Directory of project profiles in metal working industries and medicinal plant processing for small-scale industries

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Lcn/ 11~~JJ)/~~;lIOOl/(l()

May 1990

UNITED.NATIONS

ECONOMIC COMMISSION FOR AFRXCA

. Industry'. and Human· Settlements Division

DXRECTORY OF PROJECT PROFILES XN METAL

WORKING INDUSTRIES AND MEDICINAL P L A N I

PROCESSING FOR SMALL-SCALE INDUSTRIES

[ Output 4.2 (a) ]

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CONTENTS

1.

II.

Background

Metal Working Industries

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A. Agricultural Machinery, Equipment and Tools

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AI.

A2.

A3;

. A4.

Agricultural Implements Plant Tractor-Drawn) .

Spare .Parts M!l)d.ng._Pla~t.

'Gabion Making Plant (Nets) Pump Assembling Plant

(Manual, ^{Animal and}

B. Food Processing and Conservation

BI.

B2.

B3.

Can Making Plant Canning Plant

Dairy Equipment Plant

C. Other Metal Working Industries

CI.

C2.

C3.

C4.

C5.

C6.

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CS.

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--'l n

Cll.

Automobile Radiator Cores unit Belt Fasteners Plant

Bolts and Nuts Manufacturing Plant Hair ~ins Making Plant

Machine Screws and Rivets Making Plant Mechanical Toys Making Plant

Production of Hand Making Tools Springs Making Plant

Stapler and punching Machine Making Plant

Wire Nails Making Plant

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D. Medicinal Plant Processing

D1. Essential oil 02.

03.

D4.

D5.

Isolation of Active Ingredients from Plant Extracts Medicinal Alcohol

Processing of Medicinal Plants into Dosage Form

Processing of Plant Extract

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This directory, the first edition of project profiles in metal working industries and medicinal plant processing for small-scale industries aims at providing developing African countries, especially policy-makers, industrialist" and potential entreprenellrs with ~ qener~l inforrn~tion ~I-' 'sy roforcnC0S to

sm~1_1-sc~1~ met~l workinq indllstrial prninrt

The present directory of proj ect. p rot.i 1· ^Oil mcet.dl workinlJ' industries and medicinal plant procesc; iriq for smClll-sccl1c industries contains a number of possible pr0jects that could be established by indigenous entrepreneurs in most African countries.

The profiles are presented in a self-contained detachable forms for a wide distribution ,to 'potential users.

This editipn' intends:

a}' To impress reform pQlicy makers and potential ,entrepreneurs .:that:a .\.Jide.!'"ange

of

small-scale metal working industries, Lhe Lecnnlcal upgrading of the informal metal sector into modern small-scale industries. In fact, a wide spectrum of the informal sector operates in the metal working industries in most African countries.

There 15 a severe shortage of ill3ny of t.h e SP2~'~ :i.:)2t-tS D:::

machine and construction transport equipment, agr icul tural machines imported in Africa by different sectors of the national economies. Only few of them are produced in Africa by the informal sector and a narrow modern sector. The under- utilization and break-down of machinery and equipment make the establishment of small scale metal wor ki nq industries an urgent task of the African Governments.

Considering the fact that small-scale industries are more manageable, simple production techniques offer a greater employment opportunity and many other advantages" African

c ou nt.ri c c should 17l.3.kc .=t·.-c.:l~=-"::~jl'2 '.::.c ';::.~,,-....-' ,-:~,--,-.1.. .: ..:J1.--;,i:10 ';;'~2-'::'C~',

various incentives and design specific policies Which could help the creation of small-scale industries in that sector.

The establishment of small-scale industries at national level fO'r manufacture .o^f .marry metal tools, agricultural implements"

hand tools and spare parts are most likely to help overcome the constraints of foreign exchanges to import them.

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count r i o s oppo r t.uni t ior, r.o rl0\,,...,,1');1 t-Il::'~';r :,lj-;r;::,1.=0u~';_-~ll

lLhJ.ust:.rles w.it.n 1 0.:.:: d 1 fo1·-..;uicln<-11 1.J-ldI1L.::,:, a s rd'",' .uar e r i a l s . Africa as a whole accounts for only ^0.5 per cent of the world pharmaceutical product ion. 'I'll'? r::c)n:~i n'?:Jlt 1.::; vi rt.u.il I.y

to-use drugs and bulk drugs for local Lormulation/production

more tha.n 20 per cent of the cun~umption_

Lack of well conceived small-scale projects and well developed chemical and managerial capability as well as low level of economic development in general are among the factors for the poor state in the development of the pharmaceutical industry in Africa. Other factors are lack of well defined national policies, inadequacy or absence of Rand D in the African medical needs, scarcity of finance, difficult access to technology and know-how, and restrictions imposed by foreign c cmp a ni c s pray.id inq such technology.

African region is rich in flora. This potential should be exploited with a view to maximize the use of drugs from medicinal plants. This could be done, inter alia,through the establishment of 'small-scale processing plants._

It _is _ hoped _ that the pr-e s ent; - directory will be _of help in prov{dingb~sic infbrmation for theestablishmeni of small-scale

.~~t2.l ':\T?~}-:::.i!""!q '2.!}d, ·~8d~cin?-J. p l a nt; proC'~s,~ing un it.s . w~ b~1~0·u,?

that these-two.subsectors are relevant 'in the search for solutions' to African countries problems with regard to consumer and basic needs and the supply of low cost products, in line with the objectives and goals of the Second Industrial Development Decade for Africa (1991-2000).

