Wet Coffee Puping
Wet Coffee Puping
Wet Coffee Puping
EXECUTIVE SUMMARY
Mr. Awole Ebrahim Fedilu Coffee Pulping project
Promoter Mr. Awole Ebrahim Fedilu planned to promote and Operates Coffee
Pulping Industry that is intended to reduce and supply the product to foreign and
domestic markets.
The Coffee Pulping Industry will be sited in the district of South Bench Woreda Morita
Kebele, Meketa Special place. The project shall develop on 3.2 hectare of land. The
current regional market for coffee is largely dominated by coffee traders who buy and
supply coffee to central coffee markets (ECX).
The total estimated investment cost for Mr. Awole Ebrahim Fedilu is 16,150,994.00
/sixteen million one hundred fifty thousand nine hundred ninety birr)
Regarding the source of finance 70% or 11,305,660.8 birr ( Eleven million three
hundred five thousand six hundred sixty birr 80/100) shall be loan from bank.
The rest 30% or 4,845,283.2 birr(Four million eight hundred forty five thousand two
hundred eighty three birr 20/100 ) from owners' equity.
Job opportunity : at full operation Mr. Awole Ebrahim Fedilu wet Coffee Pulping
Industry expected to create 12 permanent and 148 Temporary jobs labors, most of
which are to be take on from local areas.
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2. INTRODUCTION
The coffee plant which is in digamous to Ethiopia is a perennial evergreen
dicotyledonous. It produces fruit once per year about six to nine months after flowering.
The bean (endosperm) represents about 45% of the fruit; the other 55% is generally
discarded as waste (pulp and mucilage).After oil, coffee is the most widely traded
commodity in the world. The industry worldwide provides employment for some 20
million persons. In Ethiopia coffee is the first most important agricultural product with
earnings of over US$ 560 million from export. It employs 15-20 million persons directly.
Ethiopian Arabica Coffee is lauded as the best coffee in the world. The production and
processing of coffee however, has over time been criticized for its direct and potential
negative impact on the environment, And as such in recent years the government has
initiated many initiatives for improving the environmental performance of the coffee
industry in the country. The main components of these initiatives are; development and
implementation of good agricultural practices, introduction of new waste management
techniques, and development and implementation of an environmental codes of practice
for the local coffee industry, the codes embody practical solutions for the challenges to
sustainable coffee production, adoption of a pro-active approach to mitigate threats and
enhance competitiveness. A multifunctional approach ensures that Ethiopian coffee
maintains the high standard of quality for which it is renowned and does so in a
sustainable way. With this back ground this planned project has the next objectives.
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3. GENERALOBJECTIVES OF THE PROJECT
The main objective of this project is to take part in coffee pulping industry establishment and,
produce quality washed and picked clean coffee beans and supply the products to central
markets. Up on implementing its primary objectives, the project shall also achieve the following
additional objectives.
o Creates work opportunities for 12 permanent 60 Casual local people.
o Promote government industrialization policy.
o Supply to the raise in commodity crops the country needs for export purpose.
3.1 BENEFICIARIES OF THE PROJECT
The project providers market opportunities for local farmers engaged in coffee cultivation
(local farmers would get market accesses for their ripened cherries).
The promoter Mr.Awole Ebrahim Fedilu can generate substantial income from his
business. The income that is generated from sale of the pulped coffee enables the owner
engaged in new business or expands the existing ones.
The nation processed and well prepared coffee is an important earner of strong foreign
currencies to the nation. As the main objective of this project is preparing clean pulped
and picked coffee, its out puts mill be part of the commodities the nation is seeking for
export and thus for foreign currencies earnings.
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3.2 . PROMOTERS BACKGROUND
The promoter’s Mr.Awole Ebrahim Fedilu is an Ethiopian elder. He is the founder of
Mr.Awole Ebrahim Fedilu coffee pulping Project. There have established path record of
success in coffee trade business sectors in Bench Sheko Zone, South Bench Woreda in dry coffee
industry project. The Promoters’ now have allocated 16,150,994.00 /sixteen million one
hundred fifty thousand nine hundred ninety birr) to be used for Mr.Awole Ebrahim Fedilu
coffee pulping Project.
