Melkam Endale Hunegnaw is a registered sole proprietorship enterprise employing approximately 80 staff, including 32 women. Established in 2011 in the dairy business, it expanded in 2021 to include supplying organic fertilizer products for soybean and vegetable crop businesses. Melkam is located north of Sululta Town in the Oromia Region of Ethiopia.

The dairy farm was started with local crossbreed cows acquired through local purchase and improved to high-grade Holstein Friesian cows through artificial insemination using imported semen. Currently, the farm has 110 heads comprising 60 milking cows, 15 dry cows, 18 heifers, and 17 calves. The milk processing uses state-of-the-art equipment that allows for the production of high-quality products while reducing the impact on the environment through efficient use of energy and other resources. The facilities include a milk pasteurization unit, raw milk chilling unit, packaging unit, butter and cheese making unit, cold store and incubation room, as well as a standby generator.

Melkam produces pasteurized fresh milk, set yoghurt, flavored yoghurt, butter, cheese, and whey beverage under the trade name Zagolmilk, adding value to its own raw milk and sourcing from the local community. Since 2017, Melkam Milk Processing has been progressively sharing the dairy market in the country with its healthy, nutritious, and affordable dairy products.

Driven by demand from raw milk supplying farmers, Melkam ventured into the agricultural input business, becoming a leading supplier in the area, operating Agricultural Inputs One-Stop Shops (AOSS) that supply veterinary drugs, feeds, and agro-chemicals to smallholder farmers at fair prices. Recently, Melkam installed an 80 m³ bio-digester that generates methane, powering their cold chain system for cooling dairy products and serving as a fuel source for the staff canteen, thereby minimizing environmental impact. The biogas digester processes cow manure into bio-slurry and methane gas. The methane gas is used as input for a biogas generator, substituting diesel for electrical energy production, which powers the milk processing machines. The bio-slurry is used as organic fertilizer to grow forages and grasses for dairy cow feed. The company’s agricultural input sales have grown significantly, from ETB 1.26 million (£9,920) in 2021 to ETB 2.3 million (£18,110) in 2022, and reaching ETB 4.56 million (£35,905) in 2023.

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Bio-slurry Organic Fertilizers for Enhanced Productivity, Food Security and Sustainability

CASA Ethiopia partnered with Melkam Endale Hunegnaw to improve organic fertilizer access at a reasonably affordable price, increase production capacity, and enhance the quality of bio-slurry by optimizing macro- and micronutrient content. The enterprise aims to serve 12,500 smallholder clients (with 30-35% expected to be women): 2,500 through direct sales, 4,000 via cooperatives, 2,000 through franchising, and 4,000 through an agent/dealer network. This strategy is expected to generate £110,550 from the sale of 4,320 m³ of liquid bio-slurry and £8,503 from 900 tonnes of solid (dried) bio-slurry. Beyond revenue, the business will actively promote the use of organic fertilizers, contributing to reducing chemical fertilizer use while highlighting their eco-friendly benefits. Additionally, the enterprise plans to strengthen partnerships with potential distributors and upgrade its operations from semi-manual to fully automated systems to enhance production and supply capacity.

The expected results of the partnership from this pilot project are aligned with International Climate Finance indicators focusing on (1) increased production of smallholder farmers; and 2) encouraging the use of organic fertilizer that has a positive effect on the environment.

Running from November 2024 through December 2025, of the total project cost of £46,350, CASA’s contribution toward technical assistance and a grant is £26,662. More than 85% of the target clients (smallholder farmers) will increase their income by 25% (or £150-180) through increasing productivity and reducing production cost due to bio-slurry. Through a bank loan, the company plans to install modern automized bio-slurry liquid organic fertilizer processing machines and equipment, including installation, test runs, and training on operating the processing machines and equipment.

Updated: January 2025