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CLOSE THIS BOOKSolar Drying in Morocco (GTZ)
4. Economics of solar drying
4.1 Production
VIEW THE DOCUMENT4.1.1 Purchase costs
VIEW THE DOCUMENT4.1.2 Costs of producing solar-dried apricots
VIEW THE DOCUMENT4.1.2 Costs of producing solar-dried apricots
VIEW THE DOCUMENT4.1.3 Costs of producing solar-dried raisins
VIEW THE DOCUMENT4.1.4 Multiple use of the dryer
4.2 Marketing
VIEW THE DOCUMENT4.2.1 Apricots
VIEW THE DOCUMENT4.2.2 Raisins
VIEW THE DOCUMENT4.2.3 Other products
VIEW THE DOCUMENT4.3 Assessment

Solar Drying in Morocco (GTZ)

4. Economics of solar drying

4.1 Production

4.1.1 Purchase costs

It costs DH 23,683 to install a solar dryer of the Marrakesh type for fruits and vegetables (see Table 9). Of this sure materials account for DH 17,940. A mason and two assistants require 20 days to build the system. The mason earns DH 45 per day, with each assistant receiving DH 34.20; this yields total wage costs of DH 2,268. The cost of purchase is linearly depreciated over a period of ten years for an annual depreciation of DH 2,368.30.

Implicit costs for interest and operator's wages were added to these costs. The implicit interest was taken to be equal to the opportunity costs of the capital tied up by purchasing the drying system. At an interest rate of 9%, which is what the Caisse Nationale du Credit Agricole (Bank Al-Maghrib) paid on long-term savings accounts in June 1993, this yields Implicit interest amounting to DH 1,065.74. Work done by the farmer that the other labor costs do not cover, like bookkeeping and instructing workers, is taken into account as a cost factor by assuming implicit operator's wages of 300 DH.

4.1.2 Costs of producing solar-dried apricots

In the following, the costs of producing solar-dried apricots of the Canino variety are calculated based on the assumption that the dryer is used in an agricultural context and that no other products besides apricots are dried.

The variable costs per batch (600 kg of depitted apricot halves ~ 639 kg of whole apricots) amount to DH 1,062.20 (see Table 10). Most of this goes for the raw produce, for which production costs of

Table 9: Purchase costs of a solar dryer of the Marrakech type (as of June 1, 1993)

Cost item

Calculation:

DH

Material costs



Sand

5 m³ x DH 62.30

311.50

Gravel

3 m³ x DH 42.50

127.50

Cement

72 dt x DH 25.50

1,836.00

Bricks

615 x DH 3.80

2,340.00

Structural steel

580 kg x DH 5.86

3,400.00

Wire screen

40 m² x DH 73.00

2,920.00

Sheet metal

6 m² x DH 130.00

780.00

Polyester fabric

40 m² x DH 25.00

1,000.00

Cork

1.15 m³ x DH 1,740.00

2,000.00

PE sheet

83.2 m² x DH 4.50

375.00

Paint

30 kg x DH 25.00

750.00

Small materials


2,100.00

PV drive

Fan (Fiat Uno)

1,000.00


Solar module (MXP 83)

2,475.00

or




Fan (ebm)

1,670.00

Mains-powered

Transformer

845.00

Remote thermostats


960.00

Wage costs:



Mason

20 worker-days x DH 45.00

900.00

Assistants

40 worker-days x DH 34.20

1,368.00

Total:


23,683.00

4.1.2 Costs of producing solar-dried apricots

In the following, the costs of producing solar-dried apricots of the Canino variety are calculated based on the assumption that the dryer is used in an agricultural context and that no other products besides apricots are dried. The variable costs per batch (600 kg of depitted apricot halves ~ 639 kg of whole apricots) amount to DH 1,062.20 (see Table 10). Most of this goes for the raw produce, for which production costs of

Table 10: Variable costs of drying one batch of apricots in the solar dryer

Cost item

Calculation

DH

Material costs:



Apricots

639 kg x DH 1.16

741.24

Na2S2O5

2.4 kg x DH 9.16

21.98

Water

1 m³ X DH 2.50

2.50

Packaging


8.00

Maintenance


14.90

Wage costs:



Workers

8 worker-days x 34.20

273.60

Total (120 kg of dried apricots)


1,062.22

Unit costs per kg of dried apricots

8.85


1.16 DH/kg were calculated. The material costs for sulfur treatment, packaging, and maintenance are low, only adding DH 47.38. In mains-powered operation, additional costs of DH 2.40 are incurred for electricity. Eight workers are needed for one day for depitting, sulfur treatment, and loading and unloading the dryer. The wage costs amount to DH 273.60.