4. INVESTMENT CAPITAL
The total investment cost for Mr.Awole Ebrahim Fedilu Coffee Pulping project is
16,150,994.00 /sixteen million one hundred fifty thousand nine hundred ninety
birr).
Regarding the source of finance 11,305,660.8 birr ( Eleven million three hundred
five thousand six hundred sixty birr 80/100) , shall be loan from bank and the rest
30% or 4,845,283.2 birr(Four million eight hundred forty five thousand two hundred
eighty three birr 20/100) from the promoter’s owners equity.
Stage of the Project: At full Mr.Awole Ebrahim Fedilu Coffee Pulping project
promoters’ expected to create 12 permanent and 148 Temporary jobs labors, most of
which are to be take on from local areas.
Economic support: One parts of the estimated cost required for running the project
shall be secured for the promoter, Mr.Awole Ebrahim Fedilu the rest from bank loan.
Implementing Institute: The person in charge of this project is Mr.Awole Ebrahim
Fedilu, shall be responsible to lead and administer the project throughout its life time
some of the enter areas where the person in accuse of this planned project is required
to involve in:
o Engage in land lease agreement.
o Make associates with the concerned authorities when ever required.
o Assigns the necessary personnel in all enter areas within the period.
o Assigns and releases the budget required to run the project frame work.
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o Take and releases and investigates reports from the financial units of the industry.
5. THE PROJECT AREA
Bench Sheko is the one of the Zones South West Regional state. Bench Sheko is bordered
on the north by Kaffa ,and Sheka Zones, west by West Omo zone and Sudan and on the
northwest by the Gambela Region. The administrative center of Bench Sheko is Mizan
Aman. Bench Sheko Zone has 213 kilometers of all weather roads and 125 kilometers of
dry-weather roads, for an average road density of 18 kilometers per 1000 square
kilometers. The main food crops in this Zone include Godere (Taro root), Maize and
Sorghum. Although cattle, shoats and poultry are produced in limited numbers, meat and
milk are very much appreciated. Cash crops include fruits (bananas, pineapples, oranges)
and spices (e.g. coriander and ginger); honey is also an important local source of income.
However, coffee is the primary cash crop. The central Statistical Agency (CSA) reported
that 10,097 tons of coffee was produced in Bench Sheko in the year 2005. This represents
10.6% of the SNNPRs output and 4.4% of Ethiopia’s total output. Based on the 2007
Census conducted by the CSA, this Zone has a total population of 652,531, of whom
323,348 are men and 329,183 women; with an area of 19,252.00 square kilometers,
Bench Sheko has a population density of 33.89. While 75,241 or 11.53% are urban
inhabitants, a further 398 or 0.06% are pastoralists.
A total of 157,598 households were counted in this Zone, which results in an average of
4.14 persons to a household, and 151,940 housing units.
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5. SOCIO ECONOMIC BENEFITS
Coffee increasing and its linked performance provide major source of employment in all
producing countries. The International Coffee Organization has estimated that coffee
growing provides direct fulltime employment for 25 million people worldwide, Taking
into account related industrial and service activities (processing, marketing, roasting and
transportation) the figure rises to 100 million people, including families.
The socio economic benefits that this specific project provides to the society and to
nation include:
Give skilled and unskilled work opportunities to local people
Make local farmers recognize and use new technologies in coffee produce
Make the country get more foreign currency
7. LADDER TO BE FOLLOWED FROM PLANTING TO SELLING IN COFFEE AGRICULTURE
7.1 PLANTING
A coffee bean is in fact a seed. When it dried, roasted and ground, it is used to brew
coffee. But if the seed is not processed, it can be planted and will grow into a coffee tree.
