DEVELOPMENT BANK OF ETHIOPIA

RESEARCH AND PROJECT DATA MANAGEMENT

DIRECTORATE

TRAILER (DRY & FUEL CARGO) AND TIPPER BODY

MANUFACTURING AND MARKETING BASIC DATA FOR
PROJECT FINANCING (3rd UPGRADE)

Prepared By:

Tefera Jambo Sr. Officer

Zelalem Adugnawu RPDMD Officer

Henock Tsegaye Sr. Chemical Engineer

Revised By:

Dawit Amare Team Manager

Million Jarso Technical Team Manager

APPROVED BY: RPDM APPROVAL TEAM MEMBERS

January, 2019
TABLE OF CONTENTS
LISTS OF TABLES ....................................................................................................................... iii
LISTS OF FIGURES ..................................................................................................................... iv
ACRONYM AND ABBREVIATION ........................................................................................... v
1. INTRODUCTION .................................................................................................................. 1
1.1. Background ............................................................................................................... 1
1.1. Objective of the Document .................................................................................. 1
1.2. Methodology of the Document ............................................................................ 1
1.3. Scope and Limitation of the Document ............................................................ 1
2. PRODUCT DESCRIPTION ................................................................................................... 2
3. MATERIALS AND INPUTS ................................................................................................. 3
3.1. Supply of Raw Materials .................................................................................................. 1
3.2. Source of raw materials ................................................................................................ 2
3.3. The Market Arrangement of the Raw Materials ........................................................... 2
3.4. Price of raw materials ................................................................................................... 2
4. TRAILER MANUFACTURING PROCESS DESCRIPTION .............................................. 3
5. Market Data ............................................................................................................................ 6
5.1. Market segmentation ............................................................................................................ 6
5.2. Trailer and Tipper Demand .................................................................................................. 6
5.3. Supply Data .......................................................................................................................... 8
Tanker trailers and semi-trailers ............................................................................................. 9
5.4. Marketing Arrangement ....................................................................................................... 9
5.5. Price of the products ............................................................................................................ 9
6. PROBLEMS, CONSTRAINTS AND KEY SUCCESS FACTORS.................................... 10
6.1. Problems, Constraints and Risks .................................................................................... 10
6.2. Success factors ............................................................................................................... 10
7. PARAMETERS, TECHNICAL COEFFICIENTS AND ASSUMPTIONS ........................ 11
8. REFERENCES ..................................................................................................................... 16

ii
 LISTS OF TABLES
Table 1: Import data (net weight of quantity) of standard raw materials ....................................... 1
Table 2: Source of Raw material and Inputs .................................................................................. 2
Table 3: List of processing equipments required for Trailer and Tipper ........................................ 4
Table 4: Industrial Production Volume in Tones ........................................................................... 6
Table 5: Agricultural Production Volume in Quintal ..................................................................... 7
Table 6: Ethiopian Volume of Commodities in Metric tons (2013 - 2016).................................... 8
Table 7: Domestic firm’s production capacity of Trailers .............................................................. 8
Table 8: Imported Trailer and Semi-trailer (Tones) ....................................................................... 9
Table 9: Price of the final product (Without VAT) ..................................................................... 11
Table 10: Vehicle requirement...................................................................................................... 11
Table 11: Price of major raw material .......................................................................................... 12
Table 12: List of prices of components and accessories............................................................... 13
Table 13: Truck fuel cost .............................................................................................................. 14
Table 14: Repair and Maintenance ............................................................................................... 14
Table 15: Depreciation and Amortization..................................................................................... 14
Table 16: Major Insurance Categories for the Firm...................................................................... 14
Table 17: Working capital determination ..................................................................................... 15

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 LISTS OF FIGURES

Figure 1:- Trailer manufacturing general process flow .................................................................. 3

Figure 2: Marketing Chanel ............................................................................................................ 9

iv
 ACRONYM AND ABBREVIATION
CSA Central Statistical Data
ERCA Ethiopian Revenues and Customs Authority
GDP Gross Domestic Product
GTP Growth and Transformation Plan
ITC International Trade Centre
Kg Kilogram
NBE National Bank of Ethiopia
PLC Private Limited Company
VAT Value Added Tax

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1. INTRODUCTION
1.1. Background

A trailer and Tipper body is the long rear section of a lorry or truck, in which the goods are
carried and pulled by a car or other vehicle and which is used for transporting large or heavy
items. This document consists of a raw data regarding manufacturing and marketing of Trailers
and Tipper body manufacturing excluding underground and above ground tank, depot and station
canopies.

