Key project indicators:
- Total project price (100%): EUR 2 875 000
- Internal Rate of Return (IRR): 30%
- Net present value (NPV): EUR 19,690,000
- Simple Payback Period (SPP): 4 years
- Project Profitability Index (PI): 1.76
What the project initiator has at the moment:
- Own investment 30% of the project price
- Crew
- Contractual relations with suppliers of raw materials and consumers.
- Land plot: 5-6 ha. – Kyiv region – 50 km from Kyiv.
Goals and objectives of the Project Initiator:
The initiator's task for 2019 is to sell products in the amount of 4,800 tons per year for sum of USD 15 360 000, through concluding new dealer agreements in cities with a population of at least one hundred thousand by virtue of the launch of new product lines on the market, due to the introduction of “DosaN” trademark to the market, by reducing the commodity shortage for some goods, by increasing sales of architectural and construction profiles.
Consumption and market:
If we consider the consumption of the profile by assortment groups, then there will be the profiles used in construction on the first place. According to data for the last three years, the consumption volume amounted to: architectural profiles – 23 thousand tons per year (45%), interior profiles – 15.2 thousand tons per year (23%), construction ones – 5.4 thousand tons per year (14 %). The consumption of engineering profiles amounted to about 1 thousand tons per year (2%), electrical ones – 18 thousand tons per year (8%). Profiles for advertising structures lie in a separate place in consumption – their consumption amounted to 1.8 thousand tons per year (8%).
The main industries-consumers of aluminium are currently showing growth. The growth in profile consumption per year is from 20 to 30%. Contracted project may have significant impact on architecture in aircraft industry, shipbuilding, automobile manufacturing.
The sequence of construction and commissioning of the plant. Manufacturing technology:
- The first stage includes all the preparatory work listed above, and the installation of the foundry complex start out
- The second stage is the installation of a extruder complex.
- The third stage is the installation of a coloring line.
- The fourth stage is the installation of the profile anodizing line.
It should be noted that each of the stages may operate independently, regardless of the commissioning of the next stage.
1. Foundry operation
The result of foundry is cylindrical aluminium ingots (columns) of various diameters, which are subsequently used for extruding aluminium profiles.
2. Extrusions
The result of the extrusions is a raw "aluminium" profile ready to be used in raw, painted or anodized form. The raw material for the extrusions is an aluminium column of a certain diameter.
3. Aluminum profile coloring
Raw materials - crude profile. The result is a painted “aluminium” profile in any color according to the RAL scale.
4. Aluminium profile anodizing
Raw materials – crude profile. The result is an anodized aluminium profile in certain color.
Personnel and organizational structure:
The planned number of employees at the new plant is 55 people.
- Regular manufacturing staff is 35 people (two-shift work);
- Supporting manufacturing staff – 5 people;
- Administrative and managerial staff – 10 people;
- Sales (marketing) staff – 5 people.
Products
The new plant is planned to produce 4800 tons of aluminium profiles per year, including:
- Crude aluminium profile in the amount of 1800 tons per year (150 tons/month).
- Anodized profile (AP) in the amount of 1200 tons per year (100 tons/month).
- Colored profile in the amount of 1800 tons per year (150 tons/month).
- Anodizing services to third parties – AP in the amount of 1200 tons per year (100 tons/month).
- Aluminium columns (ingots) to third parties in the amount of 1200 tons per year (100 tons/month).
- 12 main areas of aluminium profiles application.
- Construction (windows, doors, partitions, stained-glass windows, pavilions, billboards, hardscape elements)
- Aluminium partitions
- Furniture
- Systems of aluminium profiles for the manufacture of retail and exhibition equipment (showcases, racks, display platforms, exhibition stands)
- Accessories for aluminium illuminated boxes
- Shipbuilding (marine and river)
- Railway transport
- Automobile transport
- Oil and chemical industry
- Ceiling and wall frames for installation of reflected ceilings
- Electrical industry (cooling tires)
- Ventilation (AVK valves)
Product pricing
- Crude aluminium profile – LME + 500 €/ton
- Anodized profile – LME + 1800 €/ton
- Colored profile – LME + 1500 €/ton
- Anodizing services to third parties (anodized profile) – 1000 €/ton
- Aluminium column (ingots) to third parties – LME €/ton
Price analysis was conducted between 2010 and 2019 according to the international LME metals market.
Sources of raw materials
The main supplier of aluminium alloys of raw materials for the production of aluminium profiles is Rusal OJSC. Rusal OJSC satisfies 80% of the primary aluminium market in Russia. The main objective is the supply of aluminium alloys AD-31, 6063 of aluminium or the supply of primary aluminium for the production of aluminium alloys AD-31, 6063 as completely of primary aluminium.
Secondary suppliers
Brovarsky Aluminum Plant LLC is a plant for the processing of primary aluminium and secondary aluminium into alloys AD-31, 6063.
Sumy Aluminum Plant LLC is a plant for the processing of primary aluminium and secondary aluminium into alloys AD-31, 6063, which are ready to conclude contracts for the supply of the required volume of ingots.
In-house capabilities on preparation of secondary raw materials for meltback
In Ukraine, there are about 10 large enterprises for reception of non-ferrous scrap. Thus, there is no shortage of aluminium alloys on the Ukrainian market, and the project can be fully provided with raw materials by both Rusal OJSC primary supplier and secondary suppliers.
Volumes of consumption on the Ukrainian market
In Ukraine, the structure of the market for the consumption of aluminium profiles changed in 2012, on average, by 10-14% upwards, only in such a sector as retail real estate, the growth in consumption increased by 37% compared to 2015.
According to statistics for 2017, consumption level amounted to 18% in the construction of office real estate, and 32% in residential real estate. A separate place in the consumption of aluminium profile is occupied by the production of furniture – for example, wardrobes, – consumption in this segment amounted to more than 15%. Automobile manufacturing used about 13% of aluminium.
If we consider the consumption of the profile by assortment groups, then there will be the profiles used in construction on the first place. In 2018, the consumption of architectural profiles amounted to 23 thousand tons, interior ones – 15.2 thousand tons, construction ones – 5.4 thousand tons. The consumption of engineering profiles amounted to about 1 thousand tons, electrical ones – 1.8 thousand tons. Profiles for advertising structures lie in a separate place in consumption – their consumption amounted to 1.8 thousand tons.
If we talk about imports, then mainly best-finished profiles are delivered from abroad (anodized, prefinished, processed by electro-polishing or off-colored). Such a profile is not produced in Ukraine, and is imported from Europe and China. At the same time, one of the main consumers of the import profile is Kyiv region.
Implementation of investment and finance:
It is planned to carry out financing procedures of the investment project in 15 stages:
- Project design work with permission and approval € 200,000
- Construction of the plant building (5500 m) € 350,000
- Accessories (cranes, lifting and unloading) € 70,000
- Preparatory work: Water supply € 50,000
- Preparatory work: Water discharge € 20,000
- Preparatory work: Coordination of a gas pipeline junction € 55,000
- Preparatory work: Coordination of electricity connection 500kw € 150,0000
- Equipment 1st stage: Foundry (gas furnace + mixer + table) € 350,000
- Equipment 2nd stage: Extruder 1250 t (furnace + saw + ingots hanger + moulding press + annealing furnace) € 1,105,000
- Equipment 3rd stage: Coloring € 70,000
- Equipment 4th stage: Anodizing € 350,000
- Provision of the necessary facilities on site: € 20,000
- Matrix tool, 100 pcs (initial value): € 55,000
- Equipment: Compressor for air pressure (tool group) € 10,000
- Equipment: Product quality control € 20,000
