Natural Marble Making - Minya

The General Authority for Investment
GAFI Translation Department

and Free Zones
General Authority for Investments and Free Zones

Economic Performance Sector
A Preliminary Feasibility Study

on Natural Marble Making
Prepared by
Economic Performance Sector
Central Department of Feasibility Study
General Department of Economic Feasibility Studies
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GAFI Translation Department–Tel. + 2026736900-5. Ext: 2745 – 2748, Fax: 2745. -Mob. 201114650550 Email: m.fayez@gafinet.org.eg
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Contents
I. General Introduction to the Activity under Study.............................................................. 3
II. Basic Information ............................................................................................................. 4
III. The Preliminary Feasibility Study and the Reason Behind Selecting the Project Idea .. 5
IV. Marketing Study .............................................................................................................. 6
V. Project Legal Feasibility Study ...................................................................................... 11
VI. Project Environmental Feasibility Study: ..................................................................... 12
VII. Project Technical and Engineering Feasibility Study.................................................. 13

VIII. Financial Study ........................................................................................................... 26
IX. Project Social Feasibility Study: ................................................................................... 44
X. Results and Recommendations ....................................................................................... 45
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I. General Introduction to the Activity under Study

Marble is one of the types of limestone rocks that are extracted from earth, and it is one of
the metamorphic rocks that are formed by weather factors such as the effect of pressure and
heat together, and marble is extracted from specialized quarries using special equipment and
mechanisms.
Marble is one of the most used stones in our daily lives and is used for construction and final
finishes. The most common uses of marble are in the floors of homes, walls, exteriors of
buildings, the bottom of walls, stairs, bathrooms, washbasins, columns, kitchens and
shelves. However, it is known for its high price (compared to alternative products), which
is not allowed to be available to everyone, Extracting it requires effort, equipment and high
labor wages.
The technological development in the equipment used to manufacture and form natural
marble has contributed to the multiplicity of its own products, which increased the
importance of this activity, as its use is not limited to processed marble slabs, but the
products have varied from balusters, decorative forms, columns, stairs, basins, vases,
holders, and stones for binding and decorations, internal or external, that all of them are
characterized by originality and sophistication, which everyone seeks to acquire
The climate in Egypt is good for practicing the activity of manufacturing natural marble,
with the presence of quarries and natural mountains, and what Egypt abounds in have
enabled multiple sources of limestone that produce marble, in addition to the availability of
all the physical and environmental resistances necessary for this activity. The volume of
Egypt’s exports of marble according to the latest statement issued by the Export Council for
Building Materials, Refractory & Metallurgy Industries – ECBM (end of 2018) is about 2
million tonnes, at a value of EGP 4 billion, while imports amounted to nearly 700 thousand
tonnes, at a value of EGP 2.5 billion.
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II. Basic Information
Project Natural marble manufacturing complex

40,000 m2 in Minya Governorate adjacent to
Land Area
marble quarries
Project Economic Life
5 years
Expectancy
Fully polished natural marble slabs and
Targeted Products countertops, and decorative works from
natural marble
Expected Labour 150 (workers and administrative officers)
Expected Investment EGP 132 million (about $8 million, at an
Costs exchange rate of EGP16.5/dollar)
About EGP32,500,000, with 10% annual
Expected Annual Costs
growth rate.
Break-even Sales
About 100,000 m2
Volume
The Margin of Safety 74%
Expected Annual About EGP74,000,000, with 10% annual
Revenue growth rate.
Average Annual Profit About EGP40,500,000
Expected Internal Rate
About 30.88%
of Return (IRR)
Payback Period (PBP) Two years and 11 months
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III. The Preliminary Feasibility Study and the Reason Behind Selecting
the Project Idea
The activity of marble manufacturing is one of the important activities, which the State has
increased its interest in recently, and it has provided it with all means of support to develop
and maximize its return. The idea of the project comes due to the continuous increase in
demand in the construction sector and the huge boom in various industrial and housing fields
due to the development and urbaniazation in the country, in which the construction field
needs marble products that leads to an increase in demand for marble products
In light of the great boom and progress that this industry has witnessed in scientific and
technical research related to production, as well as the development of its means of
transportation and logistics, which helped to penetrate the global markets as well as the local
markets leading to the spread of this type of projects that have economic feasibility.
Factors enhance the trend of marble manufacturing activity in Egypt
 The availability of natural quarries that provide limestone in high-quality quantities

and qualities that help in the production of marble in the appropriate shape and
quality.
 Availability of the necessary industrial land areas and the state's interest in providing
the necessary facilities for the development of this industry.
 Availability of export ports, transportation and logistics for that industry.
 The State's interest in accessing foreign markets for this activity and granting
facilitiations and support for export in order to save hard currency.
The initial justification for the economic feasibility of the project

 The increasing demand for natural marble products.
 The success of similar projects invested in this field.
 There is a demand for marble to meet the needs of the local market, as well as the
broad needs of the global market.
 Ease of obtaining the necessary land for this activity.
 Availability of skilled labor at reasonable prices.
 The possibility of recycling and operating the water used in production, which
reduces costs.
 High rates of return on the project, which may exceed 40% in some projects
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IV. Marketing Study

General Market Indicators (SWOT Analysis):
1. Opportunities
 Manufacturing natural marble is one of the most important mining projects due to its
many advantages as it can benefit from the abundant limestone that is formed by
natural factors in the Egyptian lands, where there are various marble quarries that
provide various types of natural marble with specifications and quality that help in
producing high quality natural marble products with less waste.
 Suitable prices for marble blocks extracted from different quarries help reduce
production costs and achieve competitive advantages for the Egyptian marble
product.
 Availability of suitable lands for this activity, in appropriate surface areas, and at
preferential prices, in light of the State’s encouragement for this activity, as well as
the provision of the necessary facilities for those lands.
 The existence of a marketing gap in the local market in light of the continuous
development and the comprehensive urbanization it is witnessing, whether for
industrial or residential projects and the expansion of new cities, which indicates
expectations of increased demand.
 Having an appropriate market share in the global market, where Egypt exports to
more than 100 countries around the world, and it is expected to increase in light of
the country’s international agreements to facilitate international trade and access to
global markets, and this helps by owning the appropriate technology to produce high
quality products that compete in the international market with reasonable prices
 The State provides the necessary financing for these projects through the initiatives
of the Central Bank of Egypt.
 The State's imposition of duties on the export of raw marble blocks, which helped in
its availability for local manufacturing.
 The State provides packages of government support programs, customs exemptions
(for new imported machines), tax exemptions (according to the investment cost), and
export support programs in case of production for export, in a way that encourages
investment in that field.
 Egypt's favorable geographical location, which helps it access all world markets at
low costs through ports spread throughout the State.
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2. Threats
 Some technical defects that may be in blocks of marble extracted from quarries
because quarries lack of modern technology for extraction, however this can be
overcome by performing some preliminary treatments on raw marble blocks before
using them in production as well as screening and selection processes for suppliers.
 There is a strong local competition, especially with the presence of a large number of
trained Chinese workers, possessing the latest technology, and working locally for
the purpose of exporting abroad.
 There is a strong international competition from a number of marble exporting
countries such as India, China and Turkey, which are trying to increase their shares
in the global market, however the Egyptian product is characterized by its low price
compared to the competitors to achieve a competitive advantage to enable the product
to compete in the global market, provided it is presented with the appropriate quality,
as well as easy access to international markets due to Egypt's geographical location.
 There is a competition from alternative products to marble (such as artificial marble,
ceramics, stones … etc.).
 High energy costs and the lack of hard currency used to import the latest required
technologies.
 The absence of international exhibitions held in Egypt, similar to international
exhibitions that help in marketing and accession to global markets.
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3. Strengths
 The project is adjacent to the quarries for easy access to the raw material.
 Availability of trained technical workers at proper wages.
 The project owns the latest technology available in the field of marble manufacturing,
which helps in the production of natural marble in accordance with international
standards that help it to penetrate global markets and achieve a competitive advantage
in light of its competitive price.
 The reliable good reputation of Egyptian marble, gaining advantage of the low
exchange rate to present the product in the global markets.
 Relying on a closed cycle to supply the project with water, which helps to reuse it and
save costs.
 Have the appropriate financing to meet operating costs.
 The possibility of utilizing solid manufacturing waste in the production of marble
crafts and decorative works in light of owning the appropriate technology, as well as
the possibility of owning a production line to recycle smaller solid waste and the
marble abrasor in the manufacture of artificial marble.
 Proximity to the Upper Egypt region to export the product.
4. Weaknesses
 Operational risks and work accidents and injuries in the absence of technical know-
how, however they can be tackled by following security and safety instructions and
using appropriate protection means.
 The difficulty of obtaining the necessary water in some areas, and this can be
overcome by owning the appropriate tanks to own a closed toilet that helps recycling
and achieve the project's sufficiency from it.
 High transportation costs to distant markets, especially with the size and weight of
marble.
 Increased prices for energy, oils and fuels used in machinery and equipment.
 Pollution problems caused by the project, and this can be overcome by using air
purification filters and silos to collect the shanties for reuse and recycling.
 The problem of the availability of large quantities of solid manufacturing waste, and
this can be overcome by owning a production line for recycling solid waste.
SWOT Analysis Outcomes

