AAC Sample Prject Profile-Complete

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Name Of the Project

Autclaved Areated Concrete (AAC) Blocks Unit

Preparation Date

1

stst

March, 2011

Project Report Version: 001:001 Project Report Version: 001:001

Presented to

Shandong Dongyue Building Machines Co Ltd,

Linyi City, Shandng province, China

Proposed Project site

Multi Location, Pan India

Prepared by

N.Gangadhar Reddy

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1. Project at a Glance

1 Product Details :

Type :

BIS Code :

AAC light weight Blocks Fly Ash Based or sand based IS 2185 : 1984 …..Part 3 Technology Area Infrastructure & Green-Tech Capacity Utilization : 80%

2. Assumptions

The following assumptions have been made while preparing this Project Report.

a. Land of 3 Acres is Required

b. Fly to be provided free of cost by power plants. Only transportation to be arraigned by Project. Average distance of 100 KM

c. Production is estimated at 80% capacity,

d. 300 working days is considered in a year during the first year.

e. Boundary wall to be constructed from trail production bricks of Unit.

f. Carbon Credit is estimates are for reference purpose. The Project owner must handle his part of CDM project to get Carbon credits, through independent consultants.

g. Carbon credit can be transacted on registration. The PCN preparation & presentation, the PDD preparation & presentation, host country approval and the UNFCCC Registration might take somewhat 6 months to 2 years year. So it may be wise to start early.

h. Sale price at site is estimated a conservative Rs 2500/- per cubic meter. An almost at par price of regular bricks.

i. AAC Blocks of all sizes will be manufactured according to the market requirement, though mainly stipulated sizes as per the BIS standards.

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3. Introduction

AAC is Autoclaved Aerated Concrete. The blocks are made to aerate by creating a reaction between silica in base material such as fly ash or sand, active lime, and aluminum power. The block hardness is being achieved by cement strength, and instant curing mechanism by autoclaving. Gypsum acts as a long term strength gainer.

The finished product is a 2.5 times lighter Block compared to conventional Bricks, while providing the similar strengths. The specific gravity stays around 0.6 to 0.65. This is one single most USP of the AAC blocks, because by using these blocks in structural buildings, the builder saves around 30 to 35 % of structural steel, and concrete, as tese blocks reduce the dead load on the building significantly.

The major raw material………..Fly-Ash, an indispensable by-product of Thermal Power Plants, is an environmental threat across the globe. Power plants are facing an ever increasing challenge disposal of this polluting agent. This unit is proposed to manufacture AAC Bricks & Blocks by consuming the Fly-Ash as one of the prime raw material. Secondly, it also helps environment by saving the i nvaluable top soil by not using them in brick making like conventional brick making. Thirdly, they need no burning, thus further enhancing their Eco-Friendly Brand. The steam curing requires far less fuel, compared to the backing for each cubic meter of Bricks. This is the reason these bricks are also referred as Eco Bricks or popularly Green Bricks, (though the color is gray).

AAC Blocks are largely used in various constructions, such as load bearing and pillar structure Buildings, Boundary walls, Roads, Culverts, Pavements, and wherever conventional bricks can be used. The general AAC blocks fall in the strength zone of 30-60 Kg/Cm2, thus is having comparable strength as conventional Bricks, and hollow concrete blocks. These Blocks gain strength over a period of time up to 2 years, where as the conventional bricks tend to lose strength over a period of time.

These green bricks can attain very regular and uniform shapes. As no burning is involved, so the shape also remains unchanged. As a result, the final Brick work with these green bricks consumes less mortar to build, less mortar to plaster. Further, the AAC being a concrete itself, it forms a more uniform bond with cement mortar, giving almost a

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4. Strength: Higher Strength Bricks.

