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bereket woredeFEASIBILITY OF GYPSUM QUARRYING AND GYPSUM-BASED
CONSTRUCTION PRODUCT MANUFACTURING
IN EGYPT
by
Fred Moavenzadeh
Charles Helliwell
and
Joseph L. Platnick
Massachusetts Institute of Technology
October 1983
PREFACE
This report is one of a series of publications which describe
various studies undertaken under the sponsorship of the Technology
Adaptation Program at the Massachusetts Institute of Technology.
The United States Department of State, through the Agency for
International Development, awarded the Massachusetts Institute of
Technology a contract to provide support at MIT for the development, in
conjunction with institutions in selected developing countries, of
capabilities useful in the adaptation of technologies and problem
solving techniques to the needs of those countries. This particular
study describes research conducted in conjunction with Cairo University,
Cairo, Egypt.
In the process of making this TAP-supported study, some insight has
been gained into how appropriate technologies can be identified and
adapted to the needs of developing countries per se, and it is expected
that the recommendations developed will serve as a guide to other
developing countries for the solution of similar problems which may be
encountered there.
Fred Moavenzadeh
Program Director
ABSTRACT
Egypt's population growth, coupled with exteusive rural urban
migration and rising expectations regarding standards of living, has
placed large demands on the Egyptian building industry, particularly
with respect to residential buildings. As a result, the demand for
building materials often exceeds available supply.
This situation is particularly critical with respect to traditional
red brick manufactured from Nile silt. The Egyptian government, in
order to protect and preserve the country's agricultural. lands, is
attempting to stop the use of Nile silt as a basic construction
material. Thus new materials and manufacturing methods are needed not
only to increase overall supplies but also to substitute for a
diminishing natural resource.
This report assesses the technical and economic feasibility of
developing an integrated gypsum quarrying and wall panel manufacturing
facility in Egypt. The report reviews current and expected supply and
demand for gypsum plaster and interior wall partitions, and surveys
available gypsum deposits in the Fayoum Cvernorate. Based on these
findings, appropriate-scale quarrying, calcining, and panel production
processes are selected and evaluated both in terms of the technical
feasibility of an innovative wall panel system and in terms of the
economic viability of the entire project.
ii
ACKNOWLEDGEMENTS
This study was sponsored by the MIT Technology Adaptation Program,
which is funded through a grant from the Agency for International
Development, United States Department of State. The views and opinions
in this report, however, are those of the authors and do not necessarily
reflect those of the sponsors.
Much of the data and analyses contained in this report were
developed by Joseph L. Platnick in the course of researching and pre
paring a thesis for a master of science degree in civil engineering. In
addition, the authors wish to acknowledge the many valuable contribu
tions and insights provided by the other members of the MIT/Cairo
University Gypsum Project Team: Professor Albert G. H. Dietz (MIT);
Professor Hamed El-Sinbawy (CU); Professor Hasan Imam (CU); and Mr.
Tarek Selim, Research Assistant (MIT). We are particularly indebted to
Professors El-Sinbawy and Imam for their help in organizing, arranging,
and participating in the research and data collection efforts in Egypt.
We also wish to thank Star Poole and Deborah Harrington for their
patience, expert typing, and attention to detail in preparing the final
manuscript of this report.
iii
TABLE OF CONTENTS
Page
PREFACE i
ABSTRACT ii
ACKNOWLEDGEMENTS ii
TABLE OF CONTENTS iv
LIST OF TABLES vii
LIST OF FIGURES x
CHAPTER ONE Introduction 1
1.1 Introduction
1
1.2 Objective 2
1.3 Scope of Study 2
CHAPTER TWO General Aspects of Gypsum
Construction Products 4
2.1 Gypsum Use in Egypt 4
2.2 Opportunities for Expanded Use 7
2.2.1 Existing Deposits of Gypsum Ore 7
2.2.2 Shift from Existing Materials 13
CHAPTER THREE Market Analysis 15
3.1 Calcined Gypsum 15
3.1.1 Demand 15
3.1.2 Supply Estimates 24
