DEVELOPMENT BANK OF ETHIOPIA

RESEARCH AND PROJECT DATA MANAGMENT DIRECTORATE

RAW DATA AND INFORMATION ON
PET PREFORM, PLASTIC BOTTLE AND CAPS MANUFACTURING

Prepared By:
Mekonnen fekadu loan Officer
Anteneh Beziye Sr. market research Officer
Revised By:
Anteneh Mulugeta Team Manager
Million jarso Technical Team Manager

Approved By: commodity and market research Approval committee

DEC, 2023
 TABLE OF CONTENTS
1. INTRODUCTION....................................................................................................................1
1.1. Background 1
1.2. Objective 1
1.3. Methodology 1
1.4. Scope and limitation 1
2. PRODUCT DESCRIPTION.....................................................................................................2
2.1. Classification of the products 2
3. RAW MATERIALS AND INPUTS..........................................................................................4
3.1. Source of Raw Materials and Inputs 4
3.2. Supply of Major Raw Materials and Inputs 5
3.3. Marketing Arrangements of Raw Materials and Inputs 5
3.4. Packing Materials 5
3.5. Utilities 5
3.6. Current price and price trend 6
4. TECHNICAL DATA AND INFORMATION...........................................................................7
4.1. Production Process of PET preforms, PET bottles, and HDPE and LDPE caps 8
4.1.1. Material Loading.......................................................................................................8
4.1.2. Mixing........................................................................................................................8
4.1.3. Dehumidifying...........................................................................................................8
4.1.4. Melting and cooling...................................................................................................9
4.1.5. Injection Molding....................................................................................................10
4.1.6. Injection molding process........................................................................................11
4.1.7. Drying......................................................................................................................12
4.1.8. Injection Moulding Machine Basics........................................................................14
4.1.9. Summary of Machinery and Equipment..................................................................18
4.1.10. Auxiliary Machinery................................................................................................18
5. MARKET DATA....................................................................................................................19
5.1. Market Segmentation 19
5.2. Demand Situation 19
5.2.1. Domestic Demand...................................................................................................19
5.3. Supply Situation 20

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 5.3.1. Domestic Production...............................................................................................20
5.3.2. Import......................................................................................................................21
5.4. Marketing Channel and Market Arrangement 22
5.5. Current Price and Price trend 23
6. PROBLEMS, CONSTRAINTS, RISKS, and SUCCESS FACTORS...................................24
7. PARAMETERS, TECHNICAL COEFFICIENTS AND ASSUMPTIONS...........................25
7.1. Basic assumptions 25
7.2. Revenue Estimation 25
7.3. Conversion rate26
7.4. Major Investment Item 26
7.4.1. Vehicles and Service Equipment...................................................................................26
7.4.2. Machinery and equipment (It is listed at the end of the technical part).......................27
7.5. Operational Expense 27
7.5.1. Raw material cost.........................................................................................................27
7.5.2. Over head expense........................................................................................................27
7.6. Insurance 28
7.7. Fuel and lubricants 28
7.8. Depreciation and Amortization 28
7.9. Repair and maintenance 29
7.10. Land Lease Cost 29
7.11 Working Capital Determination 29
REFERENCES..............................................................................................................................30

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 LIST OF TABLES
Table 1: Different weight and length bottle preforms; and respective applications........................3
Table 2: Different weight and shape of PET jar preforms; and respective applications with this
particular..........................................................................................................................................3
Table 3: Source of raw materials and Inputs...................................................................................4
Table 4: Import trends of major raw materials (in tons)..................................................................5
Table 5: List of machineries and equipment required....................................................................18
Table 6: Auxiliary machinery........................................................................................................18
Table 7: Production Trend of main end-users of pet perform and plastic bottles..........................19
Table 8: List of domestic manufacturing firms with their actual Production Capacity of PET
Preforms.........................................................................................................................................21
Table 9: Import Trend (Hs code: 3923).........................................................................................22
Table 10: Current factory gate selling price of the products..........................................................25
Table 11: Type of vehicles and service equipment with their respective purpose.........................26
Table 12: Raw material and input prices.......................................................................................27
Table 13: The major insurance categories.....................................................................................28
Table 14: Truck Fuel consumption and cost..................................................................................28
Table 15: Depreciation and Amortization......................................................................................28
Table 16: Repair and maintenance.................................................................................................29
Table 17: Working capital Requirement........................................................................................29

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 LIST OF FIGURES
Figure 1: Bottle PET preform..........................................................................................................2
Figure 2: PET jar preforms..............................................................................................................3
Figure 3: plastic mold production process flow............................................................................10
Figure 4: PET to Bottle Production Process..................................................................................11
Figure 5: Process flow of PET dryer.............................................................................................13
Figure 6: Injection molding machine.............................................................................................14
Figure 7: Injection mold................................................................................................................17
Figure 8: Marketing channel for pet perform, plastic bottle and caps...........................................22

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 ACRONYMS
APET Amorphous Polyethylene Terephthalate
HDPE High Density Polyethylene resin
LC Letter of Credit
LDPE Low density polyethylene
LLDPE Linear Low Density Polyethylene
PET Polyethylene Terephthalate
PPM Parts Per million (milligram per liter –mg/l)
PP Polypropylene
RPDMD Research and Project Data Management Directorate

6
 1. INTRODUCTION
1.1. Background
The Ethiopian economy registered 6.3 percent growth in 2020/21, which was slightly higher than
the 6.1 percent expansion in the previous year (National Bank of Ethiopia, 2021).This growth
was broad based with industry growth at 7.3 percent, service 6.3 percent and agriculture 5.6
percent. The manufacturing sector growth was higher than the growth of the other two sectors
due to the fact that the country is looking for the transformation of its economy from agriculture
to industry. Though, the manufacturing sector of Ethiopia constitutes a small section of the
economy, it has shown significant growth and diversification in recent years.

