To develop a Business Case study for facilitating promotion of the Poultry Sector in Ethiopia Vacancy in Ethiopia

Country: Ethiopia
Organization: International Labour Organization
Closing date: 26 Nov 2021

Organisational Unit/Department: ILO Country Office, Addis Ababa, Ethiopia

Technical Cooperation Programme: ProAgro Ethiopia– ‘Promotion of Decent Work in Agribusiness’ Project

1. Background **

a. Current challenges and status of the Poultry sub-sector

More than 80% of Ethiopia’s population lives in rural areas and their main source of livelihood is agriculture. Despite recent developments, smallholder agriculture still remains unproductive. As a result, the Government of Ethiopia is pushing towards a long-term sector transformation in agriculture - encouraging a shift from traditional subsistence farming to more productive commercial agriculture.

Poultry is one of the key livestock subsectors and plays an important role in terms of generating employment opportunities, improving family nutrition, and women and youth economic empowerment. It is a suitable business for poor households due to the small size of land needed and low investment costs required to start up and run the operation. The sub-sector is almost exclusively dominated by backyard and small-scale production using limited to no inputs in production, which is targeted for either self-consumption or to the market. Unlike other parts of the world, there are relatively few intermediaries operating between producers and consumers in the Ethiopian poultry sector. However, because of increased urban development, there are newly emerging private farms responding to growing consumer demands. Indeed, rising demand for meat products has led to inflationary pressures, with poultry prices increasing fivefold in nominal terms over the past decade. Nonetheless, while growing, broiler meat production remains fairly low, with most consumers favouring traditional forms of poultry over processed products[1].

The poultry sector is characterised as largely uncompetitive, completely domestic-oriented and more reliant on egg production than meat production. About 90% of Ethiopian chickens are indigenous breeds, which are common in household farming and have mortality rates in excess of 70% and much lower in productivity– producing only about one-fifth to one-third of the number of eggs as compared to imported breeds[2].

Despite ranking 9th in poultry production amongst African countries, Ethiopia is far behind in terms of utilizing the abundant chicken resources efficiently to scale up meat production. The major limiting factors are high cost feed, low quality and scarcity of raw materials to be used as input for feed, low productivity of indigenous breeds, which make up the bigger portion of the chicken population, and high cost of Day-Old Chicken (DOC) -all broiler parent stock DOCs are imported. While the sector has seen steady growth over the last 15 years, in part due to entry of commercial businesses, growth has been much less impressive given the potential consumer base of the emerging Ethiopian urban middle class.

Development of the poultry sector in Ethiopia has the potential to generate more and better jobs especially for female workers and eventually reduce poverty for these individuals and their families. The ILO ProAgro project aims to incentivise poultry sector investment and create more effective, less costly production to improve the sector’s competitiveness and reduce the informality associated with it.

b. Current Government Initiatives

The Ethiopian Ministry of Agriculture (MoA) has developed Ethiopia 2030: The Pathway to Prosperity, Ten Years Perspective Development Plan (2021 – 2030) for the Agriculture sector aimed at boosting the production and productivity of the sector to meet domestic demand and increase export volume of different agricultural products. In this plan, the Ministry has targeted to increase the production of chicken meat and egg to meet the domestic nutritional demands and initiate export through enhancing management of indigenous chicken breeds, improving family chicken businesses and supporting new and existing commercial farms.

The 10-year plan developed by MoA indicated that the current eggs production (89%) is obtained from specialized poultry farms and targeted to increase the number of eggs production from 2.6 billion during 2019/20 to 5.1 billion eggs at the end of 2030. The volume of egg production from improved family poultry business will (or would) aim to reach 359 million from the current 200 million and eggs from traditional production will be reduced to 91.4 million through improvements in the traditional chicken farming to semi-traditional methods. The chicken meat production will reach 106 thousand tons at the end of 2030 from the current 48 thousand tons. These targets set by the Ministry of Agriculture should be achieved through the scaling-up of improved and modernised poultry production methods, focusing on the use of improved technologies and improved practices and the introduction and multiplication of productive chicken breeds at affordable prices for local producers. To achieve these objectives, the Ministry of Agriculture plans to establish five poultry grandparent multiplication centres in different regions during the coming 10 years[3].

c. ILO’s Support to Agribusiness Sector in Ethiopia

In an effort to support the government in realizing the full potential of the agricultural sector, the ILO is implementing the ProAgro Ethiopia project, a project designed within the framework of the German Federal Ministry of Economic Cooperation and Development’s Special Initiative on training and job creation. This project puts forward an integrated strategy, combining policy support and social dialogue, skills development, value chain development and entrepreneurship training, with the ultimate objective of creating decent job opportunities for women and young men in the selected sub-sectors: fruit and vegetables, poultry and edible oil. The project will develop the capacity of national, regional, and local stakeholders to develop and implement policies aimed at boosting the job creation potential of the agribusiness sector while enhancing decent work conditions.

