Value added and Profitability analysis of bamboo products in case of Banja district Awi zone Amhara regional state Ethiopia

Abstract

Background Bamboo meets a rising and diverse consumer demands and generates income and contribute to reforestation and climate change mitigation due to its rapid growth and environmentally friendly character. Most bamboo processing enterprises and farmer and consumers use manual technology and produce less durable products. Since there is no research conducted in the area related to profitability of different bamboo products and the distribution of value added Therefore, this study aims to analyse the profitability of bamboo products for producers, traders and processors in the same way it analyses the value added distribution among different agents. Methods To collect primary data 122 smallholder bamboo producers, 13 traders and 16 bamboo product processors were selected. To analyse the data descriptive statistics were employed. Results On average producers supply 374.79 bamboo culms and earn revenue of 7,623.23 ETB. The total value added at the producer level was 15.64 ETB per culm. On average local traders, retailers and wholesalers earn 7.52%, 9.51% and 9.23% of profit Margin and these traders earn average revenue of 66,420 ETB, 129,360ETB and 280,343 ETB respectively. Traditional bamboo product processors produce 687 traditional bamboo chairs on average per year and gained 3.06 ETB/culm as a net profit. Bamboo furniture enterprises on average process 823 modern bamboo chair per year and they earn 197.91 ETB per chair as a net profit. Higher value is added at bamboo furniture enterprise level and lower value is added at producer and trader level. Conclusion The result of the study revealed that all actors have positive profit and value is added by different chain actors and distributed to different agents. Bamboo furniture enterprises gained higher profit margin than traditional bamboo processors. The contribution of the bamboo sector to the government economy is limited. Based on the finding of the study, an effort should be made to increase the contribution of the sector to the national economy. In addition to this, providing working capital and working place and enhancing the processors’ skill and capacity to transform the business into more modern and profitable bamboo furniture enterprise is advisable.