Coffee seeds are generally planted in large beds in shaded nurseries. After sprouting, the
seedlings are removed from the seed bed to be planted in individual pots in carefully
formulated soils. They will be watered frequently and shaded from bright sunlight until
they are hearty enough to be permanently planted. Planting often takes place during the
wet season, so that the soil around the young trees remains moist while the roots become
resolutely recognized.
7.2 FARMING THE CHERRIES
As to the variety, it will take approximately 3 or 4 years for the newly planted coffee
trees to begin to bear fruit. The fruit called the coffee cherry turns a bright, deep red when
it is ripe and ready to be harvested.
In most countries, the coffee crop is picked by hand, a labor-intensive and difficult
process, though in place like Brazil, where the landscape is relatively flat and the coffee
fields immense, the process has been mechanized.
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Whether picked by hand or by machine, all coffee is harvested in one of two ways;
7.2.1 THIN PIECE PICKED
The entire crop is harvested at one time. This can either be done by machine or by hand.
In either case, all of the cherries are stripped off of the branch at one time.
7.2.2 SELECTIVELY PREFERRED
Merely the ripe cherries are harvested and they are picked individual by hand. Pickers
rotate among the trees every 8-10 days, choosing only the cherries which are at the peak
of ripeness. Because this kind of harvest is labor intensive, and thus more costly, it is
used primarily to harvest the finer Arabica beans.
In Most coffee-growing countries, there is one major harvest a year; though in countries
like Colombia, where there are two flowerings a year, there is main and secondary crop.
A good picker averages approximately 100 to 200 pounds of coffee cherry a day, which
will produce 20 to 40 pounds of coffee beans. At the end of a day of picking, each
worker’s harvest is carefully weighed and each picker is paid on the merit of his or her
work. The day’s harvest is then combined and transported to the dispensation stand.
7.3 IMMODERATION THE CHERRIES
Even as there are several coffee species, most coffee is made from the seed or bean of
either Coffee Arabica (Arabica coffee) or Coffee canephora (Robusta coffee). Arabica
trees normally produce berries 8-15 mm in diameter, and Robusta produce berries
approximately 10 mm in diameter. Commercially, Robusta is regarded as having inferior
quality to Arabica coffee and is used mainly as filler in instant coffee blends. Coffee
berries are picked when they ripen to bright deep red color, though there are a few
cultivars that ripen to a deep yellow color. The coffee or green bean lies within the fruit,
and is surrounded by the parchment membrane, pulp or mucilage and outer skin. Coffee
processing in the home is very time consuming. Small-scale processing equipment is now
available in Australia. Equipment is also available from the United Kingdom at
considerable expense. Processing involves six main steps outlined below.
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7.3.1 THE DRY SYSTEM
The age-old technique of dispensation coffee and is still used in many countries where
water resources are limited. The freshly picked cherries are simply spread out on huge
surface to dry in the sun. In order to prevent the cherries from spoiling, they are raked
and turned throughout the day, then covered at night, or if it rains, to prevent them from
getting wet. Depending on the weather, this process might continue for several weeks for
each batch of coffee. When the moisture content of the cherries drops to 11 percent, the
dried cherries are moved to warehouses.
7.3.2 IN WET PROCEDURE
In wet procedure dispensation, the pulp is detached from the coffee cherry after
harvesting and the bean is dried with only the parchment skin left on. There are several
actual steps involved. Firs the freshly harvested cherries are passed through a pulping
machine where the skin and pulp is separated from the bean. The pulp is washed away
with water. Usually to be dried and used as mulch. The beans are separated by weight as
they are conveyed through water channels, the lighter beans floating to the top, while the
heavier, ripe beans sink to the bottom. Next they are passed through a series of rotating
drums which separate them by size. After separation, the beans are transported to large,
water-filled fermentation tanks, depending on a combination of factors such as the
condition of the beans. The climate and the altitude they will remain in these tanks for
anywhere from 12 to 48 hours. The purpose of this process is to remove the slick layer of
mucilage (called the parenchyma) that is still attached to the parchment; while resting in
the tanks, naturally occurring enzymes will cause this layer to dissolve. When
fermentation is complete the beans will feel rough, rather than slick, to the touch. At that
precise moment, the beans are rinsed by being sent through additional water channels.
