Contents

1. Executive Summary................................................................................................................................................3
2. Introduction............................................................................................................................................................4
2.1. Objective of the Project................................................................................................................................4
2.2. Company Vision............................................................................................................................................5
2.3. Company Mission.........................................................................................................................................5
3. Market study and plant capacity............................................................................................................................6
3.1. Market Study.................................................................................................................................................6
3.1.1. Analysis of the Market..........................................................................................................................6
3.1.2. Market Growth Prospects.....................................................................................................................6
3.1.3. Proposed Marketing Strategy...............................................................................................................6
3.1.4. Electro-mechanical products demand and supply in Ethiopia.............................................................7
3.1.5. Demand and supply Gap......................................................................................................................8
3.1.6. Local Competitors and Domestic Productions.....................................................................................8
3.1.7. The Target Market................................................................................................................................8
3.1.8. Marketing Strategy...............................................................................................................................9
3.2. Plant Capacity and production program.......................................................................................................9
3.3. Pricing.........................................................................................................................................................10
4. Technical Study.....................................................................................................................................................10
4.1. Project Location and Land Ownership........................................................................................................10
4.2. Building and Civil Works...........................................................................................................................11
5. Raw and Auxiliary Materials................................................................................................................................11
6. Utilities..................................................................................................................................................................12
7. Technology and Engineering................................................................................................................................13
7.1. Technology..................................................................................................................................................13
7.1.1. Source of Technology.........................................................................................................................13
7.1.2. Production Process............................................................................................................................13
7.2. Engineering.................................................................................................................................................20
7.2.1. Machineries and Equipment’s Requirement Cost..............................................................................20
B. Vehicles...........................................................................................................................................................21
8. Organization’s Structure and Man Power............................................................................................................21
8.1. Organization Structure................................................................................................................................21
8.2. Man Power and Training.............................................................................................................................22
9. Financial Analysis................................................................................................................................................24
9.1. Underlying Assumption..............................................................................................................................24
9.2. Investment...................................................................................................................................................25
9.3. Production Costs.........................................................................................................................................26
10. Financial Evaluation......................................................................................................................................27
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11. Economic and Social Benefits and Justification..............................................................................................28

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 1. Executive Summary
1. Project type Electro Mechanical Product Assembly data mining Plant

2. Project Owners Pillar Mining PLC

3. Nationality Ethiopian.
4. Project Location The project will be implemented Bulga City

5.Project Composition (Washing Machine, Refrigerators, mobile phone, cable, charger, stove,
and Capacity computer, and TV Assembly.)
6. Premises Required 10,000 M2
7. Startup Capital The total investment capital of the project is 95,000,000 million birr Out of the
total capital (30%) Birr 28,500,000is contributed by the promoter’s Great bam
Trading Plc. While the remaining balance of (70%) Birr 66,500,000.00 is to be
financed by local banks.
8. Production Supply. Company Distribution at the end of production 60% for local markets (Import
Substitute) And 40% for foreign market (Export).
Marketshare 90%for domestic-importsubstitutionandtheremaining10%will be for export
market
9.Employment Total 156 persons skilled and un skilled) on permanent basis
Opportunity
10. Benefits of the plant Source of government revenue through taxation and help in import substitution
for the Region/ Country policy of the government by domestically producing the imported and play
down the gap between demand and supply.

2. Introduction
This profile envisages the establishment of an Electro-mechanical product assembly plant
(Washing Machine, Refrigerators, mobile phone, cable, charger, stove, computer, and TV
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Assembly) equipment’s operation repair and maintenance service center with a capacity of
repairing 4,400 units of assorted electronic production and assembly equipment’s per annum.
The technological and economic development of a society is closely connected with the
Electronics industry and its supplies. All areas of life rely on electronics products. However,
there exist very few producers for these products. In addition, the nation is almost pure importer
for those products. Besides, the electronics processing industry is constantly faced with new
challenges.
In order to meet these challenges, it required machinery, tooling, accessories, ancillary
equipment and services that are as efficient as possible in their utilization of energy and raw
materials, and which produce as little waste as possible during startup and production.
The government of Ethiopia has developed a conducive investment policy packages and other
sect oral reforms at federal and regional level to attract a huge private
investment for the wellbeing of the nation and its citizens as a whole. Moreover, it is also
implementing the five years growth and transformation plan (2012-2016) that gave a space for
industrialization.
Because of the market potentials and incentives, the promoter of the envisaged factory planned
to invest in Bulga city Administration to assemble different and diverse types of electronics
products.
Therefore, the promoter is very motivated to establish this factory by believing to get the
required support from regional government by considering the multi-benefits of the project.

2.1. Objective of the Project

The main objective of this plant is to assemble diverse types of electronics products mainly
Washing Machine, Refrigerators, mobile phone, cable, charger, stove, computer,
and TV assembling for domestic market and international market in the future.
In Addition, It is always the aim of pillar mining PLC to become the key stakeholders of the
organization to bring success to both business local and international market. It will create a
permanent management system that will provide employees with both physical and mental
satisfaction. As the factory has planned to produce world class products, the plant will maintain
ISO 9001:2008 Quality Management System, all the processing system and the quality industry
and assembled elevator as per the international standards of ISO and DIN.

