... 59
5.7.1 Abol Coffee Export PLC - Profit and Loss Statement ................................................. 59
5.7.2 Abol Coffee Export PLC - Cash Flow Statement......................................................... 59
5.7.3 Abol Coffee Export PLC - Balance Sheet .................................................................... 60
SMALLHOLDER COFFEE EXPORTER FARMERS ............................................................................ 61
5.8.1 Coffee Farmers - Profit and Loss Statement ............................................................. 61
5.8.2 Coffee Farmers - Cash Flow Statement ..................................................................... 62
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5.8.3 Coffee Farmers - Balance Sheet ................................................................................ 62
5.8.4 Financial Evaluation for Farmers .............................................................................. 63
5.8.5 Loan Repayment Schedule ........................................................................................ 63
SENSITIVITY ANALYSIS ......................................................................................................... 63
STRATEGIC IMPLICATIONS .................................................................................................... 63
6 ENVIRONMENTAL AND SOCIAL IMPACT ASSESSMENT (ESIA) ........................................ 65
ENVIRONMENTAL IMPACT ASSESSMENT (ESIA): ...................................................................... 65
SOCIAL IMPACT ASSESSMENT (SIA): ...................................................................................... 65
SOCIO-ECONOMIC IMPACT ASSESSMENT (SEIA) ...................................................................... 66
7 CONCLUSION AND RECOMMENDATION ....................................................................... 67
CONCLUSION ..................................................................................................................... 67
RECOMMENDATION ............................................................................................................ 67
ANNEXES ............................................................................................................................. 68
LEGAL DOCUMENTS .....................................................................................................................................................69
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List of Figures
Figure 1: Project Investment Cost Breakdown ............................................................................... 4
Figure 2: Study Area Map of Project ............................................................................................... 7
List of Tables
Table 1 : Global Specialty Coffee Market Overview (2020–2024) ................................................ 14
Table 2 : Global Specialty Coffee Supply & Demand (2020–2024) ............................................... 17
Table 3 : Projected Global Specialty Coffee Demand (2025–2031) ............................................. 17
Table 4 : Specialty Coffee market Share from Country total Export Coffee (2022-2024) ............ 19
Table 5 : Projected Demand for Ethiopian Specialty Coffee Exports (2025–2035) ...................... 20
Table 6 : Comparison and contrast with competitors in terms of price, quality, distribution, .... 23
Table 7: Annual production and Sales Forecast of the project .................................................... 25
Table 8 : Projected Price Table for Abol Coffee Export PLC from 2026 to 2030 ................. 27
Table 9 : Mobile Quality Control Laboratory, Traceability Systems, Machinery and Equipment &
Related Cost .......................................................................................................................... 34
Table 10 : The Estimated Cost of Office Furniture and Equipment .............................................. 36
Table 11 : Utilization capacity and Production Volume plan........................................................ 44
Table 12 : Total Abol Coffee export PLC, Supporting costs, cost structure, and costs per item .. 45
Table 13 : Total Farmers' Production costs, cost structure, and costs per item .......................... 46
Table 14 : Farmers' Production Input and Related Costs ............................................................. 47
Table 15 : Abol Coffee Export PLC Red Cherry Drying Supporting Inputs and Related Costs ...... 47
Table 16 : Abol Coffee Export PLC: Packaging Materials, Supporting and Related Costs ............ 48
Table 17: Annual Utilities Requirement and Estimated Cost ....................................................... 48
Table 18 : Annual Training Budget Requirement and Estimated Cost ......................................... 49
Table 19: Project Investment Outlay Foreign & local Cost component ....................................... 52
Table 20: A breakdown of the financial Structure & promoter’s contribution, bank finance .. 54
Table 21: Loan Repayment Schedule ............................................................................................ 57
Table 22: Projected Revenue Assumption .................................................................................... 58
Table 23: Projected Production Operation estimated cost (direct and indirect .......................... 58
Table 24 : Profit & Loss Statement (25% Revenue Share) ............................................................ 59
Table 25 : Abol Coffee Export PLC - Cash Flow Statement ........................................................... 60
Table 26 : Abol Coffee Export PLC – Balance Sheet Statement .................................................... 60
Table 27 : Profit & Loss Statement (75% Revenue Share) ............................................................ 61
Table 28 : Coffee Farmers - Projected Cash Flow Statement ....................................................... 62
Table 29 : Coffee Farmers - Projected Balance Sheet................................................................... 62
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Executive Summary
This is a newly founded private limited company by Mr. Balkew Tadese and Mr. Desalegn Olijira,
and it is called Abol Coffee Export PLC. Mr. Balkew Tadese is the general manager of the
company. It is intended to empower Ethiopian small-scale coffee farmers by creating a direct trade
channel infrastructure, developing relationships between smallholder coffee exporters, producers,
and international buyers. The business aims at fair pricing, traceability, and premium-quality
coffee standards in exporting green Arabica coffee. In this way, it forwards the long-standing
problems of smallholder farmers in low prices, restricted market access, and reliance on
middlemen.
Justification of the need:
In Ethiopia, over 1,200 small-scale coffee farmers have endeavored to export their coffee, albeit
hampered by various barriers to reach the international market, principally, the absence of a
centralized direct trade scheme with the farmer at the focus. These farmers lack the digital
platforms and visibility to attract distant buyers. They usually find themselves in a fragmented
supply chain, heavily penetrated by intermediaries who hold a good share of the value. Smallscale producers are unable to brand, price, or negotiate products by themselves without being
plugged into a trusted digital platform that publicizes their coffee profiles, certifications, and
traceability data. In addition, poor post-harvest handling and limited access to essential
equipment, including coffee dryer inputs, moisture meters, and cupping labs, also affect bean
quality, leading to lower grades, high rejection rates, and revenue losses.
To mitigate these risks, establishing a Coffee Farmers' Trade Platform Company becomes
paramount. This company would build a comprehensive online marketplace to allow small-scale
farmers to create traceable profiles, upload product lots, and engage international buyers with
logistics and payment being safely and transparently handled. This digital platform will also
facilitate the necessary post-harvest support services, including quality training, access to modern
processing equipment, and assistance in getting certifications. In this way, smallholders will be
directly connected with global buyers and supported in improving quality; hence, the platform
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would improve incomes, give market ownership to farmers, and enhance the competitiveness of
Ethiopian coffee in the global arena.
The business is located in two of the most famous coffee-producing areas in the country- Ethiopia,
the East Sidama, Guji, and Gedeo zones. More than 154 small-scale farmers will be the sources
of the top-class washed and sun-dried Arabica coffees. Process, check the quality, and export
specialty coffee of about 36 quintals per year, average profit margin of 75% or birr 750 per
kilogram, and look into emerging areas of growth; more value-added products such as roasted
and soluble coffee.
Mr. Balkew Tadese is the founding promoter and holds shares in it, with over eight years of
experience as a coffee Q-grader in the Ethiopian Commodity Exchange (ECX) sector, particularly
in various coffee exporting companies and international marketing. His vision is to serve as a
bridge for smallholder farmers to access global specialty markets, using environmentally
sustainable processes and modern processing technologies. He has a BSc in Agribusiness
Management and has served as a director at a reputable Ethiopian coffee export company.
Strategic Key Impacts of the business involve:
The Abol Coffee Export PLC project is a game-changing agribusiness that offers strong financial
returns while creating lasting social and environmental benefits. With a solid business model, the
project stays profitable even when market conditions are tough, showing a net present value of
Birr 317.059 million at a conservative FOB price of $8.00/kg. By using modern processing, strict
quality control, and direct export channels, Abol Coffee boosts Ethiopia’s position in the global
coffee market and maximizes profits. The project also focuses on sustainability through climatesmart farming, using renewable energy, and eco-friendly waste management to protect the
environment over the long term.
For smallholder farmers starting with 154 members and growing to 220 farmers working 660
hectares, this project makes a big difference. It guarantees stable income (Birr 750/kg profit),
helping families escape poverty and reducing financial risks. Expanding to include more farmers
encourages inclusive growth, with training in sustainable farming, post-harvest handling, and
fair-trade certification. This leads to better yields, higher prices, and stronger resilience against
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climate and market challenges. The project also supports community development by creating
jobs, enhancing rural infrastructure, and empowering women, who constitute a significant portion
of the workforce. By eliminating exploitative middlemen and ensuring direct market access, the
initiative fosters trust and shared success in coffee-growing communities. In short, Abol Coffee
Export PLC is more than just a business, it’s a driving force for fair rural development,
environmental stewardship, and sustainable wealth in Ethiopia’s coffee sector.
Community Impact Highlights:
 Economic Empowerment: Higher, more stable incomes for 220 smallholder families,
helping break the cycle of poverty.
 Skill Development: Training in sustainable farming and business skills to boost long-term
independence.
 Gender Inclusion: Strong involvement of women in coffee production and decisionmaking, promoting equality.
 Social Infrastructure: Potential reinvestment in local schools, healthcare, and clean water
as the project grows.
 Environmental Protection: Use of agroforestry and organic methods to preserve soil
health and biodiversity for future generations.
This project shows that profitable agribusiness and community development can work together,
setting a standard for ethical, sustainable, and impactful coffee production in Ethiopia. The
creation of a trade platform for coffee farmers is expected to initially support 154 small-scale
exporters in the project's first year, with plans to maintain a 5% growth rate in the fourth full year
of the project, along with many other opportunities to gain global market access effectively. Direct
trade facilitation, digital market access, and post-harvest quality support are how the platform
aims to transform Ethiopia's smallholder coffee sector from disarray and underpayment to one
that is connected, competitive, and ultimately profitable.
The project is expected to cost ETB 92,585,213 in total. Of this, the promoter will bring in 15% of
the required capital, while the remaining 85% will be sourced through a loan against the UNIDO
grant through the Commercial Bank of Ethiopia loan. The rest of the investment will cover both
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fixed infrastructure as well as working capital for inputs and auxiliary materials, processing,
market, and logistics. Out of the total investment capital, birr 21,011,820 will be fixed investment
cost (22.69% of total investment cost), with 5% (birr 4,517,820) of fixed investment cost required
in foreign currency, and the balance of birr 13,887,782 (15%) will go to working capital. Figure
1 presents the itemization of investments under total investment (ETB).
Figure 1: Project Investment Cost Breakdown
The profitability and cash flow statements were well scrutinized to fully understand the project's
financial viability:
•
Profitability: The financial analysis of the envisaged project is carried out for the following
ten years. According to the 6-year financial projections based on the income statement, cash
flow statement, and financial internal rate of return (FIRR), the following results have been
obtained.
•
Abol Coffee Export PLC - Profit and Loss Statement: Abol Coffee Export PLC
demonstrates strong profitability, with revenue growing from Birr 194.4M in Year 1 to Birr
278.3M by Year 6, driven by a 25% share of total export revenue at a $10.40/kg FOB price.
After accounting for direct costs (Birr 53.6–77.5M/year) and administrative expenses (Birr
18–22.9M/year), the company achieves a net profit of Birr 86M in Year 1, increasing to
Birr 124.5M by Year 6. Despite a 30% corporate tax, Abol maintains healthy margins, with
Year 6 EBIT at Birr 177.9M, reflecting efficient cost management and stable revenue
streams.
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•
Coffee Farmers - Profit and Loss Statement: The coffee farmers demonstrate exceptional
profitability, with their 75% revenue share generating Birr 583.3M in Year 1, growing to
Birr 834.9M by Year 6. After deducting modest production costs (Birr 20.0-28.8M
annually), farmers achieve staggering net profits ranging from Birr 563.3M (Y1) to Birr
806.1M (Y6). With no tax obligations, this translates to an impressive profit margin
exceeding 96% throughout the project period. The extremely low production cost of Birr
36.1-36.3/kg compared to their revenue of Birr 1,052-1,054/kg creates extraordinary value
for farming farmers.
•
Cash Flow Statement: The cash flow statement demonstrates a considerable cash surplus
from the very first year of the project’s operational life. The cash balance increases from
birr 76,364,919in the initial year to a cumulative total of birr 114,865,562 by the sixth year,
reflecting the project's ability to finance itself and generate excess cash for further
investments.
•
FIRR Computation: The calculation of the project's Financial Internal Rate of Return
(FIRR) indicates a profitable return on investment. The before-tax FIRR is estimated at
146%, suggesting the project is financially viable, with an internal rate of return (IRR) of
104.9% and a net present value (NPV) of 315.059 million at a discount rate of 15%.
•
Socio-Economic Benefits: The project will create significant socio-economic benefits by
employing 148 individuals annually, including 28 permanent and 120 semi-skilled jobs.
Additionally, it is expected to generate tax revenue for the government and improve services
for both local and international tourists.
Conclusion and Recommendation: The project is determined to be operationally profitable,
viable, and yields significant socio-economic benefits. We recommend that, in light of the appealing
financial and economic advantages, all relevant offices and financial institutions support the
facilitation of this plan's implementation.
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1 Background and Description of the Business
Types of Products
The small-scale farmers' coffee will be processed from 100% Ethiopian Arabica beans and roasted
medium, to serve both the domestic and international specialty markets. Its source is the highland
regions in which unique flavor profiles are said to be created, for example, Sidamo, Yirgacheffe,
and Guji. The business will produce and export high-quality green coffee beans, both washed and
sun-dried, sourced directly from single smallholder coffee farmers. These beans are specialtygrade, traceable, and certified for ethical sourcing.
This product is strategically positioned to enhance Ethiopia's value chain, as global demand for
premium Arabica coffee that is traceable continues to rise. This demand is driven by the extensive
growth of specialty cafés, current brewing trends at home, and health-conscious preferences. The
business will focus on value addition at source, hence contributing to the job creation, local income
generation, and enhanced foreign currency earnings. Branding the product as ethically and
environmentally friendly builds upon the establishment for premium markets in Europe, North
America, and Asia, corresponding with the new millennium trends of sustainable consumption,
while enabling Ethiopia to diversify its coffee portfolio beyond the conventional coffee beans.
The types of product/s to be exported by the business:
▪
Grade-1(80%), 443,520 kg
 Yirgacheffe or Guji
 Sidamo
▪
Grade-2(20%), 110,880kg
 Yirgacheffe or Guji
 Sidamo
Location of the Business
The geographic areas of Eastern Sidama Zoe, Bona Woreda in Gedeo zone, Yirgacheffe Woreda,
and West Guji Zone, Bule Hora Woreda coffee growing area are highly representative of the
important coffee-producing areas of Ethiopia: Sidama, Oromia, and South Ethiopia.
Approximately 60% of consumers who prefer coffee from Ethiopia belong to smallholder farmers'
exporters. These include the Sidamo, Yirgacheffe, and Guji brands, and their data have been used
for this project as high-impact activities. A central operations hub will therefore be established in
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Addis Ababa, Nifas Silk Lafto, Sub-City: woreda,09; this will also serve as a logistics, training,
and post-harvest input supply center for all other coffee regions.
Company address: Addis Ababa: Nifas Silk Lafto, Sub-City: woreda,09, email:
balkewtadesse@gmail.com, (Tel): (+251-915666526)
Figure 2: Study Area Map of Project
Type of Business
Abol Coffee Export PLC is a private share company founded by Mr. Balkew Tades and Mr.
Desalegne Olijira (Deputy Manager). It has been established primarily for processing and
exporting high-quality Ethiopian coffee. The company has now broadened its vision by moving
into emerging issues affecting small-scale coffee farmers, such as limited market access and no
direct trade for these farmers. To do this, Abol Coffee Export PLC has set up a digital platform to
link smallholder coffee exporters directly with international buyers.
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This farmer-centered trading platform will allow small-scale exporters to build traceable profiles
for their coffee lots and market them to world markets without intermediaries. Besides facilitating
trading, the platform provides an array of post-harvest support services, such as access to modern
drying equipment, quality control training for farmers, and assistance with certifications. Through
this initiative, Abol Coffee Export PLC enables smallholder farmers to improve their income,
maintain quality standards, and build long-term buyer relationships in the global coffee value
chain.
