Salt Production Feasibility Study Consultant- Somaliland

TERMS OF REFERENCE FOR SALT PRODUCTION AND PROCESSING

Job title: Salt Production Feasibility Study Consultant-Somaliland

Locations: Hargeisa, Berbera and Zeylac, Somaliland

Responsible to: Programme Director

Starting date: 15^th May 2022

Closing date: 08/5/2022

1. INTRODUCTION

Global Peace and Prosperity Initiative (GLOPPI)-Somaliland is a right based organization operating in Somaliland. GLOPPI envisions a peaceful and prosperous world where human/minority rights are respected and fully enjoyed. In collaboration with others, GLOPPI strives to transform peoples’ lives by eliminating poverty, violent conflicts and poor governance to bring about lasting peace and prosperity to the most vulnerable, marginalized, excluded and the poorest communities especially women, children, youth, minority and endogenous groups through innovative, high impact and relevant programmes and projects in the areas of good governance, livelihoods, food security, entrepreneurship and employment, value addition, resilience, access to social services, human rights, gender and social inclusion, emergencies and protection. GLOPPI empowers the poor, marginalized, excluded and the suffering people to lead a peaceful and prosperous life. We focus on regions where people suffer most as result of extreme poverty, violent and recurrent conflicts, weak governance as well as marginalization.

In response to the increasing unemployment due COVID 19, recurrent droughts and worsening livelihoods, increasing population, and lack of access to better markets, GLOPPI would like to support the vulnerable coastal communities to enhance their skills, increase and produce high quality salt to improve their livelihoods and create jobs for the youth. GLOPPI would also link them with better markets for their products through salt processing and value addition. This will ensure reliable markets throughout the year which will contribute to the sector and economic growth and development as well as improved resilience. The purpose of this consultancy is to technically support the coastal communities and other stakeholders to produce high quality salt that can be marketed nationally and regionally.

2. BACKGROUND OF SALT PRODUCTION IN SOMALILAND **

Tokhoshi located 8 KM west of Zeylac district, western part of Somaliland and close to the Djibouti border is the biggest salt producing centre in Somaliland. The salt producing area in Tokhoshi is estimated to be 15 KM along the coast and up to 3 KM wide inland. The salt production is believed to have started in early 1970s. Community cooperatives organized by then government were the pioneers of the salt production. Since then, the salt production became the main livelihood of Tokhoshi inhabitants. Thermal evaporation of brines or solar evaporation method is the only salt production method in Somaliland. In this method, seawater is extracted from the sea and captured in circular small ponds with 5 meter long and 3 meter deep. The sun and the winds are left to evaporate the water. The resultant salt crystals or the brine are harvested manually or mechanically where possible. The salt purity is low and the brine is brown or light reddish in colour due to the high iron content of the soil. The process of washing the brine has not yet been introduced to the area. Because of its low elevation, the area is vulnerable to seasonal flooding especially when it heavily rains upstream. There is very limited salt production in other coastal areas of Somaliland. Small scale production of salt often failed in Berbera, the biggest port of Somaliland. Other villages along the coast were reported to have initiated salt production. The lack of technical know-how and investment are usually the main constraints of the salt production in Somaliland. However, this project and the cooperation between the entrepreneurs, the communities and the governments at different levels are expected to significantly improve the salt production, processing and marketing in order to contribute to the economic growth and social well-being.

3. PROJECT FEASIBILITY STUDY

Somaliland has a 850 Km long coast with full potential of marine resources and natural salt which are rarely exploited by the citizens of Somaliland. Despite the extensive coastal areas with high evaporation rate and strong winds that support the production of salt, Somaliland does not produce adequate high-quality and commercial salt. Tokhoshi is the main centre of the salt production in Somaliland. The traditional method of salt production is used which leads to the production of low quality salt. The salt is impure and brown or light reddish in colour. It is coarse in texture and cannot complete with high-quality salt from other countries. The annual production of salt in Tokhoshi is estimated to be 9000 metric ton which can rarely meet the needs of the country let alone exporting it. The growing trade with Ethiopia due to the Berbera corridor and the negative trade balance with Ethiopia is a great business opportunity for Somaliland citizens to exploit. The stakeholders will collectively exploit natural resources such as such salt to enhance livelihoods and employment and contribute to the economic growth of the country.

Through public, private, non-profit and community partnership, the project will significantly accelerate the salt production. The project plans to annually produce, process and package 25,000- 50,000 metric ton of high quality salt. The project stakeholders have an ambitious plan of making Somaliland one of the salt producing countries. The project’s niche is to produce organic or natural iodized table salt. To achieve this, state of the art production technology has to be introduced to attain mass production of commercial salt. Modern and cost-effective community based salt production methods will be integrated with the large scale commercial salt production and processing to achieve the desired and value-added output of 25,000 to 50,000 metric ton per annum. Both the improved community salt production and the large scale commercial production have to channel their outputs to the processing plant. On behalf of the stakeholders, the newly established Somaliland Salt Production and Marketing Company (SOLASALT) will take the lead in the salt production, processing, packaging and marketing nationally, regionally and globally.

