MAKING ALUMINIUM SHOTS AND NOTCHED BARS
Introduction
This business idea is for manufacturing and marketing of Aluminium shots and notch bars. These have wide use in steel plants as De-oxidizers. The steel is either partially or fully de-oxidized depending on the melting condition. The De-oxidizers are normally used in steel making or ferrosilicon, an alloy of iron and silicon. Although Aluminium is added to steel mainly for the de-oxidizing purpose, it is also used for fixing nitrogen. This business idea is premised on production of 1,000 tonnes of aluminium per month which translates into 12,000 tones of aluminium per annum. The revenue potential is estimated at US$982 per month translating into US$719,784 per year with a sales margin of 20%. The total Investment requirement is US$691,998 for the first year of project operation.
Production Capacity
The production capacity of the project depends on the objectives of the investor and the quantity of raw materials put in the production process. And with this case, the envisaged industrial plant would have a minimum plant capacity of 12,000 tonnes of Aluminium produced per annum.
Production Process
The manufacturing process involves three stages of melting, casting, guarding and testing. Commercial grade Aluminium of 99 per cent purity is suitable for manufacture of Aluminium shots and notched bars. Firstly, the scrap should be properly segregated and subjected to magnetic separation. The Aluminium scrap and ingots should be prepared to drive out any oil or moisture before introducing this into molten metal. In the process of casting, castiron moulds have to be cleaned and coated with a refractory wash and dried. When the melt attains temperature of 7100C, it is ladled gently into cast iron moulds. On solidification, notched bars are taken out of the moulds. Aluminium shots are made by passing molten Aluminium, at a correct temperature, through a refractorycoated vibratory sieve. The metal beneath the sieve is collected in water through a continuous stream of water circulation. Towards the end, the shots so obtained from the water are graded and the oversized shots are melted again. The materials conforming to the standards are weighed and packed.
Market Analysis
The demand for the Aluminium shots and notched bars mostly depends on the requirements of the steel plants. Their demand is increasing as the steel industry improves. As the steel industry is intertwined with other sectors of the economy, this can indeed be a viable project to undertake. There are no key players in Uganda.
Capital Investment Requirements in US$
Production and Operating Costs
|
Item |
Units |
Qty |
Unit |
Amount |
|
Coke Fired Pit Furnace |
No |
1 |
4,000 |
4,000 |
|
Vibratory Refractory Sieve |
No |
1 |
2,000 |
2,000 |
|
Water Trough with |
No |
1 |
1,000 |
1,000 |
|
Electric Hoist |
No |
1 |
750 |
750 |
|
Platform type Weighing |
No |
1 |
500 |
500 |
|
Testing Equipments |
Set |
2 |
3,000 |
6,000 |
|
Energy Conservation |
500 |
500 |
||
|
Moulds and Fixtures |
No |
4 |
250 |
1,000 |
|
Foundry Tools |
No |
4 |
500 |
2,000 |
|
Delivery Truck |
No |
1 |
9,000 |
9,000 |
|
Total |
26,750 |
Direct Materials, Supplies and Costs in
US$
|
Cost Item |
Units |
Unit cost |
Qty/ day |
cost/ |
cost/month |
cost/ |
|
Direct Costs |
||||||
|
Commercial |
Tone |
500 |
2 |
1,000 |
26,000 |
312,000 |
|
Coal |
Tone |
1,000 |
1 |
1,000 |
26,000 |
312,000 |
|
Water |
Liter |
0.01 |
1,000 |
5 |
130 |
1,560 |
|
Sub-total |
1,003 |
2,005 |
52,130 |
625,560 |
||
|
General Costs (Overheads) |
||||||
|
Rent |
1,000 |
12,000 |
||||
|
Labour |
1,000 |
12,000 |
||||
|
Utilities |
250 |
3,000 |
||||
|
Preliminary Costs |
250 |
3,000 |
||||
|
Miscellaneous Costs |
250 |
3,000 |
||||
|
Depreciation |
557 |
6,688 |
||||
|
Sub-total |
3,307 |
39,688 |
||||
|
Total Operating Costs |
55,437 |
665,248 |
1. Production costs assumed are for 312 days per year with a daily capacity of 769 Kilograms of Aluminium produced.
2. Depreciation (fixed asset write off) assumes _4_ years life of assets written off at _25% per year for all assets.
3. Direct Costs include: materials, supplies and other costs that directly go into production of the product.
4. A
production month is assumed to have 26 days.
Project Product Costs and Price Structure in US$
|
Item |
Qty/day |
Qty/Yr |
Unit cost |
Prod cost/Yr |
Unit price |
Total revenue |
|
Aluminium |
769 |
239,928 |
2.8 |
665,248 |
3.00 |
7 |
Profitability Analysis in US$
|
Item |
Per day |
Per Month |
Per Yr |
|
Revenue |
2,307 |
59,982 |
719,784 |
|
Less: Production and |
2,132 |
55,437 |
665,248 |
|
Profit |
175 |
4,545 |
54,537 |