Extension of long term loan through DBE is considered as one of the incentive that the
government has put an effort to support different sub-sectors in the economy. In line with the
vested mandate as a bank and RPDMD (Research and Project Data Management Directorate) as
working unit, this document is prepared to facilitate project financing through availing raw data
and information. This is a document comprises consolidated basic raw data on PET preform, cap,
and bottle manufacturing, which could assist during the course of financing of same.
1.2. Objective
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; thereby enable them
to pass an appropriate decision.
1.3. Methodology
The document is 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.
1.4. Scope and limitation
The scope mainly focuses on manufacturing of different types of PET preforms, Caps
and Plastic bottles. Absence of price trend for both for raw material and products could
be taken as a limitation.
 2. PRODUCT DESCRIPTION

 PET preform: It is the shape or forms made from polyethylene terephthalate (PET resin)
beforehand. It is injection molded withdrawn from the injection cavity to be stretch blown to
form the final packing products.
 Plastic cap (closure): a type of enclosure used to seal the openings of the packing’s which
are made of plastic. It is integral part of PET preforms, i.e., PET Preform and plastic caps are
supplementary products. The two products PET preform and Plastic caps can be named as
“PET Preforms and Closure/lid” because they are made in a manner that the neck of a
preform and the closure perfect fit with each other.
 PET/ Plastic bottle: is a bottle made of PET plastic with a neck that is real body and an
opening at the top. These bottles are typically used to store liquids such as water, mineral
water, soft drinks, motor oil, cooking oil, medicine, shampoo, milk, ink, syrups and other
liquids.

2.1. Classification of the products

PET Preforms

PET Preforms can be classified based on their Application, Weight, and Length & Shape as:
 PET Bottle Preforms

Bottle preforms are used for manufacturing different types of plastic bottles in various industries
for different purpose. They vary in density and properties. For example, production of bottle that
used to pack cosmetics and herbal medicine products from PET bottle preforms require PET
preforms of high-density polyethylene (HDPE) which does not offer the transparency or clarity
of PET, and provide better packing for the product.

Figure 1: Bottle PET preform

Table 1: Different weight and length bottle preforms; and respective applications

Preforms Total length Neck finish

weight (gm) (mm) (mm) Application
16 85.83 28 Used to produce all blowing bottles
20 95.20 28 Mostly used to produce Water bottle
28 102 28 Mostly used to produce Pharmacy bottles
32 128 28 Mostly used to produce juice bottles
39 135 28 Mostly used to produce Cosmetics bottles
52-110 149 28 Mostly used to produce edible oil & Detergent
bottles

 PET Jar Preforms

This types of preforms are used for plastic jars production. Jars made from these types of PET
preforms are approximately cylindrical container with a wide mouth or opening. They are used
for foods, cosmetics, medications, and chemicals that are relatively thick or viscous: pourable
liquids are more often packaged in a bottle. They are also used for items too large to be removed
from a narrow neck bottle. PET jars preforms weight, shape and the corresponding applications
of jars made from the PET jars preforms are tabulated below.
Table 2: Different weight and shape of PET jar preforms; and respective applications with this particular
Preforms Weight (gm) Shape Application
37 Circular Mostly used to pack honey candy
37 Circular Mostly used to pack Food like
“kolo”
37 Rectangular Mostly used to Shiro packaging etc.
70 Circular Mostly used to Butter packaging

Figure 2: PET jar preforms

 PET Container Preforms

Container preforms are used for the production of different types of plastic containers.

3. RAW MATERIALS AND INPUTS

List of raw materials and inputs required for the manufacturing of Pet preform, Plastic Bottles
and Caps manufacturing are the following;

Major Raw Materials for Production of PET Preforms

 Polyethylene Terephthalate Resin (PET )
Major Raw Materials for Production of Plastic Caps (Plastic Closures)
 High Density Polyethylene resin (HDPE)
 Low Density Polyethylene (LDPE)
Auxiliary Materials (Common material)
 Master Batch
Packing materials
 LDE Bag
 PP Bag
 Carton Box
Utilities:
 Electricity
 Water
3.1. Source of Raw Materials and Inputs
Table 3: Source of raw materials and Inputs
Description Purchase sources
Domestic Import
Polyethylene Terephthalate Resin 
High Density Polyethylene resin 
Low Density Polyethylene 
Master Batch 
Packing materials  
Source: Survey data

3.2. Supply of Major Raw Materials and Inputs

Table 4: Import trends of major raw materials (in tons)
Raw materials Hs code 2018 2019 2020 2021 2022
Polyethylene Terephthalate 390760 36,537 24,203
resin
High Density Polyethylene 390120 36,061 39,739 36,480 32,900 51,073
resin
Low Density Polyethylene 390110 10,331 20,277 28,066 27,520 25,283
Master Batch 3204 3,096 5,139 4,099 5,057 4,948

