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Corrugated Iron Sheet Dukam 2hek Alexander
Corrugated Iron Sheet Dukam 2hek Alexander
FOR
PROJECT TO BE IMPLEMENTED IN
APR, 2021
FINFINE, ETHIOPIA
Corrugated Iron sheet and Cookware Manufacture
TABLE OF CONTENT
TABLE OF CONTENT...................................................................................................................1
EXECUTIVE SUMMARY.............................................................................................................3
1. INTRODUCTION....................................................................................................................4
1.1. Objective of the project.....................................................................................................5
1.2. The Economic Significance of the Project........................................................................5
1.3. Location and Premises Required.......................................................................................7
1.4. Location Map of the Area.................................................................................................8
2. MARKET STUDY AND PLANT CAPACITY....................................................................10
2.1. Market Study...................................................................................................................10
2.1.1. Demand and Supply Analysis..................................................................................10
2.1.2. Market Prospects.....................................................................................................10
2.1.3. Marketing Strategy and Promotion..........................................................................11
2.1.4. Target customers......................................................................................................11
2.2. Plant Capacity and Production Program.........................................................................11
2.3. Pricing.............................................................................................................................12
3. PRODUCTION AND TECHNOLOGY................................................................................12
3.1. Product Nature and Description......................................................................................12
3.2. Raw materials and Input.................................................................................................12
3.3. Technology......................................................................................................................12
3.4. Production Description...................................................................................................13
3.4.1. Production Process...................................................................................................13
3.5. Machinery and Equipments............................................................................................16
3.6. Project Design and Engineering......................................................................................17
3.7. Building and Construction Works...................................................................................17
3.8. Utilities............................................................................................................................18
4. MANPOWER AND ORANIZATIONAL MANAGEMENT...............................................19
4.1. Manpower.......................................................................................................................19
4.2. Organizational Structure and management.....................................................................19
4.3. Training Requirement.....................................................................................................22
EXECUTIVE SUMMARY
1. Project name Corrugated Iron Sheet and Cookware Manufacture
3. Nationality Ethiopian
8. Employment The total manpower required for the plant will be 250 employees
Opportunity Permanent Worker :- 100
Skilled and Unskilled
On Temporary Basic :- 150
Skilled and Unskilled
10. Benefits of the factory Produce and supply of quality metal Products, add value to
For the Region/ the economy, Source of Revenue, Employment opportunity,
Country Save Foreign currency, Benefit for the Local Community,
Stimulate the Local Economy and technology transfer
1. INTRODUCTION
Manufacturing Small and Medium Enterprises (SMEs) make up the largest and the most
important segment of the industrial sector in Ethiopia. In 2000, for example, SMEs contributed
to 68 per cent of gross value of production and over 80 per cent of employment in the
manufacturing sector. As will be shown below, SMEs, especially the latter, are among the
most dynamic and innovative enterprises in the country. In reviewing the investment and
technology policies of Ethiopia, therefore, it is pertinent that special attention is paid to the
pattern of development and the strengths and weaknesses of SMEs in Ethiopia.
Besides, development of small and medium industries accelerates the fast economic growth
of Ethiopia and will help the nation lay its economy foundation on strong industrial base.
However, there exist constraints on the transition of these industries to the heavy one.
The government of Ethiopia has developed a conducive investment policy packages and
other sectoral reforms at federal and regional level to attract a huge private investment
including in MSEs for the wellbeing of the nation and its citizens as a whole. Besides, it is also
currently implementing the five years growth and transformation plan gave a special focus for
manufacturing, small, medium and large industries.
In this regard, the Oromia regional state government has been exerting its maximum effort to
expand investment opportunities in the region, so as to foster the economic development of
the region and subduing the region’s big enemy that is the trap of poverty. Therefore, the
regional government has been preparing a viable business environment to attract many
domestic and foreign investors so that the dream of making poverty history turns to be true.
