Table of Contents Page

Executive Summery 1

1. Background Information 2
1.1 Brief Project Description 2
1.2 Company Profile 2
1.3 Past company sales and profit performance 3
1.4 Capital for the proposed project 4
1.5 Project cost 4
2. SWOT Analysis 5
2.1 Strength 5
2.2 Weakness 5
2.3 Opportunity 5
2.4 Threats 5

2.5 Characteristics of uPVC 5

2.6 Application of uPVC 6
3. Market Analysis 7
3.1 The plastic industry in Ethiopia 7
3.2 Supply of uPVC in Ethiopia 7
3.3 Local Production 8
3.4 Import 8
3.5 Projected demand of uPVC in Ethiopia 9
3.6 Sells Channel 10
4. Technical Study 11
4.1 Project location and site 11
4.2 Machinery and Equipment 11
4.3 Capacity and Capacity Utilization 11
4.4 Production Process 12
4.5 Environmental Impact Assessment 13
4.6 Socio Economic Benefit 13
5. Conclusion 14

EXECUTIVE SUMMARY
The strategic plan for this company is to expand the capacity and supply its products all over the country
being competitive in the market and also to start exporting good quality products at least for the
neighboring countries in east Africa.

Provided that it is operated with a good business acumen that involves having a thorough knowledge and
experience of the product range, technical requirements, operational procedures and also managing the jobs
with the right type of technical manpower. When these factors combine with good and effective business
development skills, the business is expected to give considerable profits which are expected to grow over the
years.

Piping systems are the most indispensable elements to civilized living standard from individual life to
industrial activities that is they are the basic infrastructure for urban to rural area. Particularly uPVC pipes are
used for water supply, drainage system, cable casing, irrigation and many more.

The planed manufacturing unit needs a capital investment of Birr _____________ for purchasing machinery
and equipment, in addition to this a sum of Birr _______________ is required as working capital, which
should be used for purchasing raw material and other inputs. The total project cost estimated to be Birr
_______________ including preproduction cost. In this business plan, all the calculation is based on a unit
with 3 line of production with capacity of ____kg per day.

1. Background Information
1.1 Brief Description of the product

PVC is a vinyl chloride polymer. PVC polymer is derived from oil and salt.

The unique properties of polyvinyl chloride polymer are further enhanced by the addition of
specialized additives to create tough, resilient and ductile compounds, which are process itself is
finely controlled and has a direct bearing on the final properties of the product.

uPVC was first developed in the 1930’s and came to be used in pressure pipe lines form 1950’s. The
product has now developed to a mature status with known and respected performance history in pipe
line application.

uPVC is a low maintenance material. It is used in the agriculture, chemical, construction and mainly in
water supply. It is available in variety of colors and finishing.

1.2 Company profile

Geosynthetics Industrial Works Plc (GIW) was founded in 2005.

Share holders are Water works Construction Enterprise and Golden Trade Co.

The Factory installed in a consisting area of 4000 m2

Has its own building covers 1800 m2.

The company starts by the investment of birr 39.6 million invested by the shareholders
Expansion has been executed (the machines are already erected and they are under commissioning)
that brings the company’s capacity 2 fold.

Currently the company is the supplier of high quality products such as different sizes of uPVC pipes in
various thickness plastic sheet (geomembrian) plastic gabion net and different sizes of HDPE pipes
and also various offer products commonly known as ‘’Geosynthetics’’ which will be used for the
protection, collection, Delivery, containment of water and soil.

Acquire dedicated and committed employees and management team with high expertise.

1.3 Past Company sales and Profit Performance

From the date of its establishment in short period of time (3-4 production years) the company reaches
to all over the country.

The basic performance indicator of the company i.e. sales and profit is shown below.

Since the market is attractive the company runs its activity by own capital (no borrowing)

Sales trend of the

company
 Performance of the
company
1.4 Capital for the proposed project

The company is established with a paid up capital of Birr ________________. The name of the share
holders and their respective capital contribution is shown in the table below.

S/n Name share In money

1 Geosynthetics Industrial Works Plc
2 Hawassa Water Works Construction Enterprise

1.5 Project Cost

The planed manufacturing unit needs a capital investment of Birr _____________ for purchasing
machinery and equipment; in addition to this a sum of Birr _______________ is required as working
capital, which should be used for purchasing raw material and other inputs. The total project cost
estimated to be Birr _______________ including preproduction cost. In this business plan, all the
calculation is based on a unit with 3 line of production with capacity of ____kg per day.
2. SWOT Analysis
2.1 Strength
 Having good technical support
 Know how of the machine and product
 Having well trained personnel
 Familiarized to the machine and product

2.2 Weakness
 Dependence on the imported raw material
 Variable of raw material price
  Distance the factory which contribute on the price of raw material

2.3 Opportunity
 Low labor cost
 Direct order from the region water supply services and water works
 Tax holiday
 Government import substitution policy
 Strong market demand for domestic quality products.

