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CONTENTS PAGES

I. INTRODUCTION 1

1.1. BACKGROUND 1

1.2. OBJECTIVE OF THE STUDY 2

1.3. SCOPE OF THE STUDY 2

1.4. METHODOLOGY 3

I.4.1 DATACOLLECTION 3

II. IDENTIFICATION OF PROJECT IDEAS 4

CLASSIFICATION OF PROJECT IDEAS 4

LIST OF PROJECT IDEAS 5

III. DESCRIPTION OF PROJECT IDEAS 6

1. SPONGE IRON MANUFACTURING PLANT 6

PRODUCT DESCRIPTION AND APPLICATION 6

MARKET STUDY 7

RAW MATERIAL 8

TECHNOLOGY 9

ENVIRONMENTAL IMPACT 11

2. STEEL BILLETS, SLAB AND BLOOM MANUFACTURING PLANT 13


MARKET STUDY 14

RAW MATERIAL 15

TECHNOLOGY 15

3. STRUCTURAL STEEL MANUFACTURING PLANT 16


MARKET STUDY 17

RAW MATERIAL 18

TECHNOLOGY 18

4. SEAMLESS PIPE MANUFACTURING PLANT 20


MARKET STUDY 21

RAW MATERIAL 22

TECHNOLOGY 22

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5. ALUMINUM EXTRUSION MANUFACTURING PLANT 23


MARKET STUDY 23

RAW MATERIAL 25

TECHNOLOGY 36

6. ALUMINUM FOIL MANUFACTURING PLANT 27


MARKET STUDY 27

RAW MATERIAL 28

TECHNOLOGY 29

7. BALL BEARINGS MANUFACTURING PLANT 30


MARKET STUDY 31

RAW MATERIAL 32

TECHNOLOGY 33

8. ELECTRIC MOTORS, GENERATORS AND TRANSFORMERS

MANUFACTURING PLANT 35


MARKET STUDY 35

RAW MATERIAL 37

TECHNOLOGY 38

9. SUBMERSIBLE PUMP MANUFACTURING PLANT 38


MARKET STUDY 39

RAW MATERIAL 40

TECHNOLOGY 40

10. LINK CHAIN MANUFACTURING PLANT 41

DESCRIPTION AND APPLICATION 41

MARKET STUDY 42

RAW MATERIAL 42

2

TECHNOLOGY 42

11. BAKING OVENS MANUFACTURING PLANT 43


MARKET STUDY 43

RAW MATERIAL 45

TECHNOLOGY 45

12.NON-THREADED MECHANICAL FASTENERS MANUFACTURING PLANT 45


MARKET STUDY 46

RAW MATERIAL 47

TECHNOLOGY 47

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I. INTRODUCTION

1.1. BACKGROUND

Being a developing country the Economic growth in Ethiopia is steel intensive. The

annual per capital steel consumption in Ethiopia is 12kg1, which is very low as compared

to even some African countries like Kenya which is 65kg or African average which is

42.5kg and by far low when compared to the world fastest growing economy china

which is 132.2kg.

The metal industry is found at very low stage of development; but is having a substantial

growth. The range of products manufactured in this sector includes galvanized roofing

sheets, pipes, reinforcement bars, nails, window and door frames, trusses, hand tools,

implements, pumps, and various metal fabrications. In addition to the above products,

there also exist a couple of plants assembling automobiles, trucks and tractors. There are

also some industries which produce hand tools spare parts and cutleries.

During the last five years, the demand for metal products in Ethiopia has increased

significantly due to large government projects such housings, schools and roads.

Although there are some industries that are involved in the production of steel sections

and profiles, wires and nails, corrugated steel and reinforcement bars, they cover only 15

% of the country’s metal needs. Currently the industries use imported raw materials such

as iron ore, coiled wire rods and coiled sheet metals and the locally available scrap

metals.

The government of Ethiopia through its Growth and Transformation Plan has given high

priority to the metal and engineering industry sector. An objective and target has been

set to enhance the productivity and competitiveness of the sector. It is planned to

increase the annual per capital consumption of the country to 34.72kg and the capacity

utilization of the existing industries to 95%. Substituting of imported metal products and

supporting other manufacturing industries are also some of the main targets of Basic

Metal and Engineering Industry sector as indicated in the Growth and Transformation

plan.

1Firm level study on basic metal and Engineering industries of the federal democratic republic of Ethiopia, Chapters prepared by

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1.2 OBJECTIVE OF THE STUDY

The market demand for metal is still going to increase due to huge government plans to

transform the country. Hence the Basic Metal and Engineering Industries play a vital

role in the economic development. Improving productivity and capacity utilization of

existing industries and also having new industries entering the market will definitely

help the national effort in narrowing the gap between demand and supply in the sector.

The objective of this opportunity study is to investigate the potential investment areas of

the metal and engineering sector that may attract foreign investors, foster imported metal

products substitution, create job opportunity, support other manufacturing industries and

increase the technology transfer, which in the end is believed to contribute its own share

to meet the national Growth and Transformation Plan.

1.3 SCOPE OF THE STUDY

The study shall be conducted in line with the plan for opportunity study developed by

engineering service directorate of MIDI. Hence, to attain the stated objectives the study

will include, but is not limited to,

Identification of project ideas that may suit to interest of foreign investors, taking

into consideration metal and engineering products demand of the industry sectors

of high government priority and ascertaining the availability of demand by

analyzing imported data form revenue and custom authority.

Identification & analysis of screening criteria for project ideas and conducting

screening and prioritizing of twelve viable project Ideas for further preparation of

project description document.

2

1.4 METHODOLOGY

1.4.1 Data Collection

This stage involves preparatory works necessary for undertaking the study. The major

focus at this stage includes identification of overall information requirement, collection

and review of studies, documents and literature related to government policies, strategies

and proclamations; identifications of gaps, and designing appropriate data collection

instruments.

In this study, only secondary data source is collected but in the next phases of the overall

study, there might be a need to use primary data sources. Two types of data have to be

collected from secondary sources, namely general economic and social data and specific

data for the metal and engineering sector. Accordingly, the following secondary sources

were used;

Document about growth and transformation plan

Customs data

Project Profiles from internet source

Ethiopian Mineral Resources study document

Moreover, in order to assess the trend in the sector owing to cost implications, the trend

assessment was exclusively based on secondary data sources obtained through review of

published statistics, annual reports and information available on the Internet.

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P A R T O N E

P R O J E C T I D E A S I D E N T I F I C A T I O N

I. IDENTIFICATION OF PROJECT IDEAS

CLASSIFICATION OF PROJECT IDEAS

Basic metal industries and Engineering industries were used as a main classification of

the project ideas. The categories and the sub categories are explained briefly as

follows2 .

I. Basic Metal industries are industries that are concerned with the refining and

production of raw metal products and primary metal products from mineral ores.

II. Engineering industries are industries which use the basic metal products as an

input and fabricate them in to various engineering products. The Engineering

industry is further subdivided in to 8 categories using the International Standard

Industrial Classification (ISIC Rev. 3.1Div .28-353 ).The categories are listed as

follows

1. Manufacture of fabricated metal products, except machinery and

equipment (Div.28)

2. Manufacture of machinery and equipment (Div. 29)

3. Manufacture of electrical machinery and apparatus(Div. 31)

LIST OF PROJECT IDEAS

I. Basic Metal Industries

Sponge iron manufacturing plant

Steel billet, slab and bloom manufacturing plant

Structural steel manufacturing plant

Seamless pipe manufacturing plant

Aluminum extrusion manufacturing plant

Aluminum foil manufacturing plant

2Technology Transfer as a catalyst for development of Basic Metal and Engineering Industries(BMEIs),ESME Journal 2011

3International Standard Industrial Classification of All Economic Activities :ISIC Rev. 3.1

4

II. Engineering Industries

a. Manufacture of fabricated metal products, except machinery and equipment

Ball bearing manufacturing plant

Link chain manufacturing plant

Non threaded mechanical fasteners manufacturing plant

b. Manufacture of machinery and equipment

Submersible pump manufacturing plant

c. Manufacture of electrical machinery and apparatus

Electric Motors, generators, and transformer manufacturing plant

Baking oven manufacturing plant

5

II. DESCRIPTION OF 12 PROJECT IDEAS

1. Sponge Iron Manufacturing Plant

Product Description and Application

Sponge iron or direct reduced iron is a high quality porous solid-state metallic product

that is produced from iron ore (in the form of lumps, pellets or fines) using a reducing

gas such as natural gas or coal. It has a slightly higher iron content that makes it better

suited for use in an electric arc furnace route of steel making. The gases that are

produced during the production of sponge iron can be used in various applications that

help offset the cost of iron production.