1.1. Objective of the Document

The main objective of this document is to meet the expectation of the concerned units and
decision makers through provision of comprehensive and relevant raw data about Trailers and
Tipper body manufacturing and marketing; thereby enable them to make an appropriate decision.

1.2. Methodology of the Document

The document was prepared through collection of both primary and secondary data from
different organizations, concerned stake holders, browsing internet, and reviewing of an
appropriate publications. The main instruments for primary data collection were structured
questionnaire and interview.

1.3. Scope and Limitation of the Document

This document focuses on only Trailers and Tipper body manufacturing and marketing due to
Executive Management Committee decision passed on commodity study conducted on Trailer
(Dry & Fuel Cargo), Tipper Body and Other Metal Manufacturing (2nd Upgrade) October 2017
to exclude underground and above ground tank, service station canopy and depot since the
existing metal fabricating firms manufacture the above mentioned products as a side business
based on the order they receive from any buyer. The main limitation is the absence of organized
data from the concerned government Organization.

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2. PRODUCT DESCRIPTION

A Trailer (dry cargo and Fuel cargo is a non automotive freight vehicle to be drawn by a
motor truck usually truck–trailer. A Tipper on the other hand is a mechanism mounted on a
truck or any automotive whose contents can be emptied without handling; the front end of
the platform can be pneumatically raised so that the load is discharged by gravity. Tippers
have an open top body that can be unloaded when the body is tipped backwards (using a
hydraulic arm) and the tailgate is released.

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3. MATERIALS AND INPUTS

The raw material section of the study mainly focused on the required raw material, source,
availability, and marketing arrangement of each raw material for the manufacturing of trailers
and tipper body manufacturing, such as cargo draw bar trailer and semi trailer, cargo body for
trucks, tipper body and fuel tanker manufacturing. These raw materials classified based on their
nature of importance as major raw materials, components or accessories and consumable items.
Based on this classification;
Standard Items - under this classification the raw materials listed are those metal or steel
products which largely used for assembling of the physical output. Based on this the major raw
material required for trailer and tipper body manufacturing are;
 Steel sheet i.e. Cold rolled and hot  Round rod
rolled Sheet metal  U-channel
 Checkered plate  RHS
 Flat bar  Angle Iron
 I-beam or I sections
Components or Accessories - these are those automotive accessories and all are directly
imported with full package from abroad then finally directly jointed and assembled with or hold
the physical output. These are;
 Chassis  Tire
 Axel with suspension  Hydraulic Jack
 Rim disk type  Mudguard rubber
 Breaking system  Bolt, Nut & washer
 Electrical system  Rivet
Consumables
 Electrode
 Oxy Acetylene

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 3.1. Supply of Raw Materials
The supply side of the raw material study indicated that the aforementioned raw materials
import from the international market.

Table 1: Import data (net weight of quantity) of standard raw materials, Accessories and
Consumables

Year
Type of the product HS code 2013 2014 2015 2016 2017

Hot Rolled steel sheet 720825 971 2,769 5,277 10,015 5,342

Cold rolled steel sheet 720917 25,424 26,146 35,925 61,377 53,290

Checkered plate 73089090 46,126 38,883 63,271 86,834 65,485

Flat bars 72142000 179,877 241,624 400,999 448,367 309,651

Rectangular Hollow 3,525 4,488 33,694 30,382 5,500
section 730630

Angle Iron 72169900 5,541 3,652 8,410 3,743 3,248

Trailer axel 87169090 1,574 4,271 6,869 8,062 6,037

Truck axel 860719 12 7 4 50 18

hydraulic jack vehicle 1,046 774 664 1,024 1,008
hoists 84254200
Galvanized steel pipe 73061900 2,155 1,256 1,537 3,705 402
Rim disk 8708700 427 461 507 924 701
valve 8481900 144 180 291 285 264