Source: ICT trade map

3.3. Marketing Arrangements of Raw Materials and Inputs

Marketing arrangement of materials and inputs is an agreement made between the two parties’
i.e. the seller and buyer about the means of transportation, ownership transfer and other legal
agreement. It enables to specify which party (buyer or seller) pays for which shipment and
loading costs, and/or where responsibility for the goods is transferred. For those materials
imported from abroad, there are two types market arrangement in general. The first is a direct
purchase from the producer themselves. The second option is from the brokers of foreign
countries who buy from the main suppliers and sell it to the manufacturers. On the other hand the
market arrangement for these materials is order base and the payment is based on L/C system.
The modality of payment to purchase locally available raw materials is on cash bases whereas
modality of payment for imported materials is international method of payment by opening L/C.
3.4. Packing Materials

The product shall be packed in clean, sound and suitable packaging materials which do not affect
the quality. The types of packaging material used in the packaging of products are LDE bag and
PP bag which can be easily accessible in the domestic market.

3.5. Utilities

Water and Electricity are Utilities that are required for manufacturing Pet preform, Plastic bottles
Caps and Jars.

3.6. Current price and price trend

As information obtained from the field survey, the price of major raw materials fluctuates in the
global market. The fluctuation can be within a day or week or month with different rate.
Therefore in this document, only current price of inputs is stated in the parameter parts of this
document.

4. TECHNICAL DATA AND INFORMATION

This section presents the technical study of PET performs, PET bottles, and HDPE and LDPE
caps. The section starts by describing how the PET performs is first formed and then continues to
explain how the caps are made.

In the first part the section presents description about the technical background of PET preforms,
PET bottles, and HDPE and LDPE caps, the way the sector is structured and Nature of the
industry; an overview of available technology options with their respective advantages &
disadvantages; the latest/ recent technology; major suppliers; and brief description of the
production or manufacturing processes.

PET preforms, PET bottles, and HDPE and LDPE caps manufacturing are fully machine based
manufacturing process that requires fewer manpower when compared with similar size
manufacturing factories. The production technologies have both traditional and latest versions of
machinery and equipment. The latest version requires minimum human involvement in
producing the final product by taking raw materials from the raw materials hopper. The older
version receives raw materials and with the help of manpower, and produces the final product –
and unloaded with the help of operator. Both version of technology are available in our country.

There are quite enormous technology alternatives both for the injection and blow molding
machinery. The injection mold machine can range from single head manually operated machine
up to the automatic multi-head injection machines. The multi-head injection mold machine can
eject many PETs at a time. The idea behind this technology is that processes such as loading up
to PET injection takes place by a fully autonomous machine. This technology is now available at
the hands of some PET manufacturers in Ethiopia. Operating, maintaining and managing these
high tech machinery is not easy issue.

Similarly for the blow mold machinery there are many technology alternatives. Simple desk top
single head blow mold machine up to autonomous multi head blow mold machine. Almost, many
of the technology alternatives are already at the hands of local bottle manufacturers in our
country. What is not yet imported is a blow mold machine where printing is integrated with it.

Therefore, taking the practical scenario in our country; medium level of automation and multi-
head machinery are recommendable for both the injection and blow mold machines.

The major technology suppliers found in Europe, Asia and Australia. The technology is well
developed with ample alternative suppliers.
 4.1. Production Process of PET preforms, PET bottles, and HDPE and LDPE caps

As shown in, the production process of PET preform, PET bottles and HDPE and LDPE caps
undergoes few steps with many stages in each step. The following paragraphs present, these
processes.

4.1.1. Material Loading

The material loading Process begins with bulk material loading to silos. Bulk materials within
big bags, sacks or tanker trucks are conveyed to storage silos. They are weighed and transferred
to mixers.

Central plastics feeding system is used to feed PVC, PP, PE, HDPE type plastic materials to large
number of injection molding or extrusion machinery. Each machine has its own feeding hopper
with built in level sensors. The central plastics feeding system monitors the product level in the
hoppers and feeds the machine hoppers automatically.

Central conveying systems are used instead of standalone vacuum conveyors for large capacity
production factories.

4.1.2. Mixing

After mixing raw materials are transferred to dehumidifying or drying units in case some
moisture content are available in the raw materials.

4.1.3. Dehumidifying

There are six categories of drying methods each with their own pros and cons. The best
alternative depends on the type of the raw material. Among the hygroscopic granule you find
polymers such as nylon, ABS, polycarbonate, cellulose and polymethacrylate. These are
problematic in terms of moisture content absorbed into the granule, and normally require
vigorous drying to secure the right (low) moisture level.

Other polymers, such as polyethylene and polystyrene, do not normally absorb much moisture,
but are able to carry significant moisture on their surface when exposed to liquid water, typically,
from condensation or residue from cleaning regimes.

Moreover, using carbon black or pigments can cause an increase in moisture absorption.

