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Feasibility Study of A Prefab Plant
Feasibility Study of A Prefab Plant
Feasibility Study of A Prefab Plant
Precast Building
Financial benefit of Precast Building
Precast Building
{1}
Contents
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Precast Building
1. Executive Summary.............................................................................................................................3
2. Company Description..........................................................................................................................5
3. Industrial Analysis................................................................................................................................5
4. Target Market......................................................................................................................................6
5. Competition.........................................................................................................................................7
6. Marketing Plan and Sales Strategy......................................................................................................7
7. Operation............................................................................................................................................8
8. Management and Organization.........................................................................................................12
9. Long Term Development and Exist Plan............................................................................................13
10. Financials.......................................................................................................................................14
11. Plans Appendix..............................................................................................................................18
12. Reference......................................................................................................................................19
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1. Executive Summary
Prefabrication is no modern task. The idea of prefabrication of concrete has been here for over a
century. Joseph Monier patented the first prefabricated concrete. Joseph Monier (1823 – 1906) was a
gardener and his idea was to develop permanent planters at a low price. In 1867, he patented different
products made of reinforced concrete. After his invention of reinforced concrete, the next logical step
was the invention of precast concrete elements because prefabrication has great advantages compared
with in-situ concrete (quality, speed, health and safety). {2}
The precast concrete is the reason buildings are built faster and time is indeed money. This whole paper
shall have the time value of money as its main argument. Precast members are classified into different
groups. They range from panel based to modular based.
Panel based prefabrication is the first stage, it deals with the construction of each member separately
and assembling them on site. Each column, beam and slab element is constructed in separate
formworks and assembled on site. This method is concerned with the structural element alone in stead
of the finishing element .
Modular precast element is the new stage of prefabrication, it deals with the building of a module
usually fully or partially finished unlike the panel based once. The construction of these members takes
more time and sophistication but once completed they are used to build at an exceedingly fast rate. This
is evident in the example below.
“A Chinese development company builds a 57-storey tower in a record 19 days in Changsha, Hunan
Province in southern China. The construction of the new skyscrapers consists of concrete and glass and
is located in the central part of the country. Company’s Vice President stated that a popular method has
been used to allow the construction of three full levels per day.
“With the traditional method, they have to build a skyscraper brick by brick, but with our method, we
just need to assemble the blocks,” company engineer Chen Xiangqian said.
The company, which looks forward to build (assemble) the world’s tallest skyscraper at 220 floors in only
three months, worked on Mini Sky City in two spurts separated by winter weather. Its time-lapse video
of the rapid assembly has become popular on Chinese video-sharing sites since it was first uploaded on
YouTube.” {3}
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2. Company Description
Goal: Revolutionize Ethiopian construction sector
Mission: The first prefab company that can produce quality and time saving panels for the
construction of most building designs and employers.
Vision: To become the most trusted contractor.
Motto: “Veni, Vidi Vici”
Company Values: Integrity, Punctuality, Health and Safety {5}
3. Industrial Analysis
Ethiopia is an East African nation with a rapidly growing population and economy. Like many African
countries, Ethiopia’s path to growth is preceded by a tumultuous past, both politically and economically.
However, it is emerging as one of the fastest-growing economies in Africa. According to the world bank,
its average GDP grew by 9.4% from 2011 to 2020, while the poverty rate dropped by 6% from 30% to
24% within 5 years{6}. It has a population of over 112 million growing at an annual rate of 2.61%.
Although due to Covid the GDP growth dropped to 6.1%, which is still significantly higher than most
other countries during that time frame. As the table below shows clearly.