BPJ Axles 8708809000 500 450 622 570 554

HJ Axles 8701 502 296 509 241 1,051
Ball type Turning Table 842099 12 12 9 4 31
Landing Gear 843110 14 49 58 61 42
King pin 8708 28 456 491 350 396 469
Disc type wheel rim 39269010 2,682 4,105 7,322 6,929 6,451
Electrode 831110 6,820 3,655 5,812 7,310 5,308
Oxy Acetylene 29012910 1 4 11 80 65
U-channel 72163100 1,972 980 1,006 1,806 2,360
Source: ICT trade map

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 3.2. Source of raw materials
The listed raw materials the majority is sourced from foreign countries where as some of
them are from the domestic producers. Therefore in the following table it is clearly displayed
their source.
Table 2: Source of Raw material and Inputs
Sr.No Type of the product Source
Foreign Domestic
1 Hot Rolled steel sheet 
2 Cold rolled steel sheet 
3 Checkered plate 
4 Flat bars 
5 Rectangular Hollow section 
6 Iron angles 
7 Trailer axel 
8 Truck axel 
9 hydraulic jack vehicle hoists 
10 Galvanized steel pipe 
11 Rim disk 
12 valve 
13 BPJ Axles 
14 HJ Axles 
15 Ball type Turning Table 
16 Landing Gear 
17 King pin 
18 Disc type wheel rim 
19 Electrode 
20 Oxy Acetylene 

3.3. The Market Arrangement of the Raw Materials

For imported raw materials factories in Ethiopia have two options of purchasing raw
materials. The first and foremost option is a direct purchase of the raw material from the
producer themselves. The other option is purchase of the raw material from the brokers of
foreign countries who buy from the main suppliers and sell it to the manufacturers. The
purchase from foreign factories is made through formal import procedures with L/C.
Regarding to cost of transportation, it mainly covered by the buyer but it may also depend on
the agreement of buyer and seller.
3.4.Price of raw materials

The current prices of the products are indicated in the parameter part.

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4. TRAILER MANUFACTURING PROCESS DESCRIPTION

The manufacturing process of trailers involve processes of design and customization of the
desired product using latest 3D solid modeling and stress analysis software, cutting the steel
parts using state of the art CNC machines, fabrication of chassis rails which are either flat bed
or stripped plate flanges, trailer body fabrication (by using cutting, bending, rolling, and
welding techniques on sheet metals), abrasive blasting and painting, as well as, assembly of
all parts (Chassis, trailer body, king pin, pressure brake).

The process flow is shown in the figure below;

3D CAD design

CNC machining & Profile cutting

(Fabrication)

Chassis rail fabrication

Trailer body fabrication

Blast and paint

Assembly and fit out

Figure 1:- Trailer manufacturing general process flow

3
Table 3: List of processing equipments required for Trailer and Tipper

S/n Unit Process or Machinery required Purpose(Application)

operation
A. Equipment for manufacturing Trailers

1 Design and Design computer with up to Used to make or customize

Customization date 3D solid modeling and the design of the desired
stress analysis software trailer
2 Pre-assembly Pre assembly line with manual
The pre-assembly line is
or automatic welding used to assemble different
parts of the base frame
together by welding or
bolting
3 Cutting CNC plasma cutting tables Used to cut out and form
the required shapes on the
sheet metals or plates
4 Shape forming CNC press brake machine Used to bend make
(Bending) necessary shapes on the
sheet metals or plates
5 Drilling Drilling machine To drill holes either on the
base frame sections or the
trailer body
6 Welding Welding machines; Used to carry out different
 Arc welding (fixed & welding operations to make
portable type) the chassis rail as well as
 Gas welding trailer body
 MIG welding
equipment
 TAG welding
equipment
7 Shearing Shearing machine To cut different size sheet
metals to the required size