Sponge iron can be used to produce powdered ore and wrought iron. It is also used as a

raw material for steel industries that are producing steel products such as billets, slabs,

and blooms as well as primary metal products such as long and flat steel products.

Sponge iron has gained further importance due to its proven utility in different steel

manufacturing processes such as L.D. converters, Open Hearth Furnaces (OHFs), Blast

Furnaces (BFs) Basic Oxygen Furnaces (BOFs), Induction Furnaces (IFs) and Cupolas4.

The World production of Direct Reduced Iron /sponge iron was 64.4 million tons in

2009. India is the largest producer with a production of 22 million tons which is more

than one-third of the world production. Of this, 16.2 million tons were produced In Coal

based Rotary Kilns. In India most steel industries are shifting from blast furnace route to

Electric Arc Furnace route. This together with the scarcity and the large increase in the

price of scrap metal gave a large boost for sponge iron production.

India gains a competitive advantage of sponge iron manufacturing due to the availability

of high quality ready raw materials and cheap labor. The existence of large number of

sponge iron manufacturers with inter competition also gives India an added

advantage. The fact that most of the processes used for the production of sponge iron are

not natural gas based helps India to increase its capacity despite the increase in gas price.

4http://www.dsir.gov.in/reports/techreps/tsr062.pdf

6

http://www.dsir.gov.in/reports/techreps/tsr062.pdf

Figure 1: World DRI Production Trend

When looking at the Ethiopian metal industry sector, sponge iron manufacturing is

almost non-existent. By the time this document has been prepared there is only one

Sponge iron manufacturing plant, AYAS that is under construction. The Ethiopian iron

ore has lower quality; however its existence with TiO2 makes the iron ore exploring

economical and gives it a positive edge.

It can be seen from Indian experience that Sponge iron manufacturing can have a great

advantage for Ethiopia due to the availability of untapped mineral resources necessary

for the production of sponge Iron and the large domestic market potential. The low

energy cost of the country and the large supply of cheap, diligent, semi-skilled and

skilled labor which can be easily upgraded to the required skill level also will give the

sponge iron industry an advantage. Sponge iron manufacturing also have comparative

advantage due to an ever increasing domestic demand of steel products and the focus

that is given for the labor intensive industries.

Market study

According to the Ethiopian GTP the annual per capital Metal consumption of the

country is set to reach 34.2 kg in 2014/2015. The total steel demand is estimated to reach

3, 121,187 tons in 2014/20155 .For attaining this goal, new integrated steel industries

and Mini Steel Industries have to enter the business and the existing industries also need

to utilize their maximum capacity. Currently the existing metal industries of the country

use imported raw materials and the locally available scrap. When looking at the


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percentage weight of imported basic metal products in 2008; it accounts 70 % of the

imported metal products.

For attaining the GTP raw material availability should be addressed first. The possible

utilization of iron deposit of the country plays a crucial role with this regard. Hence the

extracted sponge iron can be used as a basis for integrated and mini steel industries of

the country. It will also help in alleviating the shortage of scrap metal supply that might

be created when new industries enter the metal sector and the existing industries utilize

their maximum capacity. Hence as long as the demand for finished steel products is

increasing the demand of sponge iron is going to increase as well.

Raw Material

The main raw materials used for sponge iron manufacturing are Iron ore or pellets,

reductant (natural gas or non-coaking coal) and a desulfurizing agent

(limestone/dolomite). The economic analysis of a 100 ton per day plant suggests that for

producing 1 ton of Sponge iron 1.6ton of iron ore, 1.5 ton of coal and 0.035 ton of

Dolomite are needed6. The specific properties of the raw materials are stated briefly as

follows while the quantitative availability of raw material can be referred from

Appendix Error: Reference source not found.

Iron Ore: Iron ore lumps or pellets should have high iron content, low gangue content,

good mechanical strength and readily reducible and non-decrepitating variety.

Reductant: Non-coaking coal is used as a reductant and a fuel in sponge iron

manufacturing. It should be highly reactive and have high fixed carbon content, high

volatiles content, low coking and swelling indices and high ash fusion point.

Desulpherizing agent: As a desulpherizing agent limestone and dolomite are used in

manufacturing of sponge iron. They should have lime or line and magnesia content

which is above 45%.

Technology

Manufacturing Process

Different technologies have been devised for the production of sponge iron. The

technologies are generally categorized into Gas Based Technologies and Solid Reducant

6The economic analysis of a 100 ton per day plant suggests that for producing 1 ton of Sponge iron 1.6ton of iron ore,1.5 ton of coal and 0.035 ton of Dolomite are needed.

8

or Coal Based Technologies7.The direct reduction processes available for

commercialization are HYL III Process, Midrex Process and Coal Based Direct

Reduction8.

The manufacturing process for the coal based technologies is explained briefly as

follows. The Iron ore and non-coaking coal are charged into a rotary kiln in required

proportion along with some dolomite. The reduction process occurs in solid state.

During this process the combustion and conversion of coal to Carbon monoxide removes

the oxygen from the iron ore. The overall process requires duration of approximately ten

to twelve hours inside the kiln, during which iron ore is optimally reduced and

discharged to a rotary cooler for cooling below 120°C., before coming out into the

finished product circuit.

The Ethiopian ore is not suitable for blast furnace production of hot metal due to its high

Ti content9. Coal based technologies are best suited for extracting iron ore because there

is no need for oil and high quality coal. Due to a lower iron content of the Ethiopian ore;

production of TiO2 together with sponge iron is recommended to make it economical.

The technology for the production of sponge iron is new to Ethiopia and hence it will

have a great importance in technology transfer.


8http://www.spongeiron.com/orissa-sponge-iron-and-steel-ltd/


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http://www.spongeiron.com/orissa-sponge-iron-and-steel-ltd/


Figure 2: Process Flowchart for sponge Iron 10

Machine and Equipment

The basic capital equipment required for the coal based processes are11:

10Source :Status of sponge iron plants in Orissa Prepared : By Mr. HimansusekharPatra , MrBiswajyotiSahoo and DrBijaykumar

Mishra


10


Raw materials handling and feeding system

Rotary kiln with air injection and coal blowing systems

Rotary cooler

Product separation and handling System

Waste gas cleaning system

Briquetting system

Electrical system

Instrumentation and control system

Environmental Impact

Sponge iron plants are found to be polluting. During operation it emits huge quantity of

smoke containing oxides of Sulphur and Carbon, un-born carbon & silica particles. The

garbage factor for a ton of sponge iron and origin of pollution are shown in Table 1 and

Table 2 respectively. Different mitigation methods need to be used to minimize the

environmental effect of sponge iron plants.

