1. Product Description: A combination of cement, sand, aggregate and bars of deformed or round iron is the heart of the building and construction industry. These materials combined together in certain proportion constitute the strength of all building and other construction works. Buildings, bridges, dams and all kinds of light and heavy construction works require reinforcement bars. The bars with concrete are reliable in carrying both static and dynamic loads.
2. Rationale: The production of cement, reinforcement iron bars, sheet glass and bricks are the foundation for the development of modern construction industry. Most construction materials are bulky which make them expensive to transport long distances. Thus in practically all cases, many types of construction materials like cement, iron bars, bricks are as far as possible produced in areas which are relatively close to their consumption centers. The Amhara Region is one of the least constructed and built areas in the country. In addition, basic construction materials such as cement, reinforcement bars, even bricks are not produced in the Region. They are all imported from other parts of the country- on the average 600 km from the Region. This makes these materials more expensive which hampers the expansion of building construction and civil engineering works- which the Region needs very desperately. Reinforcement bars are made mainly from iron bars which are imported. The plant which produces reinforcement bars can be located in any city where there is enough power. At least to save transport cost and to have reliable supply of this essential construction material, there is a strong need to establish one reinforcement bars making plant in the Amhara Region.
3. Market Potential: For a long time there was only one plant which was producing reinforcement bars. Recently one plant was converted to produce reinforcement bars. Between 1999 and 2004, average annual production of reinforcement bars was 6,845 tons; and during the same period about the same quantity might have been imported every year. The two plants are located near Addis Ababa; and the imported bars are also distributed from Addis Ababa. Similar to many parts of the country, construction is increasing in the Amhara Region. The current construction volume alone can consume the production of a medium size reinforcement bars making plant.
4. Source of Raw Material: The raw materials are bellets and scrap iron. Bellets are imported and scrap iron is collected within the country mostly in and around Addis Ababa. Only bellets will be used in the new plant since scrap iron will not be found in the Region in sufficient quantity.
5. Production Process: The main process is to heat the bellets and making the heated bellets pass through a series of rolling mills whereby the bellets are elongated at each stage of rolling until they reach the desired thickness. Finally the elongated bars are cut in to the desired length usually 4 meters each. Main machineries include heating furnace, rough, intermediate and finishing mills.
6. Estimated Investment: Birr 14.45 million of which Birr 1.8 million will be for buildings and Birr 12.755 million will be for plant and machinery.
7. Benefits: self- sufficiency in a very critical building material, development of new skills in the Region, further expansion of construction activities due to less cost of reinforcement bars.
8. Location: Combolcha, Bahir Dar.