According to the goals and objectives of the organization, the organization has established itself
and it staff in the new vision, management and skill training, information technology, modern
and global business practices, by initiating its own administration, under-the-board and other
subordinates, business owners and even its customers. Without hesitation, we will make every
effort to ensure that our endeavor is in a position to prevail in the world of competitive business.
The organization is led by the same spirit, across the board.

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The fast-growing per capita consumption of those product in the country, and also in the capital
city of Ethiopia, import full dependency those products in the country, contributed in increasing
demand for those product users by governmental and non-governmental organization. As a
result, there will be a gear demand for the project. This is why the shareholders of the PLC
decided to engage themself in such business. Specifically, the project is established under the
following objectives:
 Introducing new technology ensuring to produce quality and complete set of electrical
products to earn reasonable profit.
 Ensure customer satisfaction by providing standard products and comprehensive
services in one basket.
 Play self-role in the minimization of poverty, creating job opportunity and building
capacity & skill of professionals in the industry where the company is engaged.
 Build continuously the culture of competitiveness and dominating the competitor’s
market by providing superior quality automobile car
 To create job opportunity to the city populations
 To help the development activity in the surrounding communities
 As a back for other socio-economic development of the area
 To generate profit to the PLC and hence improve shareholders economic status
 To substitute those imported elevators
 To create additional income to the government revenue in the form of tax (indirectly)
 Establishes modern supervisory system that reinforces its plans and goals.
 Creates ideas that satisfy with new leadership and norms, and systems that integrate
modern IT systems with both regional and international conditions.
 Will expanded workforce management systems to ensure that new jobs will continue to
be carried out by the traditional technology and skilled man power.

2.2. Company Vision

To continue being competitive manufacturer locally and to be one of the proffered industries at
international level, manned by well trained and motivated professionals, that is invariably the
principal choice especially for competitively priced, high volume, and acceptable quality
product requirements.

2.3. Company Mission

 Quality: producing quality standard assembled elevator
• Value: We offer greater value to our users with long lives of the product
• Integrity: Our customers depend on the quality of our products. Our commitment to the
highest standard is the foundation of our customers’ trust.
Creating environmentally friendly manufacturing industry (Green Manufacturing

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 3. Market study and plant capacity
3.1. Market Study
3.1.1. Analysis of the Market
The determining factor in the share of the electro-mechanical products (Washing Machine,
Refrigerators, mobile phone, cable, charger, stove, computer, and TV Assembly.) market by any
electro-mechanical products industry, as revealed in our investigation, is the quality of its output
and its effective distribution network.
Modern home use electro-mechanical products with their specialization have become very
popular in the urban communities in the country. The current supply gap for good quality is
largely filled by the back yard industries which, though inefficient and produce low-quality
products, yet survive and make profit.
It is quite difficult to reduce to concrete figures the actual general demand for and supply of
electro-mechanical products owing to lack of standardization in electro-mechanical products,
prices and quality. To illustrate the above observation based on our market findings, a particular
consumer went to a local market to purchase some Washing Machine, Refrigerators, mobile
phone, cable, charger, stove, computer, and TV t and left the market with the comment that "there
were no Washing Machine, Refrigerators, mobile phone, cable, charger, stove, computer, and TV
in the market" when in actual fact there were more than a hundred dining Washing Machine,
Refrigerators, mobile phone, cable, charger, stove, computer, and TV available in the same
market except that none of them satisfied one’s taste. Though this particular consumer might have
displayed an exaggerated taste for quality in this respect, it is nonetheless an intriguing situation
for an analyst of the Ethiopian electro-mechanical products market.

3.1.2. Market Growth Prospects

The demand for electro-mechanical products is closely related to the trends in the technological
industry, the level of national and individual disposable incomes, changing the life style as well
as individual tastes.
Within a period of two decades Ethiopia’s per capital income has almost amplified and the
corresponding increase in personal income has altered the taste of the consumers of both
commercial and residential houses. The new trend is towards building various hotels and
manufacturing industry with more attractive but expensive electro-mechanical products. In view
of the indirect effect on the building industry of some of the various economic measures taken by
the Ethiopian Government, the demand for electro-mechanical products with its diverse nature is
expected to increase.

3.1.3. Proposed Marketing Strategy

The business study reveals that the major electro-mechanical products manufacturers in the
country market their products through a number of distributors located in various towns of
Ethiopian. This marketing method is mainly aimed at reducing the company’s overhead costs.
The proposed factory, operational, should not make direct sales of its products except at the
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factory site and on specific orders. Direct sales will lead to opening up depots and carrying large
stocks thereby typing up large capital. It will lead to the maintenance of a large force of salesmen
and paying of workshop rent. Besides, the transportation costs of the company's products to the
various sales workshops will obviously increase the selling prices of the product thereby
rendering them less competitive. The appointment of experienced distributors of the company’s
products and allowing them a generous sales discount of up to 20% of gross sales as well as
introducing annual incentive bonus to reward the most hardworking distributors could bear out a
very effective marketing strategy. We therefore, recommend it.

3.1.4. Electro-mechanical products demand and supply in Ethiopia

3.1.4.1. Electro-mechanical products demand

Electro-mechanical product demand is growing fast in Ethiopia due to population growth,
urbanization and economic growth. The construction sector, growth urbanization and urban
population, and growing middle class is driving a rapid increase in demand for diversified
electro-mechanical products. The estimated amount in the year 2010 showed that 85 million ton
of electro-mechanical products needed in Ethiopia for different purposes. The largest electro-
mechanical product consumption in Ethiopia is wood fuel (charcoal and firewood). The other
electro-mechanical product demand which is consumed by produced and imported is industrial
electro-mechanical product.