8 Rolling Sheet rolling machine To form rolled trailer body

parts
9 Blasting and painting Blasting room with To apply steel media blast
blast sprayer and paint
Paint room with
powder coating
equipment and drying
oven
10 Final assembly Final assembly line To assemble the different
parts of the whole trailer
together
B. Quality checkup equipment

1 Thickness checkup Film Thickness Gauge, To measure the thickness of

and blast media and powder

4
S/n Unit Process or Machinery required Purpose(Application)
operation
Electronic thickness
gauge
2 Hardness testing Hardness testing To check the hardness of
machine the produced structure
C. Utility and auxiliary machines

1 Compressed air Compressors For supplying compressed

air
2 Backup electricity Diesel Generator To provide backup
Supply electricity
3 Material handling Overhead/ roof cranes To move or transport
equipment Jib cranes materials from one
Mobile crane operation to another within
Forklifts the plant
Trolley
4 Hand tools Grinders To carry out many
Wire brushes operations performed by
Disc cutting shears hand (manually)
Hacksaws
Vices and clamps
Pliers
Hammers
Tap measures
Spraying guns and etc.

5
 5. MARKET DATA

5.1. Market segmentation

Trailers and Tipper body can be segmented into domestic market. The existence of
unsatisfied domestic demand that was met via import and lack of experience in the world
market are the two determining factors for market destination to be local market. Besides, the
cost overrun due to high import tax on major raw materials hinders local manufacturers to be
competitive in the international market.

5.2. Trailer and Tipper Demand

Trailers and tipper products are used in a number of different applications. The demand for
these products has a parallel relation with the economic growth of a country, which is
composed of industry, agriculture and service sector that drive movements of national
commodity. This also in turn creates the demand for freight transport which uses draw-bar
trailers, tankers and tipper. Therefore, demand analysis considered the following sectors of
the economy:

 Industry Sectors
 Construction Sub-sectors
 Agricultural Sectors
 International Trade
 Transport subsector

 Industrial Sector

Industry accounts for about 15 % of Ethiopia's GDP, but offers few jobs. The size of the
sector increased by 20 % between 2010 and 2014, but only by 4 % for small and very small
businesses.

Table 4: Industrial Production Volume in Tones

Year 2011 2012 2013 2014 2015 2016

Production in MT 10,000,017 10,967,133 12,845,896 16,745,232 18,419,755 20,261,731

Source: Ministry of Industry

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  Construction Sub-Sector

Between 2004 and 2014, per capita growth in Ethiopia was 8% per year. This was the highest
on the continent during this period, and is impressive by any standard. The growth has been
attributed mainly to a construction boom and increased agricultural productivity.

The construction sector of Ethiopia has undergone tremendous changes in recent years. The
construction sector’s performance can be measured by the sector’s contribution to the
national Gross Domestic Product (GDP). During the GTP I period, the construction industry
on average grew at 28.7% per annum, pushing its share in GDP to rise from 4% in 2009/10 to
8.5 % by 2014/15.

Ethiopia’s government allocated a huge amount of budget for capital expenditure yearly to
maintain the growth of the country. The government had spent in billions of birr for
construction of roads, railways, dams, Mega Projects and governmental institution.
According to NBE annual report of 2016/17 The construction sector, the manufacturing
sector, mining and energy sector were grow at an annual average growth of 27.98, 17.5 and
9.54 percentage respectively in the past five years. Ethiopia’s construction sub-sector has the
major share which is 70% from all growth in the economy register by the country (NBE,
2016/17).
 Agricultural Sector

This particular sector determines the growth of all other sectors and consequently, the whole
national economy. The sector is dominated by small-scale farmers who practice rain-fed mixed
farming. It resulted in an average real agricultural GDP growth rate of 6.6% per annum during
GTP1. This growth rate is considered to be high by any measure and enabled the sector to
remain a key driver of the national economic growth given the relative weight of agriculture
in the overall economy.
Table 5: Agricultural Production Volume in Quintal

Year peasant commercial Total

2012 236,906,073 68,216,703.75 305,122,776.75
2013 250,691,249 75,620,987.08 326,312,236.08
2014 251,536,623.90 79,641,442.07 331,178,065.97
2015 270,396,048.03 81,934,805.24 352,330,853.27
2016 266,828,807.04 83,186,546.47 350,015,353.51
Source: CSA (2012-2016)

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  International Trade

There is a direct linkage between freight transportation and the economy of the countries. As
the Ethiopian economy improved, the demand for road freight services increases with the
extension and interaction of activities, hence improved freight transportation systems reduce
costs for delivery of goods and services and more reliable transportation from one place to
another. These, in turn, reduce the costs of collecting inputs and delivering products to
markets in several ways. Here below the Ethiopian Volume of commodities are shown.

