Product Description: LPG container or cylinder is a hollow metallic body with equal, circular ends and regular curving sides. At its base, the cylinder is designed not to touch the ground. It rests on a circular support to bear the weight of the cylinder and its content. LPG cylinder is used to contain or hold butane or liquid petroleum gas which enables the gas to be distributed to consumers. A device called regulator is attached at the top of the cylinder to control the intensity of the gas during the use of the cylinder. The capacity of a typical cylinder used in homes ranges from 4 kg. to 19 kg.
Market Potential: The major users of LPG cylinders are urban households, hotels, restaurants, coffee shops, pastries, etc. Oil companies are the main suppliers of these cylinders. All the cylinders are imported. The demand for LPG cylinders mainly comes from new users or consumers of butane gas. Another source of demand for cylinders is from old customers who want to have additional cylinders for keeping reserve of butane gas. New users of cylinders come from further urbanization of the country and also from scarcity of traditional energy sources which force people to use butane gas. In 2005, number of cylinders in circulation was estimated to be about 29,000. Assuming that butane gas supply will not be a constraint, the demand for LPG cylinders will increase at least by the annual rate of the urban population growth (5%). Another 5 percent of additional demand will come from people who will shift from traditional energy to butane gas energy. With this assumption the projected demand for LPG cylinders in 2011 will be 47000. Production of LPG cylinders is basically a metal fabrication operation which is less amenable to economies of scale. Fabricating close to 50,000 LPG cylinders could be a viable operation for a small plant.
Source of Raw materials: Cold rolled mild sheet, 2.6 mm thick, valves and other fittings and powder for fire extinguisher, welding wire, paint, labels and other consumables. Some of the main raw materials could be obtained from domestic sources.
Process and Technology: Cutting of the different parts by shearing machines and mechanical press, first drawing of half cylinder on a hydraulic press, annealing in the furnace (if required) second drawing, punching a hole in top half cylinder, for valve ring, making machine valve ring, welding two-half cylinders together, welding the valve ring to the cylinder, forming skirt and top guard rings, welding a skirt and top guard to cylinder, annealing in the furnace, leak testing and hydraulic testing drying the cylinders, short blasting of the exterior, painting of the exterior. Filling the cylinder with powder for fire extinguishing assembly of valves and other fittings, pressurizing the fire extinguisher, final leak testing. Main plant and machinery required include shearing machine, mechanical and hydraulic presses, furnace, lather, lathe with special welding attachments, rolling machine (small size), hand weld, rotating site, hydraulic test equipment, shot blast cabinet, paint equipment, filling equipment, assembly bench, gas filling equipment, compressed air test ring and/or test tank, welding machines,
Estimated Investment: For a plant that will produce 120,000 LPG cylinders and pressurized fire extinguishers, the investment cost will be :-
Building/shade 500m2 at Birr 2000/m2 = Birr 1,000,000
Machinery ……………………………… = Birr 1,500,000
Working capital ……………………………..= Birr 900,000
Total = Birr 3,400,000
Benefits: Similar to other industries.
Location: Combalcha, Bahir Dar, Debre Birhan