Recent Operational History
Abol Coffee Export PLC is a private share company that was established by Mr. Balkew Tades
and Mr. Desalegne Olijira, who have over eight years of experience in processing and exporting
both washed and natural Ethiopian coffee. The company has built a very strong name in the
international market through its commitment to quality and traceability. Supported by these basic
export activities, Abol has also contributed to smallholder coffee farmers by linking them to
markets and facilitating direct trade relationships with foreign buyers.
Building on this foundation, Abol Coffee Export PLC nowadays enhances its role further by acting
as the sole bridge between smallholder farmers and the international specialty market. Moreover,
the company intends to establish a digital platform exclusively for farmers that can empower
small-scale exporters to market their coffee directly to foreign buyers.
The platform is designed to provide post-harvest support services, including quality training,
modern processing equipment, and certification assistance to ensure that farmers are capable of
meeting international quality standards and commanding premium prices. Abol, through this
initiative, aims to enable smallholders, increase transparency, and make a fairer and more
sustainable Ethiopian coffee value chain possible.
Long- and Short-Term Goals of the Business
▪
Short-Term Goals:
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Abol Coffee Export PLC intends to strengthen its operations during the first year, establishing
modern coffee processing facilities such as wet mills and drying stations to ensure consistency and
traceability of the coffee produced. The other area would be in strategic partnership development
with about 154 individual smallholder coffee farmers and organizing them for direct market access
and post-harvest support. In its first year of business under this newly structured initiative, Abol
intends to export 36 quintals of premium specialty coffee to select foreign markets, thus cementing
its commitment to the ideals of quality, transparency, and farmer empowerment.
▪
Long-Term Goals:
Long-term targets of Abol Coffee Export PLC include diversifying its sources for coffee from
more coffee-producing areas across Ethiopia and increasing the smallholder exporters from 220 to
over 506 in a decade, with a 130% growth rate per annum after this project. Diversification of the
product offering is a step that the company is taking because the introduction of value-added coffee
products like roasted and soluble varieties would make the company competitive in the market and
profitable. Abol also aims at internationally recognized certifications like organic and fair-trade
that would raise the brand's value as well as open doors to a high-premium market. All in all, it
will be an Ethiopian specialty coffee brand recognized internationally that connects smallholder
farmers directly to the world market, thus leading to an inclusive and sustainable coffee value
chain.
Industry Synopsis
Inside the global arena, Ethiopia is famous for being the cradle of Arabica coffee and one of the
biggest producers in Africa in where coffee contributes reasonably to the economy of the country
and the subsistence of millions of smallholder farmers. This international market is the
increasingly-evolving specialization aspect of coffee which is based on quality and traceability and
has direct trading relationships but there is restricted participation for small-scale farmers in
Ethiopia in this highly lucrative segment due to structural barriers like fragmented supply chains,
ill-developed processing infrastructure, limited market information, and no direct access to foreign
buyers. Smallholders end up not getting a fair share of their better-quality coffee because they are
often left with the necessity of selling to intermediaries at a lower price.
Abol Coffee Export PLC will be entering this dynamic sector using a targeted business model that
addresses such gaps. The plan is to link smallholder farmers directly to a stream, transparent value
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chain, while providing modern processing facilities and quality training, and link those farmers to
a digital trade platform so that they can start bridging the disconnect that exists between Ethiopian
Producers and international specialty buyers. With the global demand for ethically sourcedtraceable coffee soaring, Abol stands ready to lead a transformational approach in Ethiopia's coffee
sector, inclusive trade, enhancing rural income earnings, and placing high value on Ethiopia as an
origin for specialty coffee.
Purpose of the Business
The primary purpose of establishing Abol Coffee Export PLC is to create an inclusive and
sustainable business model that empowers Ethiopian smallholder coffee farmers to integrate them
into the global specialty coffee market. The company was built to respond to the most pressing
challenges faced by small-scale exporters- limited access to processing facilities, lack of direct
market linkages, and post-harvest quality issues- by providing an integrated solution of
infrastructure, capacity building, and digital connectivity.
With their specialty coffee processing and a dedicated online trading platform, Abol's vision for
improve the quality, traceability, and marketability of Ethiopian coffee. Ultimately, it would like
to eradicate the presence of middlemen, foster farmers' earnings, and build a strongly recognized
Ethiopian specialty coffee brand known for excellence, transparency, and social impact.
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2 Organization and Management Plan
Key Managerial Personnel
Strategic advice on project-planning, stakeholder coordination, and investment mobilization will
be provided by Mr. Balkew Tadese, the Founder and General Manager, who has a Bachelor's
degree in Agribusiness Management and has served as a director in a reputable Ethiopian coffee
export company. and more than 8 years of professional experience in coffee sourcing through
value chain development and export marketing in the country. Post-harvest Technical operations
will be under the purview of management with at least 10 years of post-harvest experience, and an
engineering experience comprising roasting and oil extraction. The Q-grader Manager will be a
food scientist or someone trained in chemistry who, with the assistance of others, will ensure that
the product meets its standards through compliance testing for ISO, organic, and fair-trade
certifications.
The Marketing and Export Manager must also possess significant international trade and digital
marketing experience and will drive efforts in brand positioning and access initiatives targeting
Europe, Asia, and North America. The Finance and Administration Manager will control budgets,
maintain financial reports, and ensure compliance within projects funded by donors and SMEs,
and within the required experience within an academic background in finance or accounting. This
team will be able to mobilize the technical skills, managerial capacity, and commercial leadership
required for a successful business launch and scaling up.
Additional managerial roles to be recruited include:
• Field Supervisors: Monitor farm-level quality and coordination
Advisory and Technical Support
To leverage momentum and sustainability in operations, Abol Coffee Export PLC will engage a
strong team of advisors and technical experts with specialized knowledge in key areas of the coffee
value chain. A local financial advisory firm will be engaged to provide oversight for bookkeeping,
auditing, and strategic financial planning, in compliance with national regulations and international
accounting standards. This support will also guide the company regarding export revenues,
investment planning, and financial reporting.
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A post-harvest processing expert will be on board for the establishment and management of wet
mills and drying stations, ensuring that best practices for bean quality, minimizing defects, and
compliance with international specialty coffee standards are put into place. The legal advisor
would be well equipped to support the company in establishing transparent supplier contracts, legal
compliance, and navigation of export documents, focusing rather on Ethiopian export regulations
and international trade law. Continued in-house training will also be provided for partner farmers
by a certified agronomist consultant on good agricultural practices (GAP), sustainable farming
methods, and quality standards in harvesting and processing. This advisory and technical support
structure will be critical to building a reliable, high-quality supply chain and ensuring the longterm success of the company's direct trade platform.
Training Requirements
In line with a commitment made to improve quality and accessibility within the market, Abol
Coffee Export PLC will launch a complete program aimed at training 154 smallholder coffee
farmers at was cost of birr 1,990,980. This program will include essential training in areas such
as specialty coffee processing techniques, proper storage methods to retain quality, and effective
use of the company website for direct access to international markets. This training will ensure
that farmers have the know-how to comply with standards set by the specialty coffee industry,
post-harvest handling protocols, and price premiums extracted from direct and fair-trade relations.
Also included will be specialized training for selected staff from the Abol Coffee Export PLC on
managing business performance to run the organization with effective efficiency and strategic
growth. The entire training program cost is estimated at 500,000 birrs, which would cover expert
facilitation, training materials, logistics, and follow-up support, marking an all-important
milestone in investment towards capacity building and long-term value chain development.
Organizational Structure
Proposed Organizational Structure
1) General Manager (GM)
o All business functions, strategic planning, and stakeholder engagement under its
supervision sites it in the operation of reporting to the Board of Shareholders.
2) Operations Department
o Production Manager
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 Manages wet mills, drying stations, and quality control processes.
o Post-Harvest Specialist (built-in)
 Ensures good processing and storage conditions as well as consistency in
the ranges of coffee lots.
o Warehouse & Logistics Officer
 Manages inventory, transport, and export logistics.
3) Farmer Relations and Extension Services
o Extension Services Coordinator (built-in)
 Leads farmer engagement, technical training, and support.
o Agronomist Consultant (built-in/advisory)
 Coaches on-site managers on agronomy and harvesting best practices.
4) Marketing and Sales Department
o Export Manager
 This position deals with contracts to be exported, relationships with buyers,
and market expansion.
o Digital Platform Manager (built-in)
 Manages the online trade portal, farmer profiles, and buyer connections.
5) Finance and Administration Department
o Finance Officer
 Handles budgeting, financial reporting, and cost control.
o Local Audit & Financial Advisor (built-in/advisory)
 Support for financial oversight and compliance.
o Hr & Admin Officer
 Manages staff, contracts, and performance within the organization.
6) Legal and Compliance Unit (built-in/advisory)
o Legal Advisor
 Facilitates export regulation compliance; contracts with internal and
external parties; deals with legal risks as they come up.
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3 Marketing Plan
Global Specialty Market Status
According to the recent industry update, a review of the global specialty coffee market has been
revised for the period 2020- 2024 with the inclusion of various aspects related to market size and
growth rates, major players of the market, and projected market share of Abol Coffee Export PLC
in that market:
The global specialty coffee market exhibited a healthy growth trajectory from USD 22.3 billion in
2020 to USD 31.9 billion by 2024, as higher demand for quality and ethically sourced coffee, in
addition to more avenues opening up for consumers to purchase through DTC, made it a bright
spot for specialty coffee. Avg. annual growth rate for the sector stood at about 9.4% with big
players like Starbucks and Nestlé each holding small but stable shares of around 6-7%. However,
the majority (over 85%) is largely fragmented into specialty roasters, independent cafés, and direct
exporters. This fragmentation gives an opportunity for new entrants like Abol Coffee Export PLC
to focus on niche specialty buyers using a farmer-linked direct trade platform. It plans to export
1,815 quintals of traceable, premium coffee in its first year of operation, targeting a modest yet
strategic 0.005% of the global market in 2024, with this being a gradual growth strategy through
increased sourcing, value-added products, and certifications.
The summary of the specialty coffee world market from 2020 to 2024, illustrating market size and
growth rate, existing market shares, key competitors, and the projected market share of Abol
Coffee Export PLC, is presented in Table 1.
Table 1 : Global Specialty Coffee Market Overview (2020–2024)
Year Market Size (USD
Annual Growth
Global Competitors & Market
Billion)
Rate (%)
Share (%)
2020 22.3
9.5
Starbucks (5.9%), Nestlé (6.5%),
Others (87.6%)
2021 24.4
9.4
Starbucks (6.0%), Nestlé (6.6%),
Others (87.4%)
2022 26.7
9.4
Starbucks (6.1%), Nestlé (6.7%),
Others (87.2%)
2023 29.2
9.3
Starbucks (6.2%), Nestlé (6.8%),
Others (87.0%)
14
2024
31.9
9.2
Starbucks (6.3%), Nestlé (6.9%),
Others (86.8%)
Source: Market sizes and growth rates are based on aggregated data from multiple industry
reports and World Coffee Research and ICO market trend forecasts (20240)
Key Takeaways:
 Market Growth: The specialty coffee market has steadily grown due to the increased
consumer demand for high-quality, ethically sourced coffee.
 Major Rival Competitors: Starbucks and Nestlé are the other major players in the
market, whose share of the market is increasing gradually because of strategic
expansions and acquisitions.
 Entry of Abol Coffee Export PLC: Abol Coffee Export PLC is going to enter the market
in 2029 with a focus on direct trade and specialty coffee and plans to capture an initial
market share of 0.007% at the full production capacity in year four.
Planned Market Share for Abol Coffee Export PLC
Initial Entry (2026):
•
Expected Export Volume: 554,400 quintals (554.4 tons)
•
Estimated Market Value: USD 5.765 million
•
Percentage of Specialty Export Market Targeted (Direct Trade Niche): 0.005 to
0.007%- Indicated Year 1-global adoption under premium markets in Europe, the USA,
and Asia.
6-Year Goal (2031):
•
To expand volume exporting and product line with smallholder coffee farmers (to reach
18.33% of the existing coffee exporters).
•
Market share target: 0.05 to 0.007% of the total specialty coffee segment on a global
scale.
•
They are a recognized Ethiopian specialty brand/reputable in traceability, direct trade,
and quality.
Competitors of Abol Coffee Export PLC
For the next five years, Abol Coffee Export PLC will have to face tough competition not only from
established Ethiopian exporters but also from upcoming specialty coffee startups. Some of the
significant competitors include exporters such as Trabocca, METAD Agricultural Development,
15
and Kerchanshe Trading. Those have developed international networks and consistency in quality
control. They have also established direct relations to global roasters as well as certifications
(Organic, Fair Trade, Rainforest Alliance) and are being auctioned at top levels, like Cup of
Excellence. Small-scale boutique exporters such as Daye Bensa and Keffa Coffee are now finding
many doors opening for them, particularly by concentrating on traceable microlots and sustainable
farming partnerships to attract niche buyers from the U.S., Europe, and Asia.
The new market dynamics that will sharpen competition would include, among others, higher
domestic processing investments and digital traceability platforms. For example, while
cooperatives like Yirgacheffe Coffee Farmers’ Cooperative Union cut out middlemen to sell
directly, other companies such as Omni Bean and Moplaco are leveraging this technology for
transparency through blockchain. Climate-smart farming initiatives by competitors could also
disturb the supply chains if droughts or pest incidences were to tighten the availability of premium
beans. For Abol Coffee to keep ahead, it must develop different strategies for partnerships with
buyers through unique innovative processing techniques such as anaerobic fermentation and
powerful branding of terroir unique to Ethiopia against lower rates possessed by regional peers
like Kenya and Colombia, which charge significantly higher prices for the same quality tier.
Specialty Market study
3.4.1 Demand and Supply
The global specialty coffee market was in constant imbalance concerning demand and
supply. The demand for specialty coffee increased enormously, from 22.3 million 60-kg
bags in 2020 to around 30 million bags by 2024; increases in consumption across North
America, Europe, and emerging Asian markets account for the average annual growth rate
of 7 - 9%. Rising above just supplies, pauses from constraints on weather conditions,
heightened production costs, and limited infrastructure for smallholder farmers in countries
including Ethiopia, Colombia, and Honduras. While world production of specialty-grade
coffee rose from approximately 20 million bags in the year 2020 to merely 25 million in
2024, such a gap has encouraged innovative quality control measures, digital traceability
systems, and direct trade. Such an imbalance between supply and demand serves to
demonstrate how newcomer enterprises, such as Abol Coffee Export PLC, have
strengthened specialty supply through farmer capacity enhancement measures and direct
16
export models. (Source: Grand View Research, ICO Coffee Market Reports). Here is a
clear data table showing the global specialty coffee supply and demand from 2020 to 2024with figures in million 60-kg bags, the standard unit measurement in the industry. The
annual growth rates and the widening gap between demand and supply are also captured
in a table. Below is a detailed demand supply, its growth rate, and is presented in Table 2.
Table 2 : Global Specialty Coffee Supply & Demand (2020–2024)
Year Global Demand
Demand
Global Supply
Supply
(Million 60-kg Growth Rate (Million 60-kg
Growth
Bags)
(%)
Bags)
Rate (%)
2020 22.3
—
20.0
—
2021 23.9
7.2%
21.0
5.0%
2022 26.0
8.8%
22.0
4.8%
2023 28.2
8.5%
23.5
6.8%
2024 30.0
6.4%
25.0
6.4%
Source: Grand View Research, ICO Coffee Market Reports (2024)
Demand-Supply
Gap (Million
Bags)
2.3
2.9
4.0
4.7
5.0
Key Takeaways:
 Demand includes consumption by roasters, specialty cafes, and premium retail segments
throughout North America, Europe, Asia, and emerging markets.
 Supply refers only to certified or cupped specialty-grade arabica beans, excluding
conventional or commodity-grade coffee.
 The demand-supply gap widened from 2.3 million bags in 2020 to 5.0 million bags in
2024, indicating a tightening market that favors high-quality, traceable exporters.