INPUT OUTPUT1.6 -1.75 tons of Iron ore 1.8-2.0 tons of CO21.2-1.5 tons of coal 0.25 tons of dust0.035-0.05 tons of Dolomite 0.29 tons of coal char1.5-2.0 tons of water 0.02 tons of SO2,water vaporTable 1 : Garbage Factor for a one ton of sponge iron unit12

Plant activities Principal constituents

Manufacturing and operations

Likely form of pollution

Raw Material Handling Iron ore

Dust pollution Oxides of Fe,SiO2

Al2O3Sulphur compounds other trace metals Stockpiling ,crushin

g , screening and conveying

Air Pollution due to fugitive dust and localized noise

Coal Complex compounds of C,H,N,S,O and Minerals

Dolomite

CaO , MgO , C, S and other associated minerals

Direct Reduction of Iron ore with Coal and Dolomite as a

Reduction temperature is about

1200oC

Waste gas generation containing CO2, CO, SO2, NOx , and

12Status of sponge iron plants in Orissa Prepared : By MrHimansusekharPatra , MrBiswajyotiSahoo and DrBijaykumar

Mishra11

fluxing agent particulate at 900oCSponge iron product processing

Fe metal 81-84 % with SiO2,S,P,C as contaminants

Separation and screening, ambient

temperatureIndirect process cooling/direct water spraying Industrial water Process cooling and

dust suppression

Generation of waste water with contaminants mostly particulates,

Thermal pollution of water

Table 2: Origin of pollution in coal based sponge iron plant13

13Status of sponge iron plants in Orissa Prepared : By MrHimansusekharPatra , MrBiswajyotiSahoo and DrBijaykumar

Mishra12

Upstream ProductsBilletsSlabsBloomsam ProductsBillets SlabsBlooms

Downstream ProductsRail, Sheet Pile, shape, BarWire rodsPlateHot Rolled coil and sheetSeamless Pipe

Downstream ProductsRail, Sheet Pile, shape, Bar

Wire RodsPlate

Hot Rolled coil and sheetSeamless pipe

2. Steel Billets, Slab and Bloom Manufacturing plant


The product mix in this project idea includes billets, blooms and slabs that can be used

as a raw material in the extrusion, forging and rolling processes. According to the

technical glossary of steel14 the products are defined as follows.

Billets are semi-finished long product of up to 150 mm square cross-section with round

corners. They are used for the manufacturing of long steel products such as Bars, rods,

channels, angles and other structural materials.

Slabs are Semi-finished steel products typically 150-400 mm thick which are used for

the manufacturing of hot rolled flat steel products such as sheets, coils and plates.

Blooms are semi-finished long product of greater than 150 mm square or rectangular

cross-section which can be produced by continuous casting or by rolling from ingot.

Having companies that can produce steel billets, blooms and slabs will give the country

a benefit in strengthening the supply side of the basic metal manufacturing industries.

With increasing demand and production capacity of downstream products such as rods,

bars, sheets and wires there should be an increase in the local production of upstream

products such as billets, slab and blooms. Even though there are some industries that are

producing billets information was not found at if they are selling these intermediate

products.

14Technical reference page - glossary of steel industry terms http://www.steelonthenet.com/

13

Figure 3: Downstream steel products (Red indicates the industries currently using billets)

http://www.steelonthenet.com/

Market study

The import of primary steel15 products from customs data was used to study the current

market and to estimate the demand of primary steel products in the next 10 years. The

analysis of customs data shows that the import of Primary steel products such as ingots,

billets fluctuates from year to year Table 3. A total of 48,820 tons of primary steel

products have been imported from 2005-2010.

The main users of billets and ingots in Ethiopia are rebar and seamless pipe

manufacturers. The fact that most of rebar manufacturers are using local scrap as a

charge for their furnaces might be one of the reason for the fluctuation in the import of

these products. As there exist no hot rolling mills which can produce hot rolled sheet

coils, there is no import of blooms and slabs within the last 6 years.

Year Mass (Kg) CIF(USD) 3-years Average Net Import (Kg)

2005 15,573,181.00 6,922,710.192006 8,178,355.00 4,699,006.762007 4,511,333.09 2,532,944.97 9,420,956.362008 8,583,389.73 6,859,309.452009 9,378,740.13 5,242,839.612010 2,595,589.00 1,441,437.82 6,852,572.95

Tot=48,820,587.95 Tot=27,698,248.80Table 3: Import of Primary steel products

Even though industries that are producing plates, wire rods, hot rolled sheet and coils do

Not exist in Ethiopia at the time being; it is assumed that these products will be

produced locally in the future hence increasing the demand of the primary steel

products. Considering the launch of hot rolling mills in Ethiopia; an average growth rate

of 25 % is assumed to forecast the demand for the next 10 years.

Taking a base year to be 2010 and amount at this year to be the last three year average

which is 6,852,572.95 kg the demand until 2020 is forecasted. Table 4 shows the

projected demand of steel billet, slab and blooms until 2020 GC.

15Primary steel products includes billet, ingots, slabs and blooms

14

Year Projected demand(Kg)

2011 8565716.1922012 10707145.242013 13383931.552014 16729914.442015 20912393.052016 26140491.312017 32675614.132018 40844517.672019 51055647.092020 63819558.86

Table 4: Projected Demand for Primary Steel Products

Raw material

The raw materials used for the manufacturing of steel billet are sponge iron and scrap

metal. The availability of the sponge iron in the country depends on the execution of the

sponge iron plant in iron ore rich areas. However sponge iron can be imported from the

plant can also import Sponge Iron from India or other places.

Technology

Manufacturing process

The Manufacturing process begins with the inspection of the raw materials. A scrap

metal alone or a mixture of sponge iron and scrap metal can be used as raw material.

Unwanted materials such as cast iron, nonmetallic and nonferrous things are removed

from the scrap metal. When using a mixture of sponge iron and scrap metal, the sponge

iron (40 % of the load) and the scrap metal (60% of the load) are charged in to an

induction furnace through a conveyor belt and bucket respectively. After being reduced

to molten iron it is then poured in to a Ladle Refining Furnace (LRF) in which the

chemistry and temperature of the molten metal are adjusted. The use of LRF instead of

conventional ladles reduces the costs, furnace time and refractory wear. For the

manufacturing of billets the LRF is transported to a continuous casting machine or an

ingot mold with the help of a crane. However continuous casting has advantages [Error:

Reference source not found] for making the billets. The steel billets are then cut into

segments according to the required length .Finally they are allowed to cool by natural

convection and are grinded for a good surface finish.

15

Machine and Equipment

Some of the equipment’s and machineries necessary for still billet, slab and bloom

manufacturing process are listed below

Induction Furnace

Plasma Ladle Refining Furnace

Continuous Casting Machine

Channel Spectrometer

Ladle Preheating System(Vertical and Horizontal)

Crane

Magnet Crane for SMS Shop, billet and scrap yard

Cutting Torches with Iron Powder Dispensing Units

3. Structural Steel Manufacturing plant


Structural steel is a steel made construction material, profile formed with specific shape

and cross section. Structural steel is the backbone of multi-story structures. They are

used in construction for bridges, industrial sheds, structures, buildings and transmission

line towers etc. The product range includes open sections such as channels, beams, LTZs

and angles and closed hollow sections such as LTZ profiles, circular, rectangular and

square hollow sections.

Hollow structural steels (HSS) are high strength longitudinally welded or bolted

structural elements with circular or Rectangular/square cross sections. HSS has

high strength-to weight ratios, excellent compression support characteristics and

excellent torsional resistance.

The I-beam is a beam with an I- or H-shaped cross-section. The horizontal

elements of the "I" are flanges which resist most of the bending moment

experienced by the beam, while the vertical element known as the web resists

shear forces.

Market study

Rectangular hollow section (RHS) , Square hollow section (SHS) AND Circular hollow

section s( CHS) are one of the most important construction materials for the

development of construction, industrial and agricultural facilities in Ethiopia.16

According to the information obtained from Ethiopian investment agency, a total of 16

companies had obtained permits in the production of steel profiles and other products.

Out of the companies only five companies are in the operation phase currently.

On the other hand most of the remaining licensed companies are under pre investment

stages. From the past experience and trend evaluation of previously licensed companies

by the Ethiopian investment agency, it is very doubtful that all the licensed projects will

be realized and become operational

In addition to domestic production, the demand for hollow section products is mainly

met through import. Ethiopia imports a variety of hollow section products from the

world market. All the products had been imported from five countries mainly from Asia,

Europe, and Middle East.

The apparent consumption data of rectangular hollow section (RHS), Square hollow

section (SHS) and Circular hollow section (CHS), Comprising of domestic production

and imports (2005- 2010) is shown below.