Drying takes two days. The production coefficient is 0.188, so 639 kg of fresh apricots yield 120 kg of dried produce. The variable unit costs per kg of dried apricots are DH 8.85.

The harvest period for Canino apricots lasts 4 weeks on average. Owing to their poor keep-ability, if there is no way to store them under refrigerated conditions they must also be processed within this time period. Since drying takes two days, a single drying system is able to process 14 batches per harvest campaign, in other words, 8946 kg of apricots can be turned into 1680 kg of dried merchandise. Table 11 shows the overall costs per campaign.

The costs of producing solar-dried apricots of the Canino variety amount to 11.07 DH/kg, and are thus about DH 1.26 below the production costs of conventionally dried Turkish produce.

Table 11: Costs of producing dried apricots (per campaign)

Cost item

DH

Material costs

11,040.68

Wage costs

3,830.40

Dryer depreciation

2,368.30

Implicit costs

1,365.74

Total (for production of 1680 kg)

18,605.12

Unit costs per kg

11.07

At an average per-hectare yield of 16 tonnes per year, a solar tunnel-type drying system can be used to dry the apricot crop grown on 0.6 ha. For larger growing areas, capacity must be increased by adding more drying systems (see Figure 28).

4.1.3 Costs of producing solar-dried raisins

Here again, the costs of producing solar-dried raisins of the King's Ruby variety were calculated based on the assumption that no other products besides raisins are dried.

The variable costs per batch (800 kg of grapes) amount to DH 1,197.86 (see Table 12). Most of this goes for the raw produce, for which production costs of 1.15 DH/kg were calculated. The material costs for submerging treatment, packaging, and maintenance only amount to DH 72.66. In mains-powered operation, additional costs of DH 7.20 are incurred for electricity. Six workers are needed for one day to sort and dip the grapes and to load and unload the dryer. The wage costs amount to DH 205.20.


Figure 28: Need for solar tunnel-type drying systems as a function of apricot-growing area

Table 12: Variable for drying one batch of grapes in the solar dryer

Cost item

Calculation

DH

Material costs:



Grapes

800 kg x DH 1.15

920.00

K2CO3

4.6 kg x DH 9.10

41.86

Water

1 m³ x DH 2.50

2.50

Packaging


13.40

Maintenance


14.90

Wage costs:



Workers

6 worker-days x DH 34.20

205.20

Total (200 kg of raisins)


1,197,86

Unit costs per kg of raisins


5.99

Drying takes six days. The production coefficient is 0.25; accordingly, 800 kg of fresh grapes yield 200 kg of dried raisins. The variable unit costs per kg of raisins amount to DH 5.99.

It takes an average of nine weeks to harvest a crop of King's Ruby grapes. Since drying takes six days, one drying system can process ten batches, or a total of 8000 kg of grapes, into 2000 kg of raisins per harvest campaign. Table 13 shows the overall costs per campaign.

The costs of producing solar-dried raisins of the King's Ruby variety amount to 7.86 DH/kg.

Table 13: Costs of producing raisins (per campaign)

Cost item

DH

Material costs

9,926.60

Wage costs

2,052.00

Dryer depreciation

2,368.30

Implicit costs

1,365.74

Total (production of 2000 kg)

15,712.64

Unit costs per kg

7.86

At an average per-hectare yield of 20 tomes per year, a solar tunnel-type drying system is able to dry the crop from 0.4 ha of vineyard. For larger areas, capacity must be increased by adding more drying systems (see Figure 29).


Figure 29: Need for solar tunnel-type drying systems as a function of grape-growing land area

4.1.4 Multiple use of the dryer

The calculations presented so far have been based on the assumption that the solar dryer is used exclusively to dry either apricots or grapes. This means that its capacity is being inefficiently utilized, since it is only in operation for 4 or 9 weeks out of each year. The ascertained production costs should therefore be regarded as those for the "worst case scenario", namely that in which the investment and fixed costs must be completely recovered from sales of dried apricots or raisins.

But if the dryer is used to dry apricots in May/June and grapes in September/October, the production costs diminish. It then only costs DH 9.84 to produce 1 kg of dried apricots, and DH 7.03 for 1 kg of raisins (see Table 14).