It is clear from the previous analysis the possibility of using strengths to address the external
threats with the presence of great opportunities in the market as well as the possibility of
overcoming weaknesses by following modern scientific methods.
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Marketing Study Conclusion
1. Demand Volume:
The demand for Egyptian marble in the local market has increased, especially after the rise
in the prices of imported marble as a result of the liberalization of the exchange rate.
Moreover, research predicts a rise in demand for marble in light of the boom that the country
is witnessing from a comprehensive social and urban development including residential and
industrial constructions, all of which lead to an increase in demand for marble products.
In addition to the increase in external demand and the existence of opportunities for export
in the event that the project focuses on production in accordance with international
specifications appropriate to foreign markets and maintaining the competitive price of the
Egyptian product, with the state’s intervention in organizing international exhibitions and
forums that help producers reach the largest segment of consumers in the world.
2. Supply Volume:
The market still has a gap, especially with the increase in the population and the lack of
supply having high quality specifications. In addition to the potential for exporting around
the world to many countries lacking the natural quarries Egypt has.
3. Potential Competition
Competition in this field is characterized by two types, and it is possible to undertake the
appropriate strategies according to the marketing direction, which is either price competition
with large-scale production or competition in quality and production with high
specifications that fit a segment needs such specifications.
4. Distribution Outlets
Marketing marble products may require a marketing effort by making pamphlets and
brochures that explain to the consumer the nature of the product, the difference between it
and other products, and its advantages, which the project may target to achieve a competitive
advantage in the local and international markets. Advantages could be the product quality
including finishing, color homogeneity, and durability; as well price, innovation in designs
and colors to satisfy the consumers.
Marketing is carried out by targeting a number of entities and following the below
procedures:
 Construction companies
 Real-estate investment companies
 Contractors
 Construction and building sectors
 Wholesalers in decoration for the end consumer
 Distributing samples of the product to furniture sales' halls and decoration business
centers
 Participation in specialized internal and external exhibitions
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 Participation in government departments tenders (for public uses, new cities and
urban development)
 Sales representatives for direct sales in conjunction with the finishing and contracting
engineers
 Direct selling by setting up several distribution centers in different governorates
locally
 Providing a network of international agents to access global markets
 Organizing various exhibitions and forums through the Marble Manufacturers
Association and the Egyptian Export Council for Building Materials, Refractories and
Metal Industries.
5. Products, expected sales volume and prices during the fiscal year
According to the prevailing in this type of industry, the attached prices are indicative and
in light of the normal rates, and may be subject to modification according to the date of the
study.
It can be summarized during the annual production cycle according to the following table
Expected
Unit of Expected Total
Product Expected Sales Volume Average Selling
Measure Annual Sales
Price per Unit
Premium quality,
fully polished marble
slabs and M2 400,000 EGP180 72,000,000
countertops
Decorative crafts
made of natural Quantity 20,000 EGP 100 2,000,000
marble
Natural marble, It is suggested to add it as a production line as a second stage in

dyed and chemically case of owning the appropriate technology for those chemical
M2
treated treatments that give added value to products and form them with
other colors and dyes.
It is suggested to add it as a production line as a second stage to
Artificial marble M2 expand to benefit from the previous products and perform
appropriate chemical treatments.
6. Expected Costs of Marketing Campaigns

- In order to achieve the spread, especially at the beginning of the project, the
annual costs of the marketing campaign are estimated at EGP1 million (only
EGP one million).
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V. Project Legal Feasibility Study

Natural marble manufacturign activity is one of the mining activities subjected to the
Investment Law provisions where the State encourages and provide incentives to it.
Companies established for such purpose may be incorporated in accordance to the
provisions of the Investment Law, Companies Law, and Commerce Law as per the
desire of the owners.
There are some legal determinants that should be considered in respect of obtaining
the license-to-operate from certain entities, namely:
 The Governorate having the jurisdiction over the land, and the local units affiliated
thereto or the Government Office.
 Egyptian Mineral Resources Authority (EMRA).
 Ministry of Antiquities
 National Security Agency and the Military Operations Authority
 Egyptian Environmental Affairs Agency (EEAA)
 The requirements of Civil Defense Authority
 Industrial Development Authority
 Validity certificate from the Housing and Building Materials Research Center in Cairo
(HBRC)
In the event of exportation, the project shall obtain the Import and Export Card from
Export Development Authority (EDA), specifying the nature and specification of the
products dealt with. Such Import and Export Card can be modified by adding different
items the project produces, provided that the project capital is not less than EGP two
million, or it is exported through an intermediary company that will undertake on behalf
of the project the procedures for export and customs release.
Incorporation costs and obtainment of the required licenses can be estimated as:
The costs of pre-activity, incorporation and licensing are estimated at EGP 500
thousand.
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VI. Project Environmental Feasibility Study:
The project is classified within the list of projects of Gray Area (B), and the environmental
impact assessment of the project is required according to the environmental classification
model (B) and the requirements of the Environmental Law. The project must take into
account the environmental requirements for this activity, which stipulate many points due
to the special nature of the activity:
 Consider the quality of the water used and carry out the necessary treatments for any
plankton or impurities by adding filters and primary treatment plants for water used
in production.
 Consider the requirements of the environment in providing a ventilation and
automatic intake system to reduce concentrations of suspended particles (inhaled) by
preventing the spread of dust and waste polluting the environment, which needs to
install special filters to purify the air to preserve the environment.
 Ascertain the presence of a waste disposal system that conforms to the requirements
of the environment, taking into account the appropriate disposal of solid and filings
waste resulting from marble cutting and manufacturing operations, and it is
recommended to own complementary production lines that can exploit these wastes
in the manufacture of other products as well as the manufacture of industrial marble.
 Consider the requirements of the environment in the installation of exhaust filters on
used irrigation equipment and machinery in a way that does not harm the
environment.
 Provide a public sewage/industrial network.
 Provide the necessary sources of natural ventilation.
 Consider the disposal of used chemicals in accordance with the appropriate methods
in a manner that does not harm the environment, with the possibility of contracting
with contractors who may be able to supply those materials to factories that may need
them in recycling.
 Continuous evaluation and permanent review of the means used to reduce the
environmental impact, along with an appropriate training to labor to reduce waste
and the rate of solid waste in a way that works to preserve the environment as well
as maximizing the benefit of Egypt's natural resources.
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VII. Project Technical and Engineering Feasibility Study