Year Domestic production(ton)

Import(ton) Total(ton)

2005 8,418,618 9,850,719.95 18,269,3382006 15,098,298 10,480,973.79 25,579,2722007 12,674,839 17,154,623.25 29,829,4622008 17,939,029 12,558,115.25 30,497,1442009 23,870,194 18,317,920.04 42,188,1142010 28213951 10,932,931.69 39,146,883TOTAL 106214929 79,295,283.97 185,510,213AVERAGE 17,702,488 13,215,881 30,918,369

Table 5 : Import of structural steel products

Linear trend line is used for predicting the demand of structural steel products.

Year Projected demand

(Kg)

17

2011 46406562.1333

2012 50831760.2190

2013 55256958.3048

2014 59682156.3905

2015 64107354.4762

2016 68532552.5619

2017 72957750.6476

2018 77382948.7333

2019 81808146.8190

2020 86233344.9048

Table 6 : Projected Demand for structural Steel

Raw Material

The main raw materials used for the production of structural steel are Hot/cold rolled

coils/sheets.

Technology


HSS Manufacturing Methods

The general manufacturing processes for HSS include operations like forming, welding

and sizing. Three types of HSS manufacturing methods are used: Electric Resistance

Welding (ERW) Process, Form-Square Weld-Square (ERW) Process and Submerged

Arc Weld (SAW) Process .These manufacturing processes are explained briefly as

follows

i. Electric Resistance Welding (ERW) Process

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In the tube mill, flat steel strip (1) is formed continuously around its longitudinal axis to

produce a round tube. This is done by moving the strip through a progressive set of rolls

(2-6). The strip edges (7) are heated by either high frequency induction or contact

welding and then forged together by weld rolls to create a continuous longitudinal weld

without the addition of filler metal. The weld seam (8) is then cooled and processed

through a set of sizing/shaping rolls which cold-form it into a round (9), square (10) or

rectangular (11) section.

ii. Form-Square Weld-Square (ERW) Process

In the weld mill, driven forming dies progressively shape the flat strip (1) by forming the

top two corners (2) of the square or rectangular tube in the initial forming station.

Subsequent stations from the bottom two corners (3) of the shape. No cold working of

the sides of the shape is performed, and the shape’s seam is welded by high-frequency

contacts when the tube is near its final shape and size. The welded tube (4) is cooled and

then driven through a series of sizing stations which qualifies the tube’s final

dimensions.

19

iii. Submerged Arc Weld (SAW) Process

Two identical pieces of flat strip (1) are placed in a press brake and formed into two

identical halves (2) of a finished tube size. A backup bar is tack welded to each leg of

one of the half-sections (3). The two half sections are fitted together toe-to-toe (4) and

welded by the submerged arc process to complete the square or rectangular section (5).

Machineries

For the manufacturing of structural steel the following machineries are needed Slitting

machines

Uncoiler

Shearing machine

Coil end jointing fixture

Hoop feeder

Hoop exist guide roll

Tube mill

Tube mill

Leveler forming machine

Welding equipment cooling system

Sizing machine

Cutting machine

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4. Seamless pipe manufacturing plant

Product Description and application

Seamless pipes are used where strength, resistance to corrosion and product life is

crucial. Ultra high strength and corrosion-resistant properties make these perfect for oil

and gas industry, steam boilers, chemical and other processing industries, pipelines,

installation with high and supercritical steam and pressure conditions, etc. Due to their

varied uses, seamless pipes and tubes find their application in several industry sectors

which include:

Refineries & Petrochemical plants

Fertilizer industry

Steel plants

Power plants

Industry using Boilers.

Sugar plants

Chemical plants

Industry using Heat Exchangers and Condensers.

Automobile manufacturing plants

Railways

Defense (aircraft, missile, nuclear power plants)

Market study

The countries demand for steel pipes is increasing due to the growth of the construction

sector, water distribution and need of furniture for the expansion of schools, hospitals,

hotels etc. Currently the market of seamless pipes is totally from import. Recently the

product is imported from china, Czech Republic and France.

Data from custom and revenue authority shows that in the last six years seamless pipes

are imported in bulk for different purposes by local industries in Ethiopia. As table7

below indicates during the last six consecutive years a total of 31,483,373 ton of

seamless pipes were imported which costs 53131237 SUD.

21

year Net Mass (ton) Growth rate

(%)

CIF_Value

(USD)

Growth rate

(%)

2005 3097656 3131799

2006 3944299 4281454

2007 3160965 4103644

2008 2623558 4702742

2009 5827290 11624381

2010 12829606 25287218

sum 31483373 53131237

average 5247229 8855206

Table 7: Import of seamless pipes products

Whereas the predicted demand gap of the product using double exponential method is

shown in table below.

year Forecasted

(double)

2013 13686689.9065

2014 15223499.6784

2015 16760309.4504

2016 18297119.2223

2017 19833928.9943

2018 21370738.7662

2019 22907548.5381

2020 24444358.3101

2021 25981168.0820

2022 27517977.8540

Table 8: Projected Demand for seamless pipes products

22

Raw Material

The main raw material needed for the production of seamless pipe is hot rolled steel

billets.

Technology


Seamless pipe manufacturing uses hot rolled round bar billet of carbon steel or steel

alloy. The billets are cut into suitable length depending on the required length of the

finished tube. The billets are heated in a furnace at a temperature of 1200 0C to 1300 0C.

Then the seamless tube is formed by drawing a solid billet over a piercer to create the

hollow shell (mother blanks). These hollows are crimped at one end in hot condition and

then they are air cooled.

The tubes are then surface treated (pickled, phosphate coated and lubricated) to facilitate

the next process of tube drawing. Depending on the finished sizes required, the tubes are

subjected to single, double or triple drawing. After every draw the tubes are annealed at

a temperature of 750 0C. The tubes are then straightened and cleaned if necessary and

before being cut to the exact size required. The finished tubes are tested for quality and

they are marked and coated with rust preventive oil before being bundled and

dispatched.

5. Aluminum Extrusion manufacturing plant


Aluminum extrusions are used for a wide variety of structures such as windows, doors,

water tanks, for show cases, handrails, curtain walls etc. These products are popular

because they are strong, durable, flexible, lightweight, corrosion-resistant and

completely recyclable. Construction and transportation industries cover the largest end

markets of aluminum.

In Ethiopia most of the aluminum is consumed by construction industries. Due to this

demand some aluminum factories have mushroomed in the country within the last 5

years. However majority of these factories use imported profiles as a raw material.

23

Market study

Ethiopia’s Aluminum market is increasing from time to time due to the rapid growth in

the construction industry of the country. Nowadays it is common to see modern

buildings and residential areas fitted with a lot of mirrors and aluminum frames. In

accordance with this growth, more and more aluminum fabricators are entering the

market with a product mix of windows, doors, handrails and frames etc. These

companies use imported aluminum profile as a raw material. By the time this document

is being prepared there is only one aluminum extrusion factory, B and C Aluminum, in

the country. Hence the availability of aluminum extrusion factory will be advantageous

in reducing the foreign currency that is spent on the import of extruded aluminum

profiles in an addition to creating a sustainable supply chain for the aluminum industries

of the country.

To put quantitative values on the demand of an aluminum profile, the 2005-2010

customs data is used. From the data it is seen that different aluminum products such as

profiles, rods, bars, hollow profiles, pipes and tubes, windows and doors, articles of

aluminum etc. are imported. For this analysis however the import of Aluminum bars,

rods, profiles, tubes and pipes is used.

From the table it can be seen, Ethiopia has been importing 11677261 k.g of aluminum profiles and cost 523, 015,342.98 USD during the year 2005 to 2010.

Year Mass (Kg) CIF(ETB) 3 years average import (Kg)

Growth Rate (%)

2005 969105.34 79,682,229.21

2006 1472150.79 48461022.21 51.9

2007 1593454.48 49126198.03 1344904 8.2

2008 2218226.34 93830216.63 39.2

2009 2677964.25 107546746.5 20.7

2010 2746359.34 144368930.4 2547517 2.6

Avg=1946210.09 Tot=523,015,342.90 Average=24.5

Table 9: Annual import of Aluminum bars, rods, profiles, pipes and tubes

For predicting the demand of aluminum profiles a trend line is used .As seen in Graph 1

the R-squared value is 0.96 which is an indicator of a good trend line fit. The demand of

24

aluminum profile is predicted using the trend line equation. Table below shows the

projected demand for the product during the year 2011 to 2020.