3.1.4.2. Electro-mechanical products supply

In Ethiopia, Furniture and other forest products supply comes from domestic production and
import. The increasing dependence on import is a matter of serious concern for the electro-
mechanical product sector in Ethiopia. The domestic industrial electro-mechanical product
production was estimated to be approximately 5.43million m 3 in 2015. On the other hand, the
FSR (2015) estimated total domestic production of industrial electro-mechanical product at
approximately 7.4 million m3 in 2013. The bulk of this electro-mechanical product production
comes from electro-mechanical product in the form of poles, used in both modern construction.
The implementation of these programs would considerably enlarge the market for both the
domestic and institutional electro-mechanical product products, which the management of the
intended project with its established and high quality products, exploit to a maximum level
provided the necessary funds are readily available to implement this sound project with a
minimum delay.
The domestic industrial round electro-mechanical product production showed a constant growth
from 2000-2001, high increment from 2002-2003 and declined trend from 2004 to 2018. Ethiopia
experiences wood shortage from time to time and import huge quantity of electro-mechanical
product s for supplement the growing demand.

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 3.1.5. Demand and supply Gap
Electro-mechanical products demand has been highly exceeding the supply where the gap has
been still completed from import of forest products with hard currency while there are potential
timber species. At the national level, there is a huge gap between demand and domestic
sustainably produced supply of electro-mechanical product products.
Second, this forces the country to depend heavily on imported electro-mechanical products for its
electro-mechanical product based industries. Unless actions are taken quickly, the situation will
drive further degradation of the natural stands and affect the economic growth of the country
through competition for the scarce hard currency for importation of electro-mechanical product.
The gap in electro-mechanical products supply from sustainable production including electro-
mechanical product demand is approximately 80 million m 3 (FSR, 2015). The FSR (2015)
estimated 4.4 million ton gap of supply by the year 2033.

3.1.6. Local Competitors and Domestic Productions

The major existing competing electro-mechanical product assembly industries in the country are
not as easy as possible to trace clearly. Accurate and reliable statistics on the total annual
domestic productions of electro-mechanical product are not readily available. But some major
electro-mechanical product producers interviewed put the total annual productions in the country
are the millions units of electro-mechanical products with marked variations in selling prices,
quality and finishing’s. Owing to the increasing demand for electro-mechanical product products
in the country, some of the major competitors have plans to expand their Operations in the
foreseeable future subject to availability of funds. The intended project to be implemented in the
nearest area of the capital city (Addis Ababa) has a good market prospects with minimal
compotators following its product differentiation and specialization.

3.1.7. The Target Market

Perhaps it will be safe to submit that the intended play electro-mechanical product assembly
project has the widest range of customers; there is one general truth, almost everybody on planet
earth has one or more things that they would need in their houses or offices. It is difficult to find
households and office facilities without one form of electro-mechanical product.
We have conducted our market research and Business studies and we have ideas of what our
target market would be expecting from us. We are planning to manufacture a wide range of unique
electro-mechanical product, to the following groups of people and corporate organizations;
 Households
 Bachelors and Spinsters
 Corporate Executives
 Business People
 Housing cooperative associations
 Corporate Organizations / Offices
 Government Offices

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  Schools

3.1.8. Marketing Strategy

The promoter plans to enter into the business and become the favored choice for urban areas in
Ethiopia including Addis Ababa residents as a major destination. The owners will hire specialists
with extensive knowledge of the electro-mechanical products assembling industry which will have an
irreplaceable contribution in assisting the project in developing marketing tactics that will help to
reach the business goal of obtaining a larger share of available markets.
In order to continue in business and grow, promoter must continue to manufacture and sell the
intended unique product planned to be availed in each market destinations which is why it will go
all out to empower our sales and marketing team to deliver.
The promoter planned to manufacture wide range of play electro-mechanical product to the
identified potential customers in the nation to maximize profits, to contribute its fair share effort
for the socio-economic aspects of the country at large.
In essence, the source of income will be the manufacturing and retailing of a wide range of home
and office uses electro-mechanical product at an affordable prices.

3.1.8.1. Promotion and Advertising Strategy

Despite the fact that intended project and its market destination areas will prudently selected and
located, the promoter will still go ahead to intensify publicity for the business through favorable
promotion mechanisms. It will be gone to explore all available means to promote its electro-
mechanical product assembly company. The promoter has a long term plan of opening its
showrooms in various locations all around Addis Ababa and key cities in Ethiopia which is why it
will deliberately build its brand to be well accepted in selected areas before venturing out.
As a matter of fact, its publicity and advertising strategy is not solely for winning customers over
but to effectively communicate its brand. Here are the possible platforms it intend leveraging on
to promote and advertise the company.
 Place adverts on community based newspapers, radio stations and TV stations.
 Encourage the use of word of mouth publicity from its loyal customers
 Leverage on the internet and social media platforms like; YouTube, telegram, Face book
and other platforms to promote its business.
 Distribute its fliers and handbills in target areas in and around its neighborhood
 Contact corporate organizations, households, housing cooperative associations and
schools by calling them up and informing them of the products it manufactures and sells
 Brand all its official cars and trucks and ensure that all its staff members and management
staff wears its branded shirt or cap at regular intervals.