Project Setting up and Operating Stages
1. Choose the appropriate location to set up the project.

2. Obtain the licenses and permits required to practice the activity.
3. Setting up the external land fences, security rooms, electricity and transformers.
4. Building gallons for production and storage sheds for raw materials and finished
products.
5. Construction and installation of machine bases
6. Construction and installation of closed-cycle water tanks
7. Building and installing silos needed to collect filings and impurities.
8. Establishing the administrative and social building for employees
9. Determining the required devices and equipment, determining the specifications of each
equipment, where to get them and the required number for each equipment
10.Supply and installation of machinery, equipment and means of civil defense
11.Building an industrial sewage treatment unit and supplying its pumps and equipment,
as well as supplying and installing filters for impurities.
12.Supply of tools, equipment and means of occupational safety and health.
13.Supplying the necessary spare parts for each equipment according to the standard
consumption rates.
14.Labor recruitment and training.
15.Identify the sources of supply of natural marble raw blocks in accordance with the
necessary standards, along with contracting to purchase in batches to prevent storage in
large quantities that may affect the flow of work.
16.Identify distribution sources and the required production rates to ensure the highest
optimum utilization of the factory’s production capacity without the accumulation of
the final product stock.
17.Periodic follow-up with the production team to ensure compliance with the required
production rates.
18.Follow up on distributions according to delivery schedules
19.Periodic follow-up with contractors for the continuous disposal of unusable solid waste
and other waste in order to ensure the smooth flow of production processes, until the
expansion of the project and the preparation of the production lines necessary to take
advantage of these wastes in the production of industrial marble
20.The departments of research, development and standardization submit periodic reports
on the quality of production and submit proposals for continuous development to reach
the best international specifications that achieve the project a competitive advantage
21.Occupational safety and health departments ensure the commitment of workers to use
the means of occupational safety and protection, plan work courses within the factory
and confirm the extent of commitment to them, while identifying any deviations and
taking the necessary measures to overcome them.
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Production Process
1. The limestone is supplied from the mountain and is called a block
2. Then it is spread on the sawing machine (CNC - Water jet) to 2 cm, 3 cm or 4 cm

and divided into tables/ plates
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3. Then the sides are cut to make the appropriate alignment for the edges, whether
small or longitudinal in size.
4. After that, the tables are polished on a polishing machine, single or multi-headed,
according to the required technical specifications, and this is done by using some
chemical components that give a superior luster, or the natural gloss of marble is
satisfied on demand.
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5. After that, using cutting saws and the machines, the sizes of the panels are cut
according to the request and the quality of the products (slabs – tiles – marble for
floors – marble for walls – marble for stairs – marble for facades – column cladding
– circular shapes ... etc.).
6. The percentage of solid waste resulting from shredding (wasting percentage) is

about 20%, and part of the solid waste is recycled and used in the production of
natural marble stones for interior and exterior decoration.
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7. There are some decorative artifacts such as small-sized balusters, vases, stands and
beams, which can be produced through solid waste parts resulting from the production
of marble slabs, but large-sized crafts may require suitable marble blocks for their
manufacture.
8. Packaging is done inside shipping containers or cars ready for transportation through
wooden stands and tables used as dividers between products to prevent friction or
breakage during transportation processes.
9. Handling and loading work is carried out through cranes designated for heavy loads.
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In light of the clarified stages of project establishment and production process steps,
the required investment costs can be determined as follows:
1. Location
The project is being implemented in Minya governorate, Arab Republic of Egypt, near the
marble quarries. The reason for choosing Minya governorate to implement the project is due
to the following reasons:
 There are many types and quality of quarry materials in Minya governorate, and these
materials are available in large quantities to ensure the continuity of the projects for
many years, and they have a great economic value guaranteeing a profitable market
and therefore a large profit, and can be clarified according to the data published on
the official website of Minya governorate as follows:
Total Reserve in Cubic

# Item Most Important Areas
Meters
1. 4430000000 Jabal Al-Tair Monastery, Sheikh Hassan
Limestone
Tahna and most areas of eastern Minya.
2. Hard limestone 8142935 Al-Samah (Al-Wahat Road) Al-Dahsa – Village 7,
(marble) 8.
3. 21874600 West Bani Mazar (Al-Bahansa), Delga – East
Basalt
Minya.
4. Sands Varying quantities to be
Most areas of western Minya.
5. Gravel discovered successively.
6. White sand 50413733 Wadi Qena from Sheikh Fadl Road – Ras Ghareb
7. 21140298 Ras Al-Sheikh Fadl Road – Ras Ghareb – Wadi Al-
Clay
Muhashem – East Mallawi – West Minya.
 Availability of skilled labor and their wages in the field of quarrying, which reduces
cost.
 About 95% of the quarries of Minya governorate are located on paved paths and are
close to paved roads, which reduces transportation expenses.
 Minya governorate is located in a privileged location between the governorates of
Egypt and links it with the rest of the governorates, the Eastern Desert Road, the
Western Desert Road and the Agricultural Road.
 Minya Governorate is located on both sides of the Nile, which helps to transport
quarry materials by means of river transport, which reduces transportation costs
 The governorate’s proximity to the export ports, as well as meeting the needs of
southern Egypt, which suffers from a marketing gap for its needs of local
consumption, in order to save transportation expenses.
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Locate the appropriate locations on the county map