2004 2005 2006 2007 2008 2009 2010 20110

500000

1000000

1500000

2000000

2500000

3000000f(x) = 375099.492571429 x − 751066021.247143R² = 0.96422509574195

Mass (Kg)Linear (Mass (Kg))

Year (G.C)

Mas

s (M

illio

n of

Kg)

Graph 1 Trend line prediction for Aluminum Profile

Year Net Weight (kg)

2011 3,259,053

2012 3,634,153

2013 4,009,252

2014 4,384,352

2015 4,759,451

2016 5,134,551

2017 5,509,650

2018 5,884,750

2019 6,259,849

2020 6,634,949

Table 10: Project Demand of Extruded Aluminum profile

Raw Material

The raw material used for an aluminum extrusion factory is an aluminum scrap and if

the scrap is not available an aluminum billet can be imported from abroad. Aluminum

scrap can be available from aluminum factories. The other material needed is coating

powder and chemical which can be imported from abroad.

25

Technology

Manufacturing process16

If the raw material used is scrap aluminum, the process starts by melting the scarp and

casing a billet. However If the raw material used is a billet the process starts from

heating the billet to a certain desired temperature. The heated billet is then put into the

extrusion press. Lubricant needs to be added to the billet and ram so that they won’t

stick together. In the extrusion press the ram applies pressure to the billet to force it

through a die. Soft but solid metal begins to squeeze through the die opening. It is then

pushed out of the die to the lead-out table and the puller which guides the metal down

the run-out table during extrusion. The extrusion is cooled by a series of fans along the

entire length of the run out table. The remainder (butt) of the extruded billet is removed

in order to load and weld another billet to continue the extrusion process. When enough

extrusion length is acquired, the profile is cut into the desired length and transferred (via

Belt or walking beams systems) to a cooling table. After it has been cooled it is moved

to the stretcher in which straightening and work hardening of the extrusion is performed.

It is then cut to standard length with high tolerance saw. Next it is moved to an ageing

oven in which heat-treating or artificial aging hardens the metal by speeding the aging

process in a controlled temperature environment for a set amount of time. Lastly it is

moved to a powder coating plant in which the profile is coated and wrapped to prevent it

from dust. Generally, aluminum extrusions are then machined and or assembled into

finished parts and components.

Machine and equipment

The machineries and equipment needed for an extrusion plant are mentioned as follows

Melting furnace

Casting machine

Extrusion press machine and Handling system

Moving and shifting vessel

Different auxiliary machines

16http://www.bonlalum.com/extrusion_process.shtml 26

http://www.bonlalum.com/extrusion_process.shtml

6. Aluminum foil manufacturing plant


Aluminum foil is aluminum prepared in the form of thin metal leaves. The foil can

easily be bent or wrapped around objects. Its application can be divided into two:

packaging applications and non-packaging application. In the packaging application it is

used for packing foods, cosmetics, and chemical products whereas in the non-packaging

application it is used in industrial applications such as thermal insulation, fin stock,

electrical coils, capacitors etc.

The excellent impermeability of Aluminum foil to water vapor and gases together with

its ability to increase shelf life and recyclability makes it an outstanding choice for

packaging. Thin aluminum foils are fragile and are sometimes laminated /Backed to

other materials such as plastics or paper to make them more useful.

Market study

The major users of aluminum foil in Ethiopia are cigarette factories, pastries and

restaurants which sell take away foods. The expansions of hotels and restaurants will

foster the need of aluminum foil. Aluminum foil demand will also increase in relation

with the development of agro processing industries. Currently there are no aluminum

foil manufacturing industries. The demand for the backed and blister foils is met from

imports. As can be seen from the table below there is an increase in import of this

product from time to time. At an average 382595.72 kg has been imported annually in

the years 2005 -2010.

Year Mass (Kg) CIF(ETB) Three years average import (Kg)

GR (%)

2005 257,454.94 8,093,526.70

2006 319,593.99 10,362,637.36 24.1

2007 290,057.49 11,570,957.60 -9.2

2008 411,879.69 15,513,694.12 289,035.47 42.0

2009 359,039.00 17,699,086.22 -12.8

2010 532,408.41 31,024,413.73 434,442.37 48.3

Tot=2,170,433.52 Tot=94,264,315.73

Avg=18.5

Table 11 : Annual import of Aluminum Foil

27

As seen in Graph 2 a polynomial trend line has been fitted to the data. An R-squared

value of 0.81 is found form this fitted trend line and hence indicating a good fit. Using

the equation of the trend line the import of aluminum foil has been predicted.

2004 2005 2006 2007 2008 2009 2010 20110.00

100,000.00

200,000.00

300,000.00

400,000.00

500,000.00

600,000.00f(x) = 8266.6971461386 x² − 33144648.3394641 x + 33222964668.541R² = 0.80519725392923

Mass(Kg)

Polynomial (Mass(Kg))

Year (G.C)

Mas

s (M

illio

ns K

g)

Graph 2: Trend line prediction for Aluminum foil

Year Projected demand

(kg)

2011 611934

2012 724220

2013 853039

2014 998392

2015 1160278

2016 1338697

2017 1533650

2018 1745136

2019 1973156

2020 2217709

Table 12: Project Demand of Aluminum foil

Raw Material

The major raw material for the production of Aluminium foil is aluminium ingot.

Plastic, paper or paperboards are the auxiliary raw materials needed for manufacturing

backed aluminium foil.

28

Technology


The manufacturing process mentioned here starts from the heating of aluminum ingots.

The process of producing aluminum foil involves many steps, including refining,

smelting, rolling and finishing before it becomes the common product that is used in

households every day.

The ingots of aluminum are heated to make them more malleable, rolled, passing

backwards and forwards through large rollers as the slab gets thinner and thinner, and

longer and longer. This metal strip is hot rolled to a thickness of 2 to 4 mm (2000 to

4000 microns) and then coiled, before being cold rolled to metal thicknesses of between

6 and 400 microns. The thinnest foil used for wrapping chocolates may be only 6

microns thick (about one-eighth the thickness of newspaper!), with household wrapping

and cooking foil between 11 and 18 microns, lidding foil between about 30 and 40

microns, and foil for foil containers generally between 40 and 90 microns.

The foil is then annealed by a thermal process to make it pliable: great care is taken to

ensure the correct balance between flexibility and strength for different applications.

After the foil stock is made, it must be reduced in thickness to make the foil. This is

accomplished in a rolling mill, where the material is passed several times through metal

rolls called work rolls. As the sheets (or webs) of aluminum pass through the rolls, they

are squeezed thinner and extruded through the gap between the rolls. The work rolls are

paired with heavier rolls called backup rolls, which apply pressure to help maintain the

stability of the work rolls. This helps to hold the product dimensions within tolerances.

The work and backup rolls rotate in opposite directions. Lubricants are added to

facilitate the rolling process. During this rolling process, the aluminum occasionally

must be annealed (heat-treated) to maintain its workability.

The reduction of the foil is controlled by adjusting the rpm of the rolls and the viscosity

(the resistance to flow), quantity, and temperature of the rolling lubricants. The roll gap

determines both the thickness and length of the foil leaving the mill. This gap can be

adjusted by raising or lowering the upper work roll. Rolling produces two natural

29

finishes on the foil, bright and matte. The bright finish is produced when the foil comes

in contact with the work roll surfaces. To produce the matte finish, two sheets must be

packed together and rolled simultaneously; when this is done, the sides that are touching

each other end up with a matte finish. Other mechanical finishing methods, usually

produced during converting operations, can be used to produce certain patterns.