5. Uniform Shape: Easier and faster Brick working.

6. Uniform Shape: Less Mortar in Brick work.

7. Uniform Shape: Less Mortar in Plaster.

8. Natural Concrete: Gains strength over time.

9. Natural Concrete: Walls can be left exposed/un plastered.

10. Better heat & sound insulation compared to red Bricks

11. Far Lesser brakeage during handling & transportation.

12. Better Vibration resistance compared to red Bric ks.

13. Light weight : Faster and easier transportation

14. Light weight : Faster and easier brickwork

15. Light weight : saves structural concrete by 35%

5. Market

Shelter is third skin, according to a German Concept, which implies it’s importance next to human Skin and Clothing. This also shows the attachment of human race to this fundamental requirement.

Building Material accounts for major component of the construction cost. Depending on the location they can contribute to 60 - 70 % of the cost of construction. With the ever increasing population, the demand for housing increases. This directly creates demand for this prime commodity of building.

Add to the above fact the nearby area of this project site is undergoing a major infrastructure revolution. As Residential, Commercial, IT companies, and Industrial establishments are coming in, we can conclude that the Blocks unit will prosper and flourish in this environment.

There is a central government gadget notification mandating government departments and CPWD to use 100% Fly Ash based Bricks in their all constructions-directly of through contractors. This factor will help the marketability of this product immensely.

Fly Ash policy of the Government also mandates that 20% of Fly ash Generated by a power plant must be given free of cost to SME sector on a priority basis.

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6. Carbon Credits Estimates

AAC blocks are being seriously considered for CDM projects in India for earning Carbon Credits. As the CER Generated is also relatively less, four or five such units can be bundled together to make a Group CDM in the same sactors.

This project is likely to generate 1 CER per each 7 or 8 Cubic Meter of Blocks production, depending on, and subject to the CDM methodology adopted, and the interpretation of additionality and baseline parameters by the validating authority.

Just for a rough estimate of CERS, for an annual production of average size AAC plant, that is 100000CM/Annum, we are likely to get around 12500 CERs on full capacity Production. At present market rate of 11.5 Euros per CER and @ Rs. 60 per Euro, we can expect to get additional revenue on CER. But we must expect to take a cut of around 20 to 30% of CERs, if we want to forward sell the CERs and get the CDM part sponsored by the buyer.

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7. Raw Materials, Sources and Availability.

Fly-Ash:

A lot has been said about this raw material in this Project Profile itself. But this Raw material is freely available in Thermal Power plants. There are no taxes on this item whatsoever. Transportation charges are only to be attended by the entrepreneur.

Lime:

Active powered lime is a requirement for giving the real aeration to the product. In phase 1 we can aim to buy the acti ve lime directly. In phase -2 we can think of having backward integration and making a lime powering unit at site to have a more competitive advantage, We can also think of a lime burning klin inside the factory premises.

The project financials however have not considered the costs of powering unit, and the lime kiln in this project.

Different qualities of lime are available, and depending on the raw materials, the mix design can be chosen to get the optimal quality of production.

OPC.

This Project aims to utilize OPC cement as main binder material. It will give faster strength to the bricks, besides giving improved consistent quality. It also ensures a better cost effectiveness for the same. Using OPC will be a standardized practice. The other prime advantages of using OPC (compared to other binders) is it’s easy availability locally through nationwide Retail Network of Cement Companies.

Gypsum:

This too is an industrial waste. This is available as an industrial byproduct of Fertilizer Plant. Gypsum is responsible to give long term strength to the Blocks.

Aluminum Power .

Finely ground Aluminum power is used in very limited quantity ( less than 0.5%), so that it reacts with active lime, and silica in base material to make the aeration, and swell the product, making it very light weight product.

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8. Process

The Process of manufacture is simple t follow, and complex to implement.

First, the Fly Ash is mixed with water, and made Slurry in a slurry mixture. If Sand is used as a base material, we need a ball mill to grind the sand to fine power. The slurry making process is same sand.

After Slurry is made, the slurry is stored in slurry storage tank, where the slurry is constantly agitated. Care is taken to run the slurry storage tank all the time, so that is never settles down the particles.