2.4 Threat
 Importers competition, in terms of price
 Local competition since there are around 6 factories
 Instability in the price of raw materials as a result of the change in the foreign exchange rate
and price of petroleum

2.5 Characteristics of uPVC

 Suitable for potable water services
 Non toxic
 Light weight and easy to install
 High strength to weight ratio
 Rigid and high impact resistance
 Smooth internal bore for reduction of friction loss
 Resistant to wide range of chemicals
 Resistant to abrasion and corrosion
 Impermeable to gas
 Not subject to electronic corrosion
 Suitable for temperature from 00c to 600c
 Toughness
 Stiffness
 High tensile and hoop strength
 Excellent resistance to creep
 Predictable long term behavior
 Ease of repair …

2.6 Application of uPVC

 Water supply
 Chemical Industries
 Sewerage System
 Cable casing
 Irrigation
3. Market Analysis
3.1 The plastic Industry in Ethiopia

Plastic industry In Ethiopia consists of manufacturing of PE, PVC pipes and conduits. Booming in the
industry sector recently, and the basic cause of these plant propagation is due to development of
potable water supply all over the country since the basic policy of the government is to cover 94% of
the country with potable water though until now only 68% is supplied. This is only regarding water
supply if we consider the irrigation, drainage and sewerage etc we can expect more.

3.2 Supply of uPVC pipes in Ethiopia

In Ethiopia, the uPVC pipes are being used in four major sectors, Water Supply, drainage, irrigation
and cable casing. With verity of diameter range and standard ISO 4422 and DIN 8062 uPVC pipes
categorized in:

a. Pressure pipe(for water distribution and water wells)

b. Non-pressure pipes (for drainage/sewerage and conduits)

Water Supply

Water supply can be for the propose of households or for municipality sector. Mostly uses the pressure
pipes staring form the rising main, distribution to households.

Drainage system

The drainage system is as important as the water supply for one town or city for the sanitation and
cleanness. Since there will be no pressure in the drainage only the gravity governs the follow the non-
pressure pipes are implemented with different color than the water supply pipe.

Irrigation System
Ethiopia being an agricultural country needs the use of uPVC pipes in large quantities for the
irrigation purpose, due to their inherent characteristics. In this sector both the pressure and non-
pressure pipes can be used.

Cable casing

In this category lie starting from the small conduit to big size cable casing lying underground.

3.3 Local Production

In 2010/11 there are around 7 big capacity factories and around 6 small size industries only for
drainage pipe. The major entities to produce large scale products are OPF, APF, Excel Plastic, Tana
Plastic, Ethio-Plastic, Natran and The newly established MPM.

The annual local production of PVC products has been tabulated hear under. The annual growth of
plastic products during the years has been quite high, 34.9%

Description Production in Tones

2005/6 2006/7 2007/8 2008/9 2009/10
PVC 9326.4 6960.0 12,870.43 16,216.74 21,892.60
Source: CSA
3.4 Import

The annual import of PVC products has been generally steadily decreasing except one year during
2005-2010. The major sources of these imports were China, India, United Arab Emirates, Italy and
Saudi Arabia. The import of PVC products has decreased by 8.9% in this period. Source: Customs
Authority.

3.5 Projected demand of uPVC in Ethiopia

This demand projection is based on the supply growth of the product as well as the demand growth.
Referecne is made to the local development of potable water supply all over the country since the
basic policy of the government is to cover 94% of the country with potable water though until now
only 68% is supplied. In performing this supply the existing projects in this particular area Hwassa 2 nd
phase water supply project, Dilla Water supply project, Durame Water supply project are under
implementation and there are 5 projects under study. In addition to that 15 town water supply project
out of which 5 are in this region also will be a potential demand for this plant in a cost effective way.
And the big size irrigation plants for the sugar development projects are using a big size uPVC pipes
in a bulk quantity.

