Detailed Project Report on STEEL PRODUCTS MANUFACTURING

Tanzania is one of Africa's fastest growing economies, with diverse natural resources and a youthful population. USAID helps empower women and youth who are essential to the country's continued development but are among the most marginalized citizens. Women's salaries, for example, are on average 63 percent lower than those paid to men, while female-owned businesses make 2.4 times less profit. Youth under age 15 make up 45 percent of the country's population of 55 million. Increasing access to economic and educational opportunities for young people will go a long way in helping ensure prosperity for all.

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ENGINEERS INDIA RESEARCH INSTITUTE
4/54, Roop Nagar, Delhi-110007 (India)
Phone: [phone]
E-mail: [email protected]
Website: www.eiriindia.org



STEEL PRODUCTS MANUFACTURING
[EIRI/EDPR/4754] J.C.: 2974US$

TANZANIA OVERVIEW

Tanzania is one of Africa's fastest growing economies, with diverse natural
resources and a youthful population. USAID helps empower women and youth
who are essential to the country's continued development but are among the most
marginalized citizens. Women's salaries, for example, are on average 63 percent
lower than those paid to men, while female-owned businesses make 2.4 times less
profit. Youth under age 15 make up 45 percent of the country's population of 55
million. Increasing access to economic and educational opportunities for young
people will go a long way in helping ensure prosperity for all.

OPPORTUNITIES
BUDGET OVERVIEW

Despite the economic challenges born from Russia’s war on Ukraine, an increase
in commodity prices, and a stronger American dollar, the Tanzanian economy
performed satisfactorily in 2022. President Samia Suluhu Hassan’s administration
looks to sustain the growth nurtured throughout the implementation of the
country’s 3rd Five-Year Development Plan (FYDP III) 2021/22 – 2025/26, while
tackling the obstacles facing the economy. Real GDP growth was 4.7% compared
to 4.9% in 2021. The growth of the GDP was mostly driven by agriculture (15.6%),
construction (11.8%), and manufacturing activities (8.1%). In 2023, the GDP is
projected to grow by 5.2% - catalyzed by growth of credit to the private sector,
improving business and investment conditions, and the continued rebounding of
the tourism sector.

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CONTENTS

INTRODUCTION

TANZANIA OVERVIEW

OPPORTUNITIES

BUDGET OVERVIEW

KEY SECTOR HIGHLIGHTS

MARKET OVERVIEW

TANZANIA ECONOMY

INTRODUCTION TO THE ECONOMY OF TANZANIA

THE TANZANIAN ECONOMY IN 2022, 2023, AND BEYOND

TANZANIA KEY ECONOMIC SECTORS

TANZANIA INFLATION

TANZANIA EXCHANGE RATES

TANZANIA BALANCE OF TRADE

TANZANIA NATIONAL DEBT

TANZANIA FOREIGN DIRECT INVESTMENT (FDI)

INDUSTRIALIZATION

TANZANIA 2025 VISION:

TANZANIA GOVERNMENT’S PRIORITY:

RULES &REGULATIONS IN TANZANIA

TANZANIAN FINANCE ACT, 2023 ANALYSIS

DIGITAL SERVICE TAX (DST)

INCOME TAX ON REALIZA TION OF INTEREST IN LAND OR BUILDING

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THE FOLLOWING CHANGES HAVE BEEN MADE IN RELATION TO WITHHOLDING TAX
REQUIREMENT.

INCOME TAX EXEMPTION

THE FOLLOWING ARE EXEMPTED FROM INCOME TAX:

PRESUMPTIVE TAX REGIME

VALUE-ADDED TAX (VAT)

THE FOLLOWING CHANGES HAVE BEEN MADE WITH RESPECT TO INVOICE
REQUIREMENTS:

VAT DEFERMENT ON CAPITAL GOODS

THE FOLLOWING CHANGES HAVE BEEN MADE WITH RESPECT TO VAT DEFERMENT
ON CAPITAL GOODS:

ELECTRONIC SERVICES

ZERO-RATED SUPPLIES

INPUT TAX CREDIT

VAT EXEMPTIONS

EXEMPTIONS ON IMPORTS AND LOCAL SUPPLIES

IMPORTS AND SUPPLIES OF THE FOLLOWING ITEMS ARE EXEMPTED FROM VAT:

TAX ADMINISTRATION ACT

APPLICATION FOR REFUND

STORAGE FACILITY

FINE FOR FAILURE TO USE FISCAL DEVICE

DISCLOSURE OF INFORMATION ON CONTRACTED SERVICES

EXCISE (MANAGEMENT AND TARIFF) ACT

PERIODIC ADJUSTMENTS

ADJUSTMENT OF EXCISE DUTY RATE

VOCATIONAL EDUCATION AND TRAINING ACT

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CHANGES IN OTHER LAWS

THE ACT HAS ALSO AMENDED THE FOLLOWING LAWS:

MINING ACT

GAMING ACT

EXPORT TAX ACT

ELECTRONIC AND PO STAL COMMUNICATIONS ACT

NATIONAL PAYMENT SYSTEMS ACT

LOCAL GOVERNMENT FINANCE ACT

LOCAL GOVERNMENT AUTHORITIES (RATING) ACT

APPLICABLE RATES FOR PROPERTY TAX ARE INCREASED AS FOLLOWS:

ROAD AND FUEL TOLLS ACT

FOREIGN VEHICLES TRANSIT CHARGES ACT

IMPORTANT REGULARITIESORGANIZATION/BODIES IN TANZANIA

STEEL INDUSTRY

GLOBAL ECONOMY OUTLOOK

CHART 1: GLOBAL GROWTH OUTLOOK PROJECTIONS (REAL GDP, Y -O-Y CHANGE IN
%)

ADVANCED ECONOMIES GROUP

EMERGING MARKET AND DEVELOPING ECONOMIES GROUP

TABLE: GDP GROWT H TREND COMPARISON - INDIA V/S OTHER EMERGING AND
DEVELOPING ECONOMIES (REAL GDP, Y -O-Y CHANGE IN %)

GLOBAL & INDIAN STEEL INDUSTRY

GLOBAL STEEL PRODUCTION

GLOBAL PER CAPITA CONSUMPTION (IN KG)

REGION-WISE GLOBAL CAPACITY IN CY22 (IN MT)

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GLOBAL STEEL PRODUCTION

GLOBAL CRUDE STEEL PRODUCTION

STEEL PRODUCTION GEOGRAPHICAL REGION IN CY22 - 1,885 MT

GLOBAL STEEL CONSUMPTION

GLOBAL STEEL DEMAND

STEEL TUBES & PIPES INDUSTRY

SWOT ANALYSIS

GLOBAL MACROECONOMIC VIEW

GLOBAL GDP GROWTH TO STAY MODERATE

GLOBAL ECONOMIC REVIEW AND OUTLOOK

USA:

EURO AREA:

JAPAN:

UK:

CHINA:

CPI INFLATION REVIEW AND OUTLOOK

DOMESTIC FOCUS TO RESTRICT WORLD TRADE GROWTH IN 2023

WORLD TRADE IN GOODS AND SERVICES

SUPPORTIVE POLICY ENVIRONMENT TO MAKE INDIA KEY DESTINATION UNDER
CHINA PLUS ONE

STRUCTURE OF STEEL INDUSTRY

TYPES/DEFINITION OF STEEL

BY PRODUCT

BY COMPOSITION

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INDIA’S POSITION IN THE GLOBAL STEEL MARKET

GLOBAL CRUDE STEEL PRODUCTION FROM 2018 TO 2022 AND SHARE OF MAJOR
COUNTRIES IN CY 2022 (MT)

GROWTH IN INDIAN FINISHED STEEL DEMAND VIS -À-VIS GLOBAL FINISHED STEEL
DEMAND

PER CAPITA STEEL USAGE IN INDIA VIS -À-VIS GLOBAL BENCHMARKS FOR CY 2022
(IN KG)