Then a weigh batcher weighs the Slurry, lime, OPC, Gypsum and aluminum power in preset quantities, and mixes thoroughly. The mixture also pours the mix into the Mould carried n the mould cart. The full pouring of the mixture is just enough to fill around 50% of the mould.

Then the mould is kept in a warm chamber for 2 hours, so that the aeration and the light initial setting takes place.

Next process is de-molding process of the big block, in which a sophisticated overhead hoist takes the mould, demoulds the block.

Next process is the level wire cutting of the Block, while the block passes on the cutting trolley through the series of wires. This process follows a vertical wire cutting where as the block remains stationary, and the cutter cuts the block vertically.

The final cut blocks are Steam cured in autoclaves for 8 hours at 12 KG/Sq cm pressure, and 200D C

The product is ready on the same date to go into the market.

Please refer the Process Flowchart Drawing, 3D Layout Drawing, and the Pictorial Sketch Drawinggiven in following pages.

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9. Process Flow Chart.

Fly Ash Gypsum Lime OPC Main Raw Materials

Water Flyash Slurry Batched Weight Batched Weight Batched Quantity Aluminum

pouring Mixture

to mix ingredients

Bricks Casting on Mould

Hi Pressure Steam Curing for 8 Hours

De-molding and Wire Cutting

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10. Layout Drawing (3D)

Please follow the real 3D graphical layout drawing, and its prospective pictorial Sketch description

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11. Photographs

Just for technical clarity some of the photos of the real working are provided here. Please ask for a free video CD explaining complete working condition.

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11. Raw Material Suitability

Almost 95% of the raw materials can be made suitable for AAC line through proper mix design. Also we can have many different mix designs for the same denicity…same strength of Blocks. We will help you to get the Best quality blocks at optimal cost by means of designing proper Mix as per your input raw materials.

The following are basic guidelines (certainly not the final call) on the suitability of basic raw materials for AAC.

1. Fly ash (65-70%)

Index Item

Grade (%)

Gr-I Gr-II

Degree of fineness

(0.045 square hole sieve left amount) ≤ 30 45 (0.080 square hole sieve left amount) ≤ 15 25

Ignition loss ≤ 5.0 10.0

SiO2 ≥ 45-55 40

SO3 ≤ 1 2

Reference : The fineness can be 0.045 or 0.080 square sieve left amount.

2. Lime (8-25%)

Item

Grade

Super Gr. 1st Gr. 2ndGr

A(CaO+MgO) Quality Fraction % ≥ 90 75 65

MgO Quality Fraction % ≤ 2 5 8

SiO2 Quality Fraction % ≤ 2 5 8

CO2 Quality Fraction % ≤ 2 5 7

Digestion speed ,min ≤ 5-15

Digestion temperature , ℃ ≥ 60-90

Undigested residue quality fraction ,% ≤ 5 10 15

Fineness (0.080 square hole sieve left amount)% ≤ 10 15 20

3.Cement (6-15%)

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12. Indian Standard for AAC blocks

Bureau of Indian Standard Code no- 2185(Part-3):1984 discusses in details regarding the AAC blocks specifications in India. The prime requirements for AAC blocks (of ISI standards) in India as per the above said code are as follows.

