Investment Analysis For The Establishment Of Spheroidal Graphite Iron Plant In Nigeria

Abstract: An investment analysis for the establishment of Spheroidal Graphite Iron (SGI) plant in Nigeria was conducted to assess the viability of setting up a plant. Spheroidal Graphite Iron outperforms grey cast iron due to possession of the following attributes: improved strength, ductility toughness and hot work ability, with grades guarantying more than 18% elongation or high strength, with tensile strength exceeding 825 MPA . The analysis was done for a manufacturing plant with an installed capacity of 300 tonnes of SGI per annum. As part of the methodology, a market analysis, the required materials, equipment, and human resource requirements are presented. The financial implication, financial and breakeven analyses were carried out. The market analysis substantiates a ready market for SGI and the required total capital investment for the plant is approximately, ₦38 million. The estimated annual profit is approximately ₦ 29 million. The financial analysis shows that the investment is a profitable venture with a good profitability ratio and rate of return. The payback period for the venture is less than 2 years.

REFERENCES

[1] Degarmo E. Paul, Black J T. and Kohser Ronald A. (2003). Materials and Processes in Manufacturing (9th Edition), Wiley.

[2] Labrecque C. and Gagn� M. (1998). Rio Tinto Iron and Titanium Inc.�Technology, Tracy, Qu�bec, Canada. Volume 37, Issue 5, Pp 343-345.

[3] Imasogie B.I. (1994). Development and Characterization of Isothermally Heat Treated Nodular Cast Iron. PhD Thesis, Obafemi Awolowo University, Ile Ife, Nigeria, P 85.

[4] Urbat K. (2003). Proceedings, Conference: Balance Opening - the European Foundry Industry 2004 and beyond economic facts and consequences of the EU enlargement, Kielce, Poland, p. 24 - 35.

[5] William F. Smith "Structure and propertiesof Engineering Alloys", McGraw- Hill Series in Materials Science and Engineering (1981), pg 335-343

[6] International Iron and Steel Institute (IISI) (1999), World Steel figures pp 2 - 10

[7] Allison I.I.O. (1995) Investing in Industries for Economic Development, Daily Sketch Nigeria July, 1995 pp12

[8] Inuwa, I. K.(2002) Why should Nigeria bother about Steel Industries. Project Management and technical Services Consultant to Ajaokuta Steel Complex Report. Pp 1 � 17.

[9] Everett E. Adams, Jr. Roland J. Ebert. 'Production and management, Concepts, Models, Behaviour Fifth Edition .Prentice -Hall of India private limited, pg 332-369

[10] Khanna, O.P. (2006). Industrial engineering andmanagement. Dhanpat Rai publications Ltd. New Delhi.