INDIAN STEEL SECTOR REVIEW AND OUTLOOK

FINISHED STEEL DEMAND REVIEW BY STEEL TYPE

FINISHED STEEL DEMAND REVIEW BY PRODUCT TYPE

WIRE RODS PRODUCTION TREND

WIRE ROD PRODUCTION REVIEW AND OUTLOOK

• BUILDING AND CONSTRUCTION

• INFRASTRUCTURE

• AUTOMOTIVE

INDIAN FINISHED STEEL DEMAND GROWTH

FACTORS AFFECTING STEEL MARKET VALUE CHAIN

STEEL WIRES MARKET ASS ESSMENT

INTRODUCTION TO STEEL WIRES:

FEW OF THE APPLICATIONS OF STEEL WIRES HAS BEEN HIGHLIGHTED BELOW:

DEMAND TREND FOR STEEL WIRES

WIRES DEMAND REVIEW AND OUTLOOK

DEMAND SEGMENTATION BY END USER INDUSTRY FOR STEEL WIRES (BASED ON
VOLUMES)

KEY END USER INDUSTRY GROWTH DRIVERS

INFRASTRUCTURE

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AUTO

POWER CABLES

CONSUMER GOODS/KITCHEN ACCESSORIES

TRADE ANALYSIS FOR STEEL WIRES

STEEL WIRE IMPORT EXPORT TREND

COUNTRY WISE EXPORT SPLIT FOR FISCAL 2023

STEEL WIRES DEMAND TREND BY TYPE OF WIRE

STEEL WIRES SEGMENTATION BY TYPE OF WIRE

SPECIALITY WIRES MARKET

DEMAND OUTLOOK BY TYPE OF SPECIALITY WIRES

LRPC WIRES DEMAND OUTLOOK

MANUFACTURING PROCESS

BELOW IS THE TYPICAL PROCESS INVOLVED IN MANUFACTURING OF DIFFERENT
WIRES

STEEL WIRES INDUSTRY STRUCTURE

PLAYER WISE MARKET FOR STEEL WIRES IN FISCAL 2023

COMPETITION BENCHMARKING OPERATIONAL BENCHMARKING

PRODUCT PORTFOLIO MAPPING OF KEY PLAYERS

PROFILE OF KEY STEEL WIRE MANUFACTURERS (FISCAL 2023)

FINANCIAL BENCHMARKING

PEER COMPARISON FOR FISCA L 2023 (RS MILLION)

COMPARISON OF RETURN ON CAPITAL EMPLOYED (IN TIMES)

COMPARISON OF RETURN ON EQUITY (IN %)

APPLICATION LANDSCAPE OF DIFFERENT TYPES OF STEEL WIRES

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ACTIVITIES UNDERTAKEN BY THE COMPANY FOR MANUFACTURING ARE
SUMMARIZED IN THE FOLLOWING CHART:

INTRODUCTION OF THE UNCOILER;

TIG WELDING PROCESS:

SIZING SECTION:

CUTTING SECTION:

FINISHING PROCESS

STRAIGHTENING PROCESS:

POLISHING

MANUFACTURING PROCESS

INTRODUCTION:

USES & MARKET POTENTIAL:

MANUFACTURING PROCESS:

PLANT & MACHINERY MANUFACTURER

VESSEL SUPPLIERS

MIXER

PROJECT LOCATION: COUNTRY

(TANZANIA COUNTRY PROFILE)

GEOGRAPHY

AREA AND POPULATION

CLIMATE

THE CAPITAL CITY

ADMINISTRATIVE REGIONS AND DISTRICTS

CULTURE

POLITICS

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ECONOMY

CURRENCY

DOCUMENTS REQUIRED FOR LICENSES

LIST OF DOCUMENTS:

PRINCIPLES OF PLANT LAYOUT

STORAGE LAYOUT:

EQUIPMENT LAYOUT:

SAFETY:

PLANT EXPANSION:

FLOOR SPACE:

UTILITIES SERVICING:

BUILDING:

MATERIAL-HANDLING EQUIPMENT:

RAILCOADS AND ROADS:

MAJOR PROVISION S IN ROAD PLANNING FOR MULTIPURPOSE SERVICE ARE:

PLANT LOCATION FACTORS

PRIMARY FACTORS

1. RAW-MATERIAL SUPPLY:

2. MARKETS:

3. POWER AND FUEL SUPPLY:

4. WATER SUPPLY:

5. CLIMATE:

SPECIFIC FACTORS

6. TRANSPORTATION:

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7. WASTE DISPOSAL:

8. LABOR:

9. REGULATORY LAWS:

10. TAXES:

11. SITE CHARACTERISTICS:

12. COMMUNITY FACTORS:

13. VULNERABILITY TO WARTIME ATTACK:

14. FLOOD AND FIRE CONTROL:

EXPLANATION OF TERMS USED IN THE PROJECT REPORT

DEPRECIATION:

FIXED ASSETS:

WORKING CAPITAL:

BREAK- EVEN POINT:

OTHER FIXED EXPENSES:

MARGIN MONEY:

TERM LOANS:

TOTAL LOAD:

UTILITIES

POWER

WORKING

TOTAL MANPOWER AND PAYROLL

UTILITIES

LABORATORTY EQUIPMENTS MANUFACTURERS

D.G. SET MANUFACTURERS & SUPPLIERS

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SUPPLIERS OF BILLET CUTTING MACHINE

SUPPLIERS OF ELECTROPLATING PLANT

SUPPLIERS OF ANNEALING FURNACES

SUPPLIERS OF HEAT TREATMENT FURNACE

SUPPLIERS OF HARDNESS TESTING MACHINE

SUPPLIERS OF CLOSE DIE HOT FORGING MACHINE

SUPPLIERS OF FORGING DIES

SUPPLIERS OF INDUCTION HEATING FURNACE

SUPPLIERS OF CNC MACHINING CENTRE

SUPPLIERS OF METAL TESTING MACHINE

SS PIPE & TUBE MANUFACTURER

ELECRICAL GOOD & SWITCH MANUFACTURE

ELECTRICAL PANEL & BOARD MANUFACTURERS

LATHE MACHINE MANUFACTURERS

CNC MACHINE MANUFACTURERS

PANEL/SHEET BENDING MACHI NE MANUFACTURERS

BRAZING MACHINE MANUFACTURERS

EXPANDER MANUFACTURER

SUPPLIERS/ MANUFACTURERES OF EOT CRANE

WEIGHING BREIDGE MANUFACTURER

PROJECT CONSULTANT FOR PROJECT SETTINGUP

SWOT ANALYSIS

STRENGTHS

WEAKNESSES

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OPPORTUNITIES

THREATS

ORGANIZATION CHART

PLANT LATOUT

IMPLEMENTATION SCHEDULE

PREHEATING FURNACE

STEEL PRODUCTS MANUFACTURING PLANT & MACHINERY SUPPLIERS

PREHEATING FURNACE MANUFACTURERS

HIGH CAPCITY BOILERS MANUFACTURERS & SUPPLIERS

NAIL MAKING MACHINE MANUFACTURERS & SUPPLIERS

STEEL PRODUCTS MANUFACTURING CONSULTANT

RAW MATERIAL SUPPLIERS (BILLET)

APPENDIX – A:

01. PLANT ECONOMICS

02. LAND & BUILDING

03. PLANT AND MACHINERY

04. OTHER FIXED ASSESTS

05. FIXED CAPITAL

06. RAW MATERIAL

07. SALARY AND WAGES

08. UTILITIES AND OVERHEADS

09. TOTAL WORKING CAPITAL

10. TOTAL CAPITAL INVESTMENT

11. COST OF PRODUCTION

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12. TURN OVER/ANNUM

13. BREAK EVEN POINT

14. RESOURCES FOR FINANCE

15. INSTALMENT PAYABLE IN 5 YEARS

16. DEPRECIATION CHART FOR 5 YEARS

17. PROFIT ANALYSIS FOR 5 YEARS

18. PROJECTED BALANCE SHEET FOR (5 YEARS)




COST ESTIMATION

Plant Capacity 400 MT/Day
Land & Building (20 Acres) US$ 19.35 Lac
Plant & Machinery US$ 79.63 Lac
Working Capital for 1 Month US$ 53.54 Lac
Total Capital Investment US$ 1.54 Cr
Rate of Return 87%
Break Even Point 34%