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Wheat flour manufacturing plant - developing a co-operative business case
Oct 1, 2011-Dec 31, 2012
Raya Wakena Farmers’ Cooperative Union is a genuine farmer-owned company with a total membership of 15,967 of 46 primary cooperatives. The Union’s core business is input distribution mainly fertilizer, improved seed and chemicals through its member PCs and also distribution of consumable products. The Union has made grain purchase of 4,215.75qnt of wheat during the fiscal year of 2008/09 and 1,154.83qntl of improved wheat seed in 2009/2010. It also purchases and sales linseed, teff and barely from its primary cooperatives.
Other services provided are mechanization services (rent of combiner) and training of members on good agricultural practices and improved seed production.
Due to its current position as the sole provider of fertilizers and other inputs to farmers in the region the Union has managed to achieve sound financial position for the past three years and has been able to pay dividends to its member PCs and bonus to its staff. However, there is still much room for improvement, mainly through computerizing bookkeeping by installment of appropriate software and training of manager, accountant and planning and programming officer in the use of it. This is one of the key components of this year action plan.
The union aspires to grow in terms of purchase and establish a wheat flour manufacturing plant. It also acknowledges the challenges it is currently facing (lack of working capital and as a result not being able to influence the market) and has proposed bulking as a permanent solution.
The action plan for the coming three-six months of 2011 & 2012 covers activities related to improvement of financial management through computerizing bookkeeping as well as purchase and installation of accounting software and training of involved staff in use of it. Furthermore ToT courses will be organized to train farmers on good agricultural practices aiming at increase of productivity. A feasibility study will be carried out, assessing the current value chain in terms of supply and demand. This study will be main input for development of the business plan.
RWCU is expected to contribute at least 20% of the total budget of the action planning process. The Union has a good track record with the Government in handling input distribution (fertilizer) and delivering payment of loan on time.