Country 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Avg
Ethiopia 11.40 8.70 9.90 10.30 10.40 8.00 10.21 7.70 8.97 6.10 10.19
Nauru 10.78 10.37 30.97 27.23 3.42 3.02 (5.50) 5.70 0.96 1.10 9.78
Guyana 5.44 5.04 5.02 3.90 3.06 3.36 2.13 4.14 4.66 43.50 8.92
Turkmenistan 14.72 11.05 10.16 10.35 6.45 6.20 6.47 6.15 6.35 1.85 8.86
China 9.50 7.90 7.80 7.30 6.90 6.85 6.95 6.75 6.11 2.30 7.60
Tajikistan 7.40 7.50 7.40 6.70 6.00 6.90 7.10 7.30 7.50 4.50 7.59
Bangladesh 6.49 6.26 6.04 6.31 6.84 7.20 7.58 8.01 7.88 3.50 7.35
Mongolia 17.29 12.32 11.65 7.89 2.38 1.17 5.34 7.25 5.10 (4.60) 7.31
Lao P.D.R. 7.99 7.81 8.03 7.62 7.27 7.02 6.83 6.31 4.72 0.50 7.12
Rwanda 7.97 8.64 4.72 6.16 8.87 5.98 6.12 8.61 10.06 (3.40) 7.08
Table 3.1. (GDP growth){7}
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This shows that the Ethiopian Population is not only increasing numerically but also has a higher
spending capacity. The trend is showing that each year the population number increases while the
population is also getting richer. That would imply the spending capacity of the population has increased
and hence we are progressing into a developed nation (consumer based economy).
However before we reach the consumer based economy we have to first reach industry based economy.
Both of this tiers of civilization require massive infrastructure to be constructed. This therefore opens up
the room for the construction sector to thrive in. So far the Addis Ababa housing projects have not been
able to supply the demand as we can evidently see in our lives. Hence, the market is ready for a quality
and time saving building construction technology, and that is where we come in.
4. Target Market
The Ethiopian construction is divided into two major sectors Government and Private. Although aid
organization and foreign governments are involved in construction they are not the major players in the
building construction sector. Therefore our target market will be Government apartment complexes and
private investors with midrise buildings.
However we should remember that this is just the target market and other markets are also
encouraged. The government sector is ideal in a way that it can give a large number of projects. While
the private sector in turn helps us in showing the diverse designs and solutions.
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5. Competition
Our competition are divided into two main groups. First are the other construction methods and the
second is other prefab contractors.
The only other prefab contractor we know of are ECWC, which are not interested in providing diverse
deisgns but rather quick construction of known designs. Therefore they will be of little to no competition
in the modern construction world with all the diverse architectural needs.
The cast insitu contractors are far numerous to count, however their weakness is time. A prefab slab can
be manufactured, cured, transported and assembled in less than 24 hours. This is something
inconceivable even with post tensioning system which drastically reduce construction time in regards to
most other cast insitu methods.
This would ask us to put up an initial investment of 792,500USD, this doesn’t even include building and
manufacturing cost, nor does it include personnel and maintenance cost. After accounting for the
vehicular cost of 40,972,250 Birr, according to the conversion rate on May 9, 2022. {15}
Evidently, that is a significant capital venture. Hence, our aim is to sell our idea to a GC1 firm. We shall
be an extension of their company and will have our own administration section as shown in part 7 and 8
of this paper. Currently we have discussed plans with Ethio Canadian Business Group PLC about our
plans and are negotiating terms with them for a 20 year contract.
a) Introduction
b) Preambles
c) Goals
d) Responsibilities
e) Due Diligence
f) Principal Contacts
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The idea is that we have proposed is to use part of their former aggregate crushing plant area. They will
provide the financing and area to build up the prefab plant, while we shall supply them with the
technical information of the prefab plant and the financial requirements and gains as shown in part 10
of this paper. Although we will have to share our profit with ECBG, our cost and risk are significantly
reduced.
The marketing plan and sales strategy, is in short under ECBG, all we have to do is wrap up our
negotiations with them. ECBG has several sites including under sister companies, therefore can advertise
the system by applying it to their works.
7. Operation
Since ECBG has several trucks, low beds, cranes and other heavy equipment we require, their capacity is
greatly needed as is their financial investment.
Manufacturing:
Manufacturing shall be do in Dukem (ECBG aggregate crushing plant). A warehouse shall be build to
construct both 2 way and 1 way slabs. Although, 1 way slabs are encouraged more since they are easier
to modify.