The present directory of project profiles is based on the model of the portfolio of project profiles on small-scale agro-industrial projects for entrepreneurs (ECA/IND/SSI/016/89) discussed at the regional workshop held in Abidjan, Cote d'Ivoire, from 11 to 15 December 1989. The profiles contain ten sections. section one and two describe the product and production processes respectively. In section three, the necessary major raw materials and inputs are given while the need to undertake a market study locally is stressed in section four. section five deals with locational considerations for setting up the plant. The basic technology and possible suppliers are given in section six while a tentative list of manpower is provided in section seven. section eight provides cost elements that need to be considered du~ing the estimation of investments. section nine and ten deal with financing and assistance to small-scale industries at the national, regional and global levels respectively. These two sections have been deliberately -put. at_ -the end of each- profile ·because-the profiles are intended to be distributed separately -to individual entrepreneurs or potential ones. Therefore, i t is necessary that adequate information is given in each profile on all relevant aspects so as to enable potential investors to decide whether or not to make an investment decisian.

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A

AGRICULTURAL MACHINERY, EQUIPMENT

AND TOOLS

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Page 1 Al AGRICULTURAL IMPLEMENTS PLANT

1. P~oduct description

1.1 Animal-drawn implements and ITiu.ilLlally operated tools

The major implements covered under this production series would include plough, ridger, cUltivator, harrow, seed drill, sing;l.e-row plant,ers, as well as maize sheller, groundnut , thresher, paddy thresher'etc.

Traditionally agricUltural hand tools ,and animal drawn implements were being 'manufactured by village level b La ck src i.t.h . :Since the o ua Li tv of these too Is

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mark and the d~mand ^{couid not' be f u Lly} met, some coun-ci::-ies' .i.n the region have gone in for import or manufacture of hand tools. However i t has been estimated that the demand for hand tools in the African region is very high.

1.2 Tractor-drawn implements

Along with introduction of tractors into some African countries the use of tractor-drawn implements are also being popularised, which mainly improve the productivity in the export crops. Here again the demand is quite large when we consider the new pOlicies set up by most African countries to satisfy the food crops needs of the population.

The implements and machines Which are considered for manufacture are: disc plough, M.B. plough, chisel plough, disc harrow, CUltivator, seeder/planter, fertilizer distributor, thresher.

As indicated in the introduction, these two categories of implements are very important for the development of African

agricul tural sectorr esp~cially the f o od crops.

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2 . Process description

The major processes in the manufacture of various implements are described as below .

HaL-erial cutt:.illq 1'ne s1.:-<2<21 sneeL.s, ~-Ld-c.S, n.J\.lS o rn.i hJli:J'-~"';

will be cut using machines such as power Hacksaw, Abrasive cutt inq machine, shearing machines and flame cuttinq machin0s.

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Forming and forging The next stage involved in the process is either shearing of sheet steel to the required size on guillotine shearing machines or cutting off rolled steel bars on press to various lengths. Most aqricul tural implements are formed by punching, piercing, bending. Forging consists of billet cutting, pre-heating, hot forging, trimming and cleaning on machines such as pneumatic hammers, induct jon heating furnace etc.

Machining : The forgings are machined in Machineshop equipped with Jigs, Fixtures and Tooling._{. . .}

Heat treatment. : .. Some of

criti~al"

.et.c ; ' . - . . - - - - .-

Fabrication In the fabrication stage, the joints needing clean surface are not welded; those requiring more strength are arc welded and joints needing continuous welded joint with clean finish are C02/mig welded.

Sub-Assembly In the sub-assembly department, following operations are to be carried out:

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Disc assembly

Reduction gears assembly

Asserr~ly of wheels

Assembly of working bodies cultivators

Seeder assembly

of ploughs and

Final assembly: After sUb-assembly,

c3.~r-i·::.j.-out and then final assembly assembly, the implements are tested to

appropriate testing is is don·2. ?'--I.ft'2r- th·:::

check the performance.

Painting: Painting is one of the most important activity, leading. to final aesthetic appearance as well as long.life.of the implement. .

In order to clean the parts from grease and rust and to provide a coat of phosphate which will act as base for paintin1, 0~e-t~eatment process is c~rriert out. The parts qo r.ue n to t:.lle pr in.cr c oat i nq stage and ri n.sr ly to remove t11C:

glossy finish of primer and to prepare even surface, a wet sanding and putty application is manually carried-out.

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The process flow chart is given below:

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cutting

1-- ---

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-I- - MaChining - ]

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-r~~at Ti:eatnie-~~-l-

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Sub-assembly

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Painting [storage

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J. Description of raw materials and other inputs

The material inputs required - for the implements: plant are

broadly classified as follows:

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Raw materials for the manufacture of component parts

Bought-outs component procured s ou rco s

parts and sub-assembl ies from local and foreign

_~~ '~".~,~ , _ _~ t ~ _ _ , _

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Consumables these items are required during manufacture of component parts as well ~s duri.ng nss0mhly op0r~tinns_

The type of steels vary from mild steel, structural steel, plain/medium-carbon steel, low/medium carbon alloy steel and spring steel. Apart from steel, grey iron castings, aluminium castings and forgings are.also used.

Bought-outs:

Implements consist of assembly of number of parts/sub-

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:---"-":>.J-r '." ^~-, L > ' . . • ' ! - : - - f ' , ' , J ' . _ "

assemblies such as propeller shaft, pumps bearings and ona Lns, screws, bolts, studs, tyres, tubes, gaskets etc. may be found on the local market or imported.

Consumable materials:

Consu7.lable ^r..1c.t.c r ials SUCl1 <.1:;; iJ2-:'=':02.0:";'~ l?l:o::l1..:.c:'s, p'2:'rcl2'''':~ ~y­

products (grease, hydraulic oils etc.), paints, heat treatment salts etc. are available on the local market of most African countries. But certain items like special grade grinding wheels, special tools and cutters, machinery spare etc. need to be imported.