They are then ready for drying.
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7.4 DRYING THE BEANS
If the beans have been processed by the wet method, the pulped and fermented beans
must now be dried to approximately 11 percent moisture to properly prepare them for
storage. These beans, still encased inside the parchment envelope (the endocarp), can be sun
dried by spreading them on drying tables or floors, where they are turned regularly. Or they can
be machine dried in large tumblers, once dried these beans, referred to as parchment coffee, and
are warehoused in sisal or jute bags until they are readied for sell abroad.
7.5 MILLING THE BEANS
Previous to it is exported parchment coffee is processed in the following manner;
Machines are used to remove the parchment layer from wet processed coffee.
7.5.1 HULLING
Equipments are used to remove the parchment layer (endocarp) from wet processed
coffee. Hulling dry processed coffee refers to removing the entire dried husk the exocarp,
Mesocarp & endocarp of the dried cherries.
7.5.2 POLISHING
An optional process in which any silver that remains on the beans after hulling is
removed in a polishing machine.
While polished beans are considered superior to unpolished one, in reality there is little
difference between the two.
7.5.3 GRADING & SORTING
Previous to being exported, the coffee beans will be even more precisely sorted by size
and weight. They will also be closely evaluated for color flaws or other imperfections.
Typically, the bean size is represented on a scale of 10 to 20. The number represents the
size of round holes diameter in terms of 1/64’s 0f an inch. A number 10 bean would be
the approximate size of a hole in a diameter of 10/64 of an inch and a number 15 bean,
15/64 of an inch. Beans are sized by being passed throng passed through a series of
different size a series of different sized screens. They are also sorted pneumatically by
using an air jet to separate heavy from light beans. Next defective beans are removed.
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Though this process can be accomplished by sophisticated machines, in many countries,
it is done by hand while the beans move along an electronic conveyor belt. Beans of
unsatisfactory size, color, or that are otherwise unacceptable, are detached.
This strength includes over-fermented beans, those with insect damage or that are
unshelled. In many countries, this process is done both by machine and hand, insuring
that only the finest quality coffee beans are exported.
7.6 TASTING THE COFFEE
By each stage of its production, coffee is repeatedly tested for quality and taste. This
process is referred to as cupping and usually takes place in a room specifically designed
to facilitate the process. First, the taster usually called the cupper carefully evaluates the
beans for their overall visual quality. The beans are then roasted in a small laboratory
roaster, immediately ground and infused in boiling water, the temperature of which is
carefully controlled. The cupper “noses” the brew to experience its aroma an integral step
in the evaluation of the coffee’s quality, After letting the coffee rest for several minutes,
the cupper “breaks the crust” by pushing aside the grounds at the top of the cup. Again
the coffee is nosed before the tasting begins. To taste the coffee, the cupper “slurps” a
spoonful with a quick inhalation. The objective is to spray the coffee evenly over the
cupper’s taste buds, and then “weigh” it before spitting it out. Samples from a variety of
batches and different beans are tasted daily. Coffee is not only analyzed this way for their
inherent characteristics and flaws, but also for the purpose of blending different beans or
determining the proper roast. An expert cupper can taste hundreds of samples of coffee a
day and still taste the subtle differences connecting them.
7.7. EXPORTING THE BEANS
Milled beans, currently referred to as green coffee, are ready to be loaded onto shipped
for transport to the importing country. Green coffee is shipped in either jute or sisal bags
which are loaded into shipping containers, or it is bulk shipped inside plastic-lined
containers. About seven million tons of green coffee is produced world each year.