http://www.minia.gov.eg/New_Investment/Minia_requirements.aspx
According to the map, the locations of the marble quarries are shown in purple
The project requires a plot of land with an area of 40,000 M2
The construction is taking place on an area of 10% of the total land, equivalent to (4000
m2). Due to the nature of the industry that needs large open areas to store raw materials
and finished products, the land is divided into the administrative building area, the social
building area and the restaurant for workers, the storage area for raw materials and spare
parts and production requirements warehouses, production wards (marble slabs and
countertops production wards/ wards for the production of decorative marble works), the
area of water tanks, impurities collection silos, and the final product storage area, with
part planning to expand to benefit from solid waste.
Based on this type of industrial business, land price per square meter is estimated to be
EGP 500/m2 in Minya Governorate. Therefore, the total price of the plot of land required
for the project would be as per the following formula = 40,000 m2 x EGP 500 / m2 = EGP
20,000,000. (Only twenty million Egyptian pounds).
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2. Buildings:
Building footprint is 10% of the whole land. In calculating the square-meter price of
buildings, fences; security and electricity rooms; tanks; silos, trusses with a helicopter
floor are included. A percentage of 25% of the building footprint constitute personnel
building, food court, finished restrooms and residence hall built from bricks and
reinforced concrete. Presuming that the average footprint building price per square meter
is EGP3000/m2, therefore, the estimated cost of the total buildings and constructions
would be = 4000 m2 x EGP 3000/m2= EGP 12,000,000 (only twelve million Egyptian
pounds).
Based on the previous point, the total expected cost of the building footprint is EGP 12
million, with an annual depreciation value of EGP 1,200,000 (EGP 900,000 depreciation
of production facilities and EGP 300,000 as depreciation of administrative and personnel
buildings) and an estimated economic life of 10 years. Accordingly, building footprint
net book value is expected to be EGP 6,000,000 at the end of the project’s estimated
lifetime (5 years).
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3. Required Machinery and Equipment:
Asset ‫األصل‬
Productive Life ‫العمر اإلنتاجي‬
Number of units required ‫عدد الوحدات المطلوبة‬
unit cost ‫تكلفة الوحدة‬
Total Cost of Asset Units ‫إجمالي تكلفة وحدات األصل‬
Annual Depreciation ‫االهالك السنوي‬
Net Book Value at the End of ‫صافي القيمة الدفترية في نهاية المدة‬
Productive Life
stone slab sawing machine ‫ماكينة نشر ألواح الحجر‬
Large edge and side cutting machine ‫ماكينة تقطيع الحواف والجوانب الكبيرة‬
Small edge and side cutting machine ‫ماكينة تقطيع الحواف والجوانب الصغيرة‬
Polishing machine – 16 heads ‫ رأس‬16 – ‫ماكينة الجالية‬
Cutting saw machine ‫ الفريزة‬/‫ماكينة منشار التقطيع‬
Cranes ‫اوناش‬
Forklifts ‫كالركات‬
Sweeper cars and transport ‫سيارات كساحة ونقل‬
Equipment and workshop tools and ‫معدات وأدوات الورشة والديكور‬
decoration
Purification filters – water treatment ‫فالتر تنقية – ووحدات معالجة مياه‬
units
Firefighting and civil defense ‫وسائل اإلطفاء والدفاع المدني‬
equipment
Total ‫االجمالي‬
According to the previous table, it is clear that the total expected cost of machinery,
equipment and tools amounts to EGP 88 billion, and that their annual depreciation
value is EGP 8,800,000 million, with an estimated economic life of 10 years. Thus, the
net book value at the end of the estimated 10-year project period amounts to EGP
44,000,000.
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4. Required Annual Operating Cost:
A. Production Required Raw Materials to Achieve Expected Sales Target:

In order to be able to produce and achieve expected sales volume of 400,000m2 of
marble slabs and produce 20000 unit of decoration artefacts, it needs to use about
1,700 blocks of raw marble stones from the quarries available in Minya, at an
estimated cost of the block is about 5 m3 of EGP 5300.
The expected average cost of raw materials of natural marble blocks per annum =
1700 blocks with an area of 5 m3 x EGP5300 = 9,000,000 (nine million Egyptian
pounds).
B. Electricity, water and production requirements required to reach the expected sales
volume:
It consists of (electrical energy – consumed water – oils and greases – Italian
aluminium cutting discs, saw and diamond weapons – polish liquid – polyester –
cobalt – soap polish – all types of sandpaper, adhesive, iron and ordinary – welding
knives – staplers – 6 and 9-inch Slab Lifters – cloth)
According to industrial averages, the raw materials quantity required for the
production of 1700 blocks amounts to EGP 1,500,000.
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C. Labour:
Administrative Labor ‫العمالة اإلدارية‬

Employment ‫العمالة‬
The number ‫العدد‬
Monthly Salary ‫الراتب الشهري‬
Total ‫اإلجمالي‬
Total Annually ‫إجمالي سنوي‬
General Manager ‫المدير العام‬
Production and Marketing Manager ‫مدير اإلنتاج والتسويق‬
Financial Manager ‫مدير مالي‬
Human Resource Manager ‫مدير موارد بشرية‬
Accountant ‫محاسب‬
Security Guard ‫موظف أمن‬
Drivers ‫سائقين‬
Storekeeper ‫أمين مخزن‬
Janitors ‫عمال نظافة‬
Total Cost of Administrative Labor ‫إجمالي تكلفة العمالة اإلدارية‬
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Production and operational labor ‫العمالة اإلنتاجية والتشغيلية‬

Industrial safety officer ‫مسئول امن صناعي‬
Production quality officer ‫مسئول جودة انتاج‬
Production workers (trainer) 5 ‫ خطوات انتاج‬5 )‫عمال انتاج (مدرب‬
production steps
Handling workers, etc. ‫عمال مناولة وخالفه‬
Incentives and emergency labor ‫حوافز وعمالة طوارئ حسب حجم اإلنتاج‬
according to the volume of production
The total cost of production and ‫اجمالي تكلفة العمالة اإلنتاجية والتشغيلية‬
operational labor
Total ‫اإلجمالي‬
Lump sum ‫مقطوع‬
According to the previous table, the estimated annual cost of labour is EGP 6,500,000,
and it can be segmented into (administrative labour at a cost of EGP 1,824,000 annually,
productive labour at a cost of EGP 4676,000 annually).
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D. Campaign costs (solar, oils and used car spare parts)

The average annual car consumption of fuel and spare parts is estimated at around
EGP100,000, and accordingly, the total estimated cost for 10 cars annually is
EGP1,000,000.
E. Packaging materials costs
The project needs packing materials according to the expected sales volume,
estimated at about 250 m3 of wood annually, with an estimated value per meter of
EGP 8000, with an average annual total cost = 250 m3 x EGP 8000 = EGP 2,000,000.
F. Other general and administrative expenses

Expected annual
Item
cost
Electricity and lighting expenses 150,000
Transportation allowances and transfers 100,000
Lawyer fees for reviewing various 50,000
contracts
Food and drinks for employees 1,000,000
Safety and security supplies 50,000
Hospitality and reception expenses 25,000
Chartered accountant 50,000
Invoices, publications and stationery 50,000
Miscellaneous expenses 25,000
Total 1,500,000
According to the previous table, the estimated annual cost of general and administrative
expenses is estimated at about EGP 1,500,000.
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VIII. Financial Study