A. ON PHISICAL SIZES OF AAC BLOCKS

B. ON TOLERANCES OF AAC BLOCK SIZES

C. ON DENCITY, STRENGTH & THERMAL CONDUCTIVITY TABLE-1

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F

Fixed Cost Calculations

Sl

No

Details

Fixed

Cost

Promote

r's

Margin

in %

Seed

Funding

Bank

Loan

1 Land 4 Acers @ Rs. Own Land

0.00 100.00 0.00 0.00

2 Land Devolopment @ Rs. 3 Lakhs/Acer

15.00 50.00 7.50 7.50

3 Stores & workShed 17200 sft @ Rs.800/-

137.60 30.00 41.28 96.32

4 office 1000 sft

8.00 30.00 2.40 5.60

5 500 sft x 3 floor rcc or MS struct

15.00 30.00 4.50 10.50

6 Mis fixed assets

5.00 40.00 2.00 3.00

7 Transformer/geneset/Electric Installations

& charges

50.00 25.00 12.50 37.50

8 Water Source--Boor Well with Pump

2.00 25.00 0.50 1.50

9

Plant & Machinary(with

Installation)-Phase-1 (1st Year) 549.72 25.00 137.43 412.29

10

Installation)-Phase-2 (2nd yr) 133.10 25.00 33.28 99.83

11

Installation)-Phase-3 (3nd yr) 133.10 25.00 33.28 99.83

12 Prilimnary exp

5.00 40.00 2.00 3.00

13 Preoperative

15.00 40.00 6.00 9.00

14 Contingency

5.00 40.00 2.00 3.00

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G

Working Capital Calculation

1st Year Capacity 50000

Costing Per Month at 80% production 40000 24000 Tons

1 Raw materials/ CM in Rs. in Rs.

particulars Quantity T rate/tonne Amount

a FlyAsh 0.45 150 Rs. 67.50

b lime 0.09 5000 Rs. 450.00

c OPC Cement (Tanker load) 0.07 5000 Rs. 350.00

d Aluminium power 0.0005 230000 Rs. 115.00 e Gypsium 0.005 550 Rs. 2.75 f RM/CM 0.62 Rs. 985.25 g Power(KWH) 9.00 6 Rs. 54.00 h Coal (Kg) 30.00 4 Rs. 120.00 Other Consumables Rs. 50.00 i Total Rs. 1,209.25 j add Wastage @ 1% Rs. 12.09

k Raw material per CM Rs. 1,221.34

L Raw Materials per month CM 3333.33 Rs. 4,071,141.67

at 80% capacity

2 Labour/Month Nos Lab/Month Tot sal/day

a Skilled Labour 5 6000 Rs. 30,000.00

b Semi Skilled Labour 5 5000 Rs. 25,000.00

c Un skilled Labour 10 4000 Rs. 40,000.00

d Total Labour/Month Rs. 95,000.00 Rs. 95,000.00

3 Officeial staff/Month Nos Lab/Month Tot sal/day

a Managers & accounts 2 10000 Rs. 20,000.00

b Supervisors 4 8000 Rs. 32,000.00

c Otherstaff 4 6000 Rs. 24,000.00

d Total Labour/Month Rs. 76,000.00 Rs. 76,000.00

5 Insuraance per Month ( at 0.3% per annum ) Rs. 20,182.99 Rs. 20,182.99 6 Maintainance per Month ( at 2% per annum ) Rs. 91,619.96 Rs. 91,619.96 7 Office Overheads(Post+phone+Net+travel+stanry) @ Rs. 25/CM _Rs. _83,333.33 _Rs. _83,333.33

8 Total Expences per Month Rs. 4,437,277.95

9 Working Capital for 1 Cycle

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H DEPREATIATION

Item 1st Yr 2nd year 3rd Year 4th Year 5th Year Remarks

1 Block Land & Building 165.60 149.04 134.14 120.72 108.65

2 Added Land & Buildi ngs 0.00 0.00 0.00 0.00 0.00

3

Depreaciation on building/shed and other

constructions except land 10% 16.56 14.90 13.41 12.07 10.87

4 Year end Block 149.04 134.14 120.72 108.65 97.79

1 Block Machinary 601.72 511.46 567.85 615.77 523.41

2 BlockAddedintheYear 0.00 133.10 133.10 0.00 0.00

3 Depreaciation on machinary & equipments 15% 90.26 76.72 85.18 92.37 78.51

4 Year end Block 511.46 567.85 615.77 523.41 444.90

I Debt Service Coverage Ration ( D.S.C.R )

