Feasibility Study To Establish Apost Harvest Services Center For Horticultural Products Export

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Abdalrahman, Nadia Mohammed Abdalla
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The lack of adequate infrastructure for post harvest services is considered one of main obstacles for enhancing exports of fruits and vegetables of Sudan. Hence the objective of this research aims to conduct technical and financial feasibility study to establish a post-harvest services modern center for Galia Melon and green beans for export and to utilize the cold storage to store potatoes in off-season. The study relied on primary and secondary data for analysis. The primary data were obtained from the market, personal communications and private sector sources. It also used the secondary data obtained from documents and reports of various ministries, companies and projects e.g. Federal Ministry of Agriculture and Forestry, Ministry of Agriculture in Khartoum State, Ministry of Investment, Ministry of Foreign Trade, Ministry of Electricity, National Water Corporation, Sudan Trade Point, Wafra Company, Horticultural Export Company, Perfection Engineering Company, As & C techno. Company Limited, Elsilate and Umdum Projects. The study used the financial analysis approach and showed that the total capital cost of the project is estimated about US$ one million. The raw materials cost represents the highest variable operating cost, about 92% of the total variable working cost. On the other side the project would create 32 job opportunities. The financial analysis gave good indicators: The Pay Back Period of the Project (PBP) was two years and two months with Net Present Value (NPV) of about US$ 6.9 millions and US$ 5.3 millions at discount rates (12%, 15%) respectively, Benefit/Cost ratio (B/C) was 1.73% and 1.70% at discount rate 12%, 15% respectively and Internal Rate of Return (IRR) was 61%. The sensitivity analysis showed that the project had financial viability, with respect to increasing total cost, decreasing the total return by 20% and operating with a capacity 60%. First when the total cost was increased by 20%, the project gave positive NPV of about US$ 4.6 millions and US$ 3.7 millions, B/C was 1.44%, 1.41% respectively and IRR was 45%. Secondly when the total return was decreased by 20% the NPV gave positive values of about US$ 3.6 millions and US$ 2.7 millions, B/C was 1.39 %, 1.36% respectively and IRR was 42%. Lastly when the project operating capacity was 60% the NPV was US$ 4.3 millions US$ and 4.1 millions, B/C was 1.67%, 1.66% respectively and the IRR was 56%. The project is technically and financial wined.
July 2005
19 page
Agricultural Economics