Table 6: Ethiopian Volume of Commodities in Metric tons (2013 - 2016)

Year Import Export
2013 7,343,062 1,339,404
2014 10,246,626 1,559,665
2015 10,444,944 1,463,374
2016 14,595,826 942,799
Source: ERCA

5.3. Supply Data

 Domestic Production
Table 7: Domestic firm’s production capacity of Trailers
Industry Name Designed Capacity Actual capacity
Abenco general construction industry and 100 50
trading PLC
Alami industrial engineering 211 24
Ami metal engineering 1,010 750
Asnake engineering 4,005 250
Belaynehe Kindie metal Engineering 240
complex 120
Fasil Mesfin Derso manufacturing 110
Kaki plc 618 96
Mesfin industrial engineering PLC 6,480 420
NA metal industry and engineering 2,450 144
NKG Engineering 750 450
Rahel Dagnachew Gelaye 310
Zede engineering PLC 574 Tons 150 Tons
Source: Metal Institute
Note: According to the information from the previous commodity study, on average one
trailer/semitrailer equal to 6,292 kg. Therefore it is possible to convert the given data into
Kilograms.

8
  Import

Table 8: Imported Trailer and Semi-trailer (Tones)

Description Quantity in Year

2013 2014 2015 2016 2017
Trailers and semi-trailers 8,564 10,190 20,572 20,055 20,152
Tanker trailers and semi-trailers 1,134 1,825 3,330 2,082 15,514
Source: ITC

5.4. Marketing Arrangement

The marketing of product is order based on the agreement of the producer and buyer. The
current market arrangement shows an order to buy, through advance payment of some portion
of the price of required items and the remaining balance will be made after the completion.

Producer Consumer

Figure 2: Marketing Chanel

5.5. Price of the products

The current prices of the products are indicated in the parameter part.

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6. PROBLEMS, CONSTRAINTS AND KEY SUCCESS FACTORS

6.1. Problems, Constraints and Risks

 Lack of foreign currency
 Raw materials supply
 Power Interruption

6.2. Success factors

 Create job opportunity
 Trainable man power
 Import substitution
 High demand for the products at local market

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7. PARAMETERS, TECHNICAL COEFFICIENTS AND ASSUMPTIONS

This part of the document is devoted on the assessment of the coefficients and parameters,
which are to be used on the determination of costs and revenue in the production of Trailers
and Tipper body.

6.1.Basic assumptions
 Working days per annum ………….………………………….........270
 Working days per week ………………….…………………………..6
 Number of shift in a day ……………………………………………..2
 Working hours per shift ………………………………………………8
6.2. Revenue determination
Table 9: Price of the final product (Without VAT)
Description UOM Sales Price
(Birr//Unit)
Dry cargo body mounted on Truck with grill Pcs 202,850.28
Dry cargo body with grill Pcs 916,435.45
Fuel tanker mounted on truck with hand rail and roll over Pcs 47,434.70
Three axle drawbar trailer fuel tanker with hand rail and roll over Pcs 1,089,376.92
Three axle dry cargo semi-trailer High bed with grill and Pcs 1,108,077.88
extension bord (40 ton)
Three axle dry cargo semi-trailer low bed (45 ton) Pcs 1,522,970.76
Three axle semi-trailer low bed (60 ton) Pcs 1,703,877.74
Three axle fuel semi-trailer (46 m3) with hand rail and roll over Pcs 1,612,705.71
Water tanker (16 m3) Pcs 314,975.73
Bulk cement (40 ton) Pcs 1,393,432.64
Source; - Survey
Conversion factor/input-output relation

The waste termed as Scrap and which is 2-3 % of the raw material.

