1. Product Description: A radio is becoming a basic consumer item even rural areas. Rural families want radio mostly to listen to music and songs. Radios come in different sizes, shapes and capacity.
2. Rationale: Many decades have passed since radios were introduced into the country and millions of radios have been imported. But no attempt has ever been made even to assemble radios in the country. Still the county is being flooded with all sorts of radio brands–many of them with poor qualities. With increasing population and growing popularity of the Radio, there is a strong need to fabricate/assemble some brands of radios in the country. With a population of 18.5 million, the Amhara Region is the second largest consumer of radios. The volume of radio purchase in the Region can justify the establishment of a radio assembly plant in the Region.
3. Market Potential: Assembly works are not subject to the rules of economies of scale. They do not require heavy investment in expensive plant and machinery which require large production volume to minimize units cost of production. the assembly of radios need small machines and tools with minimum investment cost and highly trained manpower. Radios can be assembled in homes with a limited number of hand tools. A radio assembly plant can be financially viable if it assembles about 10,000 per year. And the demand for radios in the Amhara Region is definitely more than 10,000 per year. Of the 3.7 million families in the Region, probably more than 60 percent do not have radios; If a plant produces low cost radio in terms of original price and operation expense, there is a big market for radios in the Region.
4. Raw Materials: Assembly work involves purchase of parts and components. These parts and components will be imported during the initial years and gradually they will manufacture in the plant.
5. Process & Technology: A modern transistor radio essentially consists of a “printed circuit board” on which the components are mounted; and a battery of step down transformer with rectifier unit (for mains operations); a cabinet fitted with a loudspeaker and knobs and dial. The machinery that would be required would include soldering iron, multimeters, coil winding machine, oscilloscope, power supplies, drilling and grinding machines together with other regular hand tools.
6. Estimated Investment: For a plant that will produce 1000 radio sets per month, the investment requirement will be:
§ Building 200m2 at Birr 2000/m2= Birr 400,000
§ Machinery = Birr 80,000
§ Working capital = Birr 50,000
Total = Birr 580,000
7. Benefits: Saves foreign exchange and regional financial resource, introduces new skills and technology, improves information access to the people,------.
8. Location: Bahir Dar.