Two way slabs can be made into restricted sizes, however one way slabs can be manufactured to carry
any length required, the optimum shapes are (T or hollow core). The benefit of such systems is that it
can be cast across a large span with dividers in place. Therefore there is no limit to the length
theoretically and the width can be adjusted by adding a sequence of slabs. This is the same idea used by
ECWC in construction of their columns.
The entire factory will require 10,000m2 to starts with and will have to be increased to 50,000m2, as the
different stages will be reached.
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Transportation:
Transportation is dependent on the site hence a 12m span max is the most likely option,
consider trailer length. This is actually sufficient since most buildings column span less than
12m. The panels constructed shall be lifted by a crane and laid upon the truck. The truck shall
then proceed to take the material to the site. Since the manufacturing base is at Dukem, its
close enough to Addis to supply Addis as well as the rest of Ethiopia since we don’t have to deal
with the traffic jams in Addis nor do we deal with the time curfews.
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Assembly:
Once on site another crane probably a mobile crane will lift the load on to the predetermined
location. This is guided by the project manager and his/ her crew on site.
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a) First 5 year plan: Opening prefab factory at Dukem with capacity to construct limited number
and type of members
b) Second 5 year plan: Expanding factory to accommodate for several connection methodologies
and spans
c) Third 5 year plan: Ability to construct semi modular blocks
d) Fourth 5 year plan: Modular blocks that allow similar speeds as the Chinese constructions
mentioned above.
By default since our contract time is 20 years after the fourth stage we have to resign a contract to
continue with them if both parties wish to do so. However if that is not the case then the exit plan will
be the end of the contract.
Nevertheless to continue on forward by the end of the 20 th year if we sign a contract the contract will be
for 10 years. The reason for ten years plan is because in the first five year will be introducing 3d concrete
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printing. This is currently a new technology that allows for concrete to be constructed with fibers
without the usage of reinforcements. “Three-dimensional printing of concrete (3DPC) has a potential for
the rapid industrialization of the housing sector, with benefits of reduced construction time due to no
formwork requirement, ease of construction of complex geometries, potential high construction quality
and reduced waste. Required materials adaption for 3DPC is within reach, as concrete materials
technology has reached the point where performance-based specification is possible by specialists.” {17}
Considering the strong case made by Paul et al in 2018, we can all agree that in 2042-2052 3d printing
would be a lot more viable. Since 3d printing takes less time and cost in some conditions currently and
when technology advances in more occasions the feasibility will undoubtedly increase. Therefore, it will
make sense for us to move towards that goal.
The exit plan might seem crystal clear yet, but that is because once the contract is over the exit plan will
depend on how we want to move on after that point. Since, we don’t have any financial investments
into the project we are free to exist without worrying for what to do with owned material or property.
10. Financials
Cost of prefab Buildings NPV
year Income Expense Profit/year Our cut (5%)
factory constructed Rate
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Buildings NP
Cost of prefab
year constructe Income Expense V Profit/year Our cut (5%)
factory
d rate
Optimistic calculation with 0% inflation (i.e devaluation of currency and rate and price escalation will
be equal). Based on such assumption the tables below have been calculated. The only difference
with the above calculation being the NPV value of 0. The one thing that was neglected in this
calculation is that fact as the mode of prefab develops the income increases as it will involved in a
higher scale. However to have a safety margin that part of the calculation has not be considered.
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If the optimistic form of calculation holds then we can expect to make 1,369,000,000.00ETB during the
20 years. Averaging the income out over the 20 years and considering dividing by 4 for all four us to gain
equal share we shall reach an average monthly salary of 1,426,041.67ETB and 344,333.03ETB in the
optimistic and conservative cases respectively.
As our exist strategy there is a possibility to start 3d printing machines and continue our business
endeavor with them. However, the financial output of such a system can not be calculated due to the
fact that in 20 years 3d concrete printing machine cost could rise or fall. Although all feasibilities studies
have assumption the assumptions required to dictate such terms will guesses rather than engineering
estimates. Furthermore the fact that after the 20 years are up we have the option to move to other
business sectors or retire inhibits us from making the assumption.