3.4.1.1 Global Specialty Coffee Projected Demand
The numbers speak to a demand forecast for specialty coffee with a global view from 2025
to 2031, in million 60-kg bags, based on historical trends of 6-8% annual growth,
increasing consumer preference for traceable, fine-quality coffee, and expanding specialty
markets in Asia, North America, and Europe. Below is a detailed demand supply, its
growth rate, and is presented in Table 3.
Table 3 : Projected Global Specialty Coffee Demand (2025–2031)
Year
2025
Projected Demand (Million 60-kg Bags)
32.4
17
Annual Growth Rate (%)
8.0%
2026
35.0
8.0%
2027
37.8
8.0%
2028
40.8
8.0%
2029
44.0
7.8%
2030
47.3
7.5%
2031
50.5
6.8%
Source: Specialty Coffee Association (SCA) publications and Ethiopian coffee traceability and
value chain improvements: https://sca.coffee
From 2025 to 2035, global specialty coffee demand is projected to grow from 32.4 million
to 61.8 million 60-kg bags, almost doubling over 11 years. The early years will have the
most vigorous growth, with demand increasing at an average rate of 8% per annum until
2028, when it will gradually taper down to around 4.7% by the year 2035, as mature
markets stabilize and newer emerging areas create the next wave of demand. Steady growth
is indicative of consumer awareness focusing on sustainability, quality, and origin
transparency, which provides a fertile landscape for direct trade exporters like Abol Coffee
Export PLC. The supply-demand gap is still expected to widen, leading to sustained market
opportunities for high-quality, traceable producers.
3.4.2 Specialty Coffee Market in Ethiopia
3.4.2.1 Specialty share in Export Coffee Market
Below is an expanded table showing Ethiopia’s estimated specialty coffee exports from 2020 to
2024, followed by projected global demand for Ethiopian specialty coffee from 2025 to 2035. The
historical data (2020–2024) is based on reported export volumes and estimated specialty coffee
shares, while the projection (2025–2035) assumes a 6% annual growth rate in global demand. The
growth in special coffee exports from an estimated 62,500 to 75,359 metric tons during this period
demonstrates Ethiopia's enhanced position in premium markets regarding well-known regions
such as Sidama, Yirgacheffe, and Guji, a development further supported by cooperatives and
improved quality control.
Ethiopia is famous for high-quality Arabica coffee, and specialty coffee has played an important
role in the country's export economy. Here's an overview of coffee export data from 2022 to 2024
18
regarding Ethiopia, according to the available data. Below is a detailed demand supply, its growth
rate, and is presented in Table 4.
Table 4 : Specialty Coffee market Share from Country total Export Coffee (2022-2024)
Year Total Coffee Export Specialty Coffee Share
Ethiopia's Specialty Coffee
(MT)
(%)
Export (MT)
2020
240,000
20%
48,000
2021
245,000
22%
53,900
2022
250,000
25%
62,500
2023
236,076
30%
70,823
2024
215,312
35%
75,359
Source: International Trade Centre (ITC) as reported for the years 2022 to 2024
By about 75,359 metric tons in 2024, Ethiopia's specialty coffee exports demonstrate this increase
in an average annual growth rate by an estimated 11.9%, from around 48,000 metric tons in 2020.
Increased global awareness and growing popularity of Ethiopian single-origin coffees, improved
traceability, expansion of other certifications (e.g., Organic, Fairtrade), and different value chains
extending services to consumers directly drove this increase. This segment had steadily grown
despite fluctuations in total coffee export season challenges by attracting cooperatives and
smallholder farmers toward selective farming quality differentiation in quantity.
Ethiopia's demand for specialty coffee is expected to increase from nearly 80,000 metric tons in
2025 to approximately 143,000 metric tons by 2035, which is expected to be a 6 percent compound
annual growth rate. These projections are based on continued global demand development over
time, especially premium markets such as Europe, the United States, and Asia, assuming that the
Ethiopian value chain is not only maintained but investments continue to upgrade quality further.
Data supports the rationale for strategic investment in specialty coffee infrastructure that would
enhance postharvest handling, certification, and access to market initiatives.
Key Insights:

Growth in Specialty Coffee: The share of specialty coffee in Ethiopia's exports has been
rising, reflecting global trends that favor high-quality, single-origin coffees.
19

Economic Impact: Coffee continues to be a vital component of Ethiopia's economy,
contributing significantly to foreign exchange earnings and supporting the livelihoods of
millions.

Regional Contributions: Regions such as Sidama and Oromia are major producers of
specialty coffee, with cooperatives like the Oromia Coffee Farmers Cooperative Union
playing a crucial role in promoting quality and fair-trade practices.
3.4.3 Projected Demand
Based on Ethiopia's recent trends in coffee exports, specifically the increased share of specialty
coffee from 25% in 2022 to 35% by 2024, as well as the growth in global specialty coffee demand
(estimated from 7-10% per annum), we can predict increasing demand for Ethiopian specialty
coffees in the upcoming decade. It would be possible to broaden the specialty coffee market, given
that Ethiopia stabilizes production capacity and applies improved technologies such as value
chains, traceability, certification, and postharvest. An Ethiopian projection of demand for
specialized coffee exports from 2025 to 2031 is given, based on a cautious estimate of annual
demand growth at 6% and slow improvements in the supply chain capacity of Ethiopia. A detailed
demand-supply growth rate is shown in Table 4 below.
Table 5 : Projected Demand for Ethiopian Specialty Coffee Exports (2025–2035)
Year
2025
2026
2027
2028
2029
2030
2031
Projected Global Demand for
Ethiopian Specialty Coffee (MT)
79,880
84,673
89,753
95,139
100,847
106,898
113,312
Abol Coffee Export Projected Plan
(tons
554,400
633,600
712,800
792,000
792,000
792,000
Over the decade from 2025 to 2031, demand for Ethiopian specialty coffee is projected to increase
from approximately 79,880 metric tons to over 113,312 metric tons, an 80% growth. This
projection is underpinned by global market preferences shifting toward high-quality, traceable,
and sustainably sourced coffees, especially from origin-certified producers like Ethiopia. Rising
consumer awareness in Europe, North America, East Asia, and the Middle East, as well as
20
increasing direct-trade relationships and e-commerce platforms, are expected to sustain this
upward demand trend.
To meet this projected demand, Ethiopia must address supply-side bottlenecks, including
inconsistent quality control, limited access to certification, inadequate infrastructure, and climate
vulnerability. Ethiopia can capitalize on its competitive advantage by investing in postharvest
technologies (e.g., solar dryers, raised beds), expanding cooperative-based certifications (e.g.,
Fairtrade, Organic), and supporting women and youth in the value chain. This sustained growth in
specialty coffee demand provides a strong justification for projects focused on production,
processing, and export enhancement. The envisioned project share increased from 0.005% to
0.007%, from 554.4 tons to 792 tons at the end of the project.
Potential Customer Base Market Segment
The customer base for the specialty coffee business comprises a diverse and strategically
segmented international market. For medium-roasted Arabica coffee, the primary customers
include specialty coffee importers, organic and fair-trade retailers, café chains, and gourmet
supermarkets in Europe, North America, and the Middle East regions, where demand for traceable,
single-origin, and ethically sourced coffee is rapidly growing. Meanwhile, the coffee seed oil
targets B2B clients in the cosmetic, personal care, and nutraceutical industries, including
manufacturers of skincare products, organic beauty brands, and wellness companies in high-value
markets like Germany, Japan, South Korea, and the UAE. Both product lines also appeal to
sustainability-conscious buyers who value clean processing, eco-friendly packaging, and fair value
distribution across the coffee value chain, making the project well-aligned with global consumer
trends and UNIDO’s inclusive and green industrialization objectives.
Competitive Strategy
Abol Coffee Export PLC operates in the highly competitive international specialty coffee market
of differentiation and quality, where it pursues premiumization and direct trade strategies with
those who have specialty coffee buyers' stringent delivery standards. By focusing on single-origin,
traceable, and sustainably grown coffee, Abol Coffee positions itself as a supplier of high-value
beans to select markets in Europe, North America, and Asia.
21
. On top of that, Abol Coffee partners directly with smallholder farmers, assuring quality control
and improving farmers' livelihoods, which is an important selling proposition in the specialty
market. The source of specialty coffee fulfills the following:
Direct Sourcing from Single Farmers: The individual farmers sourcing directly from their farms
ensure quality control, fair compensation, and support sustainable practices by eliminating
middlemen.
Traceability and Transparency: Providing full traceability enhances consumer trust, allowing
access to information about the coffee's origin and production methods, which appeals to ethical
buyers in the specialty market.
Sustainable and Ethical Sourcing: Your dedication to sustainable sourcing meets the rising
demand for responsible consumption among specialty coffee drinkers who value social and
environmental responsibility.
High Cup Quality: Ethiopian coffee is renowned for its exceptional flavor profiles, appealing to
coffee connoisseurs and making your product highly desirable to specialty roasters and coffee
enthusiasts.
Abol Coffee further distinguishes its position by emphasizing unique flavor profiles linked to
Ethiopia's most famous coffee-growing regions, namely, Yirgacheffe, Sidamo, and Harrar, thereby
carving its niche. The company's niche was marketing specialty coffee roasters, boutique cafes,
and retailers, and making its presence felt at trade shows across the globe, including the Specialty
Coffee Expo. Digital marketing and storytelling also help Abol Coffee showcase its heritage,
sustainability, and craftsmanship, forging emotional ties with potential buyers. By marrying
quality, sustainability, and brand authenticity, Abol Coffee Export PLC is capable of competing
very competently in the international specialty coffee market, which is heavily reliant on consumer
transparency and premium experience.
Comparison with Competitors
The company operates in a highly competitive arena: prices differ widely, quality is inconsistent,
and distribution and market shares defy common measures, all of which are subject to great
variation among Ethiopian specialty coffee exporters. On the price front, however, Abol's currently
envisaged placement (5.00–5.00–8.00/lb for Grade 1 by 2030) situates it as a mid-to-premium
22
direct competitor against METAD Agricultural Development (6.00-6.00-9.00/lb for single-origin
microlots), while it also undercuts global traders like Trabocca (7.00-7.00-12.00/lb for exclusive
auction lots). Generally, small cooperatives such as the Yirgacheffe Coffee Farmers Cooperative
Union sell to exporters at lower prices (4.00-4.00-6.00/lb) because of their collective bargaining,
lessening their ability to brand and market themselves.
In terms of quality comparisons, Abol's Grade 1 offerings (cupping scores 85+) compete well with
Daye Bensa and Kerchanshe's top-tier lots, but METAD and Trabocca prevail in traceability and
consistency through direct contracts with farms, with the support of blockchain technology. For
allocation, Abol does so through conventional wholesale channels, while others, like OmniBean,
deploy digital B2B platforms that connect roasters more swiftly. The market remains fragmented:
on one extreme, Kerchanshe and ECX-linked traders account for the bulk share (15% to 20%) in
conventional trade, while on the other, Abol could segment a customer niche 5% to 10% focused
on medium-sized specialty roasters in Europe and North America.
Table 6 : Comparison and contrast with competitors in terms of price, quality, distribution,
Factor
Abol Coffee
Export PLC
Price
(USD/lb)
5.00–5.00–8.00
(Grade 1, 2030
proj.)
Grade 1 (85+
pts), some
microlots
Wholesale,
emerging online
sales
0.005–0.07%
(projected
growth)
Quality
Distribution
Market
Share
METAD
Agricultural
Development
6.00–6.00–9.00
(microlots)
Yirgacheffe
Cooperative
Union
4.00–4.00–6.00
(bulk premiums)
Trabocca
87+ pts,
Smithsoniancertified
Direct contracts,
U.S./EU focus
84+ pts,
organic/fair
trade focus
Fair trade
networks, bulk
exports
8–12%
(cooperative
volume)
88+ pts, rare
processed lots
10–15%
(premium
segment leader)
7.00–7.00–12.00
(auction/reserve)
Auction-based, elite
roasters
5–8% (high-end
niche)
Key Takeaways:
•
Price: Abol sits between cooperatives (lower cost) and luxury traders (higher premiums),
appealing to mid-market buyers.
•
Quality: Competes well but trails METAD/Trabocca in elite microlots; could invest in
processing innovation.
23
•
Distribution: Lags in digital adoption; could partner with B2B platforms like Algrano.
•
Market Share: Needs aggressive branding to challenge Kerchanshe’s volume or
METAD’s premium dominance.
Market Entry Barriers
Among the market entry barriers that Abol Coffee Export PLC encounters in expanding its global
presence is the fact that international certifications include strict requirements in compliance with
Fair Trade, Organic, and SCA certification, which will require costly audits and supply chain
adjustments. Trade logistics and export regulations, such as ECX (Ethiopian Commodity
Exchange) rules and fluctuating export taxes, create additional complexities and delays for doing
business in Ethiopia. In addition, the dominance of established competitors in key markets, such
as METAD in the United States or Trabocca in Europe, makes it hard to acquire buyers, while
price volatility in global coffee markets threatens profit margins. Contributing to these issues are
supply instability caused by climate change and limitations in financing options for smallholder
farmers, which hinders the production of high-quality specialty coffee consistently. These
constraints call for heavy investments in certification, direct trade relationships, and digital export
platforms, as well as strong advocacy toward policy reforms on streamlining Ethiopian coffee
exports.
Business Marketing Plan
3.9.1 Promotions
There's enough mixing of promotional strategies in the marketing plan's mixing pot to positively
increase brand awareness and engagement: limited-time discounts, referral programs, seasonal
campaigns, and partnerships with influencers or local businesses. Social media contests, email
marketing, and loyalty rewards will stimulate a repeat appearance, while in-store promotions (if
applicable) and participation in community events will enhance local visibility. Excitement,
continuous retention, and conversion through incentive-driven targeting and value addition are all
attainable by this effort.
3.9.2 Advertising
Multichannel strategy to advertise across varied channels to maximize the reach and engagement
of advertising. Digital advertising will be inclusive of paid social media ads (Facebook, Instagram,
LinkedIn), Google Ads (Search and Display), and retargeting campaigns meant to catch potential
24
customers. To round off and/or complement digital advertising, traditional advertising-local radio,
print media, and outdoor billboards can be leveraged depending on the target audience. Video
marketing (YouTube, TikTok) and collaboration with influencers could be used further to increase
credibility and brand appeal, ensuring one-line messaging everywhere.
3.9.3 Marketing Budget
The marketing budget covers all the bases of important channels, with digital advertising gaining
the lion's share (30-20%), and followed by promotional activities (20%). Some of it is allocated to
tools used for analytics, A/B testing (also known as split testing), and for spontaneous changes.
Budgets are commonly 5-10% of projected revenue, and continuous monitoring of performance
metrics, such as ROI, customer acquisition cost (CAC), and conversion rates, will determine
adjustments in spending. Hence, these would ensure cost-effective campaigns toward the
maximization of growth potential.
Sales Forecast
Based on the Sales Summary table, the project demonstrates a gradual scaling strategy, reaching
full production capacity by Year 4. In the Specialty coffee segment, the export market utilization
starts at 554,400kg/year (70% capacity) in Year 1, increases to 633,600kg/year (80%) in Year
and continues to 712,800kg/year (90%) by Year 3. From Year 4 onwards, it stabilizes at
792,000kg/year (1000% capacity), indicating efficient ramp-up and market readiness. This steady
growth reflects a cautious but strategic approach to capacity utilization, allowing time for market
penetration, operational refinement, and supply chain optimization.