As the foil sheets come through the rollers, they are trimmed and slitted with circular or

razor-like knives installed on the roll mill. Trimming refers to the edges of the foil, while

slitting involves cutting the foil into several sheets. These steps are used to produce

narrow coiled widths, to trim the edges of coated or laminated stock, and to produce

rectangular pieces. For certain fabricating and converting operations, webs that have

been broken during rolling must be joined back together, or spliced. Common types of

splices for joining webs of plain foil and/or backed foil include ultrasonic, heat-sealing

tape, pressure-sealing tape, and electric welded. The ultrasonic splice uses a solid-state

weld—made with an ultrasonic transducer—in the overlapped metal.

Machinery and Equipment

Rolling mill

Trimming machine

Slitting machine

Ultrasonic splice

Printing machine

Lamination machine

Cutting machine

7. Ball Bearings manufacturing plant


Ball bearing is a type of rolling element that uses balls to maintain the separation

between the bearing races. There are four major parts to a standard ball bearing: the

outer race, the rolling balls, the inner race, and the cage. The balls are held by a cage,

which keeps them evenly spaced around the races. They are used to reduce rotational

30

friction and support radial and axial loads .The balls in the cage are used to transmit the

loads.

Market study

A total of 3,077,139.85 Kg of ball bearings worth 22,035,890.03 USD has been

imported from the year 2005-2010. The recent three years average of the imported

bearings has increased to 587,543.94Kg from the previous three years average import,

which was 438,169.35 Kg. the average growth rate from the year 2005-2010 is 27.91%.

Year (GC) Net Weight (Kg) Growth Rate (%) Three years

Average Net

Import (kg)

2005 414,180.14 27.91

2006 529,794.45 -30.06

2007 370,533.45 5.51 438,169.35

2008 390,957.99 19.05

2009 465,424.33 94.71

2010 906,249.49 23.43 587,543.94

Tot=3,077,139.85 Avg=27.91

Table 13: Annual import of ball bearings

A Polynomial trend line has been fitted to the imported quantities of 2005-2010. An R

squared value of 0.76 is found for this fit. A forecast has been made using this line.

Taking a base year of 2010 with a forecasted demand of 680,000Kg the average growth

rate for the 2010 - 2015 has been predicted to be 10.23%.

31

2004 2005 2006 2007 2008 2009 2010 20110.00

100,000.00200,000.00300,000.00400,000.00500,000.00600,000.00700,000.00800,000.00900,000.00

1,000,000.00f(x) = 45731.4930536143 x² − 183546582.869422 x + 184169655180.936R² = 0.756086615798911 Net

Masss(Millions of kg)Polynomial (Net Masss(Millions of kg))

Year (GC)

Net

Wei

ght (

Kg) M

illio

ns

Graph 3: Trend line prediction for ball bearings

Year (G.C.) Projected demand

(Kg)

2011 741622.7347

2012 806984.4755

2013 872346.2164

2014 937707.9572

2015 1003069.6981

2016 1068431.4390

2017 1133793.1798

2018 1199154.9207

2019 1264516.6615

2020 1329878.4024

Table 14; Projected Demand for ball bearings

Raw materials

Almost all parts of all ball bearings are made of steel. Since the bearing has to stand up

to a lot of stress, it needs to be made of very strong steel. The standard industry

classification for the steel in these bearings is 52100, which means that it has one

percent chromium and one percent carbon (called alloys when added to the basic steel). 32

This steel can be made very hard and tough by heat-treating. Where rusting might be a

problem, bearings are made from 440C stainless steel. The cage for the balls is

traditionally made of thin steel, but some bearings now use molded plastic cages because

they cost less to make and cause less friction.

Technology


The different components of a ball bearing have different manufacturing processes, which are explained as follows

Races

Since both the outer and inner races are rings of steel, the process starts with steel tubing

of an appropriate size. Automatic machines similar to lathes use cutting tools to cut the

basic shape of the race, leaving all of the dimensions slightly too large. The reason for

leaving them too large is that the races must be heat treated (hardening and tempering)

before being finished, and the steel usually warps during this process. They can be

machined back to their finished size after being heat-treated. However, the races are

going to be too hard to cut with cutting tools, so the rest of the work must be done

with grinding wheels. Very fine abrasive slurry is used to polish the races for several

hours to get almost a mirror finish. At this point, the races are finished, and ready to be

put together with the balls.

BallsThe balls start out as thick wire. This wire is fed from a roll into a machine that cuts off

a short piece, and then smashes both ends in toward the middle. This process is called

cold heading. During the process the balls acquire a shape like the planet Saturn, with a

ring around the middle called "flash”.

The first machining process removes this flash. The ball bearings are put between the

faces of two cast iron disks, where they ride in grooves. The inside of the grooves are

rough, which tears the flash off of the balls. One wheel rotates, while the other one stays

still. The stationary wheel has holes through it so that the balls can be fed into and taken

out of the grooves. A special conveyor feeds balls into one hole; the balls rattle around

the groove, and then come out the other hole. They are then fed back into the conveyor

for many trips through the wheel grooves, until they have been cut down to being fairly

33

round, almost to the proper size, and the flash is completely gone. Once again, the balls

are left oversize so that they can be ground to their finished size after heat treatment.

After heat treatment, the balls are put back into a machine that works the same way as

the flash remover, except that the wheels are grinding wheels instead of cutting wheels.

After this, the balls are moved to a lapping machine, which has cast iron wheels and uses

the same abrasive lapping compound as is used on the races. Here, they will be lapped

for 8-10 hours; depending on how precise a bearing they are being made for. Once

again, the result is steel that is extremely smooth.

CageSteel cages are stamped out of fairly thin sheet metal, much like a cookie cutter, and

then bent to their final shape in a die. A die is made up of two pieces of steel that fit

together, with a hole the shape of the finished part carved inside. Plastic cages are

usually made by a process called injection molding.

AssemblyAssembly of the parts begins after all the components are manufactured. First, the inner

race is put inside the outer race, only off to one side as far as possible. This makes a

space between them on the opposite side large enough to insert balls between them. The

required number of balls is put in, then the races are moved so that they are both

centered, and the balls distributed evenly around the bearing. At this point, the cage is

installed to hold the balls apart from each other. Plastic cages are usually just snapped in,

while steel cages usually have to be put in and riveted together. Now that the bearing is

assembled, it is coated with a rust preventative and packaged for shipping.

34

8. electric motors, generators and transformers manufacturing

plant

Product description and application

An electric motor is an electromechanical device that converts electrical

energy into mechanical energy whereas The reverse process, producing electrical energy

from mechanical energy, is done by generators such as an alternator or a dynamo; some

electric motors can also be used as generators, for example, a traction motor on a vehicle

may perform both tasks. Electric motors and generators are commonly referred to

as electric machines. Most electric motors operate through the interaction of magnetic

fields and current-carrying conductors to generate force.

Electric motors are found in applications as diverse as industrial fans, blowers

and pumps, machine tools, household appliances, power tools, and disk drives. They

may be powered by direct current, e.g., a battery powered portable device or motor

vehicle, or by alternating current from a central electrical distribution grid or inverter.17

Whereas Transformer is an electro mechanical device which transfers electrical energy

from one circuit to another by means of changing magnetic field, without changing the

frequency. Different types of transformers are used for different electronic applications.

Advancement in the field of electronics has influenced change of design and use of new

type of core materials.

Market Study

Table reveals that import of transformer during the period under reference has been

generally rising except 2008. The average level of import during the first three years,

i.e., 2005-2007 was about 1,657,991 kg. However, during the recent last three years

2008-2010, the average level of import has increased to about 5,106,917 kg. During the

period 2005 – 2010, import of the products has registered an average annual growth rate

of 83%. In sum during the last six year nearly 20,294,725 kg unit of transformers had

been demanded and imported with an amount of 210,469,713 USD.

17http://en.wikipedia.org/wiki/Electric_motor 35

Whereas import of electric motor and generator during the period under reference has

been generally increasing except 2009. The average level of import during the first three

years, i.e. 2005-2007 was about 3,513,317 kg. However, during the recent last three

years 2008-2010, the average level of import has increased to about 5,201,505 kg.

