1. Product Description: Carpet is a woven or knotted thick covering for floors and stairs in residential, commercial and public buildings. It is made of woolen, cotton, or synthetic yarn and mostly has artistic patterns or design woven or knotted into it. The use of carpets gives comfort to users, warmth and beauty to the floors.
2. Rationale: Constructions of residential and commercial buildings are expanding in all the major urban centers of the country. Almost all the floors of commercial buildings and of high income residential buildings are covered with carpets imported or locally produced. Local production of carpets (i.e. factory-made) is limited in terms of quantity and design. Only the solid color or mono-color type of carpets are produced by a local factory. And annual production of this factory is about 22,821m2 per year which is far short of current demand. Consequently an average annual import of this product was almost 74,000 m2 between 1984 and 1993. With limited domestic capacity and one type of brand, the demand for imported carpets will grow in the future. This necessitates the establishment of another carpet making factory; and this factory can the established in the Amhara Region.
3. Market Potential: A market study undertaken in 1997 indicates that in 2006, the projected demand for carpets is 172000 m2 which is 149,000 m2 larger than the present domestic capacity. This demand gap can sustain the production of six plants whose/individual capacity will be similar to that of the existing factory.
4. Raw material source: The main raw materials are woolen cotton and synthetic yarn and dyes and chemicals. Except the cotton yarn, the others will be imported.
5. Process and Technology: The manufacturing process of carpets involves essentially the following operations.
· Purchasing, spanning, washing and drying the yarn
· Drawing the design on a graph paper and then memorizing
· Setting up the loom
· Weaving, (knotting) the carpet by using suitable yarns
· Pressing down in each row by using a heavy toothed metal comb
· Making the carpet look smooth and even by cutting away the fringes left after knotting the woolen yarn weft.
· Washing the carpet and drying
· Wrapping and packing
The major plant machinery and equipment required for the project are hand-operated loom, winders and pin winding machines.
6. Estimated Investment: For a plant which can produce 130,000 m2 of carpet, the estimated investment is as follows.
· Building/shades 250 m2 at Br 2000/ m2 ……….= Birr 500,000
· Machinery ……………………………….……. = 400,000
· Working capital ………………………..……… = 500,000
Total ………………… = 1,400,000
7. Benefits: saves foreign exchange, and regional financial resources, stimulates the production of cotton yarn and cotton creates possibilities of export to other regions, becomes a foundation for establishing carpet making factories for export, and introduces new skills and technology.
8. Location: Bahir Dar, Debre Birhan and other zonal capitals.