The consistency in oil production across all years points to a stable, high-margin product with an
established market niche. Together, these forecasts reflect a balanced growth plan, maximizing
revenue from both product streams while aligning with the UNIDO grant objective of enhancing
value-added exports in Ethiopia’s coffee sector
Table 7: Annual production and Sales Forecast of the project
Sales Plan Summary
UoM
Production Type
Specialty Grade-1
Kg/year
Specialty Grade-2
kg/year
Total Export Volume
Y1
70%
443,520.00
110,880.00
554,400
Y2
80%
506,880.00
126,720.00
633,600
25
Y3
90%
570,240.00
142,560.00
712,800
Y4-Y6
90%
633,600.00
158,400.00
792,000
Sales Pricing and Competitor Comparison
Ethiopia is often considered the cradle of coffee and produces some of the world's finest
specialty coffees, including the much-sought-after Yirgacheffe, Sidamo, and Harrar. These
coffees are in much demand for their distinct flavor profiles: floral and bright on the one
hand and winey and berry-like on the other, thus enhancing their desirability in the global
specialty coffee market.
Over the last few years, price trends of Ethiopian coffee have been subject to climate
issues, world demand, difficulties in production, and uncertain economic factors. The table
here provides an overview of the average global price trends for Ethiopian specialty coffee
(USD per pound) from 2023 to 2025 (projected).
Year
2023
2024
2025 (Projected)
Average
Price Key Influencing Factors
(USD/LB)
4.50−4.50−6.00
-Global inflation is affecting supply chains
- Strong demand from U.S. and European markets
- Slight production dip due to weather variability
5.00−5.00−7.00
- Increased focus on direct trade and traceability
- Higher costs due to logistics and currency fluctuations
- Growing specialty coffee demand in Asia
5.50−5.50−8.00
-Potential
climate-related
supply
constraints
-Continued premiumization of Ethiopian coffee
- Possible economic recovery boosting trade stability
3.11.1 Analysis of Price Trends
Ethiopian coffee achieved a premium in the world market. Buyers will have to assess weather
patterns, geopolitical factors, and changes in consumer preference to gauge future prices.
 2023: Prices remained strong amidst sustained demand; however, inflation and logistics
challenges kept the cost high.
 2024: Price trends upward as the specialty coffee markets have expanded with more
roasters willing to pay premiums for high-scoring Ethiopian lots.
 2025 (Projection): Prices may stabilize if climatic conditions are stable, but may fluctuate
to the higher side in case of any disruptions (drought, political factors, etc.).
26
3.11.2 Price Structure & Justification
Another internal plan is the formulation of a well-structured pricing system that is ever competitive
and simultaneously allows for fair returns to farmers and exporters. It is, however, to be noted that
the demand for high-quality Ethiopian coffee in the international market has been on the increase.
The following structures could be considered, whereby grading becomes the basis for pricing, with
Grade 1 (fully traceable, high cupping scores, highest quality) fetching a price of 5.00/lb, and
Grade 2 being at 4.00/lb (excellent but with minimum defects) in its pricing system. From there,
prices can be left to gradually adjust over the next five years according to market-related changes,
inflation, or Ethiopia's gradually enhancing reputation as a premium coffee origin.
Table 8 : Projected Price Table for Abol Coffee Export PLC from 2026 to 2030
Year Grade
1
Price Grade
2
Price Key Pricing Considerations
(USD/LB)
(USD/LB)
2026 5.00–5.00–5.50
4.00–4.00–4.50
- Stabilization of global supply chains
- Increasing demand from specialty roasters
- Expansion into new markets (e.g., China, Middle East)
2027 5.50–5.50–6.00
4.50–4.50–5.00
- Climate adaptation investments
2028 6.00–6.00–6.50
5.00–5.00–5.50
- Possible supply constraints due to climate risks
- Premiumization of Ethiopian brands
2029 6.50–6.50–7.00
5.50–5.50–6.00
-Strengthened
direct
trade
relationships
- Higher processing & certification costs
2030 7.00–7.00–8.00
6.00–6.00–7.00
-Potential
global
coffee
shortages
- Ethiopia’s specialty coffee reputation peaks
Note: USD conversion is based on an approximate exchange rate of 1 USD = 135 birr (rate subject
to market fluctuation).
Sales Personnel
For the Abol Coffee Export PLC, the sales personnel structure is designed to support both local
and international market engagement, customer relationship management, and value-added
product promotion. Out of the total 35 project staff, a dedicated Sales and Marketing Team of 5
professionals will be deployed. This team includes one Sales Manager, one Export Marketing
Officer, one Digital Marketing Specialist, and one Customer Relations/After-Sales Support
Officer. Their primary responsibilities include identifying and securing international buyers for
specialty products, developing marketing materials, managing online and B2B platforms,
27
coordinating logistics with export partners, and handling customer inquiries and feedback to build
brand loyalty and market penetration.
In terms of remuneration, the sales personnel will be compensated through a fixed base salary
in line with market standards in Ethiopia, along with a performance-based incentive structure. The
Sales Manager and Officers will receive commission bonuses based on the volume of exports
secured and sales growth targets achieved, which promotes accountability and motivation.
Additionally, sales staff will receive ongoing training in international trade, digital marketing, and
negotiation, with the support of potential partnerships with institutions such as the Ethiopian
Coffee and Tea Authority or UNIDO. This hybrid compensation and capacity-building model
ensures not only fair remuneration but also contributes to sustainable growth through enhanced
staff capacity and market-oriented operations.
Target Market
This specialty coffee is targeted at three major cuts of the market:
•
European, North American, and Asian Specialty Coffee Roasters:
 These companies source premium single-origin beans to distribute highquality coffee to their customers. They try to acquire the best coffees and
are interested in more transparent, sustainable options. Ethiopia's topquality Arabica fits this model well as roasters who are quality-focused and
traceability-oriented are often flavor-craving.
•
Ethical Trading Companies and Retailers:
 Those ethical trading coffee companies and retail brands, celebrating fair
trade and sustainable sourcing practices, thus share a target market. There
is increased awareness nowadays among customers looking for ethically
acquired products due to an emphasis on social responsibility and
environmentally friendly usage; companies in this category are most likely
to seek lasting relationships with coffee producers sharing the same
principles.
•
Direct-to-Consumer Niche Brands:
 Businesses that connect directly with their consumers, especially those
dedicated to personalizing the experience and offering premium quality
28
products, will have significant targets. Such businesses are quite popular
among coffee enthusiasts, often stressing aspects like transparency,
sustainability, traceability, and similar elements in executing their business.
They provide a direct interaction with customers by presenting an
immersive experience through education about the origins of the coffee, its
sustainability practices, and its unique flavor profile.
29
4 Service Plan for Coffee Export Project
Description of the Services
The project offers a holistic direct trade coffee export service model, intended to fill the gap
between smallholder coffee farmers in Ethiopia and the international premium market. The project
eliminates layers of intermediaries to ensure maximum value is retained by the producers while at
the same time dispensing high-quality, ethically sourced coffee to buyers around the world.
Inclusivity, traceability, quality assurance, and sustainability form the core of this service offering.
The project plans to export 554,400 kg from 154 farmers in the first year, and farmers reach 2220
at full production capacity year four, working under smallholder coffee exporters in Bule Hora
district of Oromia region, Yergachefe district of south Ethiopia, and Bona district of Sidama region
through a comprehensive direct trade coffee export service.
Farmer Identification and Profiling - The project begins by identifying 154 small-scale coffee
farmers across Sidama, Oromia, and South Ethiopia regional states systematically. Each farmer is
geo-tagged using GPS devices, and detailed digital profiles are created that include farm size,
altitude, coffee variety, agronomic practices, and historical production data. Such profiling allows
for customized support and accurate traceability.
Technical Training and Agricultural Extension Services: Participating farmers receive
continuous training on good agricultural practices (GAP), climate-smart practices, organic input
usage, post-harvest handling, and disease and pest management to improve yields and quality. The
project hires experienced agronomists and local extension agents to offer field-level guidance and
mentorship.
Infrastructure Development Support: Out of the recognition that infrastructural gaps affect
coffee quality, the project supports the negotiated rent and construction of drying beds at the farm
site and storage sheds at the aggregation center in kebeles of Bule Hora, Yergachefe, and Bona
district. Such investments help maintain the integrity of beans during the drying and storage
phases, drastically curtailing losses and reducing exposure to contamination threats.
30
Quality Control and Traceability System: A very strict quality control process is put in place,
including investigating the physical condition of beans and doing sensory evaluation (cupping)
using a mobile laboratory. Traceability covers the entire production and supply chain using a
digital system with QR-coded self-adhesive labels, enabling buyers to trace back every batch to
the individual farmer and lot. Such transparency extends buyer confidence and creates market
credibility.
Export logistics and documentation services: The project manages packaging, labeling, customs
clearance, and freight booking, thus streamlining the export process. Documentation services
encompass preparing invoices, phytosanitary certificates, export permits, and certificates of origin.
Ethically sourced coffee marketing and promotion: A marketing team promotes the coffee
brand to specialty coffee roasters, importers, and retailers abroad. The brand emphasizes
transparency, sustainability, farmer empowerment, and identity. Includes promotional activities
like attending international trade fairs, digital marketing campaigns, sending samples, and telling
the story of the farmers behind the beans.
Differences from Competitor Products/Services
Unlike traditional coffee export models that rely heavily on many tiers of intermediaries, the
project establishes a direct and transparent link between smallholders and international buyers,
ensuring that farmers receive the higher and fairer share of export value, with which they can
empower themselves economically and start giving incentives for quality in production. One of
the project's most salient features is its commitment to pricing transparency. Farmers are made
aware of international market prices, export margins, and logistics costs so that they understand
the full value chain and can negotiate from a position of strength. Such a pricing model stands in
stark contrast to that of the old system, in which price information is often opaque and subject to
manipulation.
The project also provides individually tailored capacity-building programs that take the personality
of the farmer and specific local needs into consideration. Unlike most traditional exporters, who
instill general training in group settings, support focuses on good agricultural practices, postharvest handling, quality grading, and training in the realm of sustainable farming. Only through
31
tool provision, alongside training on the necessary standards to qualify for specialty coffee, will
farmers turn this quality coffee into their own livelihood.
Another distinct feature of the project is its investment into both on-farm and common-good
infrastructure. By partially or fully supporting drying beds, fermentation tanks, and storage sheds,
this project improves the physical environment for coffee processing-giving quality enhancement
while reducing post-harvest losses. Most conventional exporters only invest in the infrastructure
of their selection but beyond central washing stations or warehouses.
Moreover, the Project incorporates digital traceability systems, such as GPS mapping, QR-coded
lot tracking, and blockchain-compatible recordkeeping, enabling buyers to trace the origin of their
coffee to the farm level, thus obtaining full supply chain visibility. This is also critical for
compliance with the international standards established, such as EUDR and Organic and Fair
Trade certifications, and for the Rainforest Alliance.
The last deciding factor, in the sense of the project, focuses on ethical sourcing and social impact.
Gender inclusion, youth employment, and environmental sustainability are parts of the core
strategy, usually absent from traditional export models. Such a comprehensive approach meets the
expectations of modern ethical consumers while assuring long-term rural development and
resilience in the coffee-growing communities.
Production Process and Machinery/Equipment Required
Exporting coffee is a process that incorporates structured and quality-oriented production, assuring
international specialty coffee standards at every stage from farm to export. The system
incorporates some of the most traditional methods and innovative technologies to ensure
traceability, quality, and sustainability.
4.3.1 Production Process of Specialty Coffee
Created with sustainable development in mind, the Green Coffee Exporters of Abol respond to
stricter quality control and processing management systems for specialty coffee, ensuring
traceability, coherence, and conformity to international standards. After the four phases established
on the farm, where smallholder farmers numbering 154 are coached on post-harvest practices, the
32
farmers are instead instructed to select and handpick only ripe, red cherries, maintaining the full
flavor and aroma potential of the coffee. This selective mode of picking will eventually determine
whether the product passes the final hurdle of becoming specialty grade.
Once picked, the coffee cherries are taken to the traditional raised drying beds made of eucalyptus
poles and plastic mesh on the farmer's farm. The rise of the drying beds ensures that airflow and
sun exposure are even. During this drying stage, moisture meters and hygrometers are closely
monitoring the beans' moisture content for a target properly set between 11 and 12%. Proper drying
is needed to avoid mold growth and maintain the quality of the beans.
In the sorting phase, after drying, the first sorting is done on site, where defective, underdeveloped,
or discolored beans are removed manually or mechanically. Sorting by size, weight, or color
uniformity ensures each coffee keeps its assigned quality. The beans are sorted and taken to rented
district warehouses in Bona, Yergachefe, and Bule Hora. Each warehouse has a capacity of 3,777
quintals, serving about 50 farmers, and is fitted with wooden pallets, moisture and temperature
control systems, and rodent-proof ventilation to ensure the integrity of beans.
Quality inspections would then happen in the warehouse by a mobile laboratory established by the
project. There, with a coffee roaster, grinder, cupping spoons, sample trays, huller, moisture and
water activity meters, and screen graders, the essential tools are in place for thorough assessment.
The beans would be cupped under the supervision of qualified specialists, graded, and roasted to
meet export standards on site.
The next stage involves hulling and polishing, which take place at specialized service providers in
Addis Ababa and the district, respectively. Mechanical hullers apply friction through a helically
pitched screw system, removing the dried outer husk of the cherry. If necessary, a polishing step
is taken to remove the silver skin, resulting in a clean, exportable product.
Afterward, the beans are packaged for export, sealed in Grain Pro or similar protective packaging,
and labeled with QR-coded traceability tags for transparency and tracking. Each bag is prepared
for container loading, weighing either 30 or 60 kg. Shipments are then sent to export terminals
either in Djibouti or the Addis Ababa airfreight terminal, based on customer needs.
33
4.3.2 Machinery & Equipment Required
For this project in quality control, Digital marketing, and traceability systems development, the
required types of machinery, tools, and infrastructure were purchased. The project assumes that
most of the machinery and tools are available on the local market. For this study, we are assuming
that good foreign-manufactured quality control, Digital marketing, and traceability systems cost
around birr 4,517,820.00. The detailed information is stated below in Table 9.
Table 9 : Mobile Quality Control Laboratory, Traceability Systems, Machinery and Equipment &
Related Cost
Mobile Quality Control Laboratory Equipment and Machinery
Item
Coffee Roasting Machine
Coffee Grinder
Boiler / Kettle
Cupping Spoons
Sample Trays
Huller (Dry Mill Sample)
Moisture Meter
Water Activity Meter-Difluid omix plus
green roasted coffee analyzer
Screen Set (Sieves)
Tables + Chairs (Foldable)
Portable Tent / Shade Structure
Tablet
Mobile Power Supply (Inverter)
Sub Total
Unit
no
no
no
no
no
no
no
no
Quantity
2
2
8
120
120
2
2
2
Unit cost (ETB)
777,410.00
60,000.00
2,500.00
300.00
300.00
45,000
80,000
500,000
Total cost (ETB)
1,554,820
120,000.00
20,000.00
36,000.00
36,000.00
90,000.00
160,000.00
1,000,000
set
set
no
no
no
2
2
2
2
2
60,000
40,000
25,000
35,000
12,000
120,000.00
80,000.00
50,000.00
70,000.00
24,000.00
3,360,820.00
Digital marketing and traceability systems, Equipment, and Machinery
Item
Office Desks & Chairs
Desktop (High spec)
Printer/Scanner Combo
DSLR Camera
Drone with Camera (DJI Mini 3)
Microphones (Lavalier + Shotgun)
Video Tripod and Gimbal
Digital Weighing Scale
Heat Sealer
Label Printer
Tablets for data collection
Sub Total
Unit
Set
Unit
Unit
Unit
Unit
Set
Set
Unit
Unit
Unit
Unit
Total Machinery and Tools cost
Quantity
3
4
2
2
2
2
2
2
2
2
7
Unit cost (ETB)
15,000.00
85,000.00
25,000.00
150,000.00
85,000.00
18,000.00
15,000.00
5,000.00
7,000.00
18,000.00
18,000.00
Total cost (ETB)
45,000.00
340,000.00
50,000.00
300,000.00
170,000.00
36,000.00
30,000.00
10,000.00
14,000.00
36,000.00
126,000.00
1,157,000.00
4,517,820.00
34
4.3.2.1 Infrastructure and Equipment Lifespan
The primary quality-testing equipment incorporated into this mobile laboratory is the coffee test
equipment. A high-weight coffee roasting machine lasts for about 10-15 years with regular
maintenance. The cupping/grinding equipment has a life span of about 5-7 years, depending on
how much it is used. Basic accessories, which include spoons, trays, and boilers, have a shorter
life span of two to five years because they are not spared from regular use and wear. Moisture and
water activity meters are expected to survive for five to seven years. Sieve or screen grading is
reasonably expected to last for about five years.
