years, the pursuit of enhanced

Optimizing Efficiency efficiency, reduced environmental

and Viability in impact, and increased automation has
driven innovation within brick
Automatic Clay Brick production. This research paper delves
into a significant project that
Production: A Case exemplifies these aspirations—the
Study establishment of an automatic clay brick
production plant in Vogirothpur,
Hemayetpur, Pabna.
Abu Rayhan1, David Gross2
1
Abu Rayhan, CBECL, Dhaka, Bangladesh The automatic clay brick production
rayhan@cbecl.com plant represents a convergence of
2
David Gross, Advisor, Research Division, cutting-edge technology and traditional
CBECL construction materials. With a focus on
advanced kiln technology and full
Abstract: automation, this project seeks to
In the pursuit of enhancing efficiency revolutionize brick manufacturing. The
and viability within the brick study of this case holds profound
manufacturing sector, this research relevance in the context of the brick
paper delves into a comprehensive case manufacturing industry, as it not only
study centered on the establishment of showcases the potential for
an automatic clay brick production plant technological advancement but also
in Vogirothpur, Hemayetpur, Pabna. The highlights the economic and
study meticulously examines various environmental implications of such
facets of the project, including its innovations. By delving into the
geographical location, innovative intricacies of this project, this paper
technological integration, financial aims to provide valuable insights into
projections, and potential industry the feasibility, viability, and long-term
impact. By dissecting these critical sustainability of modern brick
elements, this paper aims to present a production methods. Through a
detailed narrative that underscores the comprehensive analysis of its various
project's feasibility and its potential to facets, this case study aims to guide
revolutionize modern brick production. industry stakeholders, investors, and
professionals in their pursuit of efficient
Keywords: automatic clay brick and sustainable construction practices.
production, efficiency, viability, In the subsequent sections, we will
technological integration, financial explore the project's key details,
projections, industry impact. financial projections, and potential for
success in further detail.
1. Introduction
2. Project Details
The construction industry forms the
backbone of any nation's development, In the pursuit of modernizing brick
with brick manufacturing playing a manufacturing and enhancing its
pivotal role in this sector. In recent

This Research is funded by www.cbecl.com

efficiency, the establishment of an
automatic clay brick production plant
emerges as a pioneering endeavor. This
section provides a comprehensive
insight into the essential project details,
encompassing its strategic location, land
specifications, technological approach,
and legal framework.
2.1 Location: Vogirothpur, Hemayetpur,
Pabna
The project finds its roots in
Vogirothpur, a locale nestled within the
scenic landscapes of Hemayetpur,
Pabna. This strategically chosen location
offers a confluence of factors conducive
to the successful implementation of the
automatic clay brick production plant.
Situated in close proximity to key
transportation routes and resources,
Vogirothpur serves as an optimal site for
harnessing the project's potential.
2.2 Project Land Specifications and
Encumbrance
The project's land spans an extensive
area of 8.72 acres, providing ample room
for the establishment of advanced brick
manufacturing infrastructure. A of ownership and responsibilities,
notable hallmark of this land is its
unencumbered status, signifying a
significant advantage in terms of
unobstructed development and
operation. This absence of
encumbrances alleviates potential legal
and logistical challenges, streamlining
the realization of the project's objectives.
2.3 Nature of the Project: Technological
Innovation and Automation
Central to the project's vision is the
integration of cutting-edge kiln
Page 2 of 10 Automatic Clay Brick Production: A Case Study
technology and comprehensive
automation. Drawing inspiration from
successful practices in China and other
developed nations, this venture seeks to
revolutionize traditional brick
manufacturing processes. The proposed
plant envisions the utilization of the
most modern and highly efficient kiln
technology available today. This
approach aims to optimize production
efficiency, reduce labor dependency, and
enhance the overall quality of the
manufactured bricks. Through full
automation, the project intends to
minimize manual interventions and
human error, thereby further boosting
operational precision and productivity.
2.4 Legal Status: Proprietorship
Company
Operating within a clear legal
framework, the project is established as
a Proprietorship Company. This legal
structure not only provides a foundation
for organized and accountable
operations but also facilitates seamless
decision-making and resource
allocation. The Proprietorship Company
model allows for efficient management
enabling the project to navigate the
complexities of the industry with agility
and purpose.
In conclusion, the project's intricate
details, encompassing its strategic
location, unencumbered land,
technological innovation, and legal
structure, set the stage for a
transformative endeavor in the field of
brick manufacturing. Through a
harmonious blend of visionary concepts
and pragmatic execution, the automatic
clay brick production plant aims to
redefine industry standards and
contribute to the sustainable
advancement of construction materials.
3. Production Capacity and Pricing:
The heart of the Automatic Clay Brick
Production Plant project lies in its
impressive production capacity and
strategic pricing approach. This section
unveils the remarkable capacity of the
proposed plant, its pricing strategy, and
the substantial revenue potential it
holds, thereby underscoring its valuable
contribution to the brick manufacturing
industry.
3.1 Annual Production Capacity
The envisioned project is poised to
deliver a staggering annual production
capacity of 36 million units of auto
bricks. These bricks, encompassing
various forms including solid and
hollow designs, will be manufactured
through an innovative process that
embraces advanced kiln technology and
full automation. This capacity sets a new
benchmark within the industry and
positions the project as a major player in
addressing the growing demand for
quality bricks.
3.2 Pricing Strategy
A pivotal element in the project's success
lies in its pricing strategy. The proposed
selling price for each brick is set at Tk.
9.50. This pricing approach has been
strategically determined to strike a
balance between affordability for
customers and sustainable profitability
for the project. By offering competitive
pricing, the project aims to secure a
strong foothold in the market, attract a
Page 3 of 10 Automatic Clay Brick Production: A Case Study
diverse clientele, and stimulate
consistent demand.
3.3 Revenue Potential and Industry
Contribution
The synergy between the substantial
annual production capacity and the
strategic pricing strategy translates into
a remarkable revenue potential for the
project. At a selling price of Tk. 9.50 per
brick, the projected total revenue from
auto brick sales is estimated to reach an
impressive Tk. 342 million annually.
This significant revenue stream not only
contributes to the project's financial
viability and sustainability but also
makes a meaningful impact on the brick
manufacturing industry. The project's
capacity to produce high-quality auto
bricks at scale is expected to address the
industry's demands, potentially
influencing market dynamics and
setting new standards for production
efficiency and product quality.
In conclusion, the Automatic Clay Brick
Production Plant's production capacity
and pricing strategy stand as key pillars
of its viability and potential impact on
the industry. By efficiently producing
millions of bricks annually and
strategically pricing them, the project is
poised to not only achieve financial
success but also leave an indelible mark
on the brick manufacturing landscape.
4. Project Costs and Investment:

Figure 1: Modern Bricks production process flow

The success of any ambitious project hinges on a meticulous evaluation of its costs and
investment structure. In the case of the Automatic Clay Brick Production Plant, a
comprehensive breakdown of project costs and the intricacies of investment are
essential to ensure not only the project's feasibility but also its long-term sustainability.

Figure 2: Modern kiln and dryer of Clay bricks

Page 4 of 10 Automatic Clay Brick Production: A Case Study

4.1 Breakdown of Project Costs:
A detailed dissection of project costs reveals the financial intricacies involved in
establishing the automatic clay brick production plant. The following table outlines the
specific categories of costs and their corresponding amounts:

Table 1: Project Costs

Sl. Particulars Sponsors Equity (Tk. Bank Equity (Tk. Total Cost (Tk.
No. '000) '000) '000)
1 Cost of Land 87,200.00 0.00 87,200.00
2 Building & Civil works with 29,102.39 116,409.57 145,511.97
Land Dev.
3 Imported Machinery and 5,080.00 45,720.00 50,800.00
Equipment
4 VAT, Tax, Insurance (6.5%) 508.00 4,572.00 5,080.00

5 Local Machinery 9,596.60 38,386.40 47,983.00

6 Installation, Erection & 1,368.00 5,472.00 6,840.00
Commission
7 Vehicle 1,780.00 7,120.00 8,900.00
8 Furniture, Fixture & Office 137.40 549.60 687.00
Equip.
9 Pre-operating Expenses & 1,140.00 4,560.00 5,700.00
Supervision
Total Fixed Cost 135,912.39 222,789.57 358,701.97
10 Working Capital 4,720.94 11,015.53 15,736.48
Total Cost 140,633.34 233,805.11 374,438.44

The above table provides a comprehensive overview of the project's fixed costs,
including land, building, machinery, equipment, and other associated expenses. It also
details the working capital required to ensure smooth operations.

4.2 Investment Structure: The ratio of investment between the

The investment structure is a critical
aspect of project planning, as it
determines the financial responsibilities
of both the sponsor and the bank. In the
case of the Automatic Clay Brick
Production Plant, the investment is
distributed as follows:
Sponsor’s Equity: Tk. 140,633,340.00
Bank Financing: Tk. 233,805,110.00
4.3 Ratio of Investment: Sponsor vs.
Bank:
sponsor and the bank is a fundamental
indicator of the financial collaboration
in the project. In this case, the
investment ratio stands at 38:62,
signifying a significant contribution
from both parties towards realizing the
project's vision.
The comprehensive understanding of
project costs, investment structure, and
the ratio of investment allows us to
gauge the financial commitment,
distribution, and collaborative efforts

Page 5 of 10 Automatic Clay Brick Production: A Case Study

involved in establishing the Automatic
Clay Brick Production Plant. This
detailed analysis lays the foundation for
sound financial planning and
sustainable project execution.
5. Financial Performance Analysis
In this section, we delve into the critical
financial performance analysis of the
Automatic Clay Brick Production Plant
project over a span of five years. This
comprehensive assessment includes
projections of key financial metrics,
evaluation of essential financial ratios,
break-even analysis, determination of
the pay-back period, and a thorough
analysis of the Internal Rate of Return
(IRR). The following sub-sections
provide an in-depth exploration of each
aspect.