Table 14: Costs of producing both apricots and raisins (per campaign)

Cost item

DH



Apricots

Raisins

Material costs

11,040.68

9,926.60

Wage costs

3,830.40

2,052.00

Dryer depreciation

1,052.58

1,315.72

Implicit costs

607.00

758.74

Total

16,530.66

14,053.06

Unit costs per kg

9.84

7.03

Besides apricots and grapes, the solar dryer can also be used to dry chili peppers, peaches, and meat. Nor do the possibilities stop there; figs, apples, dates, onions, carrots, etc. could be dried as well. Such a varied production program, with harvest periods following upon one another in succession, permits the system to be used during a larger part of each year. This can be achieved in either of two ways:

1. A farmer uses the dryer for as many of his own products as are harvested at different times.

2. Several farmers who grow different products and harvest them at different times take turns using the dryer.

The first of these approaches will rarely lead to satisfactory utilization of the dryer's capacity, since hardly any farmers grow an adequately large range of different crops.

The second approach lends itself well to establishment of a cooperative or self-help group, whose members then together raise the capital needed to invest in a dryer. An alternative to a collective of this kind is for a farmer to rent the system to his neighbors. When the system has spare capacity, the owner can dry produce for his neighbors on a fee basis.

Yet another possibility is contractual drying. A company, for instance an agro-business, could fund drying systems and install them on farms. The farmers then produce under contract, supplying appropriate dried products for the client to market.

Drying might also be done in the immediate vicinity of urban centers, where all fruit and vegetable varieties are available. There would be much less dependency on harvest times and harvested quantities, letting the capacity of dryers be optimally utilized. These drying systems could be operated by skilled individuals from agriculture and the food industry. These people would be sufficiently well qualified to successfully introduce this new technology and master the associated drying and marketing methods within a short time. One problem that could arise here, however, concerns the space needed for drying; it is usually hard to find and/or expensive so close to the markets.

4.2 Marketing

4.2.1 Apricots

4.2.1.1 The Moroccan market

Dried apricots are virtually unknown in Morocco. They can only be bought in just a few shops in Casablanca and Rabat, at prices ranging from AH 70 to well over AH 100 per kilogram. For the most part, this is very sweet Turkish produce; no Moroccan dried apricots are offered.

In response to this situation, in 1993 a consumer survey and a sales test with solar-dried Moroccan apricots were carried out. The goal of these measures was to identify consumption habits, potential demand, trade margins, and consumer prices in order to compare these with production costs.

A standardized questionnaire was used for the survey, combined with distribution of a product sample consisting of 500 g of dried apricots and a product description. The survey covered 100 representative households with at least one gainfully employed member belonging to all income groups in the Marrakesh administrative district.

The surveyed households comprised 7 persons on average. The average monthly household income was AH 4,720. 93% of the surveyed households had never experienced dried apricots before.

The survey revealed that dried apricots are used almost exclusively as an ingredient for making tajine or eaten straight as a snack. Only 10% of the surveyed households would bake with apricots. The questioned households would be willing to spend an average of AH 19.81 on a kilogram of apricots. 31% would pay AH 24, and 22% would still accept a price of AH 30.

Several merchants in Marrakesh and Casablanca sold dried apricots packaged in 500 g bags on a trial basis, yielding retail margins of between 15 and 50%. The merchants were required to charge at least 20 DH/kg; the prices actually obtained were between AH 23 and 30. The supermarkets proved able to sell them quite successfully, but the shops in the old city of Marrakesh had a harder time.

At production costs of 11.07 DH/kg, a market price of 24 DH/kg would permit a gross margin of more than 100%. This is more than adequate for a distribution system to function, especially with a product that is so easy to store and takes up relatively little space for transport. But considering the traditional consumption patterns of Moroccan consumers, it will take some time for the market for dried apricots to develop. In other words, demand is increasing very slowly. But if drying capacities were utilized more fully, and if the associated cost reductions were passed on to consumers, demand would presumably be greatly stimulated, owing to the high price elasticity of dried apricots.

4.2.1.2 The market in Germany and Switzerland

In 1991 and 1992, two written surveys were conducted of German and Swiss importers of dried fruits in order to analyze the market.

The first survey was devoted to collecting general information about the commercial market and the structure and activities/behavior of importers. The second survey included distribution of a sample, and was intended to ascertain the market status of Moroccan dried apricots. For the first survey, 115 importers were written to; 28 of these filled out and returned the questionnaire. These then received the second questionnaire, which was returned by 16 of them.

The distributed product sample met the expectations of virtually all of the importers. They approved of its color, sulfur content, type of processing, and residual moisture content. On the other hand, they criticized the high total acid content, hard texture, and small and/or irregular size of the fruits.

Seven of the 16 companies that responded to the second survey were basically interested, despite their reservations, in importing Moroccan dried apricots. The prices they were willing to pay were based on the prices for Turkish merchandise.

In October/November of 1991, Turkish dried apricots were still being traded at just under 19,000 DH/tonne f.o.b. in Izmir; by January 1992 the price had climbed to AH 28,000, and in June 1992 it was AH 31,300. Following a good harvest in 1992, however, by autumn of 1992 the price had fallen back down to AH 20,000.