The functional life of digital traceability tools, including tablets, label printers, and QR scanning
devices, varies between three to five years because of upgrades of hardware and software
limitations. Mechanical machines, such as polishing and hulling systems, tend to be very robust
and typically last around ten to twelve years. The lifetime of sorting machines usually ranges from
7 to 10 years; such machines are used to separate the beans either by their size, weight, or color.
Sealers and digital weighers are packaging instruments that, on average, serve well for a period of
about five to seven years.
In terms of outreach and branding, computers, modems, and software licenses used by the
marketing team generally last for about 3 to 5 years. The average life span of website infrastructure,
Customer Relationship Management system, and all other digital marketing tools is also 3 to 5
years, most time based on the need for periodic updates and compatibility with ever-changing
platforms.
All fittings will be done according to ergonomic and safe layout designs, thereby optimizing labor
efficiency and reducing bean contamination.
4.3.2.2 Procurement and Sourcing Machinery
Procurement will follow a transparent and competitive bidding process, evaluating suppliers on
cost-effectiveness, product quality, delivery reliability, and after-sales support. This ensures the
best value while meeting technical requirements.
For sample roasters and coffee equipment, notable suppliers include Sweet Maria’s (international)
and Toper Sample Roasters, which has both international and local outlets in Ethiopia. Q Coffee
Ethiopia is a convenient local option for roasting and cupping equipment tailored to specialty
coffee exporters.
35
For laboratory equipment like moisture meters and grinders, suppliers in Addis Ababa provide
essential tools, while internationally certified options are available from VST Lab and SCAAcertified suppliers, ensuring rigorous quality assessments.
Top sample roasters in Ethiopia are represented by RGB Electro Mechanical Engineering, the
official agent, offering sales and support. Local sourcing will be prioritized for timber, mesh, shade
nets, and construction tools in Addis Ababa and Foreign Country.
5.4 Office Furniture & Equipment
The company's Office furniture and equipment, such as computers, printers, & Fax machines, will
be acquired for the project. The cost for furniture and equipment is estimated considering the size
of manpower required for actual production and management. The furniture and equipment will
be procured locally, and the estimated total cost is Birr 256,000. See Table 10
Below for the breakdown.
Table 10 : The Estimated Cost of Office Furniture and Equipment
Cost of Office Furniture and Equipment
Description of Work
Executive Table
Swivel Chair
Chair normal
Guest chair
Computer Table
Filing Cabinet
Normal table
Shelf with locker
Shelf ( 2 x 2)
Table with sink and Drawer
Unit
Pcs
Pcs
Pcs
Pcs
Pcs
Pcs
Pcs
Pcs
Pcs
Pcs
A computer with a printer
Fax Machine
Qty
1
1
2
2
1
1
2
1
1
1
25,000.00
12,000.00
5,500.00
7,000.00
12,000.00
5,000.00
5,000.00
32,000.00
34,000.00
5,000.00
Cost ( Et. Birr)
25,000.00
12,000.00
11,000.00
14,000.00
12,000.00
5,000.00
10,000.00
32,000.00
34,000.00
5,000.00
Set
1
64,000.00
64,000.00
pcs
1
32,000.00
32,000.00
Total Cost
256,000.00
Human Resource Requirement
The successful implementation and sustainability of the direct trade coffee export project rely on
a dedicated, skilled, and well-structured workforce. The labor force will be composed of both
technical and operational personnel, selected based on relevant experience, education, and
familiarity with coffee production and logistics in rural settings.
36
4.5.1 Required Personnel and Roles
a. Project Manager
The Project Manager is responsible for overseeing the entire implementation of the project,
ensuring effective coordination between stakeholders and alignment across the target regions. This
role involves managing the project timeline, overseeing budget utilization, and ensuring the
delivery of high-quality outcomes. The ideal candidate should hold a Master's degree in Project
Management, Agricultural Economics, or a related field, and have a minimum of seven years of
experience, preferably in the coffee value chain or development programs.
b) Monitoring & Evaluation and Traceability Officer
This officer designs and manages the project's traceability system, monitors key performance
indicators (KPIs), ensures accurate data collection, and produces monitoring and evaluation
reports. The role requires a Master's or Bachelor's degree in Statistics, ICT, Agribusiness, or
Agricultural Economics, along with at least five years of experience in monitoring and evaluation
or digital data management. Prior work with traceability systems is considered an asset.
c) Data Enumerators (6 – regional-based)
Data enumerators are tasked with collecting GPS coordinates, compiling farmer profiles, and
gathering farm-level information using digital tools such as Kobo Toolbox and ODK. Candidates
should hold a Diploma or BSc in Agriculture, GIS, ICT, or a related field and have at least one to
two years of field-level data collection experience.
d) Agronomists (3 – one per region)
Agronomists are assigned to each region to deliver practical training on Good Agricultural
Practices (GAP), climate-resilient farming, pest and disease control, and the application of organic
inputs. Candidates should possess a BSc or MSc in Agronomy or Plant Sciences, with over five
years of experience in coffee agronomy and rural extension work.
e) Extension Agents (6 – local hires)
Local extension agents provide continuous field-level coaching, support the delivery of training
sessions, and monitor the adoption of improved farming techniques. The role requires a Diploma
or BSc in Agriculture and two to three years of practical experience in agricultural extension.
37
f) Quality Control Technician
The Quality Control Technician handles the physical inspection, sorting, grading, and moisture
analysis of coffee beans, as well as sensory evaluation (cupping) using mobile laboratory
equipment. A BSc in Food Science, Coffee Quality Management, or a related discipline is
required, with three to five years of experience in coffee quality control. A Q-grader certification
is a strong advantage.
g) Export & Documentation Officer
This officer is responsible for managing all export-related tasks, including document preparation,
customs coordination, labeling, and packaging. Applicants should hold a BA in Logistics,
International Trade, or Supply Chain Management, with four to five years of experience in
agricultural exports, preferably in coffee.
h) Digital Marketing Specialist
The digital marketing specialist manages the coffee brand’s online presence, creates content, runs
marketing campaigns, and supports storytelling efforts about the farmers and the coffee origin. A
BA or BSc in Marketing, Communication, or Multimedia is required, along with three to five years
of relevant marketing experience. Preference is given to candidates with experience in the coffee
or agriculture sectors.
i) IT & Systems Administrator
The Systems Administrator maintains the traceability software, ensures the setup and operation of
hardware, manages cloud-based data storage, and oversees data security and backup systems. A
BSc in Computer Science, Information Systems, or IT is required, with three to five years of
experience in systems administration and managing digital tools for agriculture or development
programs.
j)
Drivers (2 positions)
Drivers will be responsible for transporting field staff, mobile lab equipment, and project materials
across the project areas. A high school certificate and a valid driving license are required.
Candidates must have at least three years of professional driving experience and be familiar with
rural road networks in Sidama, Oromia, and South Ethiopia.
38
k) Support Staff (2 positions)
Support staff will assist with logistics coordination, record keeping, local procurement, and office
administrative duties. A Diploma in Management or Logistics is required, along with at least two
years of experience in office or field support roles.
4.5.2 Labor Market and Availability
The project will predominantly source its workforce from local labor pools in Sidama (Bona),
Gedeo (Yergachefe), and Oromia (Bule Hora) districts. These areas have a strong tradition of
coffee cultivation, making them rich in local knowledge and experience relevant to the project's
objectives. This local hiring approach enhances community ownership, cultural alignment, and
cost efficiency.
For more specialized roles such as agronomists, monitoring and evaluation officers, logistics
coordinators, and IT experts, the project will draw from skilled labor pools located in major urban
and regional centers, particularly Addis Ababa, Hawassa, and Dilla. These cities are known for
their concentration of experienced professionals in agriculture, development, and technology
sectors, ensuring that the project can attract qualified candidates for technical and managerial
positions.
4.5.3 Human resource estimated cost
To effectively implement this direct trade coffee export model, the project requires a
multidisciplinary team with expertise in agronomy, quality control, export logistics, traceability
systems, and market engagement. Skilled professionals in project coordination, M&E, ICT, and
brand marketing are also essential to manage data-driven traceability, ensure compliance with
international standards, and build strong relationships with global buyers. The project will generate
28 permanent employment opportunities. The estimated manpower requirements for business
operations, along with the corresponding average monthly salaries, are presented in the table
below.
S.N
Position
1
2
3
4
5
Project Manager
Marketing Manager
M&E and Traceability Officer
Finance officer
Agronomists
No.
Required
Monthly
Salary (ETB)
1
1
1
1
3
40,000.00
30,000.00
27,500.00
15,000.00
22,500.00
39
Total Monthly
Salary (ETB)
40,000.00
30,000.00
27,500.00
15,000.00
67,500.00
Annual
Salary (ETB)
480,000.00
360,000.00
330,000.00
180,000.00
810,000.00
6
7
8
9
10
11
12
13
14
15
Extension Agents
Quality Control Technician
Data Enumerators
Sales Officers
Export & Documentation Officer
Digital Marketing Specialist
IT & Systems Administrator
Drivers
logistics assistant
Office assistant
Total
6
1
6
1
1
1
1
2
1
1
28
11,000.00
20,000.00
9,000.00
12,000.00
22,500.00
24,000.00
21,500.00
7,000.00
6,000.00
6,000.00
66,000.00
20,000.00
54,000.00
12,000.00
22,500.00
24,000.00
21,500.00
14,000.00
6,000.00
6,000.00
426,000.00
792,000.00
240,000.00
108,000.00
144,000.00
270,000.00
288,000.00
258,000.00
168,000.00
72,000.00
72,000.00
4,572,000
4.5.3.1 Training and Capacity Building
The project plans for a full-fledged and structured program of training for all the team members to
ensure that they uniformly hold quality standards over time and to transmit long-term capacity.
The project will kick off with induction training, which gives every new staff beginning to its
goals, ethical sourcing practices, and principles of communication. That makes sure everyone is
on board with the project's values and operational standards from the beginning.
Subsequent, specific technical training modules will be given covering core technical
competencies required for the project to succeed. Sustainable farming systems and post-harvest
handling practices will be part of these modules, while quality control measures linked to the SCA
cupping protocols will also feature. Additional sessions will focus on health and safety procedures
in the context of employees' welfare and introduce some digital tools to facilitate traceability and
stock monitoring, thus increasing transparency and efficiency throughout the value chain.
6-monthly refresher workshops will be organized to keep abreast of high standards as well as
changing criteria in the industry. Updates on new buyer requirements, changing sustainability
standards (e.g., Rainforest Alliance and Organic certifications), and the latest market trends will
all be covered. Training will both occur on-site and at regional training centers to ensure the easy
reach of all team members. When necessary, international coffee experts will be invited to provide
specialized input, further strengthening the knowledge base and expertise within the project.
Training will be conducted on-site and at regional training centers, with input from international
coffee experts when necessary. For this purpose, birr 500,000 is allocated for a one-year project
operation.
40
4.5.3.2 Gender and Youth Inclusion Strategy
The project prioritizes gender and youth inclusion by aiming for at least 50% women
representation in the field and sorting roles, while actively engaging youth aged 18–35 in
warehouse, logistics, and digital system positions. To ensure meaningful participation, special
training programs will be provided to empower women and young people to advance into
supervisory and technical roles, contributing to both the project's sustainability and its broader
social impact.
Production System and Layout
The project adopts a decentralized production system designed to optimize efficiency, maintain
quality control, and empower smallholder farmers across multiple regions. The system combines
on-farm primary processing with regional aggregation centers and a centralized export preparation
facility, allowing for flexibility, traceability, and reduced post-harvest losses.
4.6.1 Decentralized Production Flow
Farmer Training and Harvesting: The entire process begins with an intensive training for 154
smallholder farmers on harvesting techniques. The farmers have been educated to handpick only
ripe red cherries so that flavor and quality start from the farm level with the coffee.
On-Farm Processing: Cherries are processed immediately after harvesting, right on the farm. The
construction of traditional raised drying beds will be put up using eucalyptus poles and plastic
mesh for drying the cherries. The agricultural agents tend to use moisture meters and hygrometers
to monitor the drying, to achieve the desired moisture content, and prevent defects.
On-Farm Sorting: After drying, the beans are sorted on the farm by hand and by machine.
Defective, underdeveloped, or discolored beans are eliminated so that only the finest beans
advance through the next steps.
Transport and Storage: The sorted beans are taken to district-level warehouses in Bona,
Yergachefe, and Bule Hora. The warehouse for about 50 farmers is equipped with climate and pest
control systems to maintain bean quality.
Quality Control: Now, quality assessments are done at the warehouse with a mobile lab for indepth analyses. Beans are roasted and cupped on-site to grade them against export standards.
Hulling and Polishing: The beans are hulled with specialized service providers in the district and
polished with specialized service providers in Addis Ababa. This is the stage that removes the
outer husk and silver skin, preparing the beans for export.
41
Packaging and Export Logistics: Finally, the beans are packed securely in Grain Pro bags and
labelled with QR-coded tags for traceability before being loaded to be shipped for export to
Djibouti or Addis Ababa, as per buyers' specifications.
4.6.2 Facility Layouts and Components
The layout refers to the physical and organizational arrangement of resources, facilities, and
workflow throughout the coffee processing system:
➢ Farm Level:
o
Drying Beds: Located on individual farms, these are spread out for maximum sun
exposure and airflow. 10 beds each have a 45 m2 area, 450 m2 area per farmer will
be constructed from eucalyptus poles and plastic mesh. The project plan to support
in finance to construction of 1500 beds for the 154 farmers in the first year of the
project.
o
Sorting table: Areas on the farm where beans are manually and mechanically
sorted after drying.
➢ District Warehouses:
o
Storage Area: Palletized zones with climate and pest control to keep beans safe
and dry. Three warehouses will be rented at the Keble/district level in Bona,
Yergachefe, and Bule Hora districts, each warehouse can store 3777 quintals of dry
cheery (has an area of 200 m2) and serve 50 farmers. The project plan is to support
finance to cover the warehouse rent for the 154 farmers in the first year of the
project.
o
Mobile Lab Area: A designated space within the van vehicle for quality control
activities, equipped with roasting, grinding, and cupping tools.
o
Staging Area: Where export-ready beans are readied for transport.
➢ Processing Facilities (Hulling/Polishing):
o
Hulling Line: Equipment for removing outer husks, arranged for efficient
workflow at the woreda level. The project plan is to support finance to cover the
hulling service payment for the 154 farmers in the first year of the project.
o
Polishing Station: an adjacent area for additional cleaning of beans. The project
plan is to support finance to cover the polishing service payment for the 154 farmers
in the first year of the project.
42
➢ Packaging and Shipping:
o
Packaging Area: A Clean area where beans are weighed, sealed, and tagged.
o
Loading Dock: Where finished bags are staged and loaded into trucks or containers
for export.
4.6.3 Benefits of the Decentralized System
The project offers significant benefits aimed at empowering farmers and optimizing operations.
By enabling value addition at the farm level, it directly increases farmer income and promotes cost
efficiency by reducing the need to transport raw cherries over long distances. The Woreda level
processing centers further support quality consistency by allowing targeted technical interventions
and uniform post-harvest practices.
Moreover, the project's design is highly scalable, making it easy to integrate new regions and
farmers as it grows. A key innovation is the use of digital QR coding at every stage of production
and processing, ensuring full traceability for international buyers and enhancing market
transparency and trust in Ethiopian coffee.
