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Compedium of Diaspora opportunities

MAKING ALUMINUM POWDER BUSINESS IN UGANDA

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Introduction

Aluminium powder is a fine granular powder made from aluminium which has several applications and is used in the manufacturing of slurry explosives, detonators for specialized applications such as rails, crackers, sparkles and other pyrotechnic products. The envisaged project is for setting up of a plant to make this powder. The project cost is US $ 30,351 with production capacity of 300,000 kgs per annum collecting estimated revenues US $ 44,998 per year.

Production Process

Aluminium metal is melted in a furnace with the temperature maintained around 7200-7600C. By inducing an air jet in the molten aluminium, small particles of atomized aluminium are produced. A jet of hot air under pressure is passed through annular opening, near the top, drawn by suction through orifice. This leads to the formation of small particles of aluminium. These particles are drawn by suction, through a collecting duct placed above the nozzle, and finally get into a cyclone collecting system. The process of sieving segregates different sizes of aluminium powder. The envisaged plant would have a minimum plant capacity of 300 tonnes per annum. This is on the basis of 300 working days and single 8-hour daily work shifts.

Capital Investment Requirement in US $

Item Units Qty Price Total cost
oil fired furnace No 1 1,800 1,800
Ball mill No 1 529 529
Thermo compressor No 1 640 640
Hot air chamber No 1 750 750
Powder collecting duct complete section No 1 1,300 1,300
Water cooling pump No 1 800 800
Total cost of tools & Equipment 5,819

Production and Operating costs in US $ (a)Direct material, supplies and cost

Cost Item Units Unit Cost Qty/ day Pdn cost/ day Pdn cost/ mth Pdn cost/ yr
Direct Costs
Aluminium metal kgs 0.13 32 4 108 1,300
Mineral spirit ltrs 53 0.1 5.3 137.8 1,654
Coating material kgs 8 1.6 12.8 332.8 3,994
Packaging material ltrs 0.7 1.6 1.12 29.12 349
Sub-total 23 608 7,297

General Costs (Overheads)

Labour 350 4,200
Selling & distribution 200 2,400
Utilities (Water, power) 500 6,000
Administration 250 3,000
Rent 400 4,800
Miscellaneous expenses 100 1,200
Depreciation 121 1,455
Sub-total 1,921 23,055
Total Operating Costs 2,529 30,351

1. Production costs assumed are for312 days per year with daily capacity of 961 kgs

  1. Depreciation (fixed asset write off) assumes 4 year life of assets written off at 25% per year for all assets.
  2. Direct costs include: materials, supplies and other costs directly incurred to produce the product.
  3. Currency used is US Dollars.

Project product cost and Price Structure in $

Item Qty/ day Qtyyr Unit cost Pdn cost/yr Upx Total rev
Aluminum powder 961.5 299,988 0.10 30,351 0.15 44,998

Profitability Analysis in US $

Profitability Item Per day Per month Per year
Revenue 144.225 3,750 44,998
Less: Production and operating costs 97.279929 2,529 30,351
Profit 47 1,221 14,647

Market

Production of aluminium powders of various grades and products, such as aluminium paste is not well established in the country. The aluminium powder industry is still of a relatively small size. With the introduction of a plant to make military hardware, the market for aluminium powder is bound to increase. There is also a market for export of aluminium powder and paste.

Source of Equipment and materials

It can be locally made by Tonet Ltd, Kanyanya, Gayaza Rd or imported. Allumium can be locally purchased from individuals all over the country as scrap.

Government incentive:

Startup costs 25% granted on actual cost over the first four years in four equal installments. Initial allowance granted in the first year of production while 75% granted on the cost base of plant and machinery for industries located elsewhere in the country.

 

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