The other inputs for the production of agricultural implements are electric power to run various motors, heat various furnaces, operate welding machines and lighting; water for the shop floor use, personal USe and fire fighting and other USe.

In the shop floor, water is generally required for preparing

CO,Jl..J..llt.S, l~1":":'~l;~~ ...i..:.~-~ C~~0;:i...L."":c..~"; ... .1.·1 d~--.'.·":"_'c.;.,·-,-,--",-·'::'.'-.2;1<... .r.i., i-'..J.';'i;,~

shops as well as for washing machines and cooling water cirCUlation system.

4~ Market study

The products are in demand in agricultural sector by peasants, gardeners and horticulturist. FAO publication on agricultural mechanisation and the demand for "Agricultural machinery and e qui p no r.t; in Africa to 7:~e /'2.]; )c!()(j" :--: -~~~ '::?:3t:l~>Jt:'-:,i ~.;--.'-=-= ~--:~'~,l~_

demand ot around 1,139,000 implements Lor the year 200u and for the hand tools 2,930,000 The local demand is met through import in many countries. Local production c ou l d help save

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Before investment de~ision is made, however, a thorough market study is required tq establish the demand size.

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The r o Ll owⁱ nq genetal factors should De cOllsicieL"eU 'wllil"

selecting the site ~or setting up the plant - i t Sllould be well connected by rqad network to facilitate transport of raw materials and finisned products.

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Availability Of.railraysidingfacility.near to. the site would be advantageous. ^I

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Availabil ity of! maj or utili ties, electric power. and water supply

It anouLd havela large 'plot for the trials

The built-up areas ~equired for the shops and the approximate site area should be19,450 sq. meters.

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6 . Techno ls>gy

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The technology of mtnufacture of implements is simple and is already available lin manv African countries. However, considering the _v~riety "of implements required to be manufactured to meet the varying demand and the need to introduce into the barket proven designs, i t is recommended that a technical co!llaborator be selected who could provide documents on produtt design, process know-how and systems know-how. The cOlltborator could also train the workers on- the-job at site of plant and machinery. Such collaborators are available in sqme African and Asian countries. Design could be requestea from ARCEDEM, Ibadan, Nigeria, the

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Asia and Africa. ! 6.l. Equipment required

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The machinery and e~uipmentI required broadly classified fS follows:

for this plant could be

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11

4 5 6 7 8 9

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Number 1

1 set 1 1 1 1 1 1 1 1 1

1

1 set Description

Mechanical Hammer

" Set of Anvi Is Shaping Machine

Stroke 630 mm Lathe 275 x 2,400 mm

Lathe 175 x 1,500 rom Bench Grinder 200 rom¢

pillar Drilling Machine 12¢ mm G,as Welding Set

Are' Welding Set '

Air, Comprossorwith spary painting ,Equipment

Hand Folding Maching

l'".'1" n ...e .... s·

, L ~ ~..L. ~ ^{• . " •}

13 Bench Drilling Machine

6¢ rom

14 Hand Tools, Measuring Instruments and Other Equipment

6.2 £Q?sible equipment suppliers 1. ABC GmbH

Am Kirchgarten 21 6301 Pohlheim FRG

2. Feld Machinen-U Industrielbrau Feldstr. 3

4353 Oer-Erkenschwick FRG

3. MUMPER, Metallbearbeitung Robert Bosch str. l/W 7844 Neuenburg

FRG

'4. ,The National'Sm'al'l Indust.ries corporation Ltd Laghu Udyog Bhavan

Okhla Industrial Estate New Delhi 110020

India

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5. M/s M.A. Traders

7/109 A(l) Swaroop Nag~'

Yampur - 20800;>

Tndi"

6. Kosami

Kosami Bldg

13-31, Yeoeuido-Dong

Yeongdeungpo-Gu, Seoul 150 P.O. Box Yeoeuido 110 Seoul Korea

7. Manpower requireme·nt··

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At·fuli plant capacity, the total number of. personnel required.

Is 55'~ 'This .oo c'Ld include:

SIN.

1 2 3 4 5 6 7 8 9

position Number

Manager 1

Accountant 1

Secretaries 2

Engineer 2

Collaborator 1

Direct operators/workers 30 Indirect personnel 14 Cashiers/salesmen 2

Guards _.~

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8.

The salary and wage levels of the workers are expected to be determined locally.

Investment requirement

The total capital investment required for the project could vary from one country to another. In some countries, there

a~e various inc~ntive.schemes given to small-scale industries.

Stich schemes. could·have Lmpact; on the size of. the "investment·

that maybe needed. Accordingly the details need to· be carefully worked out in each country.

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The elements to be taken into consideration are mentioned below:

11. Machinery and equipment

B.

Equipment cost wit.n 12 months guarantee Inland tra~sportation (ton/km)

Customs duties and taxes

Insurance (warehouse to warehouse) Erection and commissioning

Spa~es parts (2 years) Office equipment

Laboratory equipment Land and construction cost·

Land and site.pr~paration Built-up area . (Building) Waste treatment/disposal

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C. Operating cost

Salaries and wages (for 2 months) Direct materials (for 2 months) Bought-outs

Consumables

Overheads (power, water, telephone) Depreciation and finance charges/months

9. Financing

Financing the project from one's own source could be quite advantageous. The project could be realized quickly and interest

i~'2:l::len~s coulJ. ~(-2 av oi d cd r.:~}~in'j the ~i.:la!'.ci2.1. p osit.Lon of t_~l..e

project, at least initially, quite strong.