3.2. Plant Capacity and production program

Considering the gradual growth of demand and the time required to develop the required skill
the rate of capacity utilization during the first, second and third year of production will be 50%,

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75% and 100% respectively. Full capacity utilization will be reached during the third year of
operation. The annual production programme is formulated on the basis of the market forecast
and selected plant capacity.
Parameters like potential product market size, capacity of machine to be installed, operational
hours and other factors are taken in to account in determining plant capacity. Accordingly, the
following assumptions used to reach at plant capacity of the project.
 Annual working days=250
 Daily working hour= 8( one shift)
The production program of a plant shows the targets production level and the output mix of the
plant at a certain year.
The production program worked out for this project considered the rate of capacity utilization,
particularly in the first two years of operation.
Accordingly, it is expected that the plant will work that 50% in the first year, 80% in the second
year until the plant attains optimum level through learning by doing to acquire managerial and
technical efficiency. The attainment of full capacity (100%) will begin after third year of its
production time. The factory capacity utilization and production level in the first, second and
3rd -10th years in the following table.
Table 1. Plant capacity and Production programme (pcs)
Description Year
1 2 3_10
Capacity utilization (%) 50 75 100
Refrigerator in Pcs 3,625.00 5,437.50 7,250.00
Washing Machine 3,350.00 5,025.00 6,700.00
TV, computer, mobile 16,250.00 24,375.00 32,500.00

3.3. Pricing
It would be important to examine the possible level of price based on the competitor’s action. In
this connection, the existing average prices of similar international company were assessed for
the benefit of comparison based on the average price of those products in the international
market.

4. Technical Study
4.1. Project Location and Land Ownership
The project is located in Amhara National Regional State, north shoa one bulga city
administration. The company has already acquired 10,000 m 2 of land based on lease payment
per m2 per is 54.45 birr and accordingly for the total land the lease cost becomes 544,500 birr.
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 The location and specific site of the factory imparts various advantages in terms of easy
accessibility, availability of raw materials, energy supply, maintaining qualified professionals &
skilled labors, and ideal in every direction including delivering and transportation of products
and raw materials. The road infrastructure is well established up to project area and the project
will not face problem to transport its raw materials and end products.

4.2. Building and Civil Works

The total cost of building and construction work of the project is estimated to be Birr
19,226,776. The construction work includes production halls, storage office, treatment plant,
site work and others utility constructions.

5. Raw and Auxiliary Materials

The annual materials requirement at full capacity operation of the plant and their respective
cost estimates are presented in below. The total annual cost of raw materials is estimated at Birr
48,585,112.62 is listed below.

Raw materials for electro-mechanical product assembly can include metals like copper and steel
for wiring and chassis, plastics for housings and insulation, and electronic components like
microchips, resistors, and capacitors. The cost of these materials will vary depending on factors
like quantity, quality, and supplier
Here's a more detailed breakdown:
Raw Materials:
 Metals: Copper, steel, aluminum, and various alloys are used for wiring, chassis, heat sinks,
and other structural components.
 Plastics: Used for housings, insulation, connectors, and other non-conductive parts.
 Electronics: Microchips, resistors, capacitors, inductors, diodes, transistors, and other
electronic components are crucial for the electrical function of the products.
 Other Materials: Glass, ceramics, and specialized materials for screens, coatings, and other
specific applications.
 Batteries: Lithium-ion batteries are common in many electro-mechanical products.
Cost Factors:
 Material Type and Quality: Different materials and quality grades will have varying prices.
 Quantity: Bulk purchases will likely result in lower per-unit costs.
 Supplier: Local suppliers may offer different prices than international suppliers.

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 Currency Fluctuations: Changes in the Ethiopian birr exchange rate can affect the cost of
imported materials.
 Transportation Costs: Shipping materials from suppliers to the assembly plant will add to the
overall cost.
Estimated Costs:
 A basic electronics assembly plant in Addis Ababa, capable of assembling items like washing
machines, refrigerators, TVs, and mobile phones, could cost around 120 million birr according
to a project proposal.
 A project proposal for electro-mechanical products and metal development machineries
mentions a total investment cost of 150 million birr, including working capital according to a
project proposal.

Table 2. Raw Materials and Inputs

SN Item UCM Qty Total price in birr

1 CKD for Refrigerator Set 35,000.00 15,500,000.00

2 CKD for washing machine Set 18,000 9,600,000.00
3 CKD for TV, computer and mobile
mmmmmmachmmmmmmmmmmmmmmmm Set 62,000.00 19,085,112.62
4 Auxiliary input Set 18,000.00 4,400,000.00
5 SubTotal Ls 48,585,112.62

6. Utilities
A number of utilities would be put in place in order to ensure smooth functioning of the
factory are;
 Water Supply,
 Supplementary Electricity supply,
 Telephone line
 Paved Road Transportation,
 Drainage Facility
Table 3. Annual Utilities Requirement And Estimated Cost

Annual
No. Description Unit Consumption Annual Cost 12
1 Electric power kWh 220,000 1,197,000.00
3
2 Water m 50,500 454,254.00
3 Telephone Line - - 49,000.00
Total 1,700,254.63
 7. Technology and Engineering
7.1. Technology
Technology is one of the necessary factors that need due consideration during machinery and
equipment selection. The proposed project is planned to utilize appropriate technologies that are
cheap to acquire, have low power consumption, reasonable size, enables to produce best quality
products and easily adaptable (less complicated).
In addition proper monitoring and follow up will be made during construction and production
processes.
In this study various technological options available in the market have not been considered,
though it has its own influence on capital out lay and/or recurrent costs.

