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Small Scale Steel Plant


1.      Product Description: Steel is a product basically made form iron and a small amount of carbon. There are different types of steel depending on their carbon content. Low carbon steel contains less than 0.25% carbon. Medium steel contains between 0.25 and 0.70% carbon. The amount of carbon in steel determines the physical characteristics of the steel. When steel is produced by adding some amount of other metals, this is called alloy steel. Steel is the foundation of an industrial economy. All heavy machineries and equipment are made from steel. Railways, ships, trains, motor vehicles, heavy duty trucks, earth moving machines, tanks, guns, artilleries, bridges, dams, high rising buildings, production machines and many other products small and large are basically made from steel.



2.      Market Potential: Steel is used for making different products. At an early stage of development steel is used based products. In the context of the Amhara region, production of steel will be used to produce small hand tools such as farm implements, construction tools and also to produce some components of small machines that could be assembled and fabricated in the region. Metal sheets made from steel can be used to fabricate and assemble grinding mills, hollow blocks making machines, wind mills, oil mills and other similar products. In short to build an industrial economy where machines produce other machines, where machines produce metal based products, the production of steel is a basic requirement. If the Amhara region is to have a strong industrial economy in the future, a start has to be made now. And that start is to build a small scale steel making plant.


3.      Sources of Raw Materials: The main raw materials for making steel are pig iron and coal. The pig iron will be imported while coal can be obtained from domestic sources.


4.      Process and Technology: Basically steel is made by mixing pig iron and coal in a furnace and melting the pig iron. There are different types of processes for making steel. The main ones include the Bessemer process, open hearth process, submerged injection process electric furnace process. The electric furnace process utilizes nearly 100 percent scrap. The different processes have a series of stages for producing steel. The main production machine is the furnace where the pig iron and coal are mixed. There are also other auxiliary machines and facilities.


5.      Estimated Investment: For a small scale plant which can produce about 10,000 tons of steel per year, the investment requirement will be:

    • Building/shade  2000m2 at Birr 2000/m2                    = 4,000,000
    • Plant and Machinery                                                   =20,000,000
    • Working capital                                                          = 5,000,000

                                                                                                           29, 000,000


6.       Benefits: Forms the foundation for building and industrial economy for the region, supplies inputs for metal based industries, saves foreign exchange….


7.      Location: Combolcha, Bahir Dar.