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Images
Graphs
Tables
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12. Reference
Michler, A. and Michler, A., 2022. 1000 Recycled Doors Transform the Facade of a 10-Story Building in
Seoul. [online] Inhabitat - Green Design, Innovation, Architecture, Green Building | Green design &
innovation for a better world. Available at: <https://inhabitat.com/1000-recycled-doors-adorn-the-facade-
of-a-10-story-building-in-seoul/> [Accessed 26 April 2022].{1}
page, S. and construction, I., 2022. The history of precast concrete elements. [online] Prilhofer Consulting
GmbH & Co. KG. Available at: <https://www.prilhofer.com/precast-history> [Accessed 2 May 2022]. {2}
Arch2O.com. 2022. Chinese company erects 57-storey skyscraper in 19 days - Arch2O.com. [online]
Available at: <https://www.arch2o.com/chinese-company-erects-57-storey-skyscraper-in-19-days/>
[Accessed 2 May 2022]. {3}
the Guardian. 2022. Chinese construction firm erects 57-storey skyscraper in 19 days. [online] Available
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skyscraper-in-19-days> [Accessed 2 May 2022]. {4}
Atlassian. 2022. Mission vs Vision Statements | The Workstream. [online] Available at:
<https://www.atlassian.com/work-management/strategic-planning/mission-and-vision> [Accessed 4 May
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Teka, M., 2021. With high prevalence of lived poverty, Ethiopians rate government’s economic
performance as poor. [online] Media.africaportal.org. Available at:
<https://media.africaportal.org/documents/ad426-
ethiopians_rate_governments_economic_management_as_poor-afrobarometer_di_eitInDy.pdf>
[Accessed 9 May 2022]. {6}
Tradingeconomics.com. 2022. Ethiopia GDP per capita - 2021 Data - 2022 Forecast - 1981-2020
Historical - Chart. [online] Available at: <https://tradingeconomics.com/ethiopia/gdp-per-capita> [Accessed
9 May 2022]. {8}
Globalsources.com. 2022. 2.5-1.5m3 Bucket 5ton Load Cpacity Chian Wheel Loader Best Price Hot Sale
with Factory Price, 5ton 3t wheel loader 5000kg payloader 3t front end loader - Buy China wheel loader;
on Globalsources.com. [online] Available at: <https://www.globalsources.com/Wheel-loader/wheel-
loader--1181254066p.htm> [Accessed 9 May 2022]. {10}
Alibaba.com. 2022. Find 20 ton excavator price At Wholesale Prices - Alibaba.com. [online] Available at:
<https://www.alibaba.com/showroom/20-ton-excavator-price.html> [Accessed 9 May 2022]. {11}
Alibaba.com. 2022. Get A Wholesale mobile crane 5t For Lifting Loads - Alibaba.com. [online] Available
at: <https://www.alibaba.com/showroom/mobile-crane-5t.html> [Accessed 9 May 2022]. {12}
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2022. How much does a dump truck cost?. [online] Available at: <https://www.badgertruck.com/heavy-
truck-information/how-much-does-a-dump-truck-cost/#:~:text=New%20dump%20trucks%20start
%20at,cost%20between%20%2430%2C000%20and%20%2440%2C000.> [Accessed 9 May 2022]. {13}
2022. Isuzu NPR Specifications and Pricing Information. [online] Available at:
<https://www.machinio.com/models/isuzu/npr#results> [Accessed 9 May 2022]. {14}
Xe.com. 2022. 1 USD to ETB - US Dollars to Ethiopian Birrs Exchange Rate. [online] Available at:
<https://www.xe.com/currencyconverter/convert/?Amount=1&From=USD&To=ETB> [Accessed 9 May
2022]. {15}
Chittiprolu, Ravikanth & Ramancharla, & Ramancharla, Pradeep. (2014). Seismic Safety of Joints in
Precast Buildings A State-of-the–art Literature Review. 10.13140/2.1.4311.7128. {16}
Paul, S.C., van Zijl, G.P.A.G., Tan, M.J. and Gibson, I. (2018), "A review of 3D concrete printing systems
and materials properties: current status and future research prospects", Rapid Prototyping Journal, Vol.
24 No. 4, pp. 784-798. https://doi.org/10.1108/RPJ-09-2016-0154 {17}
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