3.1.3 Demand/Supply Analysis and Summary 26
3.2 Interior Partition Walling Products 31
3.2.1 Demand Estimates 31
3.2.2 Supply Estimates 39
3.2.3 Demand/Supply Analysis and Summary 44
iv
Page
CHAPTER FOUR Production Process of Gypsum
Construction Products 52
4.1 Exploration Process 52
4.1.1 and Survey of Site Conditions
Mapping 52
4.1.2 Chemical and Physical Testing 55
4.2 Quarrying Process 55
4.2.1 of Overburden and Excavation
Removal 56
4.2.2 Haulage 63
4.3 Gypsum Processing 64
4.3.1 Crushing 64
4.3.2 Screening 67
4.3.3 Conveying 68
4.3.4 Calcining 68
4.4 Panel Production Process 73
4.4.1 Process
Dryflow 73
4.4.2 Other Processes 82
CHAPTER FIVE Feasibility Analysis 85
5.1 Technical Requirements for Partitions and Walls 85
5.1.1 Building Codes and Regulations 85
5.1.2 Contract Specifications 88
5.1.3 Installation and Erection Process 88
5.1.4 Characteristics of Competing Products 93
5.1.5 Cultural/Climate Requirements 96
5.2 Analysis and Conclusions Re: Dryflow Panel
Ability to Meet Technical Requirement 96
5.3 Cost Competitive Analysis 99
5.3.1 Total Erected Dryflow Cost 99
5.3.2 Cost of Competing Products 101
5.4 Implementational Considerations 103
5.4.1 Availability of Capital 103
5.4.2 Foreign Investment and Tax Laws 110
5.4.3 Availability of Infrastructure 113
5.4.4 Availability of Site 115
5.5 Summary and Conclusions 116
v
Page
CHAPTER SIX Gypsum-based Construction Product Manufacturing
in the Fayoum Governorate - A Case Study 117
6.1 Market Assessment for Gypsum-Based Construction Products 117
6.1.1 Gypsum Plaster
117
6.1.2 Partitions
Building 122
6.2 Gypsum Resources in Fayoum 130
6.2.1 General Description of Four Deposits 130
6.2.2 Selection of Most Promising Deposit 130
6.3
Recommended Facilities, Equipment, and Manpower 130
6.3.1 Quarrying 134
6.3.2 Processing and Calcining 147
6.3.3 Panel Production 157
6.3.4 Project Cost and Expense Summary 162
6.4 Financial and Economic Evaluation 176
6.4.1 Calcined Gypsum Production Facility 176
6.4.2 Integrated Panel Production Facility 192
CHAPTER SEVEN Summary, Conclusions, and Recommendations for
Further Study 207
APPENDIX I IFPS Financial Simulation Programs I-I
APPENDIX II List of Interviews and Other Sources II-1
APPENDIX III References
III-1
vi
LIST OF TABLES
Page
2.1 Gypsum Production and Use 5
3.1 Ratio of Calcined Gypsum (Plaster) to Cement
Consumption for Egypt 16
3.2 Ratio of Calcined Gypsum (Plaster) to Cement
Consumption for the United States 18
3.3 GNP, Investment, and Construction Volume 19
3.4 Forecasted Plaster Demand in Egypt 21
3.5 Breakdown of Construction Output in 1980 According
to 1980-84 Five Year Plan 22
3.6 Past Calcined Gypsum (Plaster) Production and
Consumption for Construction Use 25
3.7 Forecasted Plaster Production Breakdown 27
3.8 Forecasted Plaster Consumption and
Production Summary 28
3.9 Expected Volume of Housing and Other Building
for 1982-85 Five Year Plan - Scenario I 33
3.10 Expected Volume of Housing and Other Building
for 1982-85 Five Year Plan - Scenario II 35
3.11 Expected Demand for Walling Materials in Housing 37
3.12 Type of Workers Required to Build 1,000,000 L.E.
of Differing Facility Types 38
3.13 Expected Demand for Interior Partitions in
Other Buildings 40
3.14 Expected Total Area of Interior Partitions 41
3.15 Estimated Domestic Supply of Bricks -
By Brick Category 42
3.16 Potential Production of Gypsum Interior
Partition Building Products 45
3.17 Potential Production of Interior Partitions 46
3.18 Interior Partition Consumption and Production Summary 48
4.1 Chemical Properties for Various Gypsum Types 69
4.2 Annual Production - Dryflow Process 78
4.3 Estimated Dryflow Manpower Requirements 79
4.4 Dryflow Production Area Requirements 80
vii
Page
5.1 Boca Fire Resistance Ratings of Structural Elements 87
5.2 Activity Description for Network Interface Diagram 90
5.3 Properties of Competing Products 95
5.4 Cost Summary - Dryflow Panels 100
5.5 Cost Summary - Red Bricks 102
5.6 Interior Partition Product Price Summary 104
5.7 Long-Term Loan Rates
107
6.1 Forecasted Plaster Demand - National 118
6.2 Forecasted Plaster Demand
121
6.3 Forecasted Plaster Sales for Proposed
Production Facility
123
6.4 Forecasted Demand for Interior Partitions 125
6.5 Revised Forecasted Demand for Interior Partitions
127
6.6 Forecasted Dryflow Panel Sales for Proposed
Production Facility 129
6.7 Quarry Site Summary 133