Given that drying is the primary source of product failure in plastic granule processing, and the
fact that the moisture tolerances are so slim, that they normally are measured in parts per million
(PPM), it is widely recommended to integrate drying into the plastics granule processing. When
selecting the most cost effective drying solution, there are normally six generic drying methods
to be considered:
1. Compressed Air Dryers
2. Dehumidifying Dryers
3. Honeycomb Dryers
4. Hot Air Dryers
5. Rotary Wheel Dryers
6. Vacuum Dryers
In summary, Hot Air Dryers are most suitable for treatment of non-hygroscopic materials, when
the challenge is to remove surface moisture from the granule. Otherwise, the right choice
depends on a number of factors regarding; the processing environment, the granule composition
and the requirements to the finished products.

4.1.4. Melting and cooling

Melting and cooling are integral parts of the injection process – they both takes place inside the
injection machine. Once the dehumidifying takes place, the raw material is ready for melting up
to the desired temperature so that it can smoothly flow in to the injection molds.
 Figure 3: plastic mold production process flow
4.1.5. Injection Molding

The production process of PET preform starts from mixing Polyethylene terephthalate,
commonly abbreviated PET granular with recycled PET flakes. After heating the mixing to
temperature of 550’c; it enters the injection molding machine.
Figure 4: PET to Bottle Production Process
Injection molding is a versatile process for forming thermoplastic and thermoset materials into
molded products of intricate shapes like Preforms and caps, at high production rates and with
good dimensional accuracy. The process involves the injection, under high pressure, of a metered
quantity of heated and plasticized material into a relatively cool mold--in which the plastic
material solidifies.

Resin pellets are fed through a heated screw and barrel under high pressure. The liquefied
material moves through a runner system and into the mold. The cavity of the mold determines
the external shape of the product while the core shapes the interior. When the material enters the
chilled cavities, it starts to re-plasticize and return to a solid state and the configuration of the
finished part. The machine then ejects the finished parts or products.

4.1.6. Injection molding process

Loading of the plastic raw material PET or HDPE or LDPE in to the raw material hoper, the
granular plastic is fed by gravity from a hopper into a heated barrel. As the granules are slowly
moved forward by a screw-type plunger, the plastic is forced into a heated chamber, where it is
melted. As the plunger advances, the melted plastic is forced through a nozzle that rests against
the mold, allowing it to enter the mold cavity through a gate and runner system, the mold
remains cold so the plastic solidifies almost as soon as the mold is filled.

During PET processing it is important to include the drying system for per resin, because PET
has hygroscopic (water absorption) property, that could cause product defect.
 4.1.7. Drying

PET resin is hygroscopic, that is it picks up moisture from air. PET when supplied has approx.
0.2% of moisture, which during transportation/storage, can increase up to a maximum of 0.4%
depending on transit/storage time before usage. It is essential for trouble-free processing &
desired physical properties, to reduce moisture to less than 40ppm (0.004%) before processing
which can be achieved only by a de-humidifying dryer.

To achieve proper drying of PET recommended drying temperature is in the range of 150 ~
180°C.

De-Humidifying Dryer: These types of dryers circulate hot and de-humidified dry air onto the
resin, suck the air back, dry it and then pump again in a closed loop operation. This process
reduces moisture level in the PET down to 40ppm or lower. The efficiency of moisture removal
depends on the air dew point. If the air dew point is high, then some moisture remains is the
chips and cause IV loss during processing. The graph on the left shows typical values of IV loss
associated with different air dew points.

Dryer consists of two major parts:

Drying unit: This is housed in a separate cabinet nearer to the hopper. The only connection
between both the units is flexible hoses, which can with stand high temperatures. These hoses are
used for carrying dry and return air. The following picture shows a typical flow chart of
dehumidifying operation (regeneration is not shown). The air first comes into contact with the
material through the diffuser, which is attached at the lower portion of the hopper. Diffuser
spreads the air across the entire cross section of the hopper. Most hoppers will have a converging
bottom as well as an internal distribution cone, to ensure plug flow of the chips through the
system.

The dry-air then passes upward and reenters the drying unit after passing through the after cooler
and filter. This closed loop operation makes this an efficient drying process.

The air dryer is designed to remove moisture from the return air and to re-circulate. First, the air
is cooled down in a heat exchanger to around 40 °C and then passed through a filter to remove
any fines, which are carried by the return air. The performance of the desiccant depends on the
inlet air temperature; hence, cooling the return air is very important.
This air is then passed through a desiccant bed to remove the moisture in the air. The desiccant
bed contains pellets or granules that absorb moisture and are known as molecular sieves.

Figure 5: Process flow of PET dryer

After drying the injection unit is responsible for both heating and injecting the material into the
mold. The first part of this unit is the hopper, a large container into which the raw plastic is
poured. The hopper has an open bottom, which allows the material to feed into the barrel. The
barrel contains the mechanism for heating and injecting the material into the mold. This
mechanism is usually a ram injector or a reciprocating screw. A ram injector forces the material
forward through a heated section with a ram or plunger that is usually hydraulically powered.
Today, the more common technique is the use of a reciprocating screw. A reciprocating screw
moves the material forward by both rotating and sliding axially, being powered by either a
hydraulic or electric motor.