5.1 Five-Year Financial Projections

The financial projections presented below offer insights into the anticipated
performance of the Automatic Clay Brick Production Plant project over a five-year
horizon. These projections take into account sales revenue, cost of goods sold (COGS),
gross profit, and net profit. The table illustrates the expected financial performance year
by year:

Table 2: Financial Projections (in '000 Tk.)

Year Sales Revenue Cost of Goods Sold Gross Profit Net Profit

Year - 1 232,255 116,394 115,861 73,508

Year - 2 255,813 128,793 127,020 84,356

Year - 3 273,073 134,928 138,144 95,276

Year - 4 290,177 140,943 149,233 106,147

Year - 5 307,277 146,992 160,285 116,974

5.2 Evaluation of Financial Ratios

The financial ratios play a pivotal role in assessing the project's financial health and
efficiency. Here, we analyze three key ratios: Gross profit to sales, operating profit to
sales, and net profit to sales. These ratios provide insights into the project's profitability
and effectiveness in generating earnings relative to revenue. The following table
illustrates the calculated ratios for each year:

Table 3: Financial Ratios

Year Gross Profit to Sales (%) Operating Profit to Sales (%) Net Profit to Sales (%)

Year - 1 49.89 47.90 31.65

Year - 2 49.65 47.73 32.98

Page 6 of 10 Automatic Clay Brick Production: A Case Study

 Year - 3 50.59 48.71 34.89

Year - 4 51.43 49.59 36.58

Year - 5 52.16 50.35 38.07

5.3 Break-Even Analysis

The Break-Even Analysis is a critical tool to assess the point at which the project's total
revenue equals its total costs, resulting in neither profit nor loss. This analysis aids in
determining the minimum level of sales required for the project to cover its expenses.
The Break-Even Point (BEP) is calculated as follows:

Table 4: Break-Even Analysis

Break-Even Point (%)

25.21

5.4 Pay-Back Period

The Pay-Back Period represents the time it takes for the initial investment to be
recovered through generated profits. It is a key indicator of the project's ability to
generate returns within a reasonable timeframe. The Pay-Back Period for the Automatic
Clay Brick Production Plant project is:

Pay-Back Period: 3 years and 6 months

5.5 Internal Rate of Return (IRR)
The Internal Rate of Return (IRR) is a
fundamental measure of a project's
profitability, indicating the annualized
rate at which the project's net cash flows
equate to zero. A higher IRR signifies a
more attractive investment
opportunity. For the Automatic Clay
Brick Production Plant project:
revenue, gross profit, and net profit
demonstrate a promising outlook, with
favorable financial ratios highlighting
the project's efficiency. The Break-Even
Analysis, Pay-Back Period, and Internal
Rate of Return collectively affirm the
project's viability and potential for
substantial returns, making it an
attractive proposition in the realm of
brick manufacturing.

Internal Rate of Return (IRR): 35.48% 6. Conclusion:

In conclusion, the financial performance In conclusion, the case study of the

analysis reveals a positive trajectory for Automatic Clay Brick Production Plant
the Automatic Clay Brick Production in Vogirothpur, Hemayetpur, Pabna,
Plant project. The projected sales presents a comprehensive exploration of