Therefore, the lucrative market potential and those viable investment policies attracted the
owners of this project to engaged Corrugated iron sheet Plant in Dukam district, Special
Zone in Oromia region.
The owners of this envisaged plant have a good business experiences and need to extend
this assets to this plant. Therefore, the owner is very determined to establish the plant and
considers getting the required support from regional government by considering the existing
facts and the multi benefits of this project.
The main objective of the plant is to manufacture different metal products and to sale with
reasonable price for international market.
The envisaged project deemed to contribute to the economic development of the nation in
general and the region in specific with following ways:
The project under discussion will establish Corrugated iron sheet Plant that will produce
quality and affordable metallic and steel products for the country market. This will benefits the
users to get better product with better price and durability.
B. Value Add
The establishment of this factory will add a value to the manufacturing sector in specific and in
the economy in general.
C. Source of Revenue
As public policy of any nation, the government collects different forms of taxes from different
business organizations and individuals. Among the different forms of taxes, business income
taxes, VAT and payroll taxes are collected from undertaking business activities. Therefore,
the factory will serve as sources of revenue for both the region and nation in general.
D. Employment Opportunity
One of the problems that our country faced is unemployment. Therefore, the current objective
of the government is working on tackling the problem of unemployment and fostering the
development process either through creating self employment or employment in other
organization. Hence, this factory will hire around 330 both permanent and temporary persons.
By minimizing the market gab for Corrugated iron sheet demand and supply, the factory will
help to reduce the nation’s foreign exchange cost to import these materials. This will save the
foreign exchange resource of the nation.
This factory has positive externality in the zone that will encourage the economic movement
of local economy. Hence, there will be economic relationship and transactions among
different actors.
H. Technology Transfer
By producing Corrugated iron sheet Plant, the project will train and develops the capacity of
the technical staffs. By doing this, the company will add value in technology transfer for the
nation.
i. Location
The envisioned project is planned to be located in Dukam town (which is around 30km from
the capital), Oromia special Zone Surrounding Finfine, Oromia Regional State. The main
justifications behind the selection of this location are:
Strategically located to the central and largest market of the nation (Addis Ababa)
Relatively advanced development in infrastructure (Power, Water, Telephone internet,
road etc.
All road to the nearest market outlets
Accessibility of skilled labor force
Conducive investment policy and governance
Environmentally fit to manufacturing industry.
The total land holding of the project is 20,000 M2, the premises required planned as follows in
table 1
No Description Land
Requirement /M2/
1 Production Hall 7,000
2 Warehouse
Total Warehouse
Total 20,000
Besides, the demand for nails goods is increasing with the growth in investment in different
sectors. Consumer demand in the country is growing for metal products. Increase in
purchasing power and changes in designs tend to increase the demand still further. In
addition, demand for Ethiopian nails products are exports market has gone up considerably in
recent years. This aspect is relevant for the nails manufacturing industry.
At present most of the metal factories are involved in manufacturing household equipments,
office furniture, construction materials, modification of simple machines etc. The main target
market of these workshops is government and next the private individuals.
From the above market demand and supply analysis for steel and metal products, there exist
huge market gab in different Africa country market. Hence, the envisioned factory will be
successful by entering in to this market.
The majority of customers in the domestic market belong to first and second category. These
customers require metal and other kitchen materials products.
Considering the gradual growth of demand and the time required to develop the required skill
the rate of capacity utilization during the first, second and third year of production will be 70%,
85% and 100% respectively. Full capacity utilization will be reached during the third year of
operation. The plant will operate 290 days per year.
2.3. Pricing
It would be important to examine the possible level of price based on the competitor’s action.
In this connection, the existing average prices of similar metal workshop in Addis Ababa and
some Africa country’s were assessed for the benefit of comparison. Based on the existing
price in the market the firm stetted the price as follows;
The factory will produce different Corrugated iron sheet products based on the customer
desire and request. In general the following products are designed by the plant to be
produced
The envisioned plant will produce different metal work products based on the customer desire
and order. Besides, it will undertake different maintenance on demand base.