The material enters the grooves of the screw from the hopper and is advanced towards the mold
as the screw rotates. While it is advanced, the material is melted by pressure, friction, and
additional heaters that surround the reciprocating screw. The molten plastic is then injected very
quickly into the mold through the nozzle at the end of the barrel by the buildup of pressure and
the forward action of the screw. This increasing pressure allows the material to be packed and
forcibly held in the mold. Once the material has solidified inside the mold, the screw can retract
and fill with more material for the next shot.
Figure 6: Injection molding machine
4.1.8. Injection Moulding Machine Basics

Injection Moulding Machines have become highly sophisticated, complex, computerized

machines with many features that need to be considered when deciding which machine will be
able to make a particular product. Here, are the main features, how they effect output and, in
some cases, the rules that are used to determine these effects.
A. Screw
The characteristics of the screw are crucial in determining the type and size of product that can
be produced on an Injection Moulding Machine and many machines are supplied with more than
one. One of the most important factors is the ratio between the length and the diameter, or the
L/D ratio. 22:1 or higher (meaning that the screw is 22 times the length of the diameter)
improves the mix of the melt and the quality of the product.

Compared to a screw of the same length with a lower L/D ratio of perhaps 20:1, the injection
pressure will be higher but the volume lower. The volume can be increased with a longer
injection stroke but this increases the cycle time.
B. Injection Blow molding
Injection blow molding is part injection molding and part blow molding. With injection blow
molding, the hot plastic material is first injected into a cavity where it encircles the blow stem,
which is used to create the neck and establish the gram weight. The injected material is then
carried to the next station on the machine, where it is blown up into the finished container as in
the extrusion blow molding process above. Injection blow moldings are generally suitable for
smaller containers and absolutely no handle ware
C. Blow molding
Stretch blow molding is a blow molding process that produces fairly lightweight containers with
very high impact resistance and, in some cases, superior chemical resistance. This is brought
about by aligning the molecules of the resin during the stretching process. This process is
perhaps best known for producing PET bottles commonly used for water, juice and carbonated
beverages. The process can also be utilized to manufacture polypropylene containers but the
processing parameters are more stringent and therefore not widely practiced. There are two
processes for stretch blow molded containers.

The reheat and blow molding process (RHB) is a type of stretch blow process. In this process, a
preform is injection molded by an outside vendor. There are companies who produce these
"stock" preforms on a commercial basis. Factories buy the preforms and put them into a
relatively simple machine which reheats it so that it can be blown. The value of this process is
primarily that the blowing company does not have to purchase the injection molding equipment
to blow a particular container, so long as a preform is available from a stock preform
manufacturer. This process also allows access to a large catalog of existing preforms. Therefore,
the major expense is now for the blow molds, which are much less expensive than the injection
molds required for preforms.

There are, however, some drawbacks to this process. If you are unable to find a stock preform
which will blow the container you want, you must either purchase injection molds or have your
own private mold preforms injection molded, or you will have to forego this process. For either
type of stretch blow molding, handle ware is not a possibility at this stage of development.

Whether using the injection stretch blow molding process or the reheat and blow process, an
important part of the process is the mechanical stretching of the preform during the molding
process. The preform is stretched with a "stretch rod." This stretching helps to increase the
impact resistance of the container and also helps to produce a very thin walled container.
 D. Molds
Molds are used for shaping of the melted plastic material to the required shape like preform,
bottle, cap etc, they are working by mounted on the injection and blow molding machine and it
will give as the required shape and volume.

The injection and blow molding process uses molds, typically made of steel or aluminum, as the
custom tooling the. The mold has many components, but can be split into two halves. Each half
is attached inside the molding machine and the rear half is allowed to slide so that the mold can
be opened and closed along the mold's parting line. The two main components of the mold are
the mold core and the mold cavity. When the mold is closed, the space between the mold core
and the mold cavity forms the part cavity that will be filled with molten plastic to create the
desired part. Multiple-cavity molds are sometimes used, in which the two mold halves form
several identical part cavities.
E. Injection molds
Mold base

The mold core and mold cavity are each mounted to the mold base, which is then fixed to
the platens inside the injection molding machine. The front half of the mold base includes a
support plate, to which the mold cavity is attached, the sprue bushing, into which the material
will flow from the nozzle, and a locating ring, in order to align the mold base with the nozzle.
The rear half of the mold base includes the ejection system, to which the mold core is attached,
and a support plate. When the clamping unit separates the mold halves, the ejector bar actuates
the ejection system. The ejector bar pushes the ejector plate forward inside the ejector box, which
in turn pushes the ejector pins into the molded part. The ejector pins push the solidified part out
of the open mold cavity.
Figure 7: Injection mold
F. Mold channels
In order for the molten plastic to flow into the mold cavities, several channels are integrated into
the mold design. First, the molten plastic enters the mold through the sprue. Additional channels,
called runners, carry the molten plastic from the sprue to all of the cavities that must be filled. At
the end of each runner, the molten plastic enters the cavity through a gate which directs the flow.
The molten plastic that solidifies inside these runners is attached to the part and must be
separated after the part has been ejected from the mold. However, sometimes hot runner systems
are used which independently heat the channels, allowing the contained material to be melted
and detached from the part. Another type of channel that is built into the mold is cooling
channels. These channels allow water to flow through the mold walls, adjacent to the cavity, and
cool the molten plastic.
 Utility Required
The production process requires electricity and water. Water is required to cool the machinery
and the final product. An external chilling unit can be used to cool and recirculation the water.
The excessive heat has to be cooled down before releasing in to the ambient environment.
 4.1.9. Summary of Machinery and Equipment

The major production machinery is depicted on the table below.