Assuming a 50% margin for domestic traders, solar-dried apricots Dom Morocco could be offered at between 19,000 and 22,000 DH/tonne f.o.b. in Casablanca, depending on the season and on storage costs. This price is internationally competitive, being below that of the most important competitor, Turkey. Another advantage is that the harvest begins six weeks earlier in Morocco, making it possible to supply the market with new merchandise sooner.

4.2.2 Raisins

In Morocco, raisins rank among the staple foodstuffs; they are mainly used as an ingredient in making couscous and tajine. Numerous different qualities of different grape varieties are available. The most important quality attribute is color, followed by size, seedless-ness, sugar content, and moisture content (i.e., texture). The supply ranges from small, nearly black raisins with seeds all the way to large, amber-colored, seedless varieties. Accordingly, the retail prices stretch from 6 to 35 DH/kg.

Ripe grapes of the King's Ruby variety can be either white or dark-blue. King's Ruby raisins dried at high temperatures in oil- or gas-fired industrial dryers consistently have a dark-brown color. With solar drying, by contrast, the lower temperatures involved preserve the original color of the grapes, and the final product is a colorful mixture of raisins ranging in color from brown to amber.

A survey of dried fruit merchants in Marrakesh in 1991 revealed a retailer purchase price for industrially dried produce of between 13 and 17 DH/kg. By contrast, solar-dried raisins commanded prices between 15 and 19 DH/kg. and one merchant even sold them at 25 DH/kg. The consumer prices were between 20 and 24 DH/kg. In the merchants' opinion, even higher prices could be charged if the raisins were sorted by color.

When the merchandise is marketed by way of a wholesaler, then an additional margin of 3 to 5 DH/kg must be incorporated into the calculation, depending on the purchased quantity and the transport distance.

4.2.3 Other products

It is known from other countries in which comparable solar drying methods are practiced that solar-dried fruits and vegetables are vastly superior to conventionally dried products in terms of both quality and hygiene, complying with all international standards. The same holds for chili peppers and peaches, which were successfully dried in the solar dryer of the Marrakesh type in 1992 and 1993. No market tests or importer surveys have yet been carried out for these two products, however.

4.3 Assessment

The economic discussion has shown that dried apricots can be produced more cheaply in Morocco with a solar dryer of the Marrakesh type than in conventional ground drying in Turkey. One dryer is able to process the yield of half a hectare of intensively cultivated apricot-growing land. In order to increase the capacity, additional drying systems must be operated.

Owing to traditional consumption habits, the market for dried apricots within Morocco can only be expected to develop slowly. The chances of selling them in Europe may be regarded as good, however. Moroccan dried apricots largely meet the importers' requirements. In addition, Morocco is able to enter the market with its merchandise earlier while charging prices lower than those of its main competitor, Turkey.

If farmers sell their merchandise directly to retailers, then a solar dryer pays for itself in less than two years if used exclusively to produce dried apricots or raisins (see Table IS). If both apricots and raisins are dried, the payback period is reduced to less than one year.

When marketing dried products by way of wholesalers, owing to the greater trading margins the achievable sales price is lower and the payback period is longer (see Table 16).

If the amount of time the system is used each year is increased by drying additional products, then the fixed costs incurred for the system are spread out and both the production costs and the payback diminish.

Table 15: Payback period of a solar dryer of the Marrakesh type when selling directly to retailers

Production


Apricots

Raisins

Apricots and raisins

Production quantity

kg

1680

2000

1680

2000

Production costs

DH/kg.

11.07

7.86

9.84

7.03

Sales price

DH/kg.

19.00

17.00

19.00

17.00

Trading margin

DH/kg.

5.00

5.00

5.00

5.00

Consumer price

DH/kg.

24.00

22.00

24.00

22.00

Profit

DH/year

13,322.00

18,290.00

15,389.00

19,940.00

Payback period

Years

1.8

1.3

0.7

Table 16: Payback period of a solar dryer of the Marrakesh type when selling to wholesalers

Production


Apricots

Raisins

Apricots and raisins

Production quantity

kg

1680

2000

1680

2000

Production costs

DH/kg

11.07

7.86

9.84

7.03

Sales price

DH/kg

14.00

12.00

14.00

12.00

Trading margin

DH/kg.

10.00

10.00

10.00

10.00

Consumer price

DH/kg.

24.00

22.00

24.00

22.00

Profit

DH/year

4,922.00

8,280.00

6,989.00

9,940.00

Payback period

Years

4.8

2.9

1.4

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