Year Projected Demand

Fiscal Year Project Year [Tones]
2010/11 6 33,933.53
2011/12 7 35,630.20
 2012/13 8 37,411.72
2013/14 9 39,095.24
2014/15 10 41,050.00
2015/16 11 42,897.25

2016/17 12 45,042.12
2017/18 13 47,294.22
2018/19 14 49,294.22
2019/20 15 51,893.59

3.6 The Demand/Supply Gap for uPVC products

The total production capacity of the existing factories is estimated at a minimum of 5,200tons to a
maximum of 15,600 tons. The average will be 10,400.On the other hand the two plastic factories will
be feasible in the next year and the expected total annual production capacity of these projects will be
6,000tones. Thus, the total capacity of the factories will be about 16,400 tones.

Year Projected Demand Available Demand Supply Gap

[Tone] Capacity[Tone]

3.7 Sells Channel

Almost all of the total industry production will be sold through conventional market channel.
Manufacturers generally distribute pipes using a network of wholesalers who then sell to retailers and
customers or directly to the customer or retailer as per the quantity required. The wholesaler should be
well-reputed entities with past experience and sound financial position and has a wide network in the
rural areas. As we mentioned earlier these manufacturers will serve large volume orders from the
public sector directly. In an endeavor to boost sales in a very tight market competition, manufacturers
generally resort to credit facility.

Pricing of uPVC pipe is on the basis of the raw material content and pattern emerges when higher
quality product prices are studied closely but this will be constant for pressure pipes since there is no
tolerance regarding raw material. As the cost of resin increases or decreases, the price per kg of pipe
also adjusted accordingly.
4. Technical Study
4.1 Project Location

The project is doing to be located in Hawass Town which is around 273km from the capital city Addis
Ababa. The site is expected to be supplied with infrastructure like electricity, water and suitable road
accessibility.

4.2 Machinery and Equipment

S/N Description Units Qty

01 PVC (Ø315 – Ø630) mm pipes line Set 01
02 PVC (Ø200 – Ø400) mm pipes line ‘’ ‘’ 01
03 PVC (Ø63 – Ø250) mm pipes line ‘’ ‘’ 01
04 PVC Mixer ‘’ ‘’ 03
05 Chiller Rotary Screw ‘’ ‘’ 01
06 PVC Crusher ‘’ ‘’ 01
07 PVC Milling Machine ‘’ ‘’ 02
08 Rotary Screw Compressor with Tank ‘’ ‘’ 01
09 Loading Forklift 3 tons ‘’ ‘’ 01
10 Loading Forklift 6 tons ‘’ ‘’ 01
11 Generator 1500 KVA ‘’ ‘’ 01
12 Pipes Printer ‘’ ‘’ 03
13 Ancillary Equipment
14 PVC Lab. Equipments
15 Spare parts
4.3 Capacity and Capacity Utilization

The plant is assumed to have a production capacity of ______kg/day in two shift in all three lines of
uPVC production at 100% capacity utilization.

The plant is assumed to start operation at initial capacity 003\7011l.2of 65% increasing by 10%
annually until attainable capacity of 90% is reached.

4.4 Production Process

The first step in manufacturing uPVC pipe is to prepare the ingredients make mixture in the mixer.
After mixing, pipe is created by starting with a molten mixture of the material and shaping it around a
die in extrusion machine. The dimensions of the pipe are controlled by applying internal pressure or a
vacuum to the hot pipe, ensuring that its walls are in close contact with the cooling sleeve.

Modern extrusion design, allied to advanced computer controlled systems, allows pipes to be
manufactured consistently to a high level of quality and to tight tolerances.

In the down-stream processing operation, pipes are cut to specified lengths by means of a haul-off saw
and pipe sockets are belled inline.

Finally, since these products are used in many water supply projects, constructions application and
commercial purpose, it is important that each kind of pipe is tested to ensure quality. To do so, sample
pipes are tested different kinds of testes:

 Hydrostatic pressure test

 Tensile test

 Compression test

 Bending test

 Vicat Softening temperature test

 Water absorbsion test

 Dichloromethane resistance test

 Impact resistance test

4.5 Environmental Impact Assessment

The use of state of art technology is a key requirement for the minimization of industrial waste.
Furthermore, the consumption of highly concentrated raw material will reduce waste that otherwise
would be disposed to the environment. In addition, any waste, if at all occurs will be re-used in the
production process.

4.6 Socio Economic Benefit

 The most important social benefit of the project will be increased employment opportunities. This will
help the nation and in particular the region to solve the issue of poverty reduction and elevation in the
long run. Accordingly the project will create more than 100 permanent and 60 daily job opportunities.

5. Conclusion