6.8 Quarry Investment Cost Summary 145
6.9 Private Sector Construction Costs for a
Typical Apartment Building 146
6.10 Quarry Operating Costs - 131,000 Metric Tons of Ore
Per Year 148
6.11 Quarry Wage Summary 149
6.12 Calcining Kettle Output and Cost Summary 154
6.13 Processing and Calcining Plant Investment Cost 158
6.14 Processing and Calcining Operating Costs
84,000 Metric Tons of Stucco Per Year 160
6.15 Processing and Calcining Plant Wages 161
6.16 Panel Production Plant Investment Cost Summary 163
6.17
Panel Production Plant Investment Cost Summary 164
6.18 Panel Production Plant Plant Wages 165
6.19 Fixed Capital Investment Cost Summary 167
6.20 Working Capital Investment Cost Summary 168
6.21 Administrative Wage Summary
172
6.22 Overhead Costs 175
6.23 Law No. 159 - Leveraging Scenarios/Calcined Gypsum
Production Facility 177
viii
Page
6.24 Law No. 43 - Leveraging Scenarios/Calcined Gypsum
Production Facility 178
6.25 Financial Calculations for Six Leveraging and Incorpora
tion Scenarios - Calcined Gypsum Production Facility 179
6.26 Revenue Streams - Calcined Gypsum Production Facility 181
6.27 Pro Forma Cash Flows - Calcined Gypsum Production
Facility 182
6.28 Debt Service Schedule - Calcined Gypsum Production
Facility 184
6.29 Net Present Value and Internal Rate of Return -
Calcined Gypsum Production Facility 185
6.30 Monte Carlo Simulation Results 191
6.31 Law No. 159 - Leveraging Scenarios/Plaster and Panel
Production Facility 193
6.32 Law No. 43 - Leveraging Scenarios/Plaster and Panel
Production Facility 194
6.33 Financial Calculations for Six Leveraging and Incorpora
tion Scenarios - Plaster and Panel Production Facility 195
6.34 Revenue Streams - Plaster and Panel Production Facility 196
6.35 Pro Forma Cash Flows - Plaster and Panel Production
Facility 198
6.36 Debt Service Schedule - Plaster and Panel Production
Facility 199
6.37 Net Present Value and Internal Rate of Return -
Plaster and Panel Production Facility 200
6.38 Monte Carlo Simulation Results 205
ix
LIST OF FIGURES
Page
2.1 Western Desert Gypsum Deposit Locations 9
2.2 Sinai Peninsula Gypsum Deposit Locations 10
2.3 Nile Delta Gypsum Deposit Locations 11
2.4 Red Sea Gypsum Deposit Locations 12
3.1 The Regions and Governorates of Egypt 23
3.2 Calcined Gypsum Supply/Demand - Lower Limit 29
3.3 Calcined Gypsum Supply/Demand - Upper Limit 30
3.4 Interior Partition Supply/Demand - Scenario I 49
3.5 Interior Partition Supply/Demand - Scenario 11 50
4.1 Gypsum Exploration Flow Diagram 53
4.2 Generalized Flow Diagram of Gypsum Processing 65
4.3 Generalized Section of a Calcining Kettle 72
4.4 Schematic Diagram of Rotary Kiln System 74
4.5 Dryflow Panel Production Steps 76
4.6 Icon Block Production Process 83
4.7 Icon Block Production Process 84
5.1 Interface Network Diagram - Egyptian Interior
Finishing System 89
5.2 Detail of Floor/Wall Intersection 94
6.1 Calcined Gypsum Demand - Three Scenarios 119
6.2 Interior Partition Demand - Three Scenarios 128
6.3 Location of Gypsum Deposits in Fayoum 131
6.4 Inset of Figure 6.1 Map 132
6.5 Calcined Gypsum Production Facility -
Production Summary 135
6.6 Plaster and Panel Production Facility -
Production Summary 136
6.7 Dozer and Ripper Production Analysis 138
6.8 Loader Lroduction and Selection Analysis 141
6.9 Truck Production and Selection Analysis 143
x
Page
6.10 Processing and Calcining Plant - Process Flow Diagram 151
6.11 Processing and Calcining Plant - Structural Diagram 155
6.12 Calcined Gypsum Production Facility -
Breakeven Analysis 188
6.13 10/90 Triangular Distribution 190
6.14 Plaster and Panel Production Facility -
Breakeven Analysis 202
6.15 Plaster and Panel Production Facility -
Breakeven Analysis 203
I.1 FPS Financial Simulation Program - Calcined Gypsum
Production Facility 1-2
1.2 IFPS Financial Simulation Program - Plaster and Panel
Production Facility 1-6
xi
CHAPTER ONE
INTRODUCTION
1.1 Introduction
Egypt's rapid population growth, coupled with widespread migration
into urban areas, has placed tremendous demands on the Egyptian building
industry. As a result, building materials, such as brick and concrete,
are frequently in short supply, resulting in the emergence of "black
market" economies and the exhorbitant prices associated with them. This
situation is further complicated by the continued use of Nile silt, the
primary raw material used in the manufacture of traditional red brick.
