Case Study

Aloe Vera | Eritrea

The investor client had been offered by the government around 5,000 ha of land in the Gahtielay area of Eritrea. The land was bordered at one end by a new 57 million cubic metre dam. The consulting brief was to assess the feasibility of planting and processing Aloe vera for the cosmetic industry using irrigation from the dam.

The area offered for the project was said to fulfil the technical needs for Aloe vera production, being mainly flat, at an altitude of around 280m, having an ample supply of water from the new dam and benefitting from a climate that was considered to be ideal for Aloe vera – hot and dry with no risk of frost.

The first stage of the study consisted of a technical visit to confirm the site’s physical and logistical suitability for Aloe vera production as well as to meet with stakeholders to better understand their business vision. This was followed by some essential desktop research intended to extract industry-wide production variables (inputs and outputs) relevant to the crop’s agronomic and oil-extraction processes. After adjusting these to meet the specific conditions and constraints of the project, a simulation model was developed to be able to compare the outcomes of alternative development strategies. In this way, a range of scenarios and their impact on risk and return on investment could be tested. Finally, setting these simulated findings against the broader business context allowed the Agri-Africa team to reach meaningful conclusions as to how the project should go forward. These were reported fully to the client for a final decision.

In the event the Aloe vera project at Gahtielay was planned to start with 100ha in year one rising to 400ha to be achieved in Year nine. This programme offered the client a fair return on investment, in addition to benefiting from an added opportunity to develop the remaining area over time into a fruit and vegetable project which could serve the Middle Eastern market as well as Europe.