The major raw materials required for the production of the Corrugated iron sheet products
include iron, RHS, sheet metal, rectangular bar, round pip, flat bar, pipe, metals ( includes
galvanized iron) and others related. The required raw materials will be imported or purchased
in the local market.
3.3. Technology
Technologies used in this engineering plant use sophisticated and latest machineries for a
quality and branded products which are export standard. In different stage of manufacturing-
extreme care is required to ensure smooth polishing and proper platting.
In general metal and steel work will have four production parts after the product idea are
generated. i.e.,
A. Pre- production
Preparation and arrangement of resources are under this stage. The question what to do?
Where to do it? When to do it? Who to do it? All are answered at this phase of production
process.
A well prepared and arranged resources results in production cost reduction and meeting due
time.
Making a design
Material selection
Purchasing of raw material
Adopting flexibility of production places
Hiring of skilled workers
Inspection of raw-material
B. On-production
The already prepared and arranged materials, machineries and human resources are
organized to start the real production process. The strength of this stage depends on the pre-
production stage. It needs a managerial skill to coordinate the resources to achieve desire
product.
C. Postproduction
Postproduction is the final stage where preparation of product for shipment under taken. Now
the product has got the required design but needs polishing to give good appearance.
Grinding
Sanding
Painting
Assembly etc.
Note: Quality inspection activity is practical in all stages to keep the quality of the product and
to decrease scraps and reworks.
The Corrugated iron sheet industry is primarily concerned essentially heating/welding and
shearing/forming operations. In view of the high cost of most new equipment and the relatively
long lead-time necessary to bring new equipment into operation, changes in production
methods and products are made only gradually; even new process technologies that
fundamentally change the industry are only adopted over long periods of time.
Shearing operations cut materials into a desired shape and size and include punching,
piercing, blanking, cutoff, parting, shearing, and trimming activities. Basically, these produce
holes or openings, or produce blanks or parts, the most common hole-making operation being
punching. Cutoff, parting, and shearing are similar operations with different applications.
Forming operations bend or conform materials into specific shapes by turning, twisting, ,
drawing, rolling, spinning, coining, and forging metal into a specific configuration. Bending is
the simplest forming operation; the part is simply bent to a specific angle or shape. Other
types of forming operations produce both two and three dimensional shapes.
Machining refines the shape of a work piece when shearing and forming are complete, by
removing material from pieces of raw stock with machine tools. The main processes involved
are drilling, milling, and turning, shaping/planning, broaching, sawing, and grinding.
Holding the different pieces together is achieved either by riveting, bolting or more
permanently by welding. Welding is the process primarily used to join metals, most welds
being achieved by fusion in which the materials being joined are melted at, and around, the
joint between them. Most of the welds are done with a rod of filler material with the resultant
weld being composed primarily of the filler. Increasingly though autogenously welding is
catching on, in which no added material is used. There are also forms of pressure welding
rather than fusion and combinations of the two. Welding is an integral part of fabricating metal
parts so as to form spheroids, boxes and cylinders. The essential feature of a fusion welding
process is a heat source either in the form of a flame from a gas torch (most often
oxyacetylene or propane) or an electric arc.
The following are the list of necessary machineries and equipments for the envisioned
Corrugated iron sheet workshop plant;
A very simple building may suffice for an initial startup, the main consideration being the
security of the equipment and secure connections to electrical supply. The building will
have to be designed along factory production lines allowing for smooth transitioning of
the raw materials into completed products and optimized for maximum efficiencies.
3.8. Utilities
A number of utilities would be put in place in order to ensure smooth functioning of the
factory. These utilities include:
Water Supply,
Telephone line
Drainage Facility
Corrugated Iron sheet and Cookware Manufacture
4.1. Manpower
At the top of the organizational structure, there will be a general manager with the
responsibility of supervising the overall activity of the factory. Depending up on the
nature of the center and the amount of work to be performs; there will be auxiliary units
under the general manager. Employees under each unit will be supervised by the unit
head that is accountable for the general manager.