Service Utilization Capacity and Plan
4.7.1 Service Utilization Capacity
The capacity utilization strategy for the coffee export project is designed to align with the gradual
onboarding of farmers, phased infrastructure development, and the progressive strengthening of
operational systems. The plan is structured to maximize efficiency, minimize waste, and ensure
consistent product quality as the project scales over time.
In Year 1, the facility is projected to operate at approximately 70% capacity, reflecting the early
stages of setup, initial farmer engagement, and the establishment of market linkages.
By Year 2, with a broader farmer network and a stronger market presence, capacity utilization is
expected to increase to around 80%, supported by improved operational efficiency and growing
export demand.
In Year 3, the project aims to reach 90% utilization, and in Year 4, 100% capacity, driven by
streamlined processes, increased production volume, and strong demand from international
buyers. This phased growth ensures that scaling aligns with market readiness and resource
capability.
43
4.7.2 Specialty Coffee Production Program
The annual export volume projection is based on three key factors: the production capacity of
participating farmers, the operational efficiency of the company, and the strength of its market
linkages. As farmer participation grows over the first three years, production volume is expected
to rise correspondingly. This growth will be further supported by continuous improvements in the
company's operational systems and expanding demand in export markets. Initially, the plant will
operate one shift for five years, with each shift lasting 8 hours and the plant running for 312 days.
The detailed export plan, including annual volume targets and scaling assumptions, is presented in
the following table.
Table 11 : Utilization capacity and Production Volume plan
Production Plan
Production Type
Specialty Grade-1
Specialty Grade-2
Total Export Volume
UoM
Kg/year
kg/year
Y1
70%
443,520.00
110,880.00
554,400.00
Y2
Y3
Y4-Y6
80%
90%
90%
506,880.00 570,240.00 633,600.00
126,720.00 142,560.00 158,400.00
633,600.00 712,800.00 792,000.00
Breakdown of Production Costs
The cost structure of the coffee export project has been carefully developed to ensure efficient
allocation of resources across critical components of the production and export process. Each cost
category reflects a proportional contribution to the total production budget and is based on practical
field experience and market rates. These cost elements collectively establish the basis for the
project's financial planning and operational sustainability. The details are presented below:
•
Direct Cost:
 Specialty Drying Material Requirement & Cost
 Primary Processing cost
 Secondary Process & Shipment Cost
 Auxiliary Material (Package)
 Labor Cost
 Shipment Cost
•
Administrative expense
•
Farmer Production Cost:
 Input Cost (organic Fertilizer)
 Farm to Processing Site Transport Costs
44
 Natural Coffee Drying Process Cost
 Local to Primary Processing Cost
4.8.1 Abol Supporting Costs, Cost Structure, and Costs Per Item
The proposed project’s total cost structure reflects a progressive increase in operational and
administrative expenditures over four years, driven primarily by scale-up in production and
inflationary adjustments. The total project cost starts at ETB 71.573 million in Year 1 and rises to
approximately ETB 97.821 million by Year 4 at full production capacity.
The cost structure is dominated by raw materials, which account for over 75% of the production
processing cost, reaching ETB 97.821 million in Year 4. Auxiliary and packing materials
(domestic jute bags, export packaging) together cost over ETB 7.299 million annually, while
casual labor at the hulling, polishing, and manual sorting costs around ETB 2.364 to 3.810 million
per year. Utilities gradually increase from ETB 1.115 million to 1.6 million.
General administration and selling expenses, including salaries, travel, marketing, insurance, and
depreciation, range from ETB 17.877 million in Year 1 to ETB 20.780 million in Year 4. On a
per-year basis, depreciation and amortization alone contribute about ETB 3.164 million annually.
Overall, the cost breakdown highlights that the project is heavily input-intensive, with strong
emphasis on raw material procurement, while maintaining a lean yet essential administrative and
operational support framework.
Table 12 : Total Abol Coffee export PLC, Supporting costs, cost structure, and costs per item
Production Year
Direct Production Cost
Specialty Drying Material Requirement & Cost
Y1
Y2
Y3
Y4-Y6
23,408,000
26,752,000
30,096,000
33,440,000
Primary Processing cost
Secondary Process & Shipment Cost
Auxiliary Material (Package)
Labor Cost
Sub-total Direct cost
Administrative & Selling Expenses
Utilities
Salary and Wage cost
Training Cost
Digital Marketing and Brand Identity Development Cost
2,494,800
18,008,800
7,299,600
2,364,353
53,575,553
2,851,200
20,572,200
8,342,400
2,837,224
61,355,024
3,207,600
23,135,850
9,385,200
3,351,470
69,176,120
3,564,000
25,699,763
10,428,000
3,910,049
77,041,811
1,115,860
4,118,400
1,990,980
492,000
1,171,653
4,324,320
2,090,529
516,600
1,230,236
4,540,536
2,195,055
542,430
1,291,747
4,767,563
2,304,808
569,552
International Promotion
Repairs & renewals
Travel and perdime
Stationery and printing
Insurance expense
Professional fees (legal, audit, etc.)
Office rent
Depreciation expense
Miscellaneous expense
4,043,400
530,298
350,000
298,647
3,891,888
150,000
500,000
316,367
200,000
4,245,570
556,813
367,500
313,579
4,086,482
157,500
525,000
311,607
210,000
4,457,849
584,654
385,875
329,258
4,290,807
165,375
551,250
311,607
220,500
4,680,741
613,886
405,169
345,721
4,505,347
173,644
578,813
311,607
231,525
45
Sub-Total
17,997,841
18,877,154
19,805,432
20,780,123
Total Production cost(Birr)
71,573,393
80,232,178
88,981,552
97,821,934
4.8.2 Coffee Farmers' Production Cost
One of the more innovative costs of farmers is the balance of four important activities that include
quality and sustainability: Input (organic fertilizer) is a 5.6% part of the sum, that is 1.12 million
Birr per year, for maintaining the health of soils and premium organic certification; Farm to drying
Processing Site Transport (2.9% of the costs/Birr 580K yearly) refers to forming effective cherry
collection from distributing smallholdings; the all-the-while Natural Coffee Drying Process turns
exceptional with 74.6% concentrated intensity on cost (Birr 14.9-21.3M/year) in solar dried beds,
tarps, and workforce towards achieving uniform moisture content, while Local to Primary
Processing (worth 5.5%/Birr 1.1-1.6M/year) provides support on hand-sorting, hulling, and
grading before export. It means that about post-harvest quality control was budgeted for (80% of
the cost) while pre-harvest inputs were made minimal following the demand of Ethiopia's specialty
coffee value chain, in which processing excellence defines 70 percent of the final cup quality.
Table 13 : Total Farmers' Production costs, cost structure, and costs per item
Description
Total Coffee Producer Farmers
Farm Size for Single Farmers
Total Coffee Farm
Total Export Volume
Production Cost
Labro Cos
Uom
No
ha
ha
Kg
Y1
154.00
3
462
554,400
Y2
176.00
3
528
633,600
Y3
198.00
3
594
712,800
Y4-Y6
220.00
3
660
792,000
Birr/year
2,282,824
2,739,388
3,235,902
3,775,219
Input Cost (organic Fertilizer)
Birr/year
1,120,000
1,120,000
1,120,000
1,120,000
Farm to Processing Site Transport Costs
Birr/year
580,000
580,000
580,000
580,000
Natural Coffee Drying Process Cost
Birr/year
14,938,000
17,072,000
19,206,000
21,340,000
Local to Primary Processing Cost
Birr/year
1,108,800
1,267,200
1,425,600
1,584,000
Total Cost
Birr/year
20,029,624
22,778,588
25,567,502
28,399,219
Raw Materials, Utilities, and Other Inputs
4.9.1 Raw Materials and Input Requirements
The primary raw material required for the project is secured from the partnership of 154 farmers
product is not purchased directly supplied to Abol Coffee Export PLC. The raw material produced
by the individual farmer from their coffee farm, harvested and dried stored appropriately in their
storage till the primary processing starts when the Abol start exporting. The raw material quantity
required for the 554,400 kg green bean coffee produced is 1,663,200kg dry cherry at the beginning
of the project's first year, the increase to 2,187,000kg at full production capacity in year four. The
46
raw material production cost will be covered by the coffee farmers, such as input cost (organic
Fertilizer), transport cost farm to the drying processing site, red cherry drying Process Cost, from
storage to the primary processing industry (not including primary processing and sorting labor
cost), for this purpose the farmer’s expenditure 20,029,624 birrs at the first-year operation, the
increase to birr 28,399,219 at full production capacity in year four. The detailed information is
presented in Table 14.
Table 14 : Farmers' Production Input and Related Costs
Description
Labro Cos
UOM
Birr/year
Y1
2,282,824
Y2
2,739,388
Y3
3,235,902
Y4
3,775,219
Input Cost (organic Fertilizer)
Birr/year
1,120,000
1,120,000
1,120,000
1,120,000
Harvesting and transporting the farm to the Dring Site Cost
Birr/year
580,000
580,000
580,000
580,000
Red cherry coffee drying Process Cost
Birr/year
14,938,000
17,072,000
19,206,000
21,340,000
Transport from storage to the Primary Processing industry Cost
Birr/year
1,108,800
1,267,200
1,425,600
1,584,000
Total Cost
Birr/year
20,029,624
22,778,588
25,567,502
28,399,219
The project relies on a consistent and reliable supply of essential drying materials to support both the
production and the packaging of high-quality coffee for export. The primary drying materials include:
•
Plastic Mesh and Netting: Plastic mesh is employed to cover drying beds, protecting coffee
beans from strong sunlight, dust, insects, birds, and debris while allowing adequate airflow.
This material is vital for ensuring the beans dry evenly and hygienically.
•
Pallets: Pallets for storage in the primary drying of red cherry. The detailed information is
presented in Table 15.
Table 15 : Abol Coffee Export PLC Red Cherry Drying Supporting Inputs and Related Costs
Red Cherry Drying Inputs Items
UOM
Y1
Y2
Eucalyptus Poles Stalk(8 cm, hight1.30-1.50 m)
birr/unit
5,390,000
6,160,000
6,930,000
7,700,000
Mager (5 cm, length3 m)
birr/unit
924,000
1,056,000
1,188,000
1,320,000
Teshigahara (5 cm, Length 1.8 m)
birr/unit
2,156,000
2,464,000
2,772,000
3,080,000
8,470,000
9,680,000
10,890,000
12,100,000
Sub-total
Y3
Y4
Mesh Wier(2 m, length 25 m)
birr/unit
3,850,000
4,400,000
4,950,000
5,500,000
Shade Net (2m, length 25m0
birr/unit
3,696,000
4,224,000
4,752,000
5,280,000
Plastic Sheat Cover(2m, 25m)
birr/unit
2,926,000
3,344,000
3,762,000
4,180,000
Plastic Mesh(2m, length 25 m)
birr/unit
3,696,000
4,224,000
4,752,000
5,280,000
Plastic bag 50-100kg
birr/unit
77,000
88,000
99,000
110,000
Nails for Binding
birr/unit
693,000
792,000
891,000
990,000
14,938,000
17,072,000
19,206,000
21,340,000
Sub-total
47
4.9.2 Packaging Materials
These materials are predominantly sourced from local markets (Dere Diwa, Hawassa, Dilla, Addis
Ababa), with procurement managed centrally to reduce cost through bulk purchasing. The
packaging materials include Green Pro and a DHL sample delivery package. The detailed
packaging material supplied by Abol Coffee Export is presented below in Table 16.
Table 16 : Abol Coffee Export PLC: Packaging Materials, Supporting and Related Costs
Packaging Material Items
UOMK
Qt
Y1
Y2
Y3
Y4
Jute Bag price - for domestic(100kg)
birr/price
370
3,418,800
3,907,200
4,395,600
4,884,000
Jute Bag price- for Export(30,60kg)
birr/price
420
3,880,800
4,435,200
4,989,600
5,544,000
Total Packing Cost
Birr/year
Pcs
7,299,600
8,342,400
9,385,200
10,428,000
4.9.3 Utilities for Administration
The primary utility needed by the project is fuel and Oil & Lubricants. At the beginning of
the year, the estimated annual utilities consumption, based on a capacity utilization rate, is
448,960 birrs, then increases by a 5% growth rate throughout the project life. The annual
costs for water and electricity are detailed in Table 17.
Table 17: Annual Utilities Requirement and Estimated Cost
Description
Unit of
Required
Unit Price,
Measure
Qty
Birr/Unit
Fuel
Lit
3,200
122
Oil & Lubricants Kg
15%
Total
Total Cost (Birr)
390,400
58,560
448,960
4.9.4 Training Cost for the Farmers
Training will be delivered through a combination of theoretical and on-site harvesting, water
density flotation sorting, drying special net drying system, storage, quality maintaining
sessions, and certified technical programs, ensuring 154 coffee farmers' efficient and highquality production. For this purpose, birr 1,990,980 is allocated for a one-year project operation.
The training covers costs associated with:
•
Farmer capacity-building workshops and continuous agricultural extension
•
Training materials (manuals, visual guides, videos)
•
Field demonstrations and on-site follow-ups
•
Vehicle rental and fuel for field visits and coffee collection
•
Transport of materials and equipment to farmer sites and aggregation centers
48
Table 18 : Annual Training Budget Requirement and Estimated Cost
Description
UOM
No. Participant
Number of Participants
No
154
Refreshment per head
No.
154
Training hall cost
154
No. Day
Unit Price
Total Price
5
700
539,000
5
5000
25,000
0
200
30,800
Manual Preparation
No
stationery cost
LP
Not Book
No
154
60
9,240
Pen
No
154
30
4,620
55,000
Sub-total
663,660
Number of sessions
No
Total training cost
Birr/year
3
1,990,980
Delivery Methods
The logistics framework for coffee transportation is designed to ensure the timely, safe, and costeffective movement of coffee beans from farm-level collection points to international markets
while maintaining product quality and traceability.
Collection from Regional Hubs: Transport from Farmers to Aggregation Centers: Coffee cherries
or processed beans are initially gathered at decentralized woreda center aggregation hubs, located
close to farming communities. These centers serve as quality checkpoints and temporary storage
facilities.
Use of Rented Pickups and Small Trucks: To maintain flexibility and reduce capital expenditure
on owned vehicles, the project will utilize rented pickups and small trucks for transportation
between regional hubs and the central storage facility. These vehicles are selected for their ability
to navigate rural and sometimes rugged roads, ensuring access to remote farming areas.
Centralized Storage and Quality Control
Central Storage Facility: Upon arrival at the central warehouse, coffee is subject to additional
quality control measures, including grading, sampling, and moisture checks. The facility is
equipped with climate-controlled storage zones to preserve bean quality before export.
49
Inventory Management: A digital stock management system tracks the volume and condition of
coffee stock, ensuring transparency and facilitating efficient dispatch planning.
Export Logistics
Containerized Shipping: From the central storage, coffee is consolidated into export-grade
containers. These containers are sealed and documented following international standards,
preserving traceability and security.
Export Terminals: Depending on buyer preferences and cost considerations, containers are shipped
to:
•
Djibouti Port: Serving as the primary maritime export gateway, Djibouti Port offers access
to global shipping routes and is a preferred route for bulk shipments.
•
Addis Ababa Airfreight Terminals: For premium or time-sensitive consignments, airfreight
via Addis Ababa Bole International Airport allows faster delivery to international buyers,
though at higher transport costs.
Customs and Documentation: The project provides comprehensive export documentation services,
including phytosanitary certificates, customs clearance, and compliance with buyer and regulatory
requirements, ensuring smooth cross-border movement.
This multi-tiered delivery approach balances cost, speed, and quality control, enhancing the
project’s ability to meet diverse buyer needs while supporting small-scale farmers in accessing
international coffee markets efficiently.
Stock Management System
To ensure smooth inventory control, transparency, and traceability throughout the supply chain,
the project will use a digital stock tracking system with modern technology. Abol Coffee Export
PLC will implement the following stock management system and tools:
a) QR Code Tracking: Each batch of coffee beans will get a unique QR code linked to a
central database. This allows real-time tracking of stock movement from the farm, through
aggregation centers, to the central warehouse, and finally to export.