Whenever, one's own source is found inadequate various f-Lnanoi.nq institutions c ou Ld be' approached· for ·loans.·. Development banks or Development Finance Corporations are established in many countries for providing long-term investment loans. Such institutions consider granting loans, however, on the basis of detailed feasibility studies and such studies generally take a long

~1~~ t:J compl~te. In saTre C:0lJnt.::-i0::::: sn.-,.,Jl-sr:>~l,,- inrl~.l,;t:i·::,s

promotion ag~ncics also provide loans.

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Short-term fund or working capital is provided in many countries by commercial banks. Such credits are repaid in rc,lativcly short time arid ilre expensive. Short-term c rr-di ts "n"

not qcncr;'tl1y llsed for invef;tments.

In some countries capital pa rt i.ci pat i on (v e nt u r e capital) schemes are available. Through such schemes government bodies or banks could make financial contributions towards raising the investment capital needed. Such participations, however, could entail profit sharing as well as participation in the management of .. the 'ente:q>rise, . Co-<;>peratives are. found to, be other possible

sources of'finance·insome countries.

It _wo~ld.'be 'quite useful; therefore, to exa·minewhat could be . .possible sources 'of finance arid the relative advantages of each to'

:: he _~':;t r"'?p~eriel.l::::-. .Small..:-s c:a 1 e pr-omot;i on a~eri.c:;-ie s. : ecruJ._c .~~^:-O',r~^.--1.,?

uae ruI information regarding" 'financing possibiliti'es' and their advice should be sought before decisions are made to take loans.

10. Assistance available for small-scale industries

In many countries various types of assistance are available to llelp enterprising individuals ~o start-up business or to help those already established but in difficulties. Generally the assistance could take the form of project identification or study, training, advice on technology, marketing etc. Government incentive schemes such as exemption from duties and taxes, tariff protection, loans at subsidized interest rates, infrastructural facilities such as industrial estates etc. could be available. Individuals planning to start-up small-scale industry or established ones who may find themselves in difficulties should approach core small-scale industry development institutions, development banks or chambers of commerce for detailed information on what may be available in each country.

Regional institutions such as the Preferential Trade Area for Eastern and Southern African States (PTA) in Lusaka Zambia, the Economic Community of West African states, E=WAS, in Lagos, Nigeria, could provide certain valuable information on trade, industrial opportunities, resource availabilities etc. The continental organization, the Economic Commission tor Africa In

Addis Ababa, Ethiopia pe riod i.caLj.y issues small-scale industry project profiles such as this one which are intended to provide

!)-1?'i(~ iJl~n'-:":"il"-.~' ~')rt_h(-:,'::'" in"T(;3~~_rrl+-~i-:;:1 ,~-, n-~"'\' ¹ ,;~_,_~l

condition.

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UNIDO in Vienna, Austria, the ILO, in Geneva have been involved in assisting small enterprises in developing countries for many years. UNIDO operates a technology inquiry service through v.lhich inrlivirlu~ls ;n developing countries could search for solutions to techlLl_cal problems or to seek cooperation with small- .i.IH.lusLL·ies in OL. countries. various t.ra i.n.i n., and consultancy services are p rov __,] by the ILO. Individuals could contact these agencies directly or through the UNDP offices found in each country.

The African Projects Development Fund .(APDF) created by the World Bank is -helping African entrepreneurs in setting up viable projects, finding-financial means- and eventually foreign partners.

The APDF offices in.·.Abidjan -and NairoJ:ii could be contacted for. any information on industrial projects implementation. APDF envisages

"':.8 8";")C;;' ~c:.8';icr;::ll of.fi c cs in HGr~re (Zim'babTtve) Douala (came!.'"qo~)

and Lagos (Nigeria).

The "Caisse centrale de Cooperation economique" (CCCE) is an establishment which provides support to private investments. Its branch, "la Societe de Promotion _et de Participation pour la Cooperation europeenne (PROPARCO) is helping in the creation of s@all-scalc in:::ust.ries, providing expertise and financing und e r proper funds. French Embassies installed in most African countries could give any information of the CCCE and its branch.

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Page 1 A2 SPARE PARTS MAKING PLANT

Spare parts are important. [or the developmenL of ii "ouIlLry'~

economy especially the agricultural and its supporting sectors. The production of spare parts caters to existing park of various machine tools. It facilitates proper maintenance of Machine Tools and over a period time, Technological ,Capability for ,'production of simple machine tools by ,the countries 'concerned could, be developed.' ,Moreover,' 'every industrial ':;lector' -ot: the African, economy

requires spare parts towards replacement _ofworn~out parts,as' well as broken parts caused by accidents" failures of certain

s~&te~s/units etc ..

Process description

The basic pre-requisite for a small-scale manUfacturing of spare parts is to adopt the concept of "Reverse engineering Design". The manufacture of any engineering product/component requires know-how mainly in:

Product/component design Manufacturing process

The product design and manufacturing drawings, specifying the dimensions, material specifications, accuracies and special treatment if any, are basic requirements for the manufacture of any engineering product. Therefore, the first step involved in the small-scale manufacture of spares is to evolve product/component drawings, Which could only be achieved through a process of reverse engineering/detailed study and

dlldlys~5 o~ 3al:1pl.l2:S, -:~12ir Llt=J.lJ::'~c3ti,:)ns an:: :,::;.J':'-2::- .=,_::.:,~ _:::::~. ~>~:::-:-.

to proper inspection and testing to ascertain their physical dimensions, tolerances, fits etc.) and adoption of designs to the local requirement.

The second step involved in the small-scale manufacture of spare parts is to develop the necessary process know-how [or each component/product design. This could be developed within the workshop based on certain training to be provided for the

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Flow chart

r - - - , Raw Material !