The company will use efficient trained staffs in the area of marketing to be competitive
in the market. The opportunities of being serviced by well skilled professionals well
enable the company to evaluate the internal weakness and strength of the company as
well as to assess the global opportunity and risks in the world market so that the
company can cope up with the dynamics of the market situation. The company will hire
250 employees.
The detail human power requirement, monthly and yearly salary is indicated in part 5
financial part.
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Corrugated Iron sheet and Cookware Manufacture
The organizational structure of the project is designed by including all the necessary
personnel under the right division. At the top of the organizational structure, there will be
a general manager with the responsibility of supervising the overall activity of the plant.
Employees under each unit will be supervised by the department head that is
accountable for the general manager. General Manager is accountable to the owner of
the factory as indicated in figure 3
Owner/s
General
Secretary
Manager
Hence the following section deals with the duties and responsibilities of some
departments.
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Corrugated Iron sheet and Cookware Manufacture
1. Manager
Duties and responsibilities
She/he will plan, organize, direct and control the overall activities of the plant
She/he will devise policies and strategies that will enable the plant to be
profitable.
She/he will incorporate modern technological innovation that will facilitate the
service delivery of the project center and increase customer’s satisfaction.
He/he will plan, organize, direct and control the human and non-human
resources of the factory so as to achieve the short and long run objectives of the
organization.
2. The Production Department
Duties and responsibilities:-
It is the core department of the project center and it has the following responsibilities.
Design and prepared prototype metal and steel based products based on the
plant standard and customer preferences
Use modern manufacture, processing technologies that will enhance the quality
of those products.
Produce quality metal and steel products that will enable the factory competent
both in the domestic and international market.
Control on the quality of raw materials, inputs, quality of the product and also the
overall production process.
Produce products in least cost so that the profitability of the center is guaranteed.
Moreover control over the quality of the final metal and iron products
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Corrugated Iron sheet and Cookware Manufacture
Will plan, organize direct and control the financial transaction of the factory by
using the entire necessary document.
Will develop sound financial control system by developing modern financial
control systems.
Will prepare the annual financial statements and prepare condensed reports for
the general manager, owner and other concerned government body.
Will control the human and non human resources of the plant, which include:
effective handling of the different inventories of the machineries, equipments, raw
materials, finished products, and devise strategies of controlling against fraud
and damage.
Manage and execute the company national and international procurement
procedure
Administer and control the company logistic resource
Provide and manage general supportive service to the factory.
Will handle the overall marketing activities of the organization which include
planning, organizing, directing, and controlling.
Gather information on new products, designs, fashions, profiles etc
Approval of new products profile & brand plan analyzes market research.
Plan and execute sales.
Will develop effective customer handling strategies
Will develop the marketing strategies for future project center’s development.
Conduct both foreign and domestic market research for expanding the sales of
the company
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Corrugated Iron sheet and Cookware Manufacture
The production employees of the plant expected to take basic iron work production skill
training for 7 days. In addition training could be given to the mechanic and to the
supervisor will also take skill training from one of TVET Colleges or similar undertaking
factories in Addis Ababa.
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Corrugated Iron sheet and Cookware Manufacture
5.1.1.Fixed Investment
A. Building & Construction
No Description Land Total cost in br.
Requirement(M2)
1 Production Hall 7,000
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Corrugated Iron sheet and Cookware Manufacture
8,000,000
2 Warehouse , raw material and input
5,390,000
3 Office Building, and finished product 5,000
3,000,000
4 Waste Accumulation area 5,000
2,210,000
5
Green area, buffer and parking 200,000
6 500
Shops & Showrooms 200,000
1,000
7 Site Development 200,000
8 500
Design and supervision 300,000
9 Land lease initial
500,000
Total 20,000 20,000,000
B. Machineries and Equipment’s
The list of required machinery and equipment is indicated in Table below. The total cost
of machinery and equipment is estimated at Birr 50,000,000 millions
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Corrugated Iron sheet and Cookware Manufacture
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Corrugated Iron sheet and Cookware Manufacture
C. Vehicles
No Description Qty Unit Price in br. Total Price in br. Remark
Total 8,400,000
D. Office Equipment’s
No Description Qty Unit cost in br. Total cost in Br.