50
b) Tablets and Mobile Devices: Warehouse and logistics staff will use tablets with scanning
apps to update inventory instantly. This reduces manual errors, speeds up stock checks,
and makes data sharing between departments easier.
c) Stock Inventory: After processing, coffee stocks will be stored for about 30 to 45 days
before shipment. This time is for quality checks, packaging, order consolidation, and export
scheduling.
d) Quality Assurance During Storage: Climate control and regular inspections will keep the
beans in good condition, preventing moisture problems or pest damage.
e) Stockholding Costs: These are estimated to be 2% to 3% of total production costs and
include:
-
Warehouse Rent: Costs for leasing or maintaining storage facilities suited for coffee
preservation.
-
Labor Costs: Staff involved in handling stock, managing inventory, and security.
-
Loss Provisions: Covering possible losses from shrinkage, spoilage, or theft during
storage.
51
5 Financial Plan
The project's financial plan is divided into two main parts: one for Abol Coffee Export PLC and
another for smallholder farmers. For Abol Coffee Export PLC, we'll cover key details like the
investment needed, how the financing is structured, any loan requirements, and what the financial
outlook looks like. As for the smallholder farmers, we'll look at their financing setup and how it
impacts the project’s success. This plan aims to promote sustainable growth and smooth operations
for the coffee processing and direct export platform, connecting producers directly to the
international coffee market.
Abol Coffee Export Total Investment Breakdown
The total project investment cost is estimated at € 589.714 million (approximately ETB
92.585 million). The total estimated investment cost for the proposed direct market
platform for smallholder coffee exporting farmers is Birr 92,585,213. This amount
includes a fixed investment component of approximately Birr 21,011,820(22.69%),
and a working capital portion of Birr 71,573,393 (77.31%) for the production of project
products and services.
Of the overall initial investment cost, Birr 4,517,820 (5%) is required in foreign
currency, while the remaining Birr 88,067,393 (95%) is allocated for local purchasing
costs.
The following table provides a summary of the total investment cost of the project, and
a detailed breakdown of these costs is presented in Table 19 below.
Table 19: Project Investment Outlay Foreign & local Cost component
Sr.
no
Description
I
1
Fixed Asset
Direct Market Platform
Infrastructure Devt. cost
Cup Quality Control Mobile
Equipment
Office Furniture and Fixtures
Vehicles for supervision
Sub-total F/Asset
Working Capital Requirement
Direct Cost
Administrative expense
Sub-total W/capital (II)
2
3
4
I
II
1
2
Existing
Asset
value
(Birr)
Proposed
Investment
cost (Birr)
Total
Invest cost
Exi + Plan
(birr)
238,000
Foreign
Component
(Birr)
Local
Component
(Birr)
238,000
-
238,000
4,517,820
4,517,820
4,517,820
-
256,000
16,000,000
21,011,820
256,000
16,000,000
21,011,820
22.69%
0
0
4,517,820
256,000
16,000,000
16,494,000
53,575,553
17,997,841
71,573,393
53575553
17997841
71,573,393
77.31%
0
53,575,553
17,997,841
71573393
52
Share
%
Total ( I+II)
92,585,213
Percent Share of Fore & Local (%)
92,585,213
100%
4,517,820
100%
-
5%
88,067,393
95%
Note:
Fixed Asset: For development platform, marketing infrastructure, and other service machines and
equipment, such as Direct Market Platform Infrastructure costs, Cup Quality Control Mobile
Equipment, Office Furniture and Fixtures, and Motor & vehicles for supervision and follow-up.
Working Capital: Working capital is divided into Direct and Administrative Expenses.
-
Direct Costs include Green Coffee Processing Cost, Specialty Drying Material
Requirements and Costs, Primary Processing Cost, Secondary Processing and Shipment
Cost, Auxiliary Materials (Packaging), and Labor Cost.
-
Administrative Expenses include Utilities, Salaries and Wages, Training Costs, Digital
Marketing, Brand Identity Development Costs, International Promotion, Repairs and
Renewals, Travel and Per Diem, Stationery and Printing, Insurance, Professional Fees
(legal, audit, etc.), Office Rent, Depreciation, and Miscellaneous Expenses.
53
Abol Coffee Export, PLC Financial Structure
The total investment cost of the project is estimated at birr 92,585,213, or approximately €589.714
million. The project will be financed through a long-term loan from the UNIDO Grant fund loan
through Commercial Bank of Ethiopia (CBE), which is about birr 78,697,431(85%). The owner
equity contribution is secured at Birr 13,887,782(15%). The following table briefly summarizes
the total investment cost of the project. A broad break-up of the above cost under various heads is
presented below in Table 20.
Table 20: A breakdown of the financial Structure & promoter’s contribution, bank finance
Sr.
No
Description
I
1
2
3
4
Fixed Asset Investment
Direct Market Platform Infrastructure cos
Cup Quality Control Mobile Equipment
Office Furniture and Fixtures
Vehicles for supervision and follow-up
Sub-Total
II
Working Capital Requirement
1
Direct Cost
2
Administrative expense
Sub-total W capital (II)
Total (I+II)
Debt: Equity Ratio (%) on initial Year Investment
Planned
Investment
Cost (Birr)
Source of Finance (Fund
Allocation)
GRANT Loan Owner's Eqty
(birr)
cash contr.
238,000
4,517,820
256,000
16,000,000
21,011,820
202300
3840147
217600
13600000
17,860,047
35,700
677,673
38,400
2,400,000
3,151,773.00
53,575,553
17,997,841
71,573,393
92,585,213
100%
45,539,220
15,298,164
60,837,384
78,697,431
85%
8,036,332.94
2,699,676.08
10,736,009
13,887,782
15%
Note:
•
Promoter’s Contribution (Equity):
o
The promoter, contributing equity from personal savings and family resources, will
cover 15% of the required investment.
•
Bank Loan (Debt):
o
The remaining 85% of the total investment will be financed through a bank loan.
This financing will enable the business to leverage debt for expansion while
maintaining control over equity.
•
Other Borrowings: No additional borrowings are anticipated at this time.
54
Project Financial & Production Assumptions
The project cost estimates for the proposed specialty coffee farmers' direct market platform
service have been formulated based on discussions with smallholder exporter farmers. The
projections cover the cost of infrastructure, digital market infrastructure development,
machinery and equipment purchase, office furniture and fixtures, and working capital for
the startup of the project. Assumptions regarding direct marketing have been provided,
however, specific assumptions relating to individual cost components are given as follows:
Operating Expenses for the project and Its basis are taken as follows
Description Basis
Basis
CONSTRUCTION AND FINANCE
Project Life (years)
Market infrastructure construction
Bank interest
Discounted cash flow
Source of finance
ECONOMIC ASSUMPTIONS
Utilities price growth
Material price growth rate
Wage Growth Rate
Tax rate
EXPENSE
Salaries Expenses
Staff Benefits
Insurance
Production
Selling Expenses
Utilities price growth
6
6 months
15%
15%
15% equity and 85% loan
5%
5%
5%
5%
As per salary estimations
20% of Payroll
1% of equipment Cost
99% of Sales
0.05 % of Sales
Water and electric city price growth rate %
5%
Loan period
CASH FLOW ASSUMPTIONS
Inventory (% of COGS)
Minimum cash balance (% of sales)
Accounts receivable (% of sales)
Accounts payable (% of COGS)
6 years
8%
2%
5%
3%
55
INITIAL WORKING CAPITAL ESTIMATIONS
Local Raw material
Auxiliary Raw Materials Local
Stock of Finished Goods
Goods in Process
Administrative and Marketing Expenses
PRODUCTION ASSUMPTIONS
Full Capacity
Operation hours per day
available working days per year
Utilization efficacy starts
Product Mix
Grade-1
Grede-2
Sales Price
Grade-1
Grade-2
3months
3months
3months
90 days
90 days
100%
8
312
70%
80%
20%
$5-5.5
$4-4.5
Contingency Financing
Investment costs are estimated with some margin of error. To cover physical and financial
contingencies, it's common to add a percentage of the initial total cost estimate, usually between
5% and 15%.
The loan requirement
i) The total Loan Amount Required
As mentioned above, the project’s long-term loan requirement is estimated at Birr 92,585,213
(Euro 589,714.74). The UNIDO Grant Loan will cover 85% of the initial investment with an
annual interest rate of 15%, to be repaid yearly over 6 years.
ii) Other Loan Commitments of the Company and/or the Promoters
At present, the company and its promoters have no outstanding loans or major financial
obligations, except for the proposed loan for this project. This shows the company is in a strong
financial position and can secure additional financing without any existing burdens.
iii) Repayment ability
Based on the expected sales of specialty coffee, the company will have enough cash flow to pay
back its loan. The business plans to break even within one year and expects strong growth in the
56
following years. The loan is for 6 years with a 15% annual interest rate. Repayments are planned
with a 5% annual increase in revenue in mind, and production capacity will grow from 70% in the
first year to full capacity (100%) by the fourth year. The project will generate revenue from
specialty coffee sales each year, with an average service rate of 25% throughout the project’s
duration.
iv) Loan repayment schedule
The principal loan will be repaid annually, starting in 2026 and ending in 2031, with repayments
made in 6 yearly instalments. The loan repayment period is the number of years needed to pay off
the principal and interest on the original investment over the life of the project. The results show
that the investment is financially viable and has a strong cash flow forecast. According to the
repayment schedule, the annual payments are detailed in Table 21 below for the duration of the
project.
Table 21: Loan Repayment Schedule
Year
Principal
Repayment
Interest
Payment(15%)
0
1
2
3
4
5
6
13,116.24
13,116.24
13,116.24
13,116.24
13,116.24
13,116.24
Year Ending
Balance
78,697.43
11,804.61
9,837.18
5,902.31
3,934.87
1,967.44
-
65,581.19
52,464.95
39,348.72
26,232.48
13,116.24
-
Abol Coffee Export-Financial Plan and Economic Analysis
i) Projected profit margins (gross, operating, and net at full Capacity):
•
Gross Profit Margin: 18% (reflecting revenue from sales after the cost of goods
sold).
•
Operating Profit Margin: 16% (reflecting operating income after deducting
operational expenses).
•
Net Profit Margin: 11.34% (reflecting final net profit after all expenses).
ii) Projected sales figures and growth rates:
57
The expected revenue is based on market demand, with sales of renewable energy-efficient
technologies (such as specialty products) projected to grow at a rate of 5% per year throughout the
project’s life. A summary of the project’s gross revenue is shown below in Table 22.
Table 22: Projected Revenue Assumption
Year
Y1
Y2
Y3
Y4
Y5
Y6
Volume (kg)
554,400
633,600
712,800
792,000
792,000
792,000
FOB Price ($/kg)
$10.40
$10.40
$10.40
$10.40
$10.40
$10.40
Exchange Rate (Birr/$)
135
135
135
135
135
135
Total Revenue (Birr)
778,377,600
889,574,400
1,000,771,200
1,111,968,000
1,111,968,000
1,111,968,000
iii) Projected working capital requirements:
The total operating cost is estimated at Birr 71,573,393 in the first year of production, and it is
expected to grow by 5% each year throughout the project’s life. Operating costs are recorded
annually and are divided into direct and indirect costs. The direct costs are estimated at Birr
53,575,553, while the indirect costs are Birr 17,997,841. A summary of the operating costs is
shown below in Table 23.
Table 23: Projected Production Operation estimated cost (direct and indirect
Production Year
Y1
Y2
Y3
Y4
Specialty Drying Material Requirement & Cost
23,408,000
26,752,000
30,096,000
33,440,000
Primary Processing cost
2,494,800
2,851,200
3,207,600
3,564,000
Secondary Process & Shipment Cost
18,008,800
20,572,200
23,135,850
25,699,763
Auxiliary Material (Package)
7,299,600
8,342,400
9,385,200
10,428,000
Labor Cost
2,364,353
2,837,224
3,351,470
3,910,049
Sub-total Direct cost
53,575,553
61,355,024
69,176,120
77,041,811
Utilities
1,115,860
1,171,653
1,230,236
1,291,747
Salary and Wage cost
4,118,400
4,324,320
4,540,536
4,767,563
Training Cost
1,990,980
2,090,529
2,195,055
2,304,808
Digital Marketing and Brand Identity Development Cost
492,000
516,600
542,430
569,552
International Promotion
4,043,400
4,245,570
4,457,849
4,680,741
Repairs & renewals
530,298
556,813
584,654
613,886
Travel and perdime
350,000
367,500
385,875
405,169
Stationery and printing
298,647
313,579
329,258
345,721
Insurance expense
3,891,888
4,086,482
4,290,807
4,505,347
Professional fees (legal, audit, etc.)
150,000
157,500
165,375
173,644
Office rent
500,000
525,000
551,250
578,813
Description
General administration & selling expenses
58
Depreciation expense
316,367
311,607
311,607
311,607
Miscellaneous expense
200,000
210,000
220,500
231,525
Sub-Total
Total Production cost(Birr)
17,997,841
71,573,393
18,877,154
80,232,178
19,805,432
88,981,552
20,780,123
97,821,934
iv) Repayment terms given to customers and management:
Customers will be given credit terms of 2 to 6 months, depending on the order size and their credit
history. This lets customers pay in installments while ensuring the company gets paid on time.
v) Method of depreciation to be used:
Depreciation Assumption: Depreciation is calculated using the straight-line method over 6 years
for fixed assets. For example, a total fixed asset investment of 21,012 million Birr results in an
annual depreciation of 3.164 million Birr.
Abol Coffee Export PLC-Financial Project
5.7.1 Abol Coffee Export PLC - Profit and Loss Statement
Abol Coffee Export PLC shows strong profitability, with revenue rising from Birr 194.4 million
in Year 1 to Birr 278.3 million by Year 6. This growth is supported by a 25% share of total export
revenue for $10.40 per kg FOB. After covering direct costs (Birr 53.6 to 77.5 million per year) and
administrative expenses (Birr 18 to 22.9 million per year), the company makes a net profit of Birr
86 million in Year 1, which grows to Birr 124.5 million by Year 6. Even with a 30% corporate tax,
Abol keeps healthy profit margins. In Year 6, the EBIT is Birr 177.9 million, showing good cost
control and steady revenue.
Table 24 : Profit & Loss Statement (25% Revenue Share)
Description
Revenue (25%)
Direct Costs
Admin Expenses
EBIT
Tax (30%)
Net Profit
Y1
194,444,400
(53,575,553)
(17,980,849)
122,887,998
(36,866,399)
86,021,599
Y2
222,393,600
(61,355,024)
(18,879,892)
142,158,684
(42,647,605)
99,511,079
Y3
250,342,800
(69,176,120)
(19,823,886)
161,342,794
(48,402,838)
112,939,956
Y4
278,292,000
(77,041,811)
(20,815,081)
180,435,108
(54,130,532)
126,304,576
Y5
278,292,000
(77,243,102)
(21,855,835)
179,193,063
(53,757,919)
125,435,144
Y6
278,292,000
(77,454,457)
(22,948,626)
177,888,917
(53,366,675)
124,522,242
5.7.2 Abol Coffee Export PLC - Cash Flow Statement
The company generates strong operating cash flows, starting at Birr 89.5M in Year 1 and
increasing to Birr 128M by Year 6, after adding back depreciation of Birr 3.5M per year. After
repaying loans of Birr 13.2M annually, the net cash flow grows from Birr 76.4M in Year 1 to Birr
59
114.9M in Year 6. This steady cash surplus ensures the company has enough liquidity for
reinvestment or dividends. It also shows that Abol can comfortably handle its debt, run its
operations, and grow without financial stress.