Ln s pe c t.Lo: .

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1:0 cutting 10

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-. TougQ.~ni_!!?

o(if required)"

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Turning

Milling

Boring

Drilling

Hardening

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(if required)

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3. Description of raw material

The basic raw material required for the production of spare parts is steel Sections/Castings/Forgings steel. Steel Sections/castings/Forgings could be found In many African c ount r ies or .impo rLeu Besides this r<.:l'Vi mater.ia l , some consumable materials such as petroleum products, pet r o Leum by~

products (grease, hydraulic oils etc), paints, heat treatment salts etc. are required.

4. Market study

Spare parts· are in demand in·the metal working industries and mechanical'and automobile sector. Lack Of spare parts 'for'the maintenance of its installed units is one' of -t.he major p rob.Leras . The local demand often met through import could vary· depending on' the general 'development .of the industrlal sector. Accordingly, demand assessment should be properly made by an appropriate market study before an investment decision is considered.

The demand of spare parts is assumed to be increasing in many countries due to the setting-up of small-scale industries and the development of agricultural machinery and tools through out Africa. The volume of requirement of spare parts would vary widely for each of the sectors of economy and also from country to country.

5. Location requirement

The plant should be located in major industrial centres where a sizeable number of industries are available. The plant may be set-up anywhere in an industrial zone since there will not be any special requirement. Adequate roads network could be

3:j',.ran~agcous t o

tractors owners or tractors workshops .

,-"-~. ~~- '::>'--'-'-- • • _"l..~

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.The total built-up area required for accommodating the plant is' estimated to be' 2.000 square' meters. . Such a· size of building is sufficient for the factory, offices, stores etc.

If industrial estates are available the project could be accommodated in such infrastructures.

The Technology of manufacturing spare parts is simple and local expertise ll1 th is field is ava.ilablc in many )\frican Countrie~;.

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r.o" .... I,TT~n I ' ! r o , I nn., 10,...,

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6.1 Machinery and equipment required

Pas.

1 2 3 4 5 6 7 8 9.

10

11

12

13 14 15 16 17 18 19 20 21 22 23 24

25 26

27

Item

Horizontal band sawing machine

Bow-Frame Saw

Circular sawing machine Circular sawing machine Centre Lathes (L=1500) Ceptre Lathes (L=2(J0.0) Centre Lathes (L=1000)

Centre Lathes, (L=750)'

cylindrlcal grinding·

machine

Internal grinding machine Horizontal surface

grinding machine Gang Drilis

Pillar Drilling machine Radial drills

Knee-type vertical milling machine Horizontal milling machine

universal milling machine HydraUlic straightening press

Universal tool sharpener Drill sharpener

Tool sharpener Annealing furnace Salt bath furnaces

Ball hardness tester (HB) Mechanical desk with vise/vice ..

Manually operated trolleys Battery operated pellet trucks

Quantity (pes)

1 1 1 1 2 1·

2 10 1 1 1 1 1 2 2 1 1 1 1 3 1 1 1

10

1 set

2

•

•

·c.·-

:...;,; lac' :../?()

Page 5 A2

6.2 possible equipment suppliers

•

•

1.

2.

The National Small Industries Corporation Ltd.

r.aghu Udyog Bhavan

Okhla Industrial Estate New Oelhi-110020

India

Blohm·Maschinenbau GmbH postfach600303

0-2050 Hamburg 30 Telex 217801BLOHM·D.

3, Manda Machinery Corp.

1:20, Bakdal-Dong·

Anyang-Si, Korea

Telefax: (0343) 42-3364 Telex : Hallan K 24291

7. Manpower require~ent

Forty-five workers are estimated to be required for the proper running of the plant. Due to the labour intensiveness of the technology envisaged the plant could require a total of 10 mechanical technicians, 20 skilled workers and one to two good mechanical engineers. The remuneration level is expected to be determined locally.

position Number

•

•

1 1

2 3 4

:.

6 7 8

Manager 1

Accountant 1

Secretaries L

Engineers 2

Mechanical technicians 10 Ski11edworkers 2Q s~mi-skilledworkers5 cashier/salesman 2

Guards ~

45

The total capital investment required [or the project could vary f rorn one country to another. I~-j sur:]~ cou nt r-io.s , r.h e rc are various incentive schemes given to small-scale industries.

, _ '~'T,_ _ '~...-r ' ... 1 I " '....

"'I ....'·'~I '.I,,~

Page 6 A2

Such schemes could have impact on the size of the investment that may be needed. Accordingly the details need to be ci'lrcfully worked out in ei'lch cOllntry.

The elements to be taken into consideration are mentioned below:

A. Machinery and equipment •

- ' ,

Equipment cost with 12 months guarantee Inland transportation (~on/~)

customs duties arid, ta~es

Insu~ance (warehous~to warehouse) Erection and commissioning

spares parts (2 years) Q:ficc c~ui~~er.t

Laboratory equipment

•

B. Land an construction cost

Land and site preparation Built-up area (Building)

~·:aste t.r e a tmcnt/ disposal

Salaries and wages (for 2 months) Direct materials (for 2 months) Bought-outs

Consumables

Overheads (power, water, telephone) Depreciation and finance charges/months 9. Financing

Financing the project from one's own source could be quite advantageous. The project could be realized quickly and interest payments could be avoided making the financial position of the 'project, at least :tnitially, quite strong.