The project has conducted a Market System Analyses (MSA) for the poultry sectors in Ethiopia and identified major constraints hindering the performance of the selected subsectors and proposed interventions to address some of the challenges. The analysis identified that imported exotic breeds are typically more productive (both in meat and eggs) and rearing periods for imported breeds are about half that of indigenous breeds[4]. In Ethiopia and the regions targeted by the ProAgro Ethiopia project, a handful of companies own hatching and multiplication facilities for the production of day-old chicks (DOCs). Ethiopian hatcheries have parent stock for broilers (meat), layers (eggs) and dual-purpose chickens, all of which produce DOCs. Hatcheries import parent stock DOCs or hatching eggs[5] from genetic companies often located in Europe and sometimes even Brazil. This parent stock is produced from grandparent stocks which are housed at the genetic companies which needs 30% of the stock to be replaced every 3-4 months with fresh imports.

To import these parent stocks for multiplication in Ethiopia, companies need to wait for several months and sometimes more than a year to get access to foreign exchange (forex), which is not easily accessible in Ethiopia. Moreover, importing hatching or DOCs results in a high mortality rate during transportation, which increases costs. Forex-related constraints lead to long waits and force companies to import the stock only when access to forex is permitted, meaning that there is a sudden oversupply of DOCs to the market. This results in limited and inconsistent supply of DOCs to the market.

In addition, an analysis conducted by the Ethiopia Investment Commission (EIC) and the Agricultural Transformation Agency (ATA) indicated that having a grandparent stock multiplication centre within Ethiopia would reduce the DOC price by 55% [6] by reducing mortality rate of DOCs during transit from abroad and the demand for forex to import parent stocks. This could eventually increase domestic demand for chicken meat and eggs, leading to a positive change in the average consumption patterns of the Ethiopian population and hence enhancing opportunities for the export market, which would in turn make the multiplication centre more sustainable.

Against this backdrop, the ILO through its ProAgro Ethiopia Project has decided to commission the development of a business case for investment (public and private) in poultry sector in Ethiopia, including establishment of grandparent multiplication centre, to provide the government with evidence-based data and analysis to support the development of the poultry sector and address the major bottlenecks limiting its potential.

2. Scope of the Assignment

The objective of the assignment is to develop a business case study for facilitating investment in the poultry sector in Ethiopia and provide the Government of Ethiopia, notably the Ministry of Agriculture, Ministry of Industry and Ministry of Trade and others with actionable recommendations and figures on the contribution of the sector and its potential in Ethiopian economy. The analysis and results of this study would be of use not only to the Ethiopian government, but also to private-sector domestic and/or international investors interested in investing in the Ethiopian poultry sector.

3. Specific Tasks

The consultant will:

  • Develop a business case for Ethiopian Poultry Sector based on an economic and market analysis and produce a study report (max 40 pages page) which includes, but is not limited to: o A brief overview of existing policies, rules and regulations, analysis of challenges and opportunities for poultry sector in Ethiopia

· Presenting the rationale for developing poultry sector in Ethiopia, focusing on the establishment of the grandparent multiplication centre and poultry feed processing

· A high-level analysis of the socio-economic benefits and impact of investing in a poultry sector in general, grandparent multiplication centre and feed processing in particular

· Describing the type, scale and business model of the feed processing and grandparent multiplication centre (alternative models can be considered, and the most viable selected in consultation with ProAgro technical leads)

· Organisational structure, staffing needs including technical skill required and profile of the technical experts required, steps needed to establish the centre, estimated costs, governance models;

· Scoping out a high-level project implementation plan and timeline for the establishment of the multiplication centre;

· Market financial analysis; including high level poultry industry analysis, target market, competition, and marketing strategy;

· Explore the potential for environmental impact, including recommendations to mitigate against any adverse impacts that have been identified;

· Analysis of potential risks and mitigation strategies;

· Economic analysis/financial projections; including estimates on fixed and working capital needs, and projections of costs and returns under various scenarios through different types of investments-domestic, FD, debt equity etc.

  • Presentation of the main findings of the report to the Government of Ethiopia and other national stakeholders at a validation workshop.

4. Methodology

The methodology of the study will include a combination of first-hand information gathering through interviews and also a desk review of existing research and evidence on the constraints facing the poultry sector. It will draw on the findings of interviews with senior policy makers, experts, commercial poultry farmers, poultry feed processors, researchers, investors as well as additional desk research on the constraints facing the poultry sector, focusing on the specific challenges in terms of availability of DOCs and poultry feed.

The desk research will also include the experience of other countries in Africa and similar developing economies in building efficient and sustainable grandparent stock centre/s.

The preparation of the feasibility study will be based on:

  • Interviews with senior policy makers from the Ministry of Agriculture, Ethiopian Institute of Agricultural Research, Agricultural Transformation Agency, Ministry of Trade, Ministry of Industry, Ethiopian Investment Commission, Commercial Farms, Poultry feed processors, poultry investors, , consumers, and other relevant sector stakeholders(appropriate questionnaires will be used as a tool)

  • Review of Ethiopia’s ten-years perspective plan, focusing on Ministry of Agriculture plan on poultry

  • Review of the current status of poultry production and productivity, demand, marketing and investment policies, rules and regulations.