Page 7 of 10 Automatic Clay Brick Production: A Case Study

a visionary project that combines
technological innovation, strategic
planning, and financial foresight. The
project's key findings and insights
underscore its immense potential for
success and its significant contribution
to the ever-evolving brick
manufacturing industry.
Throughout the analysis, it becomes
evident that the integration of advanced
kiln technology and full automation sets
the stage for a new era in brick
production. The utilization of these
modern techniques not only enhances
the efficiency of the manufacturing
process but also reduces operational
complexities and minimizes manual
labor. This, in turn, has the potential to
revolutionize the industry's landscape
by setting a benchmark for future
projects seeking to embrace cutting-edge
methodologies.
The financial performance projections
showcased in the case study
demonstrate a robust outlook for the
project. The favorable financial ratios,
including gross profit to sales, operating
profit to sales, and net profit to sales,
underscore the potential for sustainable
profitability. Furthermore, the
calculated Break-Even Analysis, Pay-
Back Period, and Internal Rate of Return
(IRR) provide quantifiable evidence of
the project's viability and attractiveness
to potential investors and stakeholders.
The implications of this case study
extend beyond the confines of a single
project. The insights gained from the
careful examination of the Automatic
Clay Brick Production Plant can serve as
a guidepost for future projects in the
brick manufacturing industry. The
Page 8 of 10 Automatic Clay Brick Production: A Case Study
successful integration of advanced
technology and automation highlights
the importance of embracing innovation
and adapting to changing market
dynamics. As industries continue to
evolve, the brick manufacturing sector
can draw inspiration from this case
study to drive efficiency, optimize
financial performance, and achieve
sustainable growth.
In conclusion, the Automatic Clay Brick
Production Plant stands as a testament
to the potential of human ingenuity,
strategic planning, and technological
advancement. By presenting a holistic
view of the project's prospects and
contributions, this case study provides
valuable insights that can inform and
shape the future trajectory of brick
manufacturing, inspiring progress and
innovation in the field.
7. Recommendations:
In light of the detailed analysis of the
automatic clay brick production plant
project, several strategic
recommendations emerge to further
enhance project efficiency, profitability,
and long-term sustainability. These
recommendations are rooted in
leveraging advanced kiln technology,
optimizing automation processes, and
ensuring prudent financial
management.
7.1 Enhancing Project Efficiency and
Profitability:
1. Continuous Technological
Integration: The project should consider
ongoing research and development to
integrate the latest advancements in
kiln technology. Regular updates to the
automated processes can lead to higher downtime and maximizing production
efficiency, reduced energy efficiency.
consumption, and improved brick
quality. 3. Data-Driven Decision-Making:
Establish a data analytics framework to
2. Quality Control Measures: analyze production data and trends. By
Implementing stringent quality control harnessing data insights, the project can
protocols throughout the production make informed decisions to optimize
process is essential. Regular monitoring production schedules, minimize
and testing of raw materials, resource wastage, and maximize output.
manufacturing processes, and final
products can minimize defects and 7.3 Strategies for Optimal Financial
waste, thereby enhancing overall Performance and Long-Term
efficiency and customer satisfaction. Sustainability:

3. Supply Chain Optimization: 1. Diversification of Product Portfolio:

Establishing robust supply chain Explore opportunities to diversify the
management practices, including product portfolio beyond auto bricks.
efficient procurement of raw materials Investigate the demand for specialized
and timely delivery of finished products, brick variants, such as eco-friendly
can contribute to streamlined bricks or those tailored for specific
operations and reduced production construction purposes, to tap into new
costs. markets and revenue streams.

7.2 Leveraging Advanced Kiln 2. Energy Efficiency Initiatives:

Technology and Automation:
1. Smart Manufacturing Solutions: The
project should explore the integration of
Internet of Things (IoT) technologies to
enable real-time monitoring and control
of the production process. IoT sensors
can provide valuable data on
temperature, humidity, and other
variables, enabling swift adjustments
for optimal production.
2. Artificial Intelligence (AI)
Applications: Consider utilizing AI
algorithms for predictive maintenance
of machinery and equipment. AI-
powered predictive analytics can help
identify potential maintenance issues
before they escalate, minimizing
Undertake energy efficiency audits to
identify areas where energy
consumption can be minimized.
Investing in renewable energy sources,
such as solar panels, can reduce
operating costs over time and contribute
to environmental sustainability.
3. Employee Training and Development:
Prioritize continuous training and skill
development for the workforce. A skilled
and knowledgeable workforce can
contribute to increased productivity,
reduced errors, and smoother adoption
of new technologies.
In conclusion, the success of the
automatic clay brick production plant
hinges on a comprehensive approach
that embraces advanced kiln

Page 9 of 10 Automatic Clay Brick Production: A Case Study

technology, automation, and prudent enhance efficiency, profitability, and
financial management. By long-term sustainability, thereby
implementing the aforementioned making a significant impact in the brick
recommendations, the project can manufacturing industry and beyond.

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physical properties of fired clay bricks. American Journal of Civil Engineering,
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Brick: Variability Considerations as a Function of Stationaryversus Nonstationary
Kiln Types. Journal of the American Institute for Conservation, 43(3), 255-272.
3. Naveen, S. (2016). Production and marketing network chain of brick kiln product:
A case study of Hyderabad City. International Journal of Managing Value and
Supply Chains, 7(1), 27-37.
4. Schmidt, C. W. (2013). Modernizing artisanal brick kilns: A global need.
5. Joseph, S., McGarry, B., Sajjakulnukit, B., & Sopchokchai, O. (1990). A study of brick
production in Thailand. TDRI Q. Rev, 5(2), 11-15.
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brick kiln on arable land degradation, environmental pollution and consequences
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Informatics, 6(02), 474-488.
7. Darain, K. M., Rahman, A. B. M. S., Ahsan, A., Islam, A. B. M. S., & Yusuf, B. (2013).
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