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7.7.1 PRODUCTION CAPACITY AND SALES REVENUES
Table 7.1 production capacity and sales revenues
Year Expected cherry Expected pulped Price /qt/of hulled Total
coffee to be pulped and picked coffee and picked coffee revenue from
(qt) (qt) (birr) sales(birr)
2023 9,000 1,935 15,000 29,025,000.00
2024 10,000 2,174 15,000 32,610,000.00
2025 11,000 2,391 15,000 35,865,000.00
2026 12,000 2,608 15,000 39,120,000.00
Grand total 136,620,000.00
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8. FINANCIAL ANALYSIS
8.1FIXED COST
Fixed (Capital) costs are expenditure on Building and Civil Work; Vehicle and Machinery; and
pre-operation cost. The total fixed costs of the project are outlined. The costs of Machinery,
vehicles, Equipment and buildings the machinery and equipment and building cost are shown
below.
TABLE 9.1 Summary of Fixed Cost
Sr. No. Description Total cost
1 Fixed cost
1.1 Concrete coffee drying plane 435,240.00
1.2 Store and office 1,696,500.00
1.3 Machine shade 526,500.00
1.4 Machine cost 3,732,300.00
1.5 Vehicles 3,439,800.00
1.6 Pre operating cost 292,500.00
Grand Total 10,122,840.00
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8.2 VARIABLE COSTS
Like those of fixed costs , the money allocated for variable costs amounts 6,028,104.00 birr
Table 9.3 summary of variable costs
Sr. No. Description Total cost
1 VARIABLE COSTS
1.1 Sacks 253,612.32
1.2 Labor costs 2,015,984.00
1.3 Fuel and greases 56,087.34
1.4 Utilities cost 73,157.4
1.5 Running cost 3,629,262.94
Grand Total 6,028,104.00
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9. SOURCE OF FINANCE
Regarding the source of finance 11,305,660.8 birr ( Eleven million three hundred five
thousand six hundred sixty birr 80/100) , shall be loan from bank and the rest 30% or
4,845,283.2 birr(Four million eight hundred forty five thousand two hundred eighty three birr
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10. REVENUE ANALYSIS
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11. FINANCIAL AND ECONOMIC ANALYSIS
Table: 9.5 Assumptions used in the financial evaluations of Mr.Awole Ebrahim Fedilu
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9.5 BANK LOAN REPAYMENT SCHEDULE
Number of Payments: 60
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10. ORGANIZATIONAL STRUCTURE AND MANAGEMENT
Mr.Awole Ebrahim Fedilu Coffee pulping industry development project is a privately
owned project that is going to act as per the articles and amendments appeared on the
Federal and regional investment proclamations and directives. As a general manager of
the project the person in charge shall have full power to manage the affairs of the project
within the specified business objectives. He will also have the power to delegate part of
the authority vested up on him to other management members with in the project.
However, the project shall have the following main divisions.
10.1 THE ADMINISTRATION AND FINANCE DEPARTMENT
It is responsible for the general personnel management including, administration of
salaries and wages, staff benefits, control and administration of properties, and other
related tasks.
10.2 THE INDUSTRY MANAGEMENT DEPARTMENT
It will be responsible for the general operation of the industry including environmental
protection and other related tasks.
11. FEASIBILITY & JUSTIFICATION
11.1 MARKET OPPORTUNITIES
Ethiopian economy largely depends on the agricultural sector.
The sector plays significant role in the contribution to gross domestic production (GDP),
employment, and the country’s foreign currency earnings and so on. The country is
expected to promote the industrial development so as to improve the capital formation
and the foreign currency earnings. Coffee production in Ethiopia for the last two seasons
has exceeded all expectation according to the International Coffee Organization. Coffee
output, internationally, exceeded expectations by 1 million bags for 2010-11 to reach
134.2 million bags. The ICO has increased its estimated global output for 2011-12 by 3.8
million bags due to a significant increase in production in Ethiopia expected to be around
6 million bags. Ethiopia is currently producing an estimated 9.8 million bags that would
rank the country as the third largest coffee producer in the world after Brazil and
Vietnam, beating out Columbia noted the ICO. Because of the vast promotion works that
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has been made the number of countries showing interest to buy Ethiopia coffee is
increasing from time to time. The 9 th African Fine Coffees Conference and Exhibition
that has been held in Addis Ababa, Ethiopia for example has attracted more than 1,500
buyers, producers, traders, marketers and equipment and input dealers. According to
conference organizers, the timing of the Conference is ideal as world prices for coffee are
currently at a new high boosting the confidence of producers inclined to abandon coffee
crop. The event is expected to play a significant role in building positive image for, as
well as promoting knowledge transfer and creating market connections.