Input = output + 2% scrap

Selling price of Scrap………………13 Birr/kg

7.3. Investment requirement

7.3.1. Vehicles
Table 10: Vehicle requirement
Type of vehicle Purpose
Automobiles For administration
Service vehicles For employees
Cargo Trucks For delivery of products and collection of inputs
NB: Vehicle requirement is varied based on the size of the factory

11
7.3.2. Machinery and equipment

Machinery and Equipment required for Trailer production are listed in the technical part of
the document.

7.4.Operational expenses
Table 11: Price of major raw material
SN Description UoM FOB value per tone
1 Sheet metal 6000X2000X4mm, St-52 pcs 450.00
2 Steel plate 5800X1500X5mm, St-52 pcs 450.00
3 Steel plate 6000X1500X6mm, St-52 pcs 450.00
4 Steel plate 1000X2500X6mm, St-52 pcs 450.00
5 Steel plate 3000X2500X6mm, St-52 pcs 450.00
6 Steel plate 6000X2000X8mm, St-52 pcs 450.00
7 Steel plate 1000X2500X8mm, St-52 pcs 450.00
8 Steel plate 6000X2000X10mm, St-52 pcs 400.00
9 Steel plate 1000X2000X10mm, St-52 pcs 400.00
10 Steel plate 1000X2000X10mm, St-52 pcs 420.00
11 Steel plate 6000X1500X15mm pcs 420.00
12 Steel plate 1500X1000X20mm pcs 420.00
13 Flat Bar 1000X180X20mm, St-52 pcs 420.00
14 Steel Pipe 30X2.5X6000mm, St-37 pcs 420.00
15 U-Channel 6000X200X80X10mm, St-37 pcs 450.00
16 I Beam 6000X260X140XX6X10mm, St-37 pcs 450.00
17 RHS 6000X50X50X4mm pcs 450.00
18 Pipe, Steel Pipe 65X8.5XX6000mm, St-37 pcs 450.00
19 Pipe, bronze, 48X3.5X6000mm, Bronze pcs 450.00
20 Pipe, Steel Pipe 186X19XX6000mm, St-52 pcs 500.00
21 Pipe, Steel Pipe 155X37X6000mm, St-52 pcs 500.00
22 Round Road 40X6000mm pcs 450.00
23 Round Road 60X6000mm, C-40 pcs 450.00
24 Angle Iron 6000X80X80X10mm, St-52 pcs 450.00
25 Angle Iron 6000X160X160X8mm, St-52 pcs 600.00
26 Angle Iron 6000X120X120X8mm, St-52 pcs 3000.00
27 U-Channel 6000X160X100X8mm, St-52 pcs 850.00
28 U-Channel 6000X120X60X8mm, St-52 pcs 650.00
29 RHS 6000X100X100X8mm, St-52 pcs 800.00
30 RHS 6000X80X40X8mm, St-52 pcs 800.00
31 Pipe Steel 60X8X6000mm, St-52 pcs 450.00
32 Pipe, Steel 2X6X6000mm, Galvanized pcs 500.00
33 Pipe, Steel 11/2X6X6000mm, Galvanized pcs 500.00
34 Pipe, Steel 4X6X6000mm, Galvanized pcs 500.00
35 U-Channel 6000X60X30X6mm, St-52 pcs 520.00
36 Round rod 32X6000mm,St-37 pcs 550.00
37 Sheet Metal 1250X2mm pcs 500.00
38 Sheet Metal 3000X1250X3mm pcs 500.00
39 Sheet Metal 6000X1500X4mm pcs 1000.00
40 Steel plate 6000X1500X5mm pcs 1000.00
41 Steel plate 8000X2000X6mm pcs 1000.00
42 Steel plate 6000X1500X8mm pcs 500.00
43 Steel plate 6000X1500X10mm pcs 800.00