During the period 2005 – 2010, import of the products has registered an average annual

growth rate of 18%. In sum during the last six year nearly 8714822 kg unit of

transformers had been demanded and imported with an amount of 16,625,324.09 USD.

year CIF value ( USD) Net_ Mass Growth RateMotor and generators

transformer Motor and generators

transformer Motor and generators

transformer

2005 2,465,078.85 5,936,986.79 977450.2 572,479 - -2006 1718628.47 9,982,982.29 1103943 962,618 12.94% 68%2007 1414368.52 35,663,433.76 1431924 3,438,878 29.7% 257%2008 1776907.69 32,458,404.21 1546315 3,129,830 7.98% -9%2009 5228394.4 54,744,989.32 1514199 5,278,833 -2% 69%2010 4021946.16 71,682,916.83 2140991 6,912,087 41.39% 31%Average growth rate

18% 83%

Table 15: Import of motor, generators and transformer used in {kg} and its CIF value (USD)

To estimate the current demand of transformer, 2010 has been taken as a base year and

the net mass for this year is projected as 6,900,000. The trend line in graph 7 below

Shows that in the year (2011-2020) in average the demand for transformers will increase

by 10.78 % and if the trend keeps linear, the demand for the product will be anticipated

to go up to 134,700,000 units of KG by 2020.

36

2004 2005 2006 2007 2008 2009 2010 20110

10000002000000300000040000005000000600000070000008000000

f(x) = 1266789.62857143 x − 2539697725.19048R² = 0.94008323370325

Net_MassLinear (Net_Mass)Linear (Net_Mass)Linear (Net_Mass)

Year

Net

_Mas

s in

Mill

ions

Graph 4: projected demand of transformer

Where as to estimate the current demand of electric motor and generator, 2010 has been

taken as a base year and the net mass for this year is projected as 2,150,000 kg. The

trend line shows that in the year (2011-2020) in average the demand for transformers

will increase by 6.86 % and if the trend keeps linear, the demand for the product will be

anticipated to go up to 30,970,000 units of KG by 2020.

2004 2005 2006 2007 2008 2009 2010 20110

500000

1000000

1500000

2000000

2500000

f(x) = 204653.252857141 x − 409388934.769045R² = 0.878611772085932

Net_Mass(Kg)Linear (Net_Mass(Kg))

year

Net

_M

ass

Graph 5: projected demand of motor and generators

Raw Material

The raw materials used are Super enameled copper wire (different gauges); Core

material (laminations); Bobbins and forms; Clamps/base plates/ bolts and nuts; Flexible

leads/sleeves; Impregnate materials (including varnish); insulating material and

37

Consumables (solder, flux, packing material). Bolts and nuts demand will be covered by

domestic demand whereas the other raw materials will be imported from abroad.

Technology


The incoming raw materials are tested for required quality before released for

production. The super enameled copper wire is wound on bobbins or former as per

required specification by using CNC winding machine. The coils are then stalked with

core material, terminated and clamped. The completed transformer and coils are vacuum

impregnated by using varnish and baked in an Oven at a particular temperature. Then

transformers are tested for electrical specification before packing.

Machine and equipment

Machinery and equipment to manufacture transformer are CNC Winding Machine ,

Semi-Automatic Winding machine, Oven (3.5 kW) ,Vacuum Impregnation

Plant ,Testing Equipment Digital LCR-Q Meter ,Oscilloscope , Insulation Tester , High

Voltage break ,down tester, egger , Digital Multi meter , Analog Multi meter ,

Electrification ,machinery and equipment, Tools, Jigs, Fixtures and Soldering Iron

station and Office equipment and furniture.

9. Submersible pump manufacturing plant


Submersible pump is centrifugal type of pump which pumps out water from the bored

hole or well. The pump is coupled with an electric motor. The shape of the pump and

motor is cylindrical which makes it easy to be fitted in drilled bore in the earth. The

pump remains dipped in water due to which there will not be any suction trouble.

Submersible pump is used for continuous discharge of water in quantity as well as for

high heads and also for domestic purpose to get sufficient water. Ethiopia being rich in

agricultural resources there will also always be demand for the product in areas of

irrigation.

38

Market Study

Table 35 reveals that import of Submersible Pumps during the period under reference

has been generally declining. The average level of import during the first three years,

i.e., 2005-2007 was about 911,677 kg. However, during the recent last three years 2008-

2010, the average level of import has decreased to about 67,413kg. But the result shows

that the product has been imported and significant costs has been incurred up to recent

years. In sum during the last six year nearly 2,937,271 kg of Submersible pumps had

been demanded and imported with an amount of 30,325,513 USD.

year CIF value ( USD) Net_ Mass Growth Rate2005 15,071,480 1,926,246 -2006 9,696,841 697,828 -642007 1,738,568 110,958 -842008 1,563,940 93,387 -162009 2,121,692 101,494 8.72010 132,992 7,358 -92.8Average growth rate -50

Table 16 : import of submersible pumps

To estimate the current demand the recent three years average has been taken as a abase

demand for 2010. Accordingly the current (year 2010) demand for submersible pumps

has been estimated as 67,413kg.

Increase in construction sector, housing and industries will promote more production of

said goods and tend to increase the demand still further. However, the future demand is

expected to proliferate and stabilize at 10% rate of increase. Future demand estimates of

Submersible pumps have been projected at 10% rate of increase and the figure has

shown below in Table 36.

Table 36 shows that, in the year (2011-2020) the demand for the product will be

anticipated to go up to 1,181,828 units of KG by 2020.

39

year Projected demand

2011 74,154

2012 81569

2013 89,726

2014 98,699

2015 108,569

2016 119,426

2017 131,369

2018 144,506

2019 158,957

2020 174,853

Table 17: Projected demand of Submersible pumps

Raw Material

Cast Iron Castings, Gun Metal Castings, Stainless Steel Shafts, EN-8 Steel, MS Rods of

various sizes, Copper Rods & Castings, Stamping/Laminations for Stators & Rotors,

Seamless pipe 150mm diameter and PVC wire of different gauges, Cable wire, Rubber

components, Hardware items and paints will be used as raw materials and all the raw

materials will be imported.

Technology

Manufacturing process There are two main portions of Submersible Pump which are coupled together, one is

electric motor and the other is pump which is manufactured single stage or multi stages.

Motor body i.e. Stator is made by boring seamless pipe and fitting stamping in it. The

rotor is made by turning shaft and fitting bushes, stamping on it. PVC wiring is done in

stamping of both rotors as well stator; terminals are brought out from the motor and

jointed with the cable. Pump has number of parts which are made out of various metals

such as CI, GM, SS, and EN Steels etc. The raw material is cut to size on power

hacksaw, turned on laths, key-way cut on milling and slotting machine. Some of the

parts are ground and some are balanced on balancing machines. All component parts are

inspected at every stage before taking for assembly. Then the parts are assembled to

40

complete the pump. Motor and pump are coupled together to get Submersible Pump.

Then it is tested for water discharge.

10. Link chain manufacturing plant


Link Chain is a series of links made from mild steel wire / rod with electric butt-welding

on each link. These link chains are generally of three type's namely large link / semi long

link and short link depending on the size of the link and safe working load. These are

also made from alloy steels depending upon the working requirements. The diameter of

the wire/rod varies from 4 to 12 mm. The size of the link varies according to its

diameter.

Link Chain is a very vital part of material handling equipment’s. it is mainly used in

handling activities and used in Cranes, Chain Drives, Conveyor Systems, Dairy and

Agro farming activities, Manual Weighing Systems, Road Transport and Railways etc.,

Market Study

Table 37 reveals that import of articulated link chain of iron or steel during the period

under reference has been rising except 2007/08. The average level of import during the

first three years, i.e., 2005-2007 was about 306,325 kg. However, during the recent last

three years 2008-2010, the average level of import has decreased to about 303,197 kg.

But the result shows that the product has been imported and significant costs has been

incurred up to recent years. In sum during the last six year nearly 609,522 kg of link

chain had been demanded and imported with an amount of 2,999,544 USD.