1. Fundamentals and Hypotheses of the Financial Study
 The data used in the study and the expected revenue estimates of the volume and value
of sales have been estimated according to results of the market study.
 Investment spending values and other elements of costs and expenses have been
estimated according to results of the technical study.
 The annual depreciation installment for buildings and machinery is estimated
according to results of the technical study, assuming that the sales value at the end of
the period is according to its book value.
 It is assumed that first operating cycle requirements with EGP 10 million facilitations
will be obtained from suppliers.
 The estimated value of the fixed assets mentioned in this study is related to a specific
period according to the prevailing circumstances at the time of preparing this study;
and that this value may change with the change of circumstances by the limitation
period of the report or by the change of the economic climate in general.
 Incorporation and pre-commencement expenditure have been assumed that they are
fully depreciated with the first year of revenue as per the Egyptian Accounting
Standards.
 The economic life of the project is estimated at five years.
 The estimated income statements have been prepared on the assumption that there is
no fundamental change in the revenue values and expected annual costs during the
study period, other than the estimated growth rate in sales, which corresponds to a
similar growth rate in costs by 10% annually.
 Pursuant to the Egyptian legislation prevailing at the time of preparing the present
study, a tax rate (TR) of 22.5% on companies' annual profits and a TR of 20% on
companies' returns on treasury bonds issued by the Egyptian Ministry of Finance are
applicable.
 Annual cash flows are estimated using the indirect estimation method; necessary
adjustments have been applied to the results of the estimated income statements of the
years in the current study.
 The criteria of Return on Investment (ROI), Payback Period (PBP), Net Present Value
(NPV), and Internal Rate of Return (IRR) are applied in assessing the economic
feasibility of the project, taking into account the Required Rate of Return (RRR) on
investment.
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 RRR on investment has been determined according to the method of Weighted

Average Cost of Capital (WACC), presuming that the project is fully funded by the
owners.
 Future financial estimates include estimated and unforeseen risks and other factors
that may lead to a difference between the actual performance and results to be achieved
by the project and the project expected performance that was hypothesized relying on
estimated statements reflecting the business climate prevailing at the time of preparing
the current study.
2. RRR on Investment
 RRR is the minimum return sought by the investor in order to invest in Egypt, provided
that such return be assessed in light of the industrial risks encountered in the activity
being subject-matter of the current study.
 It is concluded under the present study that a RRR with a value of 32%, based on
marble industry risks in Egypt is to be used and calculated as follows:
RRR = [RFR + (CRP x β)]
 Based on the official data published by Central Bank of Egypt (CBE) regarding the
Egyptian treasury bonds to be mature at the end of 2023 – a period covering almost
all project valuation period (five years) – the Risk Free Rate (RFR) is calculated using
the Weighted Average Yield of various bond issues during the said period.
https://www.cbe.org.eg/en/Auctions/Pages/AuctionsEGPTBondsCouponHistorical.a
spx
Pre-tax average yield

‫متوسط العائد قبل خصم الضرائب‬
After-tax average yield 20%
%20 ‫متوسط العائد بعد خصم ضريبة‬
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 Country Risk Premium (CRP) of 14.99% is used based on Egypt's global ranking
issued by (Moody's Corporation) and (Standard & Poor's – S&P) as per Egypt's 2018
market data as updated on Damodaran’s website.
http://www.stern.nyu.edu/~adamodar/pc/datasets/ctryprem.xlsx
 In respect of Egyptian market risk for the industry under study, the beta coefficient is
estimated to be 1.11, based on the average risks of the industry.
http://www.stern.nyu.edu/~adamodar/pc/datasets/ betas.xls
Accordingly, RRR on investment is calculated as follows:
RRR = (13.84 + 14.99 x 1.11) = ~ 30.5%
3. Estimation of Project Investment Cost:

 In accordance with Article (11) of the Executive Regulations of Investment Law No.
72 of 2017 enacted by Prime Minister Decree No. 2310 of 2017, Project Investment
Cost has been defined as follows:
"Project investment cost shall mean such costs required to set up an Investment
Project represented in property rights, in addition to long-term liabilities invested in
setting up or establishing fixed corporeal (tangible) assets or incorporeal (intangible)
assets, conditional on payment of value thereof in cash, and working capital."
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The opening budget of the investment project can be prepared in accordance with the
results of the estimated technical feasibility study as follows:
Item Value (EGP)
LONG-TERM ASSETS
Incorporation, licensing and pre-commencement expenditure 500,000
Lands 20,000,000
Buildings 12,000,000
Machinery and equipment 88,000,000
Total long-term assets 120,500,000
CURRENT ASSETS
Stock of marble blocks 9,000,000
Stock of production supplies and machine spare parts 1,500,000
Stock of fuel and auto parts 1,000,000
Stock of wood and packing and packaging materials 2,000,000
Cash and cash equivalents (1) 9,000,000
Total current assets 22,500,000
CURRENT LIABILITIES
Suppliers of marble blocks 4,500,000
Suppliers of production supplies and machine spare parts 500,000
Suppliers of wood and packing and packaging materials 1,000,000
Payable general fees and expenses 4,500,000
Total current liabilities 11,000,000
Working capital 11,500,000
Total investment 132,000,000
To be financed as below:
Property rights
Capital 132,000,000
Total investment cost 132,000,000
1
The required cash was estimated to meet the expenses of the first operation cycle valued EGP9 million, distributed as follows: (EGP6.5 million
for labour wages, EGP1 million for marketing expenses, about EGP 1.5 million for general and administrative expenses including electricity
consumption, food, allowances, stationery, professional fees … etc.).
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Project Investment Cost Diagram ‫رسم بياني لهيكل االنفاق االستثماري‬

Incorporation, licensing and pre- ‫مصروفات تأسيس وما قبل النشاط‬
commencement expenditure
Lands ‫األراضي‬
Buildings ‫المباني‬
Machinery and equipment ‫اآلالت والمعدات‬
Working capital ‫رأس المال العامل‬
Hence, project total investment costs = .

total long-term assets + working capital = EGP132,000,000 approximately
(Only one hundred and thirty-two million Egyptian pounds)
Equivalent to an estimated average exchange rate of EGP16.5 per one USD
(approximately $8 million)
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4. Expected Income Statements for the Years of Investment Project

Such statements can be prepared according to the results of the technical feasibility
study as follows:
Item Year 1 Year 2 Year 3 Year 4 Year 5
Total Revenue 74,000,000 81,400,000 89,540,000 98,494,000 108,343,400

Subtract:
Cost of Sales (18,400,000) (20,240,000) (22,264,000) (24,490,400) (26,939,440)
Gross Profit 700,000,000 770,000,000 847,000,000 931,700,000 1,024,870,000
Subtract:
Incorporation and
pre-commencement (500,000)
Expenditure
Depreciation of
(10,000,000) (10,000,000) (10,000,000) (10,000,000) (10,000,000)
Fixed Assets
General and
Administrative (4,324,000) (4,756,400) (5,232,040) (5,755,244) (6,330,768)
Expenses
Net Accounting Profit
40,776,000 46,403,600 52,043,960 58,248,356 65,073,192
before Tax
Subtract:
Tax (at a rate of
(9,174,600) (10,440,810) (11,709,891) (13,105,880) (14,641,468)
22.5%)
Net Accounting
31,601,400 35,962,790 40,334,069 45,142,476 50,431,723
Profit after Tax
Return Rate on
23.94% 27.24% 30.56% 34.20% 38.21%
Investment (ROI)
The Annual Profit Development
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5. Estimation of the cash flow stream for the investment project years
According to the foregoing, the cash outflow in year (zero) = EGP 132,000,000
The cash flow stream of the project economic life can be estimated indirectly by adjusting
the net accounting profit by re-adding the depreciation premium because it is a non-cash
expenses as well as re-adding the incorporation and pre-commencement expenditures
because they were calculated within the value of the outgoing investment costs in the year
as (zero).
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Item Year 1 Year 2 Year 3 Year 4 Year 5
Total revenue 74,000,000 81,400,000 89,540,000 98,494,000 108,343,400
Subtract:
Cost of Sales (18,400,000) (20,240,000) (22,264,000) (24,490,400) (26,939,440)