Whenever, one1s own source is found inadequate various financing institutions could be approached for loans. Development banks or Development Finance Corporations are established in many COLlntries for providi.nq lonq-term inve~tmcnt l.oans. Su~~

insti tutions consider granting loans, however, on the lJdsis or:

detailed feasibility studies and such studies generally take a long rLrnc to complete. In some countr ies sma Il-sc"

co

•

•

•

•

•

l:lage 7 A2

Short-term fund or working capital is provided in many countries by commercial banks. Such credits are repaid in relatively short t.ime and arc expensive. Shnrr.-tr:>rm r:rnoits ;,rn not. rJen,~r.a11y used tor invC'stmcnt.s.

In some ccuut.r i.o s capital pe rt i.ci pa ci on (venture c a p.it.a.:

schemes are ava, ble. Through such schemes government bodies or banks could make financial contributions towards raising the investment capital needed. Such participations, however, could entail profit sharing as well as participation in the management of the 'enterprise,CO-bp\!ratives' :a.re found to be other possible Sources of finance in some countries. " .

It would be quite usefUl, thererore, to examine what could be 'possible -s our-cc s of ·finance 2'lrJ. the ...~1:2.ti.VL? adv3"n~~0r=,s of 0nch' _t~n ",

tlie entrepreneur. Sma'll-scale' promoticin"'agencies ''::'ould prcivi"de' useful information regarding financing possibilities and their advice should be sought before decisions are made to take loans.

10. Assistance available for small-scale industries

In many countries various types of assisLance are available ~c

help enterprising individuals to start-up business or to help those already established but in difficulties. Generally the assistance could take the form of project identification or study, training, advice on technology, marketing etc. Government incentive schemes such as exemption from duties and taxes, tariff protection, loans at subsidized interest rates, infrastructural facilities such as industrial estates etc. could be available. Individuals planning to start-up small-scale industry or established ones who may find themselves in difficulties should approach core small-scale industry development institutions, development banks or chambers of commerce for detailed information on what may be available in each

coun::'ry.

Regional institutions such as the Preferential Trade Area for Eastern and Southern African States (PTA) in Lusaka Zambia, the Economic' Community" of West" Afric'an States, ECOWAS, in Lagos, Nigeria, could provide certain valuable information on trade, industrial opportunities, resource availabilities etc. The continental organization, the Economic Commission for Africa in Addis Ababa, Er.hⁱ opia periodically issues small-scale industry

P~(}j·-.:.':t ;;:-".rj.l_",~.~ C;1.,,-:::rl 1;'; t:'.!i!.::; C)?''.' '.·'hi,::1: "-,~, ~.;'"\~r.:l"Jn.i-~ ... 'J :)!-''l\,j~],=:

basic intocma~ioll

condition.

for Lurther lnves't.1gdLlon i n <2dL~!l Lo c a L

- , - - ,--~~,'.- / '-.- - ',...~,., /,-,/ \

Page 8

A2

UNIDO in Vienna, Austria, the ILO, in Geneva have been involved in assisting small enterprises in developing countries for many years. UNTDO operates a technology inquiry service through which individuals in developing countries could s ca r-ch for solutions to technical problems or to seek cooperation with small- industries in other countries. Various training and consultancy services are provided by the ILO. Individuals could contact these agencies directly or through the UNDP offices found in each country.

. . The. African Proj.ects· Develqpment Fund. (APDF) created .by the World 'Bank- is helping 'African entrepreneurs in setting up viable projects, finding'financial means. and everttually foreign partners.

The APDF offices in Abidjan and· Nairobi could be contacted for any information-ort industrial projects implementatiqn. APDF envisages

to .: orien r~crion.a·~ offices·1;' Hara~~ (2ip,bab:·,T0)·, Do uoLa (.C.3.;':1.er.oon)·

and Lagos (Nigeria); -

The "Caisse centrale de cooperation economique" (CCCE) is an establishment which provides support to private investments. Its branch, "la Societe de Promotion et de Participation pour la Cooperation europeenne (PROPARCO) is helping in the creation of small-scale industries, providing expertise and financing under proper funds. French Embassies installed in most African countries could give any information of the CCCE and its branch.

•

•

..

1.

2.

l'aye 1 1\3

GAB ION (WIRE NET) MAKING PLANT

Gabion i:::; mb.dc of wov c n mot a L b.a nd c . They o r o u'3crl in engineering or fortification. The product h~s '~ng been 11sPrl as a transition method of construction engineering for protecting river banks from erosion. It is also used for woodland path in afforestation districts or buried in the ground for drainage, .

Process description

Galvanized .iron wire is set on an automatic wire netting machine and knitted into diamond shaped wire netting. In

·ard~r·.to·Sh~P~' c.h-e .wire' 'net c.i.nq .int.o :tiie d:e~i9ilaL:~Q"LUUUi.u..i..-

form or rectangular cube form, the backbone framework is made.

This backbone framework is inserted in the central portion and outer edge of the wire netting to produce the desired tubular or rectangular cube form. For fencing farms, residential plots etc. the netted wire could be used without being shaped

into a form.

•

3. Description of raw materials and other inputs

The basic raw material for the production of gab ion is galvanized iron wire. The specification of the galvanized iron wire depends on the local demand and is as follows:

3,2 mm

4 mm

5 mm

The markets for the gab ion are expected to be the governments for the realisation of big infrastructural works as well as the· ·constructionsector. ...It is also. used by. the farmers for stopping the erosion and for fencing their plot.

However, the actual demand in each country would have to be determined through appropriate market study. The supply of other g~bi_on made from ~l_astj_c materials and other needs to hn

expected to, among other things, assess the local demand,the impact of competitors ~nd the purchasing power of the target

{J~aups b~~orc invcstm'~nt d0CisioT1S ~lr0 ~3d0.

" " ' .

ECl\./laSUj ^{d . , ... /} o()"J../ S' :;

Page 2

A3

5. Location reguirement

.