Table 25 : Abol Coffee Export PLC - Cash Flow Statement
Description
Net Profit
Add Depreciation
Operating CF
Loan Repayment
Net Cash Flow
Y0
–
–
–
–
(92,568,222)
Y1
86,021,599
3,501,970
89,523,569
(13,158,650)
76,364,919
Y2
99,511,079
3,501,970
103,013,049
(13,158,650)
89,854,399
Y3
112,939,956
3,501,970
116,441,926
(13,158,650)
103,283,276
Y4
126,304,576
3,501,970
129,806,546
(13,158,650)
116,647,896
Y5
125,435,144
3,501,970
128,937,114
(13,158,650)
115,778,464
Y6
124,522,242
3,501,970
128,024,212
(13,158,650)
114,865,562
5.7.3 Abol Coffee Export PLC - Balance Sheet
Abol’s financial position improves every year, with total assets rising from Birr 92.6 million in
Year 0 to Birr 5.15 billion in Year 6, mainly due to retained earnings. Fixed assets are fully
depreciated by Year 6, while working capital increases to Birr 5.1 billion, showing accumulated
profits. Liabilities decrease as the Birr 78.95 million loan is paid off by Year 6, resulting in no debt
and Birr 5.15 billion in equity, highlighting a debt-free and strong equity positions.
Table 26 : Abol Coffee Export PLC – Balance Sheet Statement
Line Item
ASSETS
Fixed Assets
Less: Accum.
Depreciation
Current Assets
Cash & Equivalents
Receivables
Inventory
Total Assets
Liability and Equity
Liability
Bank Loan
(Current Portion)
Accounts Payable
Total Liabilities
Equity
Share Capital
Retained Earnings
Total Equity
Total Liab. &
Equity
Y0
Y1
Y2
Y3
Y4
Y5
Y6
21,011,820
(0)
17,509,850
(3,501,970)
14,007,880
(7,003,940)
10,505,910
(10,505,910)
7,003,940
(14,007,880)
3,501,970
(17,509,850)
0
(21,011,820)
0
0
0
21,011,820
76,364,919
58,333,320
12,000,000
164,208,119
166,219,318
66,718,080
13,500,000
260,445,338
269,502,594
75,102,840
15,000,000
369,604,434
386,150,490
83,487,600
16,500,000
492,133,150
501,928,954
83,487,600
16,500,000
615,408,724
616,794,516
83,487,600
16,500,000
736,782,296
0
13,158,650
13,158,650
13,158,650
13,158,650
13,158,650
13,158,650
0
0
8,000,000
21,158,650
9,000,000
22,158,650
10,000,000
23,158,650
11,000,000
24,158,650
11,000,000
24,158,650
11,000,000
11,000,000
13,932,688
7,079,132
21,011,820
21,011,820
13,932,688
129,116,781
143,049,469
164,208,119
13,932,688
224,354,000
238,286,688
260,445,338
13,932,688
332,513,096
346,445,784
369,604,434
13,932,688
454,041,812
467,974,500
492,133,150
13,932,688
577,317,386
591,250,074
615,408,724
13,932,688
711,849,608
725,782,296
736,782,296
Key Financial Ratios:
Ratio
Y1
Y2
Y3
Y4
Y5
Y6
Current Ratio
5.8:1
7.8:1
9.2:1
10.9:1
12.4:1
14.3:1
Debt-to-Equity
0.15
0.09
0.07
0.05
0.04
0.02
Based on the financial ratios above, Abol Coffee Export’s financial results show the following:
a) Fixed assets have been fully depreciated over 6 years using the straight-line method.
b) The cash flow aligns with the previously provided statement, where ending cash equals
opening cash plus net cash flow.
60
c) The principal portion of the loan repayment is listed under current liabilities.
d) Conservative estimates have been applied:
o
Receivables = 3 months of revenue
o
Inventory = 3 months of direct costs
o
Payables = 2 months of operating expenses
This result presentation demonstrates:
 Strong liquidity (growing cash reserves)
 Declining leverage (debt repaid by Y6)
 Robust equity growth (retained earnings drive 97% of equity increase)
The overall financial evaluation of the project (NPV, IRR, Payback, Breakeven) is summarized
below:
 NPV (@ 15%): Birr 317.06 million – This shows the project is highly profitable after
accounting for the time value of money.
 IRR: 100.4% – Much higher than the 15% loan interest rate, indicating excellent returns.
 Payback Period: 1.1 years – The initial investment will be recovered in just over a year.
 Breakeven Point: Year 1 – Revenue surpasses total costs right from the start.
Smallholder Coffee Exporter Farmers
5.8.1 Coffee Farmers - Profit and Loss Statement
The Exporter coffee farmers show outstanding profitability, earning 75% of the revenue, which
amounts to Birr 583.3M in Year 1 and grows to Birr 834.9M by Year 6. After covering modest
production costs of Birr 20.0-28.8M each year, farmers make impressive net profits, ranging from
Birr 563.3M in Year 1 to Birr 806.1M in Year 6. Since they don’t pay taxes, their profit margin
stays above 96% throughout the project. The very low production cost of Birr 36.1-36.3 per kg,
compared to the revenue of Birr 1,052-1,054 per kg creates great value for the farmers.
Table 27 : Profit & Loss Statement (75% Revenue Share)
Description
Revenue (75%)
Production Costs
Net Profit
Y1
583,333,200
(20,029,624)
563,303,576
Y2
667,180,800
(22,778,588)
644,402,212
Y3
751,028,400
(25,567,502)
725,460,898
Key Metrics:
•
Profit/kg: Birr 1,017/kg (Y1).
61
Y4
834,876,000
(28,399,219)
806,476,781
Y5
834,876,000
(28,587,980)
806,288,020
Y6
834,876,000
(28,786,179)
806,089,821
•
Profit/Farmer: Birr 3.66M/year (Y6).
5.8.2 Coffee Farmers - Cash Flow Statement
Farmers see strong positive cash flows that closely match their net profits because all revenue after
costs goes straight to them. Starting at Birr 563.3M in Year 1, their annual cash inflows steadily
increase to Birr 806.1M by Year 6. Without any debt or capital expenses, all of this money is
available for reinvestment in their farms, community projects, or personal income. This cash flow
trend shows clear sustainability and growth potential for the farming communities.
Table 28 : Coffee Farmers - Projected Cash Flow Statement
Description
Revenue (75% of
Export)
Production Costs
Net Cash Flow
Y1
583,333,200
Y2
667,180,800
Y3
751,028,400
Y4
834,876,000
Y5
834,876,000
Y6
834,876,000
(20,029,624)
563,303,576
(22,778,588)
644,402,212
(25,567,502)
725,460,898
(28,399,219)
806,476,781
(28,587,980)
806,288,020
(28,786,179)
806,089,821
5.8.3 Coffee Farmers - Balance Sheet
Smallholder farmers usually don’t keep formal balance sheets, but together, their financial
situation has improved a lot. Starting with very little, their savings grew to over Birr 4.5 billion by
Year 6 among 220 farmers. That means each farmer made about Birr 20.5 million in profits over
six years, or roughly Birr 3.4 million per year an amount that can really change life for rural
Ethiopian families. Being debt-free and having more cash saved up puts them in a strong position
to improve their lives and invest more in their farms.
Table 29 : Coffee Farmers - Projected Balance Sheet
Description
Assets
Cash & Savings
Farm
Equipment/Improvements*
Total Assets
Equity
Retained Earnings
Total Liabilities & Equity
Y0
Y1
Y2
Y3
Y4
Y5
Y6
0
0
563,303,576
20,000,000
1,207,705,788
40,000,000
1,933,166,686
60,000,000
2,739,643,467
80,000,000
3,545,931,487
100,000,000
4,352,021,308
120,000,000
0
583,303,576
1,247,705,788
1,993,166,686
2,819,643,467
3,645,931,487
4,472,021,308
0
0
563,303,576
583,303,576
1,207,705,788
1,247,705,788
1,933,166,686
1,993,166,686
2,739,643,467
2,819,643
3,545,931,487
4,352,021,308
Key Assumptions:
Farm Reinvestment:
• 3.5% of annual profits (Birr 20M/year) is set aside for equipment and improvements.
• No Debt: Farmers have no liabilities in this model.
• Cash Savings: 96.5% of net cash flow is saved each year (no dividends are paid out).
62
Financial Overview:
•
•
•
By Year 6, farmers together will have Birr 4.47 billion in assets, including Birr 4.35 billion
in cash.
On average, each of the 220 farmers will have about Birr 20.3 million in savings and assets
by Year 6.
There is no financial risk since there is no debt.
5.8.4 Financial Evaluation for Farmers
•
NPV (@15%): Birr 3.4 billion - phenomenal value creation
•
IRR: 498% - Astronomical returns on labor/land inputs
•
Payback Period: Immediate - Costs are covered within the first harvest
•
Breakeven Point: Year 1, First Shipment - Revenue exceeds costs from the outset
5.8.5 Loan Repayment Schedule
In this model, farmers don’t have any loan obligations. All the project financing is managed by
Abol Coffee Export PLC, so farmers don’t carry any debt. This setup means farmers face no
financial risk and still receive 75% of the export revenues. It offers a level of financial security
that’s never been seen before for the farming families involved.
Sensitivity Analysis
The sensitivity analysis shows that the project is still financially viable even if the FOB price falls
to $8.00/kg. In this case, Abol’s Net Present Value (NPV) would be Birr 317.059 million, which
means the project remains economically feasible. Farmers would also continue to make a profit of
Birr 750 per kilogram, keeping their income steady despite the lower export price. This analysis
demonstrates that the business model can handle price changes, protecting both investor returns
and farmers’ livelihoods.
Strategic Implications
These financials reveal an extraordinarily favorable position for farmers, with several key
implications:
•
Reinvestment Potential: Massive profits enable farm upgrades, education, and
diversification
•
Risk Mitigation: No debt exposure cushions against market fluctuations
•
Sustainability: Profitable operations ensure long-term participation
•
Scaling Opportunity: Model demonstrates viability for expanding farmer participation
63
The financial outcomes represent a transformative opportunity for Ethiopian smallholder coffee growers,
potentially serving as a benchmark for equitable agricultural export models in developing economies.
Careful monitoring will be essential to ensure profits translate into tangible community development.
64
6 Environmental and Social Impact Assessment (ESIA)
Abol Coffee Export PLC is committed to maintaining a sustainable and environmentally friendly
coffee processing operation. The processing stations will implement eco-conscious practices to
minimize environmental impact while optimizing operational efficiency. The key environmental
practices include:
Environmental Impact Assessment (ESIA):
The Environmental Impact Assessment (EIA) for the project looks at possible effects on the
environment, such as changes in land use, water use, and waste production. Since the project
includes farming and export processing, the main concerns are soil damage from intensive farming,
chemical runoff from fertilizers or pesticides, and energy use in processing plants. To reduce
environmental harm, the project will use sustainable farming methods like crop rotation and
organic fertilizers, water-saving irrigation systems, and renewable energy sources such as solar
power. Waste will be properly managed through disposal or recycling. An environmental
monitoring plan will regularly check air, water, and soil quality to make sure the project meets
national and international standards.
Social Impact Assessment (SIA):
The Social Impact Assessment (SIA) looks at how the project affects local communities, especially
smallholder farmers and workers. On the positive side, farmers can earn more income (about Birr
750/kg profit even with lower FOB prices), new jobs will be created in processing and logistics,
and rural livelihoods will improve. However, there are some risks, like land displacement, uneven
sharing of benefits, and concerns about labor rights. To tackle these issues, the project will hold
community consultations, set fair pricing agreements, and offer training programs for farmers.
Gender inclusivity will also be a focus to make sure women have equal access to jobs and training.
By following ethical sourcing and fair-trade practices, the project aims to support long-term social
sustainability while reducing negative impacts on vulnerable groups.
65
Socio-Economic Impact Assessment (SEIA)
The project is expected to have a wide-ranging positive impact on both local communities and the
larger economy. Here’s a quick overview of the main socio-economic benefits:
A. Job Opportunities
 28 professionals will be hired as company managers and staff.
 Around 220 small farmers across 660 hectares will be involved during peak production.
 Over 50 seasonal roles will be created for tasks like harvesting and processing.
B. Supporting Community Growth - Budget allocations for community reinvestment could
include:
 About 30% for farm improvements like better irrigation systems and organic inputs.
 Around 20% toward education and healthcare services.
 The remaining 50% of household income may be redistributed locally.
C. Export Potential - The project could add between $4.17 million and $6.25 million annually
in foreign exchange earnings by Year 6.
The project is increasingly helping Ethiopia earn foreign currency, with farmer-produced coffee
exports expected to grow from 4.17 million in the first year to 6.25 million by year six. This
estimate is based on about 75% of the total export revenue for $10.40 per kilogram FOB. Over six
years, this means a 50% boost in foreign exchange inflows, which directly supports Ethiopia’s
goals of increasing export earnings and improving the country’s balance of payments. The steady
growth in dollar earnings from 554,400 kg in Year 1 to 792,000 kg from Year 4 onward shows
that the project reliably brings in hard currency. Plus, the premium prices paid for specialty coffee
help maximize the value of each kilogram exported. These earnings are especially important for
Ethiopia, which often faces shortages of foreign currency. They help pay for essential imports and
service external debt at the national level. On a local level, the dollar earnings are converted into
Ethiopian Birr at the official exchange rate, which helps strengthen the country's financial system.
66
7 Conclusion and Recommendation
Conclusion
The Abol Coffee Export project shows strong potential to be financially successful and resilient.
Even if prices dip, like when FOB prices are at $8.00 per kilogram, the analysis indicates it can
still be profitable, with an estimated net present value of 317.059 million Birr. The project not only
offers good returns for investors but also provides smallholder farmers with a steady income,
guaranteeing them Birr 750 per kilogram. On the environmental side, adopting sustainable farming
methods, waste management, and renewable energy helps reduce ecological impact and aligns
with global sustainability goals. Socially, the project helps rural communities by creating jobs,
improving farmers’ livelihoods, and supporting gender-comprehensive growth. Overall, it
balances economic, environmental, and social priorities, making it a promising model for
sustainable coffee farming.
Recommendation
To maximize long-term success, Abol Coffee Export should strengthen partnerships with
smallholder farmers through capacity-building programs, ensuring consistent quality and yield
improvements. Expanding access to climate-smart agricultural techniques and fair trade
certification will further enhance market competitiveness and farmer resilience. On the
environmental front, investing in carbon-neutral processing technologies and water conservation
systems will solidify the project’s sustainability credentials. Additionally, establishing a
transparent pricing mechanism and grievance redress system will foster trust and equitable benefitsharing with farming communities. Finally, diversifying export markets and securing long-term
off-taker agreements will mitigate price volatility risks. By implementing these measures, the
project can sustain profitability while driving inclusive growth and environmental sustainability in
Ethiopia’s coffee industry.
67
Reference
1. Commercial Bank of Ethiopia. (2024). Agricultural Loan Guidelines. These
guidelines support farmers with loans at a 15% interest rate, repayable over six
years, while corporate taxes are set at 30%, aligned with the Ethiopian Revenue
Authority.
2. Ethiopia Commodity Exchange (ECX). (2023). Annual Coffee Market Report. This
report offers an overview of coffee trading and market trends in Ethiopia.
3. Ethiopian Coffee & Tea Authority. (2023). Coffee Value Chain Analysis. It breaks
down costs associated with farming, such as transportation (around Birr 580,000
per year) and drying, which can range from Birr 14.9 million to 21.3 million yearly.
4. FAO. (2022). Sustainable Coffee Production in Ethiopia. This document discusses
the costs involved in organic farming, including approximately Birr 1.12 million
annually for about 220 farmers adopting organic inputs.
5. International Coffee Organization (ICO). (2024). Ethiopia Coffee Profile. It provides
detailed insights into Ethiopia’s coffee production, export stats, and industry
structure.
6. World Bank Report (2023): Socioeconomic Impact: Ethiopia Rural Livelihoods
Project. It emphasizes models for increasing farmer incomes, with about 75% of
revenue sharing going back to farmers.
68
Annexes
Legal Documents
69