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SN Description UoM FOB value per tone
44 Steel plate 7500X1500X12mm pcs 420.00
45 Steel plate, Chequered 2500X1250X3+1.5mm pcs 525.00
46 Steel plate, Chequered 2500X1250X2.5+2 pcs 525.00
47 I Beam 6000X140X140X12X7mm pcs 500.00
48 Steel pipe, 114X4.5X6000mm pcs 850.00
49 U-Channel 6000X50X25X5mm pcs 450.00
50 Pipe, hallow steel 63.5x10x6000mm pcs 500.00
51 Pipe, steel 70x10x6000mm pcs 800.00
52 RHS 6000x80x40x2mm pcs 500.00
53 Rounds, steel 55x6000mm pcs 800.00
Source: Mesfine Industrial Engineering Plc date of purchased as 2017
Table 12: List of prices of components and accessories
SN Description UoM FOB value per tone
1 Set of BPW Axles Set 1,837.00
2 Set of HJ Axles Set 3,130.00
3 Ball type turning table set 278.00
4 Electrical system (PAGG) set 152.50
5 Towing Eye set 55.00
6 Brake system (WABCO) Set 407.00
7 8.50x20 Disc type wheel rim pcs 47.15
8 55 set of landing gear set 590.70
9 55 pcs of king pin pcs 178.16
Source: Mesfine Industrial Engineering Plc date of purchased as 2017

Overhead Expenses

 Telephone, post & internet: on average 0.02% of annual sales

 Travel and Perdium .............……………....0.05 % of total salary
 Office supplies……………………………0.0001% of annual sales
 Medical expense......................................5% of wage and salary
 Price for Uniform
 Use submitted Proforma Invoice
Utilities
 Water consumption:- as per the specification of machinery
 Electricity consumption:- as per the specification of machinery
Fuel and Oil lubricants
Fuel and lubricant oil for vehicle depends on the distance purpose of the vehicles intended
for. However the Fuel cost:

a) For Automobile: 13-15 Km per litre

b) For Service Vehicle : 0.013559 lit/seat/km
c) The cost of oil and grease: 2% of fuel cost
d) For Truck:
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Table 13: Truck fuel cost
Gross Distance Fuel Fuel Consumption
AVERAGE
Vehicle Pay Load travelled in one Consumption per Km for each
lit/km/ton
Weight liter per Km ton of load
7.5 TON 3.124 Ton 5.840 km/lit 0.171 lit/km 0.055 lit/km/ton
12 TON 6.311 Ton 5.500 km/lit 0.182 lit/km 0.029 lit/km/ton 0.035
18 TON 10.198 Ton 4.540 km/lit 0.220 lit/km 0.022 lit/km/ton
Source: Cross cutting, 2018
 Repair and Maintenance

Table 14: Repair and Maintenance

Description Percentage of Original Value
Building and Construction 2% of original cost
Machinery & Equipment 5% of original cost
Furniture and Fixture 5% of original cost
Vehicles 5% of original cost
Generator 5% of original cost
 Depreciation and Amortization

Table 15: Depreciation and Amortization

Description Percentage of Original Value
Building and Construction 5% of original cost
Machinery & Equipment 10% of original cost
Furniture and Fixture 10% of original cost
Vehicles 20% of original cost
Generator 10% of original cost
Insurance
Table 16: Major Insurance Categories for the Firm
Description Types of Insurance
Building, Machinery & Earthquake, flood, Fire and lightening
equipments and Furniture
Vehicles Motors commercial and third party
Life insurance Working hrs and work man composition for employee and 24 hrs
personal and work team for managers
 For Insurance Premium refer to the “Cross Cutting Project Supporting Data,2018”
Land Lease Cost

Refer to land lease agreement between the project and concerned office from where the land
would be availed.

14
 7.5. Working capital
Table 17: Working capital determination
Description Period (Months)
Raw material Import 4
Local 1
Salary and Wages 1
Fuel and lubricant 1
Stationary and P.T.T 1
Travel and per diem 1
Insurance 12
Work in progress Trailer 3 days
Tipper 1 day

15
8. REFERENCES
 Central Statistical Data
 International Trade Center
 Ethiopian Metal Institute
 Mesfin Industrial Engineering PLC
 National Bank of Ethiopia

16