Total 5,000,000
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Corrugated Iron sheet and Cookware Manufacture
F. Pre-Service Expense
No Description Cost in br.
1 Project proposal 20,000
2 EIA 50,000
4 500,000
Staff Capacity Building
5 830,000
For Adverting
Total 1,500,000
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Corrugated Iron sheet and Cookware Manufacture
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Corrugated Iron sheet and Cookware Manufacture
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Corrugated Iron sheet and Cookware Manufacture
500
25 General service 1,
3 Diploma in management 500 54,000
26 Security 1,
5 Unskilled 000 60,000
27 Gardener 1,
5 Unskilled 000 60,000
28 Cleaner 1,
5 Unskilled 000 60,000
Other workers 77 850 785,400
Grand Total 500 15,393,400
5.3.1.Underlying Assumption
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Corrugated Iron sheet and Cookware Manufacture
The financial analysis of the envisioned factory is based on the data provided in the preceding
sections and the following assumptions.
B. Depreciation
Building 5%
Vehicles 10%
C. Working Capital
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Corrugated Iron sheet and Cookware Manufacture
5.3.2.Sources of Fund
No Description % share Amount (in birr)
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Corrugated Iron sheet and Cookware Manufacture
5.3.5.Depreciation Schedule
Original Depreciation rate Depreciation Per
SN Description Value In Birr in % year
5.3.6.Revenue Projection
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Corrugated Iron sheet and Cookware Manufacture
Based on the price and the capacity program of the factory indicated in previous chapter
(chapter 2), the revenue of the factory projected as indicated in the table below;
Balance Sheet
Asset
Current Asset
Cash 119,779,000
Fixed Asset
Vehicles 5,000,000
Total Asset
Liability
Capital
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Corrugated Iron sheet and Cookware Manufacture
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Corrugated Iron sheet and Cookware Manufacture
5.3.7. Profitability
According to the projected income statement, the project will start generating profit in
the 1st year of operation. Important ratios such as profit to total sales, net profit to equity
(Return on equity) and net profit plus interest on total investment (return on total
investment) show an increasing trend during the lifetime of the project.
The income statement and the other indicators of profitability show that the project is
viable.
The break-even point of the project including cost of finance when it starts to operates
at full capacity (year 3) is estimated by using income statement projection.
The investment cost and income statement projection are used to project the pay-back
period. The project's initial investment will be fully recovered with in 9 year of operation.
6. FUTURE DEVELOPMENT
Every business undertakings be it large or small should have future development plan.
It is a plain fact that business activities are undertook in a dynamic business nature and
different environment. Therefore, the factory will have an expansion phase depending
on the condition of the industry character particularly in producing the Profile itself by
installing the plant. In this regard, the Factory will expand its capacity and production
varieties.
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Corrugated Iron sheet and Cookware Manufacture
The owner will provide the land on lease bases, and all required compensation will be
paid for the project. The Livelihood of the local peoples around the project area is rural
dwellers of various occupation and economic background.
Environmental aspects are fundamental for the sustainability assessment of the current
and novel designs of any new project. In this regard the plant will undertake a separate
and detail Environmental impact Assessment.
To assess the impacts and design mitigation measure if any adverse impacts are there
so as to make the project benefited more society and nation.
PROJECT PROPOSAL
FOR
PROJECT TO BE IMPLEMENTED IN
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Corrugated Iron sheet and Cookware Manufacture
APR, 2021
FINFINE, ETHIOPIA
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Corrugated Iron sheet and Cookware Manufacture
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