1 BankLoan 689.04 689.04 616.61 444.35 272.09

2 IntrestonBankLoan 89.57 89.57 80.16 57.77 35.37

3 Repayment 0.00 172.26 172.26 172.26 172.26

4 AditionalLoaninYear 0.00 99.83 0.00 0.00 0.00

5 Profits before TAX 249.99 709.64 1147.13 1256.72 1387.22

6 Profits after Tax (33%) 33% 82.50 234.18 378.55 414.72 457.78

7 ProfitAfterTax 167.49 475.46 768.57 842.00 929.44

8 D.S.C.R 4.06 2.51 3.75 4.37 5.08

9 Average DSCR 3.95

Note D.S.C.R = ( Profit After Tax + Depreciation + Intrest on Trrm Loan ) / (Intrest on Term Loan + Term Loan Repayment )

Prepared by Project Consultant. N.Gangadhar Reddy (Ph-9437123235, [email protected])

Sample AAC Project for Dongyue-India Clients

J Project Cost, Profitability Calculation & Ratios

J1

Project Cost

1st Yr 2nd year 3rd Year 4th Year 5th Year

1 Total Fixed Capital 807.32 940.42 1073.53 1073.53 1073.53

2 Total Working Capital (30 days) 44.37 88.75 133.12 144.21 155.30

3 Project Cost 851.69 1029.17 1206.65 1217.74 1228.83 J2 Machinary Utilisation assumed/production 40000 80000 120000 130000 140000 CM/ year

E Cost of production per year

1 Working capital for 12 months 532.47 1064.95 1597.42 1730.54 1863.66

2

Depreaciation on building/shed and

other constructions except land 10 percent 16.56 14.90 13.41 12.07 10.87

3 equipments 15 percent 90.26 76.72 85.18 92.37 78.51

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J Project Cost, Profitability Calculation & Ratios

J1

Project Cost

1st Yr 2nd year 3rd Year 4th Year 5th Year

1 Total Fixed Capital 807.32 940.42 1073.53 1073.53 1073.53

2 Total Working Capital (30 days) 44.37 88.75 133.12 144.21 155.30

3 Project Cost 851.69 1029.17 1206.65 1217.74 1228.83 J2 Machinary Utilisation assumed/production 40000 80000 120000 130000 140000 CM/ year

E Cost of production per year

1 Working capital for 12 months 532.47 1064.95 1597.42 1730.54 1863.66

2

Depreaciation on building/shed and

other constructions except land 10 percent 16.56 14.90 13.41 12.07 10.87

3 equipments 15 percent 90.26 76.72 85.18 92.37 78.51

4 Intrest and Oppurtunity Cost 13 percent 110.72 133.79 156.86 158.31 159.75

5 Total cost of production 750.01 1290.36 1852.87 1993.28 2112.78

J3 Sales per year @ Rs. 2500/CM 1000.00 2000.00 3000.00 3250.00 3500.00

Note : Sales inclusive of VAT & Excise 2808.00

Expected CER Generated _5000.00 _10000.00 _15000.00 _{16250.00 17500.00}

J4 Carbon Credit Revenue (Apprx) 25.88 51.75 77.63 84.09 90.56

Note : CERs @8 CM=1 CER, 50000 CM=6666 CER @ 11.5 Euros@60 INR Analisis J5 Total Revenue 1000.00 2000.00 3000.00 3250.00 3500.00 J6 Net Profit/year 249.99 709.64 1147.13 1256.72 1387.22

J7 Net Profit Ratio 25.00 35.48 38.24 38.67 39.63 %

J8 Rate of return on investment 29.35 68.95 95.07 103.20 112.89 %

J9 Fixed cost (Per annum)

1 Depreatiation (Full) 106.82 91.62 98.59 104.44 89.38

2 Insurance (0.3% on Fixed costs) 2.42 2.82 3.22 3.22 3.22

25% of CERs deducted as transactional and operational costs. CER revenues for Guidelines only. Not computed in Profitability of this report