Table 5: List of machineries and equipment required
Machineries Application
Raw material loader Raw material loading
De-humidifier (PET dryer) hoper To dry the PET
Raw material and master batch mixer To mix the PET with master batch
Injection molding machine To melt the plastic inject and mold and cool the
product
Blow molding machine To heat and blow mold the machine
Crusher To crush the damaged products to mix with the
virgin raw materials
Molds To give the required shape and volume

4.1.10. Auxiliary Machinery

As shown in table 4.2 below, PET preform, PET bottle and cap manufacturing requires some
auxiliary machinery such as the chillers, cooling tower, compressors, overhead Crain and
firefighting system.
Table 6: Auxiliary machinery
Machineries Applications
Chiller For Cooling the mold
Cooling tower For Cooling the mold
Compressor plant For blowing and instrumental air
Firefighting equipment To manage fire in case it happens
Overhead crane To lift the molds for changing
 5. MARKET DATA
5.1. Market Segmentation

Globally the Pet preform and Plastic Bottles Market can be segmented by raw material type
(Polyethylene Terephthalate (PET), Poly Propylene (PP), Low-density Polyethylene (LDPE),
High-density Polyethylene (HDPE)), End-user (Beverage, Food, Pharmaceutical, Cosmetics,
Household Care), and Geography. The market for PET performs Plastic bottle and Closure cap in
Ethiopia is segmented by its End-users as domestic market since the domestic manufacturers
don’t have comparative advantages in terms of raw material access, technology, level of
expertise in quality orientation, and re-export poses higher sales price in the international market
leads together to lower competitive position.

5.2. Demand Situation

5.2.1. Domestic Demand

Pet preform and plastic bottle products market is emanated from the anticipated demand from
the growth of food & beverage industries (edible oil, bottled water, soft drinks, fruit juice,
brewery, wine, alcohol, and liquor); pharmaceutical manufacturing industries (syrup and
capsule), paint and chemical manufacturing industries, Cleaning products manufacturers (soap
and liquid detergent), Cosmetics industries and toiletry products which are among the key end
users. Production trend data of some key end users of the envisage products for the past years
(2012-2017) is depicted in the table below.

Table 7: Production Trend of main end-users of pet perform and plastic bottles
Quantity Produced
List of End-Users UOM
2012 2013 2014 2015 2016 2017
Orange Juice Ton 15,405 2,867 1,243 384 24,818 3,823
Edible Oil Ton 6,520 4,573 9,596 5,612 748,859 70,543
Lemonade HL 3,500,550 4,289,377 3,509,970 4,052,037 2,394,073 1,372,354
Mineral Water HL 1,512,655 4,288,903 2,027,028 3,103,794 10,461,879 5,834,745
Liquor HL 237,418 281,264 62,143 202,903 162,617 279,109
Alcohol HL 4,965 1,053 25,988 35,592 56,498 104,695
Soap Tons 70,914 *84,900 90,959 117,453 5,250,812 852,333
Paraffine Tons 2,990 12,975 44,158 32,355 18 247,426
Syrup ‘000 Liter 1,463 22,069 19,100 1,844 225,630 203,483
Source: CSA, Medium and Large Scale Manufacturing Report
Remark: The above volume of production over the past six years assists to quantify the demand
for PET perform and Cap (enclosure).
Note: From the above identified major end-users, few may prefer packaging made up of PP
resin.
Coefficients taken from previously conducted same studies to quantify the demand-side

• Blowing 32 gram of preform will hold one liter of Mineral water /Edible oil/Bicarbonate
soft drink/Fruit juice/Alcohol and Liquor.

• Half of the total production of Bicarbonate soft drink is expected to be packed by plastic
bottle (Previous commodity surveyed data).

• According to National Alcohol and Liquor Factory, which is the largest producer in the
country, 10% of the total alcohol and liquor production expected to demand PET preform
for packaging.

• At least 10% of the total soap and detergent production is expected to demand PET
preform for packaging. According to the information obtained from “Shemu Soap and
Detergent factory” (Dire Dawa), about 28% is packed by using PET preform. Thus, to be
realistic and conservative in consideration of others with a lower production of detergent
in their product mix, the team has taken only 10%.

• Regarding syrup, according to information obtained from the Ethiopian Food, Beverage
and Pharmaceutical Development Institute, out of the total domestic syrup products
amounting 15% is packed by using PET preform.
5.3. Supply Situation

The supply of preform and plastic bottles in Ethiopia comes from both import and domestic
production. Beyond that, plastic bottle is derived from PET preform and the same demand exists
for plastic bottle.