12. TECHNICAL STUDY
12.1 INFRASTRUCTURE (ELECTRIC POWER, ROAD, AND TELEPHONE SERVICES)
Currently, the Ethiopia electric power corporation has stretched hydro electric power
lines to the area. The required power to run warehouse and machines thus, shall easily be
stretched to the site through negotiation with the authority. The all whether gravel road,
accesses to regular and mobile telephone services, makes the site an ideal place to run the
project efficiently.
12.2 MAN POWER
Industrial development activities require both skilled and unskilled man power. The fact
that there is a relatively cheap but yet efficient labor in Bench Sheko; where this project
is to be set makes it in advantageous position in minimizing the cost of operation required
for its activities.
12.3 FINANCE SOURCES
As the Private sector is believed to play the key role in the social and economic
development activities in the country, the government of Ethiopia is encouraging the
sector in many ways; one of which is provision of long and short term loans to those
engaged in the agricultural sector. Those who are licensed for the sector and who are
under operation can secure enough money either from the development or commercial
banks of Ethiopia.
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13. WORK OPPORTUNITIES
The type and number of workers required by the project is shown in the table below
Table4. Type and number of man power required by the project
S/n Position Educational Required Employment Monthly Annual
status type salary salary
1 Manager Diploma 2 Permanent 8226 197,424
2 Store keeper 12 complete 2 Permanent 5000 120,000
3 Finance officer Certificate 2 Permanent 8000 192,000
4 Machine 12 complete 2 Permanent 5000 120,000
operator
5 Guard Grade 4 4 Permanent 2000 96,000
Sub total 12 725,424
6 Temporary As required 148/day Temporary 148x 1,290,560
80birr/day x
workers
109day
Sub total 1,290,560
Grand total 160 2,015,984
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14. ENVIRONMENTAL IMPACT ASSESSMENT REPORT
An investment policy for sustainable agriculture designing strategies with regard to protecting
the working environment is an important issue that needs to be considered by every development
project. Ministry of environmental protection encourages agriculture investment enterprise to use
environmental management system that improves compliance, environmental degradation and
pollution, in all development activities in the country. The environmental impact of growing,
processing and transporting coffee from when it is planted on the farm to when it is harvested
and arrives at processing facilities in Ethiopia is becoming a serious concern. More than 90% of
the environmental impact of, processing, the harvested coffee in Ethiopia is due to the impact of
waste management. Thus assessment of the local impact of coffee processing industries and thus
undertaking a series of measures to prevent contaminants the environment and the ecosystem is
important.
14.1 ENSURING RESPONSIBILITY, ECO-FRIENDLINESS
Income as a result of selling dries processed coffee but also address environmental pollution
related to the conventional coffee processing method. In the conventional method the coffee hull
and dust are removed from the beans and get discharged into a special hole that will be dug in
the site where they decompose and deteriorate. The eco-friendly method of processing reduces
the amount of organic waste from the hulling process and cuts the escaping to environment by 90
percent. The new coffee hulling machine to be installed by the promoter is eco -friendly. It is
designed in such a way that it will absorb dusts and conserve the environment that is so crucial
for its ability to continue producing high quality coffee. With minimum additional investment,
the accumulated parchment and dust particles, which are organic by-products of hulled coffee,
can be converted into bio-fuel, fertilizer, and animal feed so that, the way Mr. Awole Ebrahim
Fedilu coffee pulping project operates represents the best combination of solution for preserving
the environment that it depend on for sustainable development.
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