Gross Profit 55,600,000 61,160,000 67,276,000 74,003,600 81,403,960
Subtract:
Incorporation and pre-commencement
(500,000)
Expenditures
Depreciation of Fixed Assets (10,000,000) (10,000,000) (10,000,000) (10,000,000) (10,000,000)
General and Administrative Expenses (4,324,000) (4,756,400) (5,232,040) (5,755,244) (6,330,768)

Net Accounting Profit before Tax 40,776,000 46,403,600 52,043,960 58,248,356 65,073,192
Subtract:
Tax (at a rate of 22.5%) (9,174,600) (10,440,810) (11,709,891) (13,105,880) (14,641,468)

Net Accounting Profit after Tax 31,601,400 35,962,790 40,334,069 45,142,476 50,431,723
Adding non-cash and Operative

Expenses
Depreciation and Incorporation and pre-
10,500,000 10,000,000 10,000,000 10,000,000 10,000,000
commencement Expenditures
Net Operation Cash Flow 42,101,400 45,962,790 50,334,069 55,142,476 60,431,723
Adding Other Revenues for the Last

Year
Net Working Capital 11,500,000
Salvage Value of Fixed Assets 50,000,000

Net Annual Cash Flow 42,101,400 45,962,790 50,334,069 55,142,476 121,931,723
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The Annual Cash Flow Stream
Accordingly, the annual cash flow stream can be summarized as follows:
Years Zero 1 2 3 4 5
Net Annual Cash Flow (132,000,000) 42,101,400 45,962,790 50,334,069 55,142,476 121,931,723
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6. Financial Feasibility Indicators of the Investment Project
i.Break-even Analysis (BEA)

ii.Return on Investment (ROI)
iii.Payback Period Indicator (PBP)
iv.Net Present Value (NPV)
v.The Internal Rate of Return (IRR)
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i. Break-even Analysis (BEA)
BEA is used in feasibility studies because it helps to know the lowest level of production
and/or sales that the project would be able to continue in the market without deciding to stop
production and exit the market.
Break-even point of the project under study can be reached after completing the sales
estimate through the marketing study, and the cost estimate through the technical study. The
lower the break-even point, the higher the chances of the project to achieve profits and the
lower the probability of realizing losses. The difference between the expected energy use
limit of the project and the break-even point represents the safety zone, which is the larger
the better.
To sum up, break-even point expresses the lowest production level that can be allowed to
use the productive capacity of the project.
The basis for technically calculating break-even sales is based on estimating the sales value,
which equals the total value of fixed costs adding to it the variable costs resulting from such
sales, and it can be concluded as follows:
- Sales revenues = Total costs

- Sales revenues = total fixed costs + total variable costs
- (Sales volume × price per unit) = fixed costs + (sales volume × variable cost of the
unit)
- (Sales volume × price per unit) – (sales volume × variable cost of the unit) = fixed
costs
- Sales volume (price per unit – variable cost of the unit) = fixed costs
- Sales volume = fixed costs ÷ (price per unit – variable cost of the unit)
- Sales volume = fixed costs ÷ unit contribution margin
The break-even sales could be calculated as follows:
Value of break-even sales = break-even sales volume × unit sale price
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According to the results of the marketing and technical study, the costs of the project
could be divided, and the data necessary for the BEA could be calculated as follows:
 The estimated sale price of square meter of marble, including its share of the decoration
works, as per the results of the marketing study, is EGP185.
 The variable costs required to produce each square meter of marble, according to the
results of the technical study, could be clarified as follows:
Item Value
Marble block and stones 23
Production workers 12
Driving forces and production supplies 4
Fuel and auto parts 3
Packaging 5
2
Total variable cost/ m 46
 According to the technical study of the project, annual fixed costs are as follows:
Item Value
Buildings depreciation 1,200,000
Machinery and equipment depreciation 8,800,000
Marketing expenses 1,000,000
Administrative labor 1,824,000
Electricity and lighting cost 150,000
Transport and transfer expenses 100,000
Attorney fees for reviewing various 50,000
contracts
Food and drinks for employees 1,000,000
Safety and security supplies 50,000
Hospitality and reception expenses 25,000
Accountant fees 25,000
Invoices, publications and stationery 50,000
Miscellaneous expenses 50,000
Total of fixed costs 14,324,000
 The contribution margin of a square meter of marble could be calculated in the coverage
of the fixed costs as follows:
Unit contribution margin = (unit price sale – unit variable cost)
Unit contribution margin = (185 – 46) = EGP 139
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 Break-even sales volume is as follows:

Break-even sales volume = fixed costs ÷ unit contribution margin
Break-even sales volume = 14,324,000 ÷ 139 = about 103,000 m2 of marble
 Break-even sales value is as follows:
Break-even sales value = break-even sales volume × unit sale price
Break-even sales value = 103,000 m2 × EGP 185 = EGP 19,055,000 annually
 Value and percentage of margin of safety is as follows:
The margin of safety is the amount of increase in the target or actual sales over the sales that
achieve the break-even; the margin of safety shows the amount in which sales can decrease
without losses. In other words, the margin of safety shows the strength and safety of project
sales and their increase over the break-even sales. The safety margin can be calculated as
follows:
Value of margin of safety = target (actual) sales value – break-even sales value
Value of margin of safety = EGP74,000,000 – EGP 19,055,000 = EGP 54,945,000
Percentage of margin of safety = value of margin of safety ÷ target (actual) sales value
Value of margin of safety = EGP 54,945,000 ÷ EGP 74,000,000 = 74%
 Break-even sales and expected project sales within five years are as follows:
Comparison between break-even sales and expected project sales
Break-even sales ‫مبيعات التعادل‬

Expected project sales ‫مبيعات المشروع المتوقعة‬
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The results of the break-even analysis of the project under study:
1. It is clear from the above that the minimum production level to cover the costs of the
project without incurring losses is 103,000 m2 of marble, and this limit is fixed
throughout the economic life of the project in light of the stability of the expected growth
rate of 10%, whether in revenues or variable and fixed costs.
2. By comparing the value of the break-even sales revenues, which amount to EGP
19,055,000 with the expected annual revenues from the project according to the results
of the marketing study, which amounted to EGP 74,000,000, we conclude that the
expected project sales revenues amounted to approximately four times the value of the
break-even sales revenues, which reflects the strength and stability of the project’s sales.
3. The value of the safety margin amounted to EGP 54,945,000, and the safety margin was
74%, which means that the value of the project’s sales could decrease within 74% of the
project’s expected annual sales value without the project incurring losses. This enhances
the financial feasibility of the project, the high probability of achieving profits, the low
probability of realizing losses and the project's exposure to risks, in light of the project
achieving a large margin of safety.
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ii. Return on Investment (ROI):

According to what was explained above by reviewing the estimated income statements of
the project, the ROI can be calculated as follows:
Ratio of average net accounting profit to investment cost =

𝑎𝑣𝑒𝑟𝑎𝑔𝑒 𝑛𝑒𝑡 𝑎𝑛𝑛𝑢𝑎𝑙 𝑝𝑟𝑜𝑓𝑖𝑡
%
𝑡𝑜𝑡𝑎𝑙 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡 𝑐𝑜𝑠𝑡𝑠
Net
Accounting Paid-in Expected
Year
Profit after Capital ROI
Tax
1 31,601,400 132,000,000 23,94%
2 35,962,790 132,000,000 27,24%
3 40,334,069 132,000,000 30,56%
4 45,142,476 132,000,000 34,20%
5 50,431,723 132,000,000 38,21%
ROI 30,83%
Project ROI Results:

The project has recorded an average percentage of net accounting profit for the paid-in
capital of 30.5%, which exceeds the investors' RRR, which was previously determined at
30.5%, and this stresses that the project is financially feasible.
It is worth noting that this indicator is an aid tool to evaluate the project. However, it cannot
be relied upon alone in determining the economic feasibility of the project, as this indicator
is faulted for the following:
1. Its dependence on the net accounting profit, which may be based on depreciation and
provisions estimates that may lead to a return value that is different from the actual
value achieved by the project; and
2. The indicator is not expressing the actual cash flows, which may give misleading
results.
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iii. PBP:
The payback period is the amount of time a project takes to recover its investment costs
through the net cash flows expected to be achieved during the operating years. It expresses
the period elapsed from the life of the project until it achieves net cash flows from operating
its assets equal to a value equal to the paid-in capital at the beginning of the project's
operation.
In accordance with the above mentioned, and by reviewing the estimated annual cash flow
statements for the project, the payback period can be calculated as follows:
𝑃𝑎𝑦𝑏𝑎𝑐𝑘 = 𝑙𝑎𝑠𝑡 𝑦𝑒𝑎𝑟 𝑜𝑓 𝑛𝑒𝑡 𝑛𝑒𝑔𝑎𝑡𝑖𝑣𝑒 𝑐𝑢𝑚𝑢𝑙𝑎𝑡𝑖𝑣𝑒 𝑐𝑎𝑠ℎ 𝑓𝑙𝑜𝑤
𝑎𝑏𝑠𝑜𝑙𝑢𝑡𝑒 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑙𝑎𝑠𝑡 𝑛𝑒𝑔𝑎𝑡𝑖𝑣𝑒 𝑐𝑢𝑚𝑢𝑙𝑎𝑡𝑖𝑣𝑒 𝑐𝑎𝑠ℎ 𝑓𝑙𝑜𝑤
+
𝑐𝑎𝑠ℎ 𝑓𝑙𝑜𝑤 𝑜𝑓 𝑡ℎ𝑒 𝑓𝑜𝑙𝑙𝑜𝑤𝑖𝑛𝑔 𝑦𝑒𝑎𝑟
Net Annual Cash Flows (132,000,000) 42,101,400 45,962,790 50,334,069 55,142,476 121,931,723
Net Cumulative Annual Cash Flows (132,000,000) (89,898,600) (43,935,810) 6,398,259 61,540,735 183,472,458
Payback Period by Years 2.9
43,935,810
𝑃𝑎𝑦𝑏𝑎𝑐𝑘 = 2 + = 2.8729 𝑦𝑒𝑎𝑟𝑠
50,334,069
Project PBP Results:

The project has successfully recovered all of its investment costs within a PBP of three years
in operation, and this period does not exceed the projected economic life of the project,
which is five years. This stresses that the project is financially feasible and its potential risks
are reduced.
It is worth noting that the project has recovered its investment costs within a short period,
which presents an opportunity for investors to reinvest the recovered capital in other projects
or to make expansions in the project, and maximize ROI.
However, this indicator is criticized to have overlooked the time value of money, which will
be taken into consideration later in NPV and IRR below.
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iv. NPV:
NPV is the difference between the present value of net cash inflows during the operating
years and the present value of net cash outflows throughout the establishment phase.
𝑛𝑒𝑡 𝑐𝑎𝑠ℎ 𝑓𝑙𝑜𝑤 𝑑𝑢𝑟𝑖𝑛𝑔 𝑡ℎ𝑒 𝑦𝑒𝑎𝑟

Present value of cash inflows = 𝛴 [ ]
( 1 + 𝑟)𝑖
By reviewing the estimated annual cash flow statements for the project, NPV can be
calculated using a discount rate of 30.5%, and it represents the return requested by investors
as follows:
Net Annual Cash Flow (132,000,000) 42,101,400 45,962,790 50,334,069 55,142,476 121,931,723
The Present Value Factor for

an amount at discount rate of 1 0.766284 0.587190 0.449954 0.344793 0.264209
31% and (i) years
Present Value of Cash Flow (132,000,000) 32,261,609 26,988,911 22,648,034 19,012,718 32,215,446
NPV of Cash Flow 1,126,719
 PV of net cash inflows during the operating years = (32,261,609 + 26,988,911 +

22,648,034 + 19,012,718 + 32, 215,446) = EGP 133,126,718,76.
 PV of net cash outflows during the establishment phase = EGP 132,000,000.
 NPV = the present value of net cash inflows - the present value of net cash outflows.
 NPV = EGP 133,126,718,76 - EGP 132,000,000 = EGP 1,126,719.
Project NPV Indicator Results:
The project has recorded a positive NPV that is greater than zero, which means that the
project has recovered the entire capital, achieved the investors' RRR, and exceeded such
rates with a surplus of EGP 1,126,719, which stresses that the project is financially feasible
and able to face the potential risks and the decline in profits within the surplus limits that
such project will achieve.
It is worth noting that this indicator takes into consideration the time value of money, which
reflects the project's ability to cover investment costs and achieve an additional return.
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v. IRR:
It is the rate of return achieved by the project regardless of RRR, and it represents the
discount rate at which the present value of net cash inflows is equal to the present value of
net cash outflows of the project. In other words, IRR is the discount rate at which the net
present value of the project is zero.
IRR is extracted by searching for the discount rate at which NPV equals zero. Moreover,
IRR can be deduced by trial and error method up to the rate at which NPV that is equal to
zero is achieved or by using complex mathematical methods or Excel.
Net Annual Cash Flows (132,000,000) 42,101,400 45,962,790 50,334,069 55,142,476 121,931,723
The Present Value Factor
for an amount at discount 1 0.76406 0.58379 0.44605 0.34081 0.26040
rate of 31% and (i) years
Present Value of Cash Flow (132,000,000) 32,167,940 26,832,418 22,451,336 18,792,870 31,750,479
NPV of Cash Flows Zero approximately

Calculated IRR ~30.88%
Results of IRR Indicator for Project under Consideration:
It is clear that the project has achieved IRR equal to 30.88%, which exceeds investors' RRR
(30.5%). The positive increase is 0.33, which stresses that the project is financially feasible
and able to address potential risks and the decline in profits within the limits of achieved
increase percentage in RRR.
It is worth noting that this indicator takes into consideration the time value of money, which
reflects the project's ability to cover investment costs and achieve an additional return.
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IX. Project Social Feasibility Study:

 The project is one of the main pillars of the State's process of economic development and
a means to achieve the economic, social, and development objectives to be achieved,
which by the end is reflected on the achievement of good rates of well-being for the
society.
 The marble manufacturing activity is one of the important activities that characterizes
Egypt in the world, as it ranks seventh in the world, and it can exploit this activity to
achieve growth and income rates that raise the level of national income instead of being
satisfied with being an extractive industry that depends on exports in the form of raw
blocks without any added value to the society.
 Due to the need for the marble manufacturing activity to have roads and corridors for
transportation from the quarries to the factory then to the final market, this led many
factories working in this field to develop these roads as a social contribution that helped
in the development of those areas, especially with the workers’ need to live nearby.
 The project helps in employing various categories of labor, either directly through
working in the project itself, or indirectly through the supply and distribution chains the
project deals with; starting from obtaining the raw materials needed for the production
until the distribution outlets, then to the end consumer.
 The project helps increase the State's tax revenue, which ultimately benefits the society.
 The project contributes to the exploitation of wastelands not suitable for agriculture or
flooded with water not suitable for construction, and converting them into lands useful
for the community.
 The project, especially as it mainly tends to export, contributes to increasing the state's
foreign exchange currency hence increasing the state's reserves of hard currency
necessary to meet the requirements and needs of society.
 The project reduces the level of unemployment, especially for the categories of
uneducated workers that the project needs, and provides them with a level of income that
achieves a decent life, instead of resorting to behaviors or practices that harm public
security in the event of unemployment.
In light of the foregoing, the project is socially feasible.
Page 44 of 46
and Free Zones
X. Results and Recommendations

Recommendations:
 The necessity of taking into account the potential risks of the project and providing all
means of protection and occupational safety to help avoid these risks.
 The necessity of observing the requirements of foreign countries in the event of an export
trend by applying the required standard production specifications in order to avoid being
exposed to the risks of writing off from the exporters’ records and rejecting export
shipments.
 It is necessary to follow the appropriate methods of storage and reduce the percentage of
wastage as a result of breakage and wrong storage. We also recommend taking into
account the appropriate methods of transportation and packaging for market access to
avoid exposure to the risk of breakage.
 It is necessary to establish partnerships with suppliers to ensure the provision of raw
materials with the required specifications, with a focus on high-quality items to achieve
a competitive advantage in the local market and export.
 The necessity of expanding production lines that deal with waste, whether solid or filings,
resulting from sawing and shredding operations, in order to make the most of every grain
of marble that may bring returns to the project instead of looking for ways to dispose and
pay high costs.
 The necessity of observing the necessary environment requirements through installing
filters, sewage treatment plants and closed water circuits in a way that preserves the
environment and reduces the percentage of damage to ensure the continuity of the
project.
 It is necessary to provide laboratories for laboratory tests for the components of stones
and to expand research and development processes to increase the added value of the
uses of raw stones instead of being satisfied with their natural form, while benefiting
from the pioneering Chinese experience in dyeing and chemical treatments of stones to
give an added value than the traditional methods.
 The necessity of using the latest technological methods in manufacturing to reduce the
wastage rate and achieve the highest level of productivity and thus reduce the cost and
make the Egyptian product at reasonable prices to penetrate the global markets and
achieve a competitive advantage.
 The necessity of participating in all international exhibitions and forums to go global,
with the necessity of holding internal partnerships between the activity manufacturers to
organize local exhibitions and inviting all countries of the world to participate in them to
increase marketing opportunities.
Page 45 of 46
and Free Zones
Results:
 In light of the results of the economic feasibility study, it is recommended to invest in

the field of marble manufacturing because of its rewarding returns, taking into account
the need to adjust market prices and project costs according to the situation at the time
of the decision, as the data used in the study are according to the data prevailed at the
time of preparing and obtaining within the prevailing circumstances and investment
climate at the time, which may be subject to change with the passage of time.
 As per the financial study, the project achieves an average annual profit of approximately
EGP 40,500,000, with an internal rate of IRR of approximately 30.88%, and the recovery
period for its investment costs is estimated at approximately two years and eleven
months.
 The implementation of the project will start with the main production lines for the
manufacture of marble, with the expansion as a second phase of the chemical processing
and dyeing production lines for marble to maximize the added value, with making
partnership with the pioneer Chinese. It is necessary to establish a factory for the
manufacture of industrial marble to deal with waste, whether solid or filings that result
from sawing and slicing operations to achieve maximum benefit and maximize project
profits.
Note: This is a preliminary study.
Page 46 of 46

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The General Authority for Investment

GAFI Translation Department

General Authority for Investments and Free Zones

A Preliminary Feasibility Study

II. Basic Information ............................................................................................................. 4

IV. Marketing Study .............................................................................................................. 6

V. Project Legal Feasibility Study ...................................................................................... 11

VI. Project Environmental Feasibility Study: ..................................................................... 12

VII. Project Technical and Engineering Feasibility Study.................................................. 13

IX. Project Social Feasibility Study: ................................................................................... 44

X. Results and Recommendations ....................................................................................... 45

I. General Introduction to the Activity under Study

II. Basic Information

Project Natural marble manufacturing complex

Factors enhance the trend of marble manufacturing activity in Egypt

 The availability of natural quarries that provide limestone in high-quality quantities

The initial justification for the economic feasibility of the project

IV. Marketing Study

SWOT Analysis Outcomes

Marketing Study Conclusion

Natural marble, It is suggested to add it as a production line as a second stage in

6. Expected Costs of Marketing Campaigns

V. Project Legal Feasibility Study

VI. Project Environmental Feasibility Study:

VII. Project Technical and Engineering Feasibility Study

1. Choose the appropriate location to set up the project.

1. The limestone is supplied from the mountain and is called a block

2. Then it is spread on the sawing machine (CNC - Water jet) to 2 cm, 3 cm or 4 cm

6. The percentage of solid waste resulting from shredding (wasting percentage) is

Total Reserve in Cubic

Locate the appropriate locations on the county map

The project requires a plot of land with an area of 40,000 M2

3. Required Machinery and Equipment:

4. Required Annual Operating Cost:

A. Production Required Raw Materials to Achieve Expected Sales Target:

Administrative Labor ‫العمالة اإلدارية‬

Production and operational labor ‫العمالة اإلنتاجية والتشغيلية‬

D. Campaign costs (solar, oils and used car spare parts)

F. Other general and administrative expenses

VIII. Financial Study

 RRR on investment has been determined according to the method of Weighted

Pre-tax average yield

Accordingly, RRR on investment is calculated as follows:

RRR = (13.84 + 14.99 x 1.11) = ~ 30.5%

3. Estimation of Project Investment Cost:

Project Investment Cost Diagram ‫رسم بياني لهيكل االنفاق االستثماري‬

Hence, project total investment costs = .

4. Expected Income Statements for the Years of Investment Project

Total Revenue 74,000,000 81,400,000 89,540,000 98,494,000 108,343,400

The Annual Profit Development

Item Year 1 Year 2 Year 3 Year 4 Year 5

Total revenue 74,000,000 81,400,000 89,540,000 98,494,000 108,343,400

Cost of Sales (18,400,000) (20,240,000) (22,264,000) (24,490,400) (26,939,440)

General and Administrative Expenses (4,324,000) (4,756,400) (5,232,040) (5,755,244) (6,330,768)

Tax (at a rate of 22.5%) (9,174,600) (10,440,810) (11,709,891) (13,105,880) (14,641,468)

Adding non-cash and Operative

Adding Other Revenues for the Last

Salvage Value of Fixed Assets 50,000,000

The Annual Cash Flow Stream

Accordingly, the annual cash flow stream can be summarized as follows:

6. Financial Feasibility Indicators of the Investment Project

i.Break-even Analysis (BEA)

i. Break-even Analysis (BEA)

- Sales revenues = Total costs