5.3.1. Domestic Production

In Ethiopia, PET preform, caps, and plastic bottle of PET products are mainly produced and
marketed in the vicinity of capital city, Addis Ababa. They are produced by 15 PET preform and
cap producing firms and most of the water bottling firms for their sole consumption in the
country.
Table 8: List of domestic manufacturing firms with their actual Production Capacity of PET Preforms
Actual Production Capacity
S.No Name of Company
(ton/year)
1 Pearl packaging 3,200
2 Roha pack 8,450
3 Coba impact 2,100
4 Ethio-gambia 1,900
5 Mintuplast 1,260
6 Super shine 850
7 Baheruabrehaminvstment 4,300
8 Bitweded bahiru 2,600
9 Adp packaging 1,500
10 Nio polymer 780
11 Aqua pure 4,500
12 Finel Aplast 1,300
13 Task plastic 1,600
14 Dala industries 459
15 Aqua pure 4,500
Total Production Capacity 39,299
Source: Ethiopian Chemicals & Construction Inputs Industry Development Institute

Remark:
Historical production trend over the past five years in terms of volume is not obtained
due to data aggregation problem as reported in CSA Report.
Based on the data obtained from Ethiopian Chemicals & Construction Inputs Industry
Development Institute there is no local production of plastic bottle yet by the operational
firms.
There is no as such exhaustive data that exhibit both designed/installed capacities against
actual capacity.

5.3.2. Import
Import is the other sources of supply to satisfy the need for plastic bottle packaging for the local
manufacturing industries in Ethiopia which is mainly engaged in food, drink, and pharmaceutical
products. The key supplying markets for Ethiopia are United Arab Emirates, Turkey, Kenya,
India, Saudi Arabia and China. The table below shows the import trend of Pet perform and
plastic bottle products for the year 2017-2021.

Hs Code 3923: Articles for the conveyance or packing of goods of plastic; stoppers, lids, caps
and other closures, of plastics.
Table 9: Import Trend (Hs code: 3923)

2018 2019 2020 2021 2022

Exporters Imported Imported Imported Imported Imported
quantity, quantity, quantity, quantity, quantity,
Tons Tons Tons Tons Tons
15,12 16,03 14,38 30,58 18,55
World 6 8 1 6 8
1,43 1,25 79 19,03 10,92
India 9 3 6 3 9
3,93 5,14 6,03 5,42 4,99
China 9 1 3 5 7
57 20 87 16 75
Saudi Arabia 0 1 1 9 3
United Arab 4,23 3,84 2,65 2,99 37
Emirates 2 0 0 3 5
1,42 1,57 1,63 69 33
Kenya 4 4 2 2 0
2,45 2,64 1,35 78 23
Türkiye 2 8 8 0 2
2 11 9 26 14
Malaysia 7 8 3 4 5
12 8 2 45 12
Egypt 3 5 7 2 1
3 14 2 1 11
Belgium 7 4 5 2 3
4 4 7 10 9
Netherlands 3 5 3 5 6

Source: ITC trade map

5.4. Marketing Channel and Market Arrangement

PET preform, caps, and bottles, which are produced by PET preform manufacturing firms, are
sold to customers either at factory gate or through distribution centers of producers located at
strategic place by the same price; most sales are made on cash basis, directly to the customer.
Transportation cost is covered by the buyers while the loading cost is covered by manufacturer.
 5.5. Current Price and Price trend
The price trends of the captioned products were not obtained from surveyed operational firms in
the industry. Hence, only current selling price of the specified products are depicted in the
parameter part of this document.

6. PROBLEMS, CONSTRAINTS, RISKS, and SUCCESS FACTORS

PROBLEMS

 Shortage of foreign currency

 Power interruption
 Raw material price fluctuation

CONSTRAINTS
 The sub-sector has had foreign market competition risk in terms of price with adverse
impact on competitiveness position in the domestic market and even in the neighboring
countries in the context of export.
 PET bottle is exposed to intertwine problems such as sanitation problem and end-users
satisfy their respective bottle demand by their own blowing plant that could pose the
market in question.

RISK FACTORS
 Almost all raw materials are import based
SUCCESS FACTORS
 Domestically growing market
 Expansion and growth registered in the possible end-users
 Government support to ward sub-sector development
 7. PARAMETERS, TECHNICAL COEFFICIENTS AND ASSUMPTIONS
This part of the document is devoted in assessment of the coefficients and parameters, which are
used to determine the costs and revenue. The very important caution which has to be taken by the
users of this document is that the parameters and prices determined are just indicatives, which
help understand where the real parameter lays.

7.1. Basic assumptions

 Working days per annum………………………….270

 Working days per week ………………………...…....6
 Number of shift per day……………………....……...2
 Working hours per shift………………....…………....8
7.2. Revenue Estimation
Table 10: Current factory gate selling price of the products
Weight in Average Factory
Types of gram & gate price/unit Purposes used for
Products UoM thickness before VAT (application)
PCS 14.1 gm
15gm 30mm 0.33 liter Bottling Water
PCS
17.5gm 30mm
PCS 3.28
18 gm
PCS
20gm30mm 0.6 liter bottling water
PCS
20gm 28mm 4.44
PCS
24 gm 28 mm
PCS
27gm 30mm
PCS
1 liter bottling water
28gm 28mm
Pet preform PCS
32 gm 30mm 6.02
PCS
39 gm 30 mm
PCS
40 gm
PCS
2 liter bottling water
42 gm 28mm
PCS
42gm 30mm 9.00
PCS
28 gm 5.43 1 liter Edible Oil
PCS
PCS 20 gm 5.60 100ml for Glycerin &
Medicine products
PCS 28 gm 5.60 250ml for Cosmetics &
 Acheto products
PCS 32gm 6.68 500ml up to 1liter for
Alcohol, Hand soap, and
Sanitizer products
PCS 40 gm 11.25 500gm jar for Honey
PCS 56gm 12.65 1kg for Peanut
PCS 1.8 gm 0.50
Caps/Closure PCS 2.15 gm 0.52
PCS 2.70 gm 0.70
PCS 65 gm 12.00 3 liter Edible Oil
Pet Bottles
PCS 95 gm 17.00 5 liter Edible Oil
Jar PCS 65gm 12 20 liter Water
Source: Roha Pack Plc and Ethio Gambia Plc
7.3. Conversion rate
There is no significant size (percentage) deemed as waste. This is due to there is tailored
mechanism technology wise for recycling even for possible waste and ruminants for the
manufacturing of both PET perform and Cap.
Master Batch is to be used maximum of 2% from the total raw material required.
7.4. Major Investment Item

