1. Product Definition: A bicycle is a very efficient form of personal transport. In some countries especially in South East Asia, bicycles are also used to transport personal belongings in addition to their human cargo. Following the oil embargo of the mid 1970’s, bicycles have become popular means of transport in some European countries especially in the Netherlands.
2. Rationale: Some say Ethiopia is not suitable for using bicycles because it is mountainous. But the experience of other countries shows that bicycles can be as popular in mountainous countries as they are in flat countries. The main difference is that bicycles used in mountainous countries can be fitted with small motors to be used while climbing hills if need be. Even in Ethiopia there are many places where bicycles can be used without any difficulty. The ever increasing prices of petroleum is a warning sign that transport using petroleum consuming vehicles is going to be very expensive in the future. One alternative to the use of petroleum using vehicles is bicycles. The Amhara Region has many places where it is convenient to use bicycles. In fact, compared to other regions of the country, more bicycles are used in the Amhara Region. Bahir Dar has more bicycles per capita than any urban center in the country. Considering these factors, establishing a bicycle assembly plant will meet the existing demand and will also trigger additional demand in the Region and outside the Region.
3. Market Potential: An annual import of bicycles is about 15000 units and people in the business say that there is additional inflow of bicycles illegally through the Ethio-Sudan boarder. Practically all the bicycles are made in China and some other South East Asian countries. Assembling at least one-half of the import will most likely make the plant viable. Assembling a product especially a mechanical, or electrical or electronic product is one step forward towards manufacturing some parts initially and all parts finally of the product.
4. Source of Raw Materials: Compared to other mechanical gadgets, a bicycle appears to be a simple object, but it is composed of at least 20 components and parts- which are by and large metal (steel) and there is a small quantity of rubber for the wheel and pedals. For the first stage of operation, all the parts will be imported; but gradually some parts of the bicycle of will fabricated here.
5. Production Process & Technology: There is not much to say about the assembling process of a bicycle. The main activities are parts are carefully checked whether they are proper for use and if they are of the specified standard. Once checked, parts are carried to the assembly line to be made into the final product. (for each component standards are set and this is known by the manufacturers). Major machinery and tools for the assembly include spoke tightening and deviation adjusting machines, assembly conveyor line, trolley conveyor, roller and compressor.
6. Estimated Investment: Building 500 m2 at Birr 1500/m2 =750,000
Machines, tools 1,341,000
Total 1,091,000
7. Benefits: saving of foreign exchange to the country, saving financial resources to the Region, introduction of new skills and technology to the Region, foundation for manufacturing bicycle parts and components, earning foreign exchange through possible.
8. Location: Bahir Dar or Combolcha or Debre Birhan.