7.1.1. Source of Technology

In the production process, only very simple workshop practices such as cutting and assembling
are carried out. Therefore, Washing machine, Refrigerator and TV production and equipment
can be acquired by contacting the commercial attaches of local electronics factories.

7.1.2. Production Process

Electro-mechanical Product Assembly
Electronics manufacturing refers to the process of designing, producing, and assembling
electronic components and products, such as semiconductors, printed circuit boards, and
consumer electronics like smartphones and computers. This industry involves technicians at
various stages, including design, fabrication, assembly, quality control, and distribution of
electronic devices.

1. Design
Design typically begins with the creation of a schematic diagram, illustrating the circuitry and
connections between electronic components. This schematic guides the layout design, where the
physical placement of components on the printed circuit board (PCB) is determined. Layout is
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finalized, a prototype is often built and tested to identify and address any issues. Following
successful prototyping, the design is refined, and a detailed bill of materials (BOM) is created,
specifying all necessary components. Lastly, the manufacturing files, including Gerber files, are
prepped for PCB fabrication and assembly files for component placement.

2. Fabrication
Fabrication usually begins with the production of the printed circuit board (PCB), where a
substrate material is coated with a layer of copper and etched to create the desired circuit
pattern. Surface mount technology (SMT) is commonly employed for component placement,
where automated machines precisely mount miniature components onto the PCB. Through-hole
components, if used, are inserted manually or by automated insertion machines. Once
components are placed, the assembly undergoes soldering, either through wave soldering for
through-hole components or reflow soldering for SMT components. Inspection and testing are
crucial stages to identify any defects or issues, ensuring the final product meets quality
standards. The assembled electronics are then integrated into the final product, completing the
fabrication process.

3. Assembly

The assembly phase of electronics assembly involves bringing together all the fabricated
components to create the final electronic product. This phase of electronic assembly process
begins with the careful placement of components onto the printed circuit board (PCB), whether
through automated surface mount technology (SMT) processes or manual insertion for through-
hole components. Following component placement, the assembly undergoes a soldering process,
such as reflow soldering for SMT components or wave soldering for through-hole components,
to securely attach the components to the PCB. Precision and consistency in this phase are
critical to ensure proper electrical connections and the overall functionality of the electronic
device. After soldering, the assembly is typically subjected to thorough inspection and testing to
identify and rectify any defects. Once the quality checks are completed and the assembly is
confirmed to meet specifications, it moves on to the final stages of product integration and
packaging, marking the completion of the assembly phase in the electronics manufacturing
process.

4. Quality Control

This critical stage is aimed at ensuring the reliability and functionality of the manufactured
electronic devices. It involves a thorough inspection and testing process to identify any defects
or deviations from design specifications. Automated inspection systems, such as optical
inspection and X-ray imaging, are commonly employed to detect issues with solder joints,
component placement, and overall PCB integrity. Additionally, functional testing is conducted to
14
verify that the assembled electronics operate as intended. Quality control measures help identify
and address any anomalies before the final product reaches the market, minimizing the risk of
faulty or malfunctioning devices. Continuous improvement strategies may be implemented based
on feedback from quality control processes to enhance the overall manufacturing process and
product quality.

5. Distribution

Involving the logistics and management processes that facilitate the movement of finished
electronic products from the manufacturing facility to end-users or retailers, this phase includes
packaging the assembled electronics securely for transportation, coordinating with shipping and
distribution partners, and managing inventory to meet market demand. Distribution channels
play a crucial role in delivering products efficiently and timely to the intended destinations.
Additionally, this phase may involve tracking and traceability systems to monitor the movement
of products through the supply chain. Effective distribution ensures that the electronics assembly
reaches its target market in optimal condition, contributing to customer satisfaction and the
success of the overall manufacturing and distribution process.

Electronic Components
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 Electronic components are fundamental parts used in assembling electronic devices. They
include:

 Semiconductors: These are integrated circuits and transistors that control the flow of electrical
signals.
 Passive Components: Resistors, capacitors, and inductors regulate and store electrical energy.
 Connectors: These facilitate the interconnection of components, such as USB ports or wire
connectors.
 Diodes: Diodes control the direction of electrical current.
 LEDs: Light-emitting diodes emit light when current flows through them.
 Sensors: These detect and respond to various environmental conditions, like temperature or
motion.
 Microcontrollers and Microprocessors: These are the brains of many electronic devices,
executing instructions and processing data.
 Power Supplies: Components that provide and regulate electrical power to the device.
These components are combined and interconnected to create complex electronic systems and
devices. Recently, we helped one customer locate hard to find LCDs for the automotive industry.
If you need help sourcing your electronics components, contact SCM Solution today!

Different Ways of Circuit Board Assembly

There are two primary test types of circuit board assembly: through-hole assembly and surface
mount assembly.