7.4.1. Vehicles and Service Equipment

As shown in table below, PET preform, PET bottle and cap manufacturing requires service
equipment and vehicle such as welding machine, standby generator, truck and pickup.
Table 11: Type of vehicles and service equipment with their respective purpose

Vehicle or service equipment Application

Truck For raw material and finished products delivery
Pickup For office logistics
Forklift To load and unload raw materials and finished products
Generator As a standby power source
Water pump For water pumping for the cooling system
Firefighting Fire is dangerous in such production areas – the primary raw
materials is flammable hydrocarbon

7.4.2. Machinery and equipment (It is listed at the end of the technical part)
7.5. Operational Expense

7.5.1. Raw material cost

Table 12: Raw material and input prices

Unit of Purchase Price/unit in birr

Description of Raw materials
measurement including VAT
Major raw materials
PET resin Kg 202.00
HDPE resin Kg 230.00
LDPE resin Kg 180.00
Packing materials and additives
Carton big 1m*88cm (5 ply) Pcs 110.00
LDPE bag for PET perform and cap Kg 220.00
Poly bag one side open Kg 205.00
PP Bag Kg 40.00
Master Batch for Pet Kg 800.00
Master Batch for Cap Kg 400.00
Source: Roha Pack Plc and Ethio Gambia Plc
Note:
 The above price is subject to fluctuation of international market as a result, the appraisal shall
compromise and crosscheck the proforma invoice with actual price indicated above.
 A single LDPE Packing material (bag) can contain 600 pieces of PET perform.
 A single PP Bag as packing material can contain 5,000 pieces of caps.
 * As per the information obtained from surveyed firms, Master batch for Pet couldn`t use any more.

7.5.2. Overhead expense

A. Utilities
 Electricity Cost/KWh: will depend on the specification of the proposed machinery
requirement.
 Water Tariff Rate Water Tariff Rate: will depend on the specification of the proposed
machinery.
B. Travel and per diem …………………………………….2% of salary
C. stationary Expense……………………………………… 0.14 % of sales
D. Telephone, fax and internet cost………………………….0.19% of sales
E. Medical expense………………………………………….5% of wage and salary
F. Employee Uniform............................................................ the appraisal shall use submitted
 Performa invoice
7.6. Insurance
Table 13: The major insurance categories
Description Types of Insurance
Buildings Earthquake and fire
Machinery, equipment’s and Fire and lightning
Furniture
Vehicles Accidents( life and property damage, and third party
insurance)
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 updated “Cross Cutting Project Supporting Data”
7.7. Fuel and lubricants
 Fuel cost:
a) For Automobile: 13-15 Km per liter
b) For Service Vehicle : 0.013559 lit/seat/ km

c) The cost of oil and grease: 2% of fuel cost

d) For Truck:
Table 14: Truck Fuel consumption and cost
Fuel Fuel Consumption
Gross Vehicle Distance travelled AVERAGE
Pay Load Consumption per Km for each ton
Weight in one liter lit/km/ton
per Km 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

7.8. Depreciation and Amortization

Table 15: Depreciation and Amortization

Sr. No. Description Rate (Percentage of original value)

1. Building and Construction 5
2. Machineries and equipments 10
3. Furniture and fixture 10
4. Vehicles 20
5. Generator 10
6. Auxiliary machineries 20

7.9. Repair and maintenance

Table 16: Repair and maintenance
Sr. No. Item Percentage of Original Value
1. Building and construction 2
2. Office Furniture and fixture 5
3. Machinery and Equipment 5
4. Vehicle 5
5. Generator 5
6. Auxiliary machineries 5

7.10. Land Lease Cost

Refer to land lease agreement between the project and concerned office from where the land
would be availed.
7.11 Working Capital Determination
Table 17: Working capital Requirement
Description Period (months) Remark
Raw material and Import 4 lead time for importation
inputs Domestic/local 1
Salary and Wages 1
Fuel and Lubricant 1
Stationary and office supplies 1
Travel and Perdiem 1
Electric bill 1
Work in progress -
Finished stock period -
REFERENCES
CSA, report on mmedium and large scale mmanufacturing
Ethiopian Chemicals & Construction Inputs Industry Development Institute
International Trade Center
Previous Raw data and information,2022
Bitwoded Bahiru Abreham Industry
Roha Pack PLC
Ethio Gambia PLC