-

The plant may be best established in an industrial estate where adequate infrastructure, especially electrical power is provided. The plant will require a tota} of 2,000 square meters of land out of which pearly 660 m will be built-up area for production and 1340 m for the products and materials storehouse.

6. Technology

There are two types.of automatic machine, the

fUlly.a~t.omatic

type chain~link wire netting machine and. the semi-automatic type wire netting machine. The later type requires considerable skill. Therefore, . the fully automatic type .i.s . sugg.ested . . .This type is a l s'o de si r ab I.e from the point of low cost and mass production . . The automatic type will also.enabie knitting of big or small mesh fence netting and rockslide

(landslide) prevention netting of various lengths.

6.1 Machinery and equipment requirement

Description Quantity

1

2

3

5

6

Fully automatic chain-link 1 wire netting machine

3 ton/day

Rectangular cube frame 1 manUfacturing machine

circular ring frame 1

manufacturing machine

F~amG twisting machine 2

circular ring frame and rectan- 2 gular frame fixing machine

Machine for straightening wire 1 netting

7. Manpower requirement

Due to the fact that the machinery ^1S fully a u r oma r ^j c rile

plant could require only 12 persons to run properly (7 skilled workers and 5 office and administrative personnel). A

•

."

•

Page 3

A3

tentative list is attached, but the remuneration level is expected to be determined locally.

TnvestTD~Dt__T"_egl~_~_rement

The total capital invest.ment required ,.01.' li1e "uj~cl. ,_ ):'.LU vary from one country

to

are various incentive schemes given to small-scale industries.

Such schemes could have impact on the size of the investment that may be needed. Accordingly the details need to be carefully. worked out ;in:each.country .

The elements ·to be taken· into consideration are mentioned below:

Equipment cost with 12 months guarantee Inland transportation (ton/km)

customs duties and taxes

Insurance (warehouse to warehouse) Erection and

Spares parts (2 years) Office equipment

Laboratory equipment B. Land an construction cost

Land and site preparation Built-up area (Building) Waste treatment/disposal C. Operating cost

Salaries and wages (for 2 months) Direct ma~?~~ ._~ (~~~ 2 '~-~~~~:

Bought-outs Consumables

Overheads (power, water, telephone) Depreciation and finance charges/months

' j . financing

•

paymencs coulet De avoided n1dK.lDY tIle lll1dllCl(}1 POsi-:":"lun o : Lik,

project, at least initially, quite strong.

- , - - -- I

Page 4 A3

Whenever, one's own source is found inadequate various financing institutions could be approached for loans. Development banks or Development Financ' Corporations are established in many countries for providing !nng-term investment loans. Such institutions consider q r ant i '-", loans, however, on the basis of detailed f . -sibility s t u u i " d such studies generally take ^d long time tc __ .nplete. In ,_",'"'' countries small-scale industries promotion agencies also provide loans.

Short-term fund or working capital is provided in many countries bycqmillercial banks., Such G:reqits' axe repaid in 'relatively, short 'tiine, and rane expensive. Short-term credits are

not generally used for investments.

In some courrtri.es capital :participation (venture capital)

sChem~s are availQ-Q:Le.. Through such sch~TDe.s gQvernment_ DQdies 9r

'banks could make 'financial contributions towards raising the investment capital needed. Such participations, however, could entail profit sharing as well as participation in the management of the enterprise. Co-operatives are found to be other possible sources of finance in some countries.

It would be quite useful, therefore, to examine what could be possible sources of finance and the relative advantages of each to the entrepreneur. Small-scale promotion agencies could provide useful information regarding financing possibilities and their advice should be sought before decisions are made to take loans.

10. Assistance available for small-scale industries

In many countries various types of assistance are available to help enterprising individuals to start-up business or to help those already established but in difficulties. Generally the assistance could take the form of project identification or study, training, advice 0;) techn:Jlo'3Yf 2,:} __ -. :::-:=i.:;; e t.c . ::=;ovc~:;;-;-\'2n~ incl?n~ive scher:,es such as exemption from duties and taxes, tariff protection, loans at subsidized interest rates, infrastructural facilities such as industrial estates etc; could 1:)e available. Individuals planning to start-up small'-scale industry or established ones who 'may find themselves in difficulties should approach core small-scale industry development .in s ci t.ut i o n s , development banks or chambers of commerce for detailed information on what may be available in each country.

Regional .insr.it.ur i.o.... SuL:Il as the Preierential Trade Area for

Eastern and Southern African States (PTA) in Lusaka Zambia, the

Economic Community of Hest African States, ECOHAS, in Lagos, nigeria, could. p r ovi c: ~J,>_-iin v(il11a~)l-,~~ lrlfurr.ld-c.i011 on trade,

industrial opportunities, resource availabilities etc. The

•

•

•

•

A3

continental organization, the Economic commission for Africa in Addis Ababa, Ethiopia periodically issues small-scale industry project. profiles such as this one which are intended to provide b a si o information for further investiqation in each 10c,,1 condition.

UNIDO In Vienna, Austria, the ILO, in Genova have been involved in assisting small enterprises in developing countries for many years. UNIDO operates a technology inquiry service through which individuals in developing countries could search for solutions·to technical problems or to seek cooperation,with small- ,. industties in other countries. _ various training and consu.l t.ancy .services are provided by the JLO. Individuals could contact these agencies directly or t.hrouqh the UNDP offices found in each- country.

The African Frojects Development Fund (APDF) created

oy

World Bank is helping African entrepreneurs in setting up viable projects, finding financial means and eventually foreign partners.

The APDF offices in Abidjan and Nairobi could be contacted for any information on industrial projects implementation. APDF envisages to open regional offices in Harare (Zimbabwe), Douala (Cameroon) and Lagos (Nigeria).