Because of this new venture, the stakeholders would like to conduct this feasibility study to ensure the success of the project. Although the feasibility study will cover different aspects, we were interested in those companies, firms or consultants who demonstrate high level of technical expertise and extensive experience in salt production from designing salt works, running salt plants to producing and marketing high quality commercial iodized table salt. Those experts must ensure the project will be technically feasible and if not what needs to be done to achieve the desired technical feasibility. This will ensure that the communities and the other stakeholders benefit from the project, improve their livelihoods and contribute to the economic growth and development. GLOPPI-Somaliland may identify a national consultant who will support the senior technical consultant in conducting the social, economic, financial aspects of the feasibility study.

Somaliland is one of the most peaceful countries in Africa. Employees and consultants from different countries and continents and cultural/religious backgrounds work in this country. Somalilanders are also friendly, social and approachable and highly coming. Therefore, any companies, firms or individual consultants from anywhere around world are encouraged to apply provided that they have the required technical expertise and the experience.

4. OBJECTIVES

Overall objective of the feasibility study is to determine whether or not a large scale production of commercial and iodized salt is technically, socially, financially, economically and management-wise feasible in Somaliland.

4.1. Specific objectives

4.1.1 To analyse why small scale production of salt failed in most of the coastal areas of Somaliland with the exception of Tokhoshi, the biggest salt production centre in Somaliland.

4.1.2 Assess and identify the most cost-effective salt production methods

4.1.3 To develop an architectural design of the salt works for the annual production of 25,000 to 50,000 metric ton of commercial and table salt

4.1.4 To determine if a large scale commercial table salt is technically feasible in Somaliland

4.1.5 To examine that the salt production and the processing plant will be financially and economically feasible

4.1.6 To explore if the salt production will socially feasible

4.1.7 To find out if the salt production and processing will be management-wise feasible

5. ACTIVITIES AND STRATEGIES TO ACHIEVE THE OBJECTIVES

5.1. TECHNICAL FEASIBILITY

5.1.1. To analyse why small scale production of salt failed in most of the coastal areas of Somaliland with the exception of Tokhoshi, the biggest salt production centre in Somaliland.

· Survey the potential coastal areas of Somaliland and identify the most appropriate locations for a large-scale production of commercial and iodized table salt.

· Assess the potential coastal areas of Somaliland, collect samples of the seawater and the soil and test the level of iodine content in the seawater. Which part of Somaliland coast has the highest level of iodine? If there is no iodine or if the level of the iodine content is low, identify potential areas to outsource iodine. Also determine that the land (soil) and the sea-water will be feasible for mass salt production

· Calculate the areas (hectares) required to produce and process and package 25,000 to 50,000 metric ton per annum. Also consider the land for potential expansion. It is expected that 50% of the salt production will come from the large scale commercial salt production and the remaining 50% will come from community based salt production.

· Design a salt iodization program

5.1.2. Assess and identify the most cost-effective salt production methods

· Assess the salt production methods in Somaliland and elsewhere and analyse all possible and modern salt production methods and decide the most appropriate and the most cost-effective method(s) for Somaliland context.

· Assess and propose which method or combination of salt production method (s) can produce maximum salt for commercial table salt using the state of the art technology to ensure that Somaliland becomes one of the high quality salt producing countries.

· Assess the land or the area proposed or identified for the commercial salt production and decide if the area is technically appropriate for the mass production of salt.

· Assess and identify the technical gaps of the community based salt production and propose ways to improve community based salt production with the latest industry technology to increase salt production.

· Develop the training programme for improving community based salt production and management skills.

5.1.3. To design salt works for the annual production of 25,000 to 50,000 metric ton of table salt

· Assess and survey the land proposed for the production and processing of salt and propose various designs of the salt works and select the best in terms of its potential output.

· Develop an architectural design of the salt works for the annual production of 25,000 to 50,000 metric ton of commercial and table salt.

· Observe the existing designs of salt works in Tokhoshi and develop better design of the salt works for Tokhoshi communities that will maximize the salt production.

5.1.4. To determine if a large scale production of commercial table salt is technically feasible.

· Assess and survey the coastal areas between Berbera and Tokhoshi and select the most appropriate site for a large scale salt production.

· Assess the appropriateness of the area proposed to the modern salt production and the salt factory (plant) considering the extreme weather conditions and temperature, the infrastructure and other requirements. Select the best site for the salt plant if that is inappropriate.

· Analyse the advantages and disadvantages of moving the salt plant or factory to the inland away from salt production site where weather is better (cooler) and examine the associated costs.

· Assess and identify the companies across the globe that specialize in the manufacturing of the specialized salt production and processing plants or factories.

· Identify and select the plants or factories that can produce and process 2-10 ton per hour (tph) of commercial table salt. Select the highest quality plant that can produce, process and package up to 50,000 metric ton of commercial salt.

· Assess all the existing types of plants or factories and other required salt equipment that can withstand the extreme temperature that can reach to 49 degree centigrade in the summer time and select the best ones.