 Through-Hole Assembly (THA): In through-hole assembly, components have leads that are
inserted into holes on the printed circuit board (PCB). The leads are then soldered on the
opposite side of the board to create the electrical connection. This method is often used for
larger components and those that require extra mechanical strength, such as connectors and
large capacitors.
 Surface Mount Assembly (SMA): Surface mount assembly involves mounting components
directly onto the surface of the PCB. The components have small contacts or leads that are
soldered directly onto pads on the board. This method is more space-efficient, allowing for
smaller and lighter electronic devices. Surface mount technology (SMT) is widely used in
modern electronics for components like resistors, capacitors, and integrated circuits.
In many cases, a combination of both through-hole and surface mount components is used,
referred to as mixed-technology assembly, to leverage the strengths of each method in a single
circuit board. The choice between through-hole and surface mount assembly depends on factors
such as component size, board size, and the specific requirements of the electronic device being
manufactured.

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Printed Circuit Board Assembly (Smt + Tht)

Through-Hole Technology (THT) and Surface Mount Technology (SMT) are two distinct
methods used in printed circuit board (PCB) assembly, each with its advantages and
applications.

Through-Hole Technology (THT):

In THT assembly, electronic components have leads that are inserted into drilled holes on the
PCB. These leads protrude through the other side of the board, and solder is applied to secure
the components and establish electrical connections between component leads. THT is
commonly used for larger and heavier components such as connectors, switches, and
electrolytic capacitors. This method provides robust mechanical connections and is often
preferred for components requiring extra stability or those subject to mechanical stress.

Surface Mount Technology (SMT):

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Surface Mount Technology involves mounting components directly onto the surface of the PCB.
Components used in SMT have small, flat contacts or leads that are soldered directly onto pads
on the PCB. SMT is widely utilized for smaller and more compact electronic devices as it allows
for higher component density and is more suitable for automated assembly processes. SMT
components include resistors, capacitors, integrated circuits, and other miniature devices. This
method enhances manufacturing efficiency, reduces the overall size and weight of electrical
parts on the PCB, and is well-suited for high-volume production.
Both BGA and fine-pitch components are integral to modern electronics, enabling the
development of compact and high-performance electronic devices. Their usage has become
widespread in applications ranging from consumer electronics to telecommunications and
industrial equipment. It’s important to plan ahead in the early stages of the 5 step process. BGA
packages offer advantages such as high pin count in a compact space, improved thermal
performance, and enhanced signal integrity. They are commonly used in applications where
miniaturization and high performance are crucial, such as in microprocessors, GPUs, and
memory chips.

Fine-pitch components, on the other hand, refer to SMDs with closely spaced leads or contacts.
The term “fine pitch” indicates that the distance between adjacent leads is relatively small,
requiring precision during assembly. These components often have lead pitches less than or
equal to 0.8 mm. Fine-pitch components include various integrated circuits, such as
microcontrollers, FPGAs, and memory chips. The assembly of fine-pitch components demands
careful placement and soldering techniques to ensure accurate alignment and reliable
connections. Advanced manufacturing processes, including automated pick-and-place machines
and precise soldering equipment, are commonly employed for the manufacture and assembly of
fine-pitch components.

Do you offer Electro-Mechanical Assemblies?

Electromechanical assemblies refer to systems or devices that integrate both electrical and
mechanical components to perform a specific function. These assemblies involve the
combination of electrical elements, such as circuits, sensors, or motors, with mechanical
components like gears, levers, or actuators. The synergy between the electrical and mechanical
aspects allows for the controlled movement, manipulation, or transformation of physical objects
or signals. Examples of electromechanical assemblies include motors in appliances, robotics
systems, automotive components, and various devices where electrical components and
mechanical systems work together to achieve a specific outcome. The design and assembly of
electromechanical systems often require interdisciplinary expertise, combining knowledge from
electrical engineering and mechanical engineering. SCM Solution is the source of supply chain
support in Asia. Find out how we can support your assembly needs today!

18
 The Future Of PCB Assembly

Predicting the future of PCB assembly involves considering ongoing trends and emerging
technologies. Let’s highlight some directions and solutions that are gaining attention within the
electronics manufacturing industry.

1. Miniaturization and Increased Complexity: The demand for smaller, more compact electronic
devices with increased functionality has been a driving force in PCB assembly. The trend
towards miniaturization, combined with higher component density, requires advanced assembly
techniques and technologies.
2. Advanced Materials and Substrates: The development and adoption of advanced materials,
including new substrate materials and conductive inks, contribute to improvements in
performance, reliability, and flexibility of PCBs. These materials are crucial for emerging
applications like flexible and wearable electronics.
3. Integration of IoT and Industry 4.0: The integration of Internet of Things (IoT) devices and the
principles of Industry 4.0 into electronic products are influencing PCB assembly. Smart
manufacturing practices, including real-time monitoring, predictive maintenance, and data
analytics, are becoming more prevalent in the electronics assembly process.
4. Automation and Robotics: The trend toward greater automation in PCB assembly is likely to
continue. Automated assembly processes improve efficiency, reduce costs, and enhance
precision. Robotics is being increasingly integrated into assembly lines for tasks like pick-and-
place, soldering, and inspection.
5. Environmental Considerations: There is a growing emphasis on environmentally friendly
practices in electronics manufacturing. This includes the use of lead-free solder, recyclable
materials, and sustainable manufacturing processes.
6. Advanced Inspection and Testing Technologies: As electronic devices become more complex,
the need for advanced inspection and testing technologies grows. X-ray inspection, automated
optical inspection (AOI), and other advanced testing methods are becoming standard to ensure
the quality and reliability of PCB assemblies.
7. 3D Printing and Additive Manufacturing: While not yet mainstream for large-scale
production, 3D printing and additive manufacturing techniques are being explored for
prototyping and low-volume production of PCBs. This could offer greater design flexibility and
shorter development cycles.