41

year CIF value ( USD) Net_ Mass Growth Rate (%)2005 512,910 85,285 -2006 499,567 127,621 49.62007 592,668 93,419 -26.792008 281,693 67,796 -24.42009 455,692 94,168 38.82010 657,014 141,233 49.9Average growth rate 17.4

Table 18 : import of articulated link chain

To estimate the current demand 2010 has taken as a base line year and accordingly the

current demand for link chain has been estimated as 140,000kg. The trend line shows

that in the year (2011-2020) in average the demand for link chain will increase by 20.9

% and if the trend keeps polynomial, the demand for the product will be anticipated to

go up to 4,640,000 of KG by 2020.

2004 2005 2006 2007 2008 2009 2010 20110

20000

400006000080000

100000120000

140000160000

f(x) = 4748.94643132867 x² − 19062626.8360722 x + 19129789862.8299R² = 0.312178085944571

Year

Net

_Mas

s in

Mill

ions

Graph 6 : projected demand of articulated link chain

Raw Material

Wire rods 8, 10, 12 mm. diameter, welding material/consumables and packaging material wooden cases PP strips shall be used as raw materials.

Technology


Mild Steel dram wire in coils is set on the de-coiler of wire bending machine. Then wire

is fed to automatic wire bending machine where during the feeding wire get straightened

then cut to the required link size and bent to form link. The process repeats and chain is

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formed with bent links. The chains are pickled and cleaned with acid and water. Now

chains [one by one] fed on to the electro mechanical butt-welding machine, where open

ends of the chains automatically welded and debarred. The welded chains are now

inspected and tested as per the specifications laid down in the respective Standards, after

this welded chains are generally packed in wooden cases. The defective chain links may

be salvaged by gas welding.

11. Baking Ovens manufacturing plant


Baking ovens are used to prepare bakery products like bread, cookies, cakes and various

sorts of sweet and normal bread. Baking ovens using electric power are clean and

comfortable to utilize. They can be made for preparing the products in various

capacities. Their sizes can vary from 50x50x50cm small size to larger sizes of

100x100x200cms.Their output capacity can vary in range from 20kgs/day to200kgs/day

of bread. The electric consumption for such bakery is within the range of 5 kw to 20 kw.

These are baking ovens that are useful for small and medium scale bakeries which are

commonly spread with in the towns and cities of the country. Their fabrication involves

mainly metal tubes and sheet metals utilizing locally available machines.

Market Study

Supply of bakery ovens is mainly met from import. Although negligible amount of the

product is produced in some workshops locally the data could not be found in the Survey

of Manufacturing and Electricity Industries published by the Central Statistical Agency.

Hence, in the absence of domestic production data the import data obtained from the

Customs Authority is used as a proxy to estimate the current unsatisfied demand for

bakery ovens.

The import data depicted in Table 38 shows that The imported quantity which was only

305,807 units during 2005 has sharply increased to 1,286,505 units during 2006, then

declined to 110,499 units and 32,296 unit and again increased to 92,840units in after

declined by a large rate. One specific features of the data presented in Table 40 is that

there is a sharp decline in the year following large importation.

43

However during the last six year nearly 1,833,002 units of electric ovens had been demanded and imported which costs 305,272 USD.

CIF Value (USD) Net _ Mass rate (%)

2005 43,681 305,807 -

2006 228,744 1,286,505 320

2007 10,302 110,499 -91

2008 9,555 32,296 -71

2009 12,193 92,840 187

2010 797 5,055 -95

Average growth rate 50

Table 19 : import of electric oven during the year 2005 to 2010

In the absence of a trend in the data set the following assumptions are adopted to

determine the current effective demand. The demand for baking ovens is believed to

increase with population growth, income rise urbanization and electrification of towns.

And the combined effect of the above factors is expected to increase the demand by 5%

per annum. The projected demand based on this assumption is given in Table 39 below.

To estimate the current demand the recent three years average has been taken as a abase

demand for 2010. Accordingly the current (year 2010) demand for electric ovens has

been estimated as 43397 unit. The unsatisfied demand for baking ovens will be expected

to increase by 573,134.25 units in 2020.

Table 20 : projected demand for electric oven

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year Projected demand

2011 45566.85

2012 47845.19

2013 50237.44

2014 52749.31

2015 55,386.77

2016 58156.1

2017 61063.8

2018 64116.99

2019 67322.83

2020 70688.97

Raw Material

Baking oven is made by the assembly of different parts of tubular metals, sheet metals,

insulating materials, electric resistors, and electric insulator materials. The main frame

of the oven is made from tubular metals; typically an electric cooking oven having an

external dimension of 100x100x200cms can bake 100 kgs of wheat bread in a day of 8

working hours. The external parts of the stove in touch with bread and exposed to steam

and heat are made of stainless steel since the material resists corrosion. All the raw

materials are to be imported, except the insulation materials which can be obtained in the

local market.

Technology


The manufacturing of ovens consists of fabrication of RHS section metals and sheet

metal parts to form the finished part. The process involves cutting and joining by

welding of RHS metals and covering the whole structure by stainless steel sheets. The

process involves metal cutting, arc welding, sheet metal cutting bending and electric

spot welding.

12. Non-threaded Mechanical Fasteners Manufacturing Plant


A rivet is a mechanical fastener. It consists of a smooth cylindrical shaft with a head on

one end. On installation the rivet is placed in a pre-drilled hole. Then the tail is “Upset”

(i.e. deformed) so that it expands to about 1.5 times the original shaft diameter and holds

the rivet in place. To distinguish between the two ends of the rivet, the original head is

called the factory head and the deformed end is called the shop head or buck tail. There

are a number of rivets, designed to meet different cost, accessibility, and strength

requirements. These include: solid rivets, blind rivets, multi-grip rivets, grooved rivets,

peel type blind rivets, self-pierce rivets, plastic rivets, tubular rivet, etc.

45

Rivet has wide application in the structural parts of aircraft, in static structures such as

bridges, cranes and building frames. It is also used in manufacture or repair of truck

bodies.

Market Study

Rivets have wide application in the manufacturing sector as well as during maintenance

of various products. As there is no local production of rivets, the country’s requirement

is entirely met through import. Normal rivets and tabular or bifurcated type of rivets are

imported in a substantial quantity annually. Imported quantity of rivets for the past six

years is shown in Table 40.

CIF Value (USD) Net _ Mass rate (%)

2005 67,787 35,302 -

2006 147,182 35,524 0.6

2007 157,254 72,894 105

2008 63,532 32,005 -56

2009 91,464 42,422 33

2010 241,289 96,943 201

Average growth rate 57

Table 21 : import of rivets during the year 2005 to 2010

The demand for rivets is directly related with the manufacturing sector, especially with

the engineering industries. Although the manufacturing sector is planned to grow by

11.5% per annum the engineering industry requires some time to develop as it requires

relatively high knowledge and technology.

To estimate the current demand 2010 has taken as a base line year and accordingly the

current demand for rivet has been estimated as 96,000 units. The trend line shows that in

the year (2011-2020) in average the demand for rivet will increase by 6.9% and if the

trend keeps linear, the demand for the product will be anticipated to go up to 1,176,000

units by 2020.

46

year Projected

demand

2011 84,000

2012 88,000

2013 98,000

2014 106,000

2015 114,000

2016 120,000

2017 130,000

2018 138,000

2019 144,000

2020 154,000

Average growth rate (%)

Table 22: projected demand for rivet

Raw Material

The raw materials used for the production of rivets are mainly mild steel and alloyed or

non-ferrous metals (Aluminum) depending upon the applications. The raw materials

have to be imported. Mild steel and aluminum are available in Ukraine, Turkey & India

and packing materials are found locally.

Technology


The raw material is fed into the shearing machine to form rivet by shearing length of the

rod and extruding. An aluminum rivet blank approximately the same diameter as the

head of the finished rivet is used. This rivet blank is forced into a die to extrude the

tapered region and the shank of the finished rivet. The fabrication process provides more

uniform cold working at the junction of the shank and the tapered region. This process

also can provide a superior surface finish, and is suitable for use in wet wing fabrication

without further processing for improved surface finish.

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After the final product is manufactured will be transferred to the quality inspection and

packing department. Then ready for dispatch. The technological process has no any

adverse environmental impact.

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