  • Review of past research on the constraints facing the poultry sector,

  • Review of current government and development partners initiatives in the poultry sector

  • Assessment of the experience and good practices from other countries (especially Africa) that could be transferred, after adaptation, to Ethiopia.

5. Deliverables

· The following main deliverables are expected from the consultant:

  • Inception report including detailed work plan and methodology with information on the stakeholders to be interviewed, specific research questions, interview guides / questionnaires
  • Preparation of a draft report on “a Business Case Study” for poultry Sector in Ethiopia to be shared with the ILO, partners and stakeholders for additional inputs and feedback.
  • Presentation of the main findings of the report to the Government of Ethiopia and other national stakeholders at a validation workshop. The consultant will integrate comments gathered in this workshop into the final draft report
  • Preparation of the final report that takes into account comments from the ILO and selected partners and stakeholders.

6. Duration of the assignment

The assignment will take place from 1st December 2021 to 28th February 2022 for total of 30 working days.

1. Staffing

This is a national consultant position.

2. Logistics

The bidder is encouraged to familiarize themselves with the operating context as regard to security for staff and access to services e.g. office space, living accommodation, travel etc., and to take into consideration all relevant factors as they prepare their bid.

3. Key Qualifications

Required qualifications include:

· University degree and above in Economics, Agribusiness/Agricultural Economics, Business Management, Livestock/poultry, other relevant subjects with more than 10 years of working experience

· Proven experience in poultry development in Ethiopia and similar economies

· Knowledge of working in Ethiopia and in agricultural development

· Specific knowledge on developing business case studies in the agribusiness sector

· Good facilitation, presentation and analytical skills, as well as ability to elaborate high quality research documents

· Language skills: fluency in English, Amharic and other Ethiopian languages.

· Prior experience of working with the ILO and other UN agencies.

4. Evaluation Criteria

Bidding documents (technical weighing 70% and financial weighing 30%) will be evaluated based on the following criteria. These includes:

1. Technical Evaluation: Technical proposal will be evaluated as per the following criteria:

  • Consultant qualification, experience and similar previous works (30%)

· University degree and above in Economics, Agribusiness/Agricultural Economics, Business Management, Livestock/poultry, other relevant subjects with more than 10 years of working experience

· Knowledge of working in Ethiopia and in agricultural development

· Specific knowledge on developing business case studies in the agribusiness sector

· Experience working preferably with ILO or sister UN agencies

· Good facilitation, presentation and analytical skills, as well as ability to elaborate high quality research documents

· Language skills: fluency in English, and knowledge of Ethiopian languages is an asset.

  • Technical compliance with the TOR (clear understanding of the task, deliverables, methodology, work plan and the approach to handle the assignment) (40 %).

· The proposal responds comprehensively to the TORs

· Realistic time plan and human resourcing

· Major risks and mitigation options identified

2. Financial Proposal

The financial proposal of offers having passed the technical review will be considered. The financial offer will account for 30% of the final score. The maximum number of points assigned to the financial proposal will be allocated to the lowest priced proposal. All other price proposals receive pro-rated points according to the following formula: p = y (x/z), where: p = points for the financial proposal being evaluated y = maximum number of points for the financial proposal x = price of the lowest priced proposal z = price of the proposal being evaluated. The proposal obtaining the overall highest score, after adding the score of the technical and the financial proposals, is the one that offers best value for money.

The financial proposal should detail each line of envisaged expenditure, in particular:

· Consultancy fee

· Travel costs for local missions

1. Supervision and reporting

Under the overall supervision of ProAgro Chief Technical Advisor, and in close coordination with the NPC – Enterprise Development, the consultant will develop a business case for investment in the poultry sector in Ethiopia.

The consultant will also work in collaboration with the Ethiopian Ministry of Agriculture (MoA), the Ethiopian Institute of Agricultural Research (EIAR), the Agricultural Transformation Agency (ATA) and other relevant project partners.

2. Payment Schedule

Payments will be made as follows:

  • First tranche (50 %) upon submission of the inception report to the satisfaction of the ILO; and

  • Second tranche (50%) upon submission of the final report to the satisfaction of the ILO and presentation of findings.

Ownership and Disclosure of Data/Information

All the information shall be treated as confidential and shall not without the written approval of ILO be made available to any third party. In addition, the consultant formally undertakes not to disclose any parts of the confidential information and shall not, without the written approval of ILO be made available to any third party. No part of the report shall be reproduced except with the prior, expressed and specific written permission of ILO.

How to apply:

Application Process:

Interested and qualified firms should submit a technical and financial proposal by clearly indicating cost per day for the number of days indicated above. The costs for missions and travel should be separately and clearly indicated. The applications should be sent by email to ADDIS_PROCUREMENT by 26 November 2021



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