7.2. Engineering
7.2.1. Machineries and Equipment’s Requirement Cost.
The machinery and equipment required by the plant is as listed below. The total cost of these
machinery and equipment is estimated at about Birr 43,625,507
Table 4. Machinery and Equipment
19
 S Item UC Qty Unit Price Total Price in
N M in Br. Br.
1 Full Refrigerator Assembly Line Set 1 8,200,000.00 8,200,000.00
2 Full TV and computer assembly Set 2 8929762 17859524
3 Full Washing machine line Set 1 6,260,550.00 6,250,550.00
4 Full Mobile phone assembly line Set 1 3,100,000.00 3,100,000.00
5 Other related product making line Set 1 40,004,000.00 4,000,000.00
6 Generator500KVA
line Unit 1 800,000.00 800,000.00
Subtotal 40,210,074.00
Transport, Insurance, other 3,415,433.12

Grand Total 43,625,507

B. Vehicles

Vehicles play a great role for transporting raw material and managerial supervision. The
appraisal technical team planned vehicles that are worth about Birr 8,580,500 were envisaged
to be procured and carryout the basic functions of the factory. Office Furniture and Equipment’s
Office furniture and equipment’s are vital and important for the project. Hence, the company
has submitted Pro forma invoices for major office furniture and equipment’s component, and
selection of suppliers taken for price consideration has been made. Accordingly, the planned
furniture and equipment’s cost of the company is estimated to Birr 2,600,000.

8. Organization’s Structure and Man Power

8.1. Organization Structure
The organization structure of the company shows that the Company has a General Manager
at the top to manage and supervise managerial staffs, division heads, supervisors and other
work forces for the purpose of coordinating and controlling the performance of the factory
and the achievement of its business objectives. Under the General Manager, there are three
functionally related departments such as Production and technical department, Finance and
Administration department and Commercial (marketing & Sales) department. Besides to the
main functional departments, there are also supporting units under the General Manager
like Project Manager, Lawyer, Auditor, planning and programming experts.

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 General Manager

Executive Project Manager

Secretary

Planning and
Programming
Experts

Audit Services Lawyer

Technical and Administrative & Market & Sales

Production Dep’t Finance Dep’t Dep’t

Production Administrative Market &

Technical Section Section Section Finance Section Sales Section
Research Section

Figure 1: Organizational Structure of the company

8.2. Man Power and Training

According to the required demands and accessibility criterion for the project, man power
will be recruited from domestic market. Hence, the company will create new job
opportunities for at least 156 individuals when the factory starts operation as shown table
bellow.
Table 5:. Human resource
Description Number Monthly Annual
required Salary Salary

General Manager Office

General Manager 1 17,000 204,000
Project Manager 1 13,000 156,000
Auditor 1 9,000 108,000
Lawyer 1 9,000 108,000
Planning & Programming expert 1 9,000 108,000
Executive Secretary 1 3,200 38,400

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Production and Technical Department
Production and technical Dep't Manager 1 12,800 153,600
Production section
Production section head 1 10,500 126,000
Quality Controllers/Officers 5 7,800 468,000
Labratorists 3 8,200 295,200
Loading/Unloading & Raw material 13 2,450 382,200
Preparation Operators
Production operators 54 3,200 2,073,600
Techinical section
Technical section head 1 10,500 126,000
Electrician 4 4,150 199,200
Mechanics 5 4,150 249,000
Utility/boiler Operators 6 4,300 309,600
Forklift Operator 1 4,100 49,200
Administrative and Finance
Department
Administrative and Finance department 1 12,800 153,600
Manager
HRM Section
Administrative section head 1 10,500 126,000
Human resource officers 3 6,500 234,000
Drivers 8 2,300 220,800
Janitors 4 1,200 57,600
Messengers 4 1,300 62,400
Guards 10 1,200 144,000
Finance section
Accountants 4 3,400 163,200
cashier 3 3,150 113,400
Store keepers 4 3,200 153,600
Marketing and Sales Department
Marketing and Sales Dept. Manager 1 12,800 153,600
Market and research Section
Market and research section head 1 10,500 126,000
Market research and information officer 2 6,500 156,000
Market promotion officer 2 6,500 156,000
Purchasing officer 2 6,500 156,000
Sales section
Sales section head 1 10,500 126,000

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 Sales person 5 3,400 204,000
Grand Total 156 234,600 7,660,200

Training is a process of enhancing the skills, capabilities, and knowledge of employees for
doing a specific job. It is crucial for organizational development and success. It is fruitful to
both employers and employees of an organization. An employee will become more efficient
and productive if provided with outfitted training and skill development facilities. As a
result, continuous and related training is recommended as per the project’s requirement.

