1. Product Description: Candles are sources of light for homes during evenings and as such they are items of necessity especially in rural areas. Commercial candles are made from paraffin wax which is one of the by- products of petroleum refineries.
2. Rational: Only about 3-5 percent of the people in the Amhara Region have access to electric light and energy. The rest of the Amhara people about 17.5 million of them use traditional sources of energy for getting light and heat. Two main sources of light for homes (where there is no electric power supply) are fuel wood and kerosene. Fuel wood made in a form of “kitkit” provides light during the evening. Kerose in “kuraz” also provides light for homes. But due to widespread deforestation, the type of fuel wood where “kitkit” is made is not available practically in all parts of Amhara. Keroses because of its price, is only used by “well-to –do” farmers mostly in holidays. For these reasons, more than 95 percent of homes in the rural areas of the Amhara Region do not have lights during the evening especially after meals are cooked. Hence Amharaland is as dark as darkness itself after sunset. This is one manifestation of the backwardness of the Region.
The production of candles in the Region (and if they are sold at prices which the majority of the people can afford,) could reduce the problem or lack of sources of light in the Region.
3. Market Potential: All commercial candles produced in the country are produced in and around Addis Ababa. Between 1999/2000 and 2003/2004, average annual production of candles was about 610 tons is equivalent to to 12.2 million of candles. The share of the Amhara Region in the consumption of candles was about 165 tons which is equivalent to 3.3 pieces of candle. If this was the average level of consumption of candles in the Amhara Region during the period mentioned above, the current consumption could have grown at least to reflect population growth. This consumption level could justify the establishment of candle manufacturing plant in the Region.
4. Source of Raw Material: Paraffin wax from which candle is made is a product of the petroleum industry. As all petroleum products are imported, paraffin wax will also be imported.
5. Production Process and Technology: Major production stages include melting of the paraffin wax, putting the molten wax into moulds, calling the wax in the moulds, trimming the candles and packing. Major machines required are vessels for melting wax, monldling machines, oil fired or electric furnace, spare moulds, pistons and accessories.
6. Estimated Investment:
§ A250 m2 building Birr 375,500
§ Machinery & Equipment Birr 200,000
§ Working Capital Birr 80,000
655,000
7. Location: any major urban center in the Region