The "Caisse centrale de Cooperation economique" (CCCE) is an establishment which provides support to private investments. Its branch, "la Societe de Promotion et de Participation pour la Cooperation europeenne (PROPARCO) is helping in the creation of small-scale industries, providing expertise and financing under proper funds. French Embassies installed in most African countries could give any information of the CCCE and its branch .

..' . ' .

Page 1

A4

PUMP ASSEMBLING PLANT

centrifugal pumps are being used extensively in the field of agricul t.ure, water works and manufacturing. Hanufacturinq of centrifugal pumps can be undertaken in small workshops.

2. Process description

The manUfacturing process of pumps begins from the machining of. castings/raw materials for pulleys, coupj Lnqs , fla.nges etc.

at the machine shop.

Ma¢hine t.ools of v a r iou s ki nds. a r-e required for ca r ryi no out:

above operations. . Atter. assembly

of

are SUbjected to performance tests, and they are shipped out after painting and packing.

Process flow sheet

I~ ^,-

Raw ^~ Machining ^~ Inspection !parts storing^I materials

I

I I

I

I

I

~ Assembly ^~ Tests ^~ Painting I~

I

•

•

3 •

4 .

Description of raw materials and other inputs

The basic raw materials for the production of centrifugal castings pumps are castings, steel sections, bolts, ball bearings etc . . When the plant attains f u L'l c apa c^{i t.y} its annual casting ·requirement will be 190 torrs. ·other types of raw materials required are various paints and packing materials . A few of the raw materials are ~o be imported.

Market study

T'n e markets t o r ci:lese produces are C:Z!:l'..:cceJ. to lJ12 i..:.ne rULJ".l

areas and the government water and construction authorities.

The actual demand in each country would have to be determined througtl appropriat2 ~.l~ke~ stuJ\"

T:" ... ITl"<"n I<:"<"T ,,"''''., Io.r.

" " ., ,

Pa.ge 2 A4

5. Location requirement

The location of the plant should be close to the market. The site should be accessible by road facilitating the transport of raw materials and finished products. Electricity is

~equired to operQte the maChinery as well as'ihdustrial water, 'fuels etc. The p:~nt should, therefore, preferably be located in major cities where such facilities exist and where the demand for the products could be available .

.6. Technology

The plant is designed to manufactur~a total of nine types of pumps, (120 units/month):

•

..

iou rom, 190 un~tsjmonth

End-suction small-type centrifugal pumps: size 50, 65, 80, 100 and 125 mm, 150 units/month.

6.1 Machinery and equipment requirement

The machinery and equipment required for the production of centrifugal pumps include:

1 2 3 4 5 6 8 9

10 11 12

Description

Vertical special purpose lathe Lathe

Copying lathe

vertical milling machine Multi head drilling machine Tapping and milling machine Slot::er

Key way milling machine

Cylindrical grinding machine Testing equipment

·Accessories,·· jigs .and . fixtures Hand cart

Ql!antity

1 2 1 1 1 1 1 1 1

1 set

1

•

6.2 possible sources of machinery and equipment

Th0 ~~ti~n2]_ S~al1 Tndllst~j0s ~8~nor~tion TJ~~, LJdynu GUiog onav e n

Okhla Industrial Estate New Delhi - 110020

Telefax: 91-11-6837669

..

...., ... ..,. IT,....- ... I ... , 111"'1/'1'"

-I-~-,--

Page 3

A4

7. Manpower requirement

,~ ..

Manufacturing of centri fugal pumps process, For the plant proposed The remuneration level for each determined based on the local lu,

reguh, , a labour intensive

~~ workers are sufficient.

post need to be locally

~r mJIJ·;~t conditiol1S.

N/S position Number

1 Manager 1

2 Sales man 1

•

4 secretary 1

5 Engineers 2

6 Skilled workers 7

~ ,..."' __1· -: 11 ",..::1 " T...~_l_ ~,v-r-- ~

.,-. -

8 Driver 1.

9 Guards ^{_ _1}

22

8. Investment requirement

The total capital investment required for the project could vary from one country to another. In some countries, there are various incentive schemes given to small-scale industries.

Such schemes could have impact on the size of the investment that may be needed. Accordingly the details need to be carefully worked out in each country.

The elements to be taken into consideration are mentioned below:

A. Machinery and equipment

Equipffi2nt cost ~:i~~ ~~ ~=:1t~~ _:~~1~~0:

Inland transportation (ton/km) Customs duties and taxes

.Insurance .(warehouse t.o warehouse) Erection'and commissioning

Spares parts (2 years) Office equipment

Laboratory equipment

•

Land and site preparation Built-up area (Buildin~)

-pr]\_,ITH~n I~~TInn1 _,Ion

Page 4 A4

C. Operating cost

Salaries and wages (for 2 months) Direct materi~lb (for 2 months) 1l0ught-outs

Co nsu:

9. ,Financing

ovo rr.c... ..

Depreciation a,.,d

d~ter, telephone) finance charges/months

•

Financing the project from one's own aour'oe could be quite advantageous. The project cou14 be realized quickly and interest payments could be avoided making the fina~cial position of the

... rn-;pr;r ~... lo"Co"C>--:;+- "in;+-;;:>ll." r'"1l;+-p c:::-r.1:"rln'-r

Whenever, one's own source is found inadequate various financing institutions could be approached for loans. Development banks or Development Finance Corporations are established in many countries for providing long-term investment loans. Such institutions consider granting loans, however, on the basis of

detai led feasibi 1ity st.:udi(~.3 ,jr'i such studies generally take a long

time to complete. In some countries small-scale industries promotion agencies also PT' :d~ loans.

•

•