Employee remuneration and benefit are also an important factor for employee’s productivity.
Employee remuneration is the reward or compensation given to the employees for their work
performances. Similarly, benefits are any perks offered to employees in addition to salary. The
most common benefits are medical, disability and life insurance, retirement benefits and fringe
benefits. Both remuneration and benefits provide basic attraction and motivation to an employee
to perform job efficiently and effectively. Therefore, the promoter is expected to work hard on
implementation and consideration of such man power factors for the success of the project

9. Financial Analysis
9.1. Underlying Assumption
The financial analysis of this plant is based on the data provided in the preceding sections and
the following assumptions.
A. Construction and Finance
Box 1: Construction and Finance

Construction period 2 years

Source of finance 30% equity and 70% loan
Tax holidays 2 years
Bank interest rate 12%
Discount for cash flow 18%
Value of land Based on lease rate of ANRS
Spare Parts, Repair & Maintenance 3% of fixed investment

B. Depreciation

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Box 2: Depreciation

Building 5%
Machinery and equipment 10%
Office furniture 10%
Vehicles 20%
Pre-production (amortization) 20%

C. Working Capital (Minimum Days of Coverage)

Box 3: Working Capital (in days)

Raw Material-Local 30
Raw Material-Foreign 120
Factory Supplies in Stock 30
Spare Parts in Stock and Maintenance 30
Work in Progress 10
Finished Products 15
Accounts Receivable 30
Cash in Hand 30
Accounts Payable 30

9.2. Investment
The Total Initial Investment including working capital is estimated at Birr 100 million of which
Birr 43,625,507 is for plant machinery and equipment’s. The foreign component amounts to
52.8%. The detail is shown below.
Table 6. : Total Investment cost

Ser. Investment
Description
No. Cost

1 Land Lease cost 545,400

2 Electric Installation Cost 975,342
24
 4 Machinery and Equipment 43,625,507
5 Vehicle 8,580,500
6 Building & construction 19,226,776
Office Equipment & 2,600,000
7
Furniture
Sub-total 75,553,525
9 Pre-production Interest 2,000,000
Sub-total 2,000,000
10 Working Capital 17,446,475
Sub-total 22,446,475
Total 95,000,000

*Pre-production capital expenditure includes - all expenses for pre-investment

studies, consultancy fee during construction and expenses for company‘s
establishment, project administration expenses, commission expenses,
preproduction marketing and interest expenses during construction.

9.3. Production Costs

The total production cost at full capacity is estimated at Birr 66,252,040.54. The details are
shown bellow.
Table 7: Production Cost at Full capacity

Total Production Cost at F+ull Capacity

Items Cost
1. Raw materials 48585112.62
2. Utilities 1,700,254.63
3. Wages and Salaries 7,660,200
4. Spares and Maintenance 2,004,405.75
Factory costs
5. Depreciation 5,240,926
6. Financial costs 1,061,144.90
Total Production Cost 66,252,040.54

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10. Financial Evaluation

I. Profitability
According to the projected income statement attached in the annex part the project will generate
profit beginning from the first year of operation. Ratios such as the percentage of net profit to
total sales, return on equity and return on total investment are 4%, 4% and 18% respectively in
the first year and are gradually rising. Furthermore, the income statement and other
profitability indicators show that the project is viable.
II. Breakeven Analysis
The breakeven point of the project is estimated by using income statement projection.
Accordingly, the project will break even at 38.3% of capacity utilization.
III. Payback Period
Investment cost and income statement projections are used in estimating the project payback
period. The projects will payback fully the initial investment less working capital in 3 years and
3 months.
IV. Simple Rate of Return
Simple rate of return refers to the ratio of net profit plus interest to the total capital invested for
a single year at full capacity operation. Accordingly, for the envisaged plant the rate equals to
19.7%.
V. Internal Rate of Return and Net Present Value
The sum of the discounted cash inflows at a rate of 10% less the initial investment cost results
NPV of Birr 81,332,053. The internal rate of return (IRR) is 18%, which is fairly above the
considered cost of capital. Financial annex part shows the IRR and NPV computations. With the
anticipated market and financial data considerations, these two major feasibility indicators
(NPV and IRR) indicate that the project is viable to be implemented.
VI. Sensitivity Analysis
The envisaged plant is profitable even with considerable cost increment. That is, the plant
maintains to be profitable starting from the first year when 10 % cost increment takes place in
the sector.

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11. Economic and Social Benefits and Justification
The envisaged project possesses wide range of benefits that help promote the socio-economic
goals and objectives stated in the strategic plan of the Amhara National Regional State. It also
plays positive role in diversifying the economic activity of the region. The other major benefits
are listed as follows:
A. Profit Generation
The project is found to be financially viable and earns a profit of Birr 225,561,068 within the
project life. Such result induces the project promoters to reinvest the profit which, therefore,
increases the investment magnitude in the region.
B. Tax Revenue
In the project life under consideration, the region will collect about Birr 89,248,389 from
income tax. Such result creates additional fund for the regional government that will be used in
expanding social and other basic services in the region.
C. Employment and Income Generation
The proposed project is expected to create employment opportunity to several citizens of the
region. That is, it will provide permanent employment to156 professionals as well as support
staff. This would be one of the commendable accomplishments of the project.
D. Pro-Environment Project
The proposed production process is environment friendly. Currently the issue of environment
and envelopment get due emphasis and thus every citizen called exert their maximum effort for
fighting against any negative impacts on the environment so as to result in a win-win solution on
common agenda that is creating environmentally friendly business environment. Therefore this
industrial use building project does not cause a negative impact on the environment.
E. Diversification and Inter Sectorial linkage.
The proposed project helps to diversify ANRS’ and Ethiopian economy. It contributes to
industrialization of the region as well as the county’s economy.+

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