· Contact the manufacturers and suppliers of salt plants, collect quotations and advise/select the highest quality plants and equipment with the lowest possible cost based on your experience and observations of similar durable plants that existed for a longer period without major break downs considering ease of operations, maintenance and repair, the high temperature of the coastal areas, plant delivery time, energy requirement, the possibility of using solar power as an energy for the plant.

· Identify the area and design of the layout of the compound required by the plant and the types of buildings housing the plant that can withstand the higher temperature of the coastal area and possible seasonal flooding.

· List the number, the experience and skills of the staff and positions required for running the plant and skilled and unskilled labour for salt production works.

· Assess if the skills and the experience required to manage salt production and processing are nationally available in Somaliland.

· Develop capacity development programme to train the staff to achieve the required skills to operate the factory and to produce and process salt using the latest technology.

· Determine if running or operating of such a plant will technically feasible

· List and estimate the cost the plants and other required equipment for the production and processing of commercial table salt.

· Develop a sequential plan for procuring, installing and operating the plant.

5.2. FINANCIAL AND ECONOMIC FEASIBILITY

5.2.1. To Explore if the salt production and the processing plant will be financially and economically feasible

· Carry out a brief salt market assessment and identify the types of salt available in the country, the quality, the level of purity and its sources as well as the price.

· Identify the potential and existing competitors in the country and in the region and visit Djibouti if possible to see the salt quality and production as well as marketing.

· Decide if adequate market is available for the mass production of salt in Somaliland and in the region as well as globally.

· Identify the potential markets globally for Somaliland iodized table salt and its uniqueness.

· Engage and consult with the Government of Somaliland and the Ethiopian Embassy and understanding the bilateral trade issues and the possibility and practically of Somaliland exporting salt to Ethiopia and on what conditions.

· Conduct a cost-benefit analysis of the commercial salt production

· Identify the rate of return and payback period of the salt production in general and the plant in particular.

· Identify the breakeven point for the production and processing of salt

· Estimate how much investment will be required to produce and process salt intensively or extensively.

· Examine potential financial risks of the project

· Analyse and estimate the potential contribution of the project to the Somaliland economy

· Determine if the salt production will financially and economically feasible.

5.3. SOCIAL FEASIBILITY

5.3.1. To examine if the salt production will socially feasible

· Identify the social issues that can affect negatively or positively the production of commercial salt

· Assess land issues and possible conflict and collaboration between the large scale production of salt and community based salt production

· Identify the areas of cooperation and complementarity between the two systems of salt production.

· Explore the possibility that cooperatives and communities involved in salt production can sell their brine to the commercial salt company for processing and marketing as well as any impact that one system may have on the other.

· Examine the price of community based salt at the site and the cost of the transport to the plant and roughly estimate the total cost of the brine when delivered to the plant compound.

· Analyse how the communities can get the maximum benefits from the project and community collective bargaining of the prices.

5.4. MANAGEMENT FEASIBILITY

5.4.1. To examine if the salt production and processing plant will be management-wise feasible

· Analyse the complexity of running or managing a large scale production of salt and its processing plant.

· Study and propose an effective management structure to ensure the success of this complex project.

· Assess and audit the managerial and leadership skills and experience required for both the success and expansion of the project in the near future.

· Propose production and processing performance systems and standards /benchmarks and indicators for assessing or evaluating the performance of the project in general and staff/leadership in particular.

6. EVALUATION CRITERIA AND POINTS

We will be interested in consultants/firms that have technical know-how and practical experience of designing salt works; producing maximum salt from minimum land; iodization program; processing commercial salt or table salt; manufacturing or operating salt plants/factories and related equipment; designing iodization programme; cost-benefit analysis of salt production and processing etc.

A) Technical feasibility (5.1.1)-(10%)

B) Technical feasibility (5.1.2) – (10%)

C) Technical feasibility (5.1.3) – (10%)

D) Technical feasibility (5.1.4) – (30%)

E) Financial and economic feasibility (20%)

F) Social feasibility (10%)

G) Management feasibility (10%)

7. QUALIFICATIONS, SKILLS AND EXPERIENCE OF THE CONSULTANT AND CONSULTING FIRMS

· The consultant or the consulting firms must have at least 10 years of experience in conducting feasibility study of a large scale commercial project.

· The consultant or the consulting firms must have at least 15 years of experience in designing salt works and producing and processing commercial salt or table salt

· The consultant or the consulting firms must have at least 10 years of managing a salt plant

· The consultant or the consulting firms must be on the top of the state of art technology of salt production and processing.

· Master’s degree in mechanical, civil engineering, economics, business management, marketing, or relevant master’s degree

· The consultant or the consulting firms must have an extensive network of manufacturers and suppliers of specialized salt production plants and equipment

· The consultant or the consulting firms must have at least 3 years of experience in salt iodization program.

· The consultant or the consulting firms must have 10 years of experience in different salt production methods and innovations.

· The consultant or the consulting firms must have an extensive experience in marketing of salt products.

· The consultant or the consulting firms must have 10 years of management, operations, maintenance and repairs of salt plants and its related equipment.