In recent years, in an effort to protect its agricultural lands, the
Egyptian government has declared illegal the use of Nile silt. Conse
quently, alternative raw materials and building products are needed not
only to meet current demand, but also to substitute for the use of Nile
silt bricks.
Present efforts in Egypt aimed at finding new materials and prod
ucts include the detvelopment of shale and sand-lime brick and
lightweight-concrete and gypsum block. The use of these products
appears to be economically feasible, but, to manufacture an adequate
supply will take several more years.
Prior to 1967, the bulk of gypsum mined in Egypt came from the
Sinai Peninsula, as gypsum from other parts of the country was of poorer
quality. When this territory was lost during the 1967 Middle East war,
alternative gypsum deposits were needed to meet the construction and
agricultural needs of the country. Large deposits of high-grade gypsum
ore were subsequently discovered and it is estimated that there is
approximately 200 million tons of ore reserves in the Western Desert.
These deposits are being exploited by the Egyptian Gypsum, Marble, and
Quarries Company (GYMCO). Other reserves located in the Suez Canal
region and Sinai Peninsula are being reopened by the Specialized
Contracting and Industrial Company (Osman) and the Sinai Manganese
Company. Further explorations west of the Nile have indicated the
possibility of additional reserves, particularly within the Fayoum
Governorate. Because these reserves within Fayoum are only on the order
of 6 to 8 million tons, they are ideally suited for small-scale
processing and manufacturing operations (34).
1.2 Oblective
The overall objective of this study is to develop an analytic
framework for the preliminary evaluation of a small-scale, totally
integrated process for the manufacture of gypsum-based construction
products in Egypt. The process will incorporate such activities as
quarrying, processing and calcining, and manufacture of products used in
residential, commercial, and light industrial construction.
1.3 Scope of Study
This project is concerned only with an assessment of the gypsum
deposits within the Fayoum Governorate and the subsequent processing and
manufacture of the gypsum ore into interior, non-load-bearing building
partitions.
This assessment can be broken down into five different areas, each
discussed in a separate chapter of this report. Chapter 2 provides
general background material on the use of gypsum in Egypt, including its
use in constrution, agriculture, and in industry.
Chapter 3 begins with an historical review of the supply and con
sumption of calcined gypsum. This analysis is used in conjunction with
a comprehensive assessment of the potential for producers to correctly
forecast demand and satisfy supply. A similar procedure is employed for
deriving forecasts for partition products. This chapter describes the
basis for demand forecasts through 1985, as well as several different
scenarios for future expected demand. The chapter concludes with a
comparison of potential supply and expected demand to determine the
possible gap or surplus resulting under each scenario.
Chapter 4 presents a summary and overview of alternative quarrying,
processing, and manufacturing methods. For purposes of analysis, the
quarrying process is broken down into three stages: (1) removal of
overburden, (2) excavation, and (3) haulage. The methods and equipment
selected are tailored to the specific job-site conditions of the Fayoum
deposits, on the basis of cost, performance, versatility, and adapt
ability to any conditions which may exist. Processing operations
include both ore preparation and calcining. An in-depth review of
manpower requirements is also made for all quarrying and processing
operations.
Chapter 5 begins by investigating the technical requirements for
partitions and walls. Particular attention is given to identifying and
summarizing those requirements which are applicable to Egyptian building
methods and existing conditions. This includes a survey of existing
products used in partition wall construction, including such factors as
physical characteristics and total installed costs. This chapter con
cludes with an assessment of matters related to economic feasibility,
including cost aid availability of capital, site, and infrastructure.
Chapter 6 presents a case study for an integrated gypsum panel
production facility located in the Fayoum Governorate. This section
provides cost data and recommendations for the design of quarrying,
processing, and product manufacturing systems. These recommendations
are based on the specific technical and economic factors highlighted in
earlier sections, and serve in the configuration of an optimum
production facility.
Chapter 7 concludes with a summary of the previous findings, and
presents recommendations for further study.
In order to fulfill its aim, this study has used information and
data drawn from both primary and secondary sources. A major portion of
Chapters 2, 3, and 4 has been compiled using secondary sources, mainly
in the form of government documents, analyses of building industries and
materials in Egypt, and feasibility studies for similar type projects.
Chapter 5 was researched in a similar manner, however, this was combined
with numerous interviews and site visits. The secondary sources used in
the preparatin of this report are listed in the table of references.
All primary sources are listed in a separate appendix at the end of this
report.
CHAPTER TWO
GENERAL ASPECTS OF GYPSUM CONSTRUCTION PRODUCTS
2.1 Gypsum Use in Egypt
The per capita consumption of gypsum in Egypt is quite low relative
to other countries. Actual per capita consumption is currently 10
kilograms per year. This level of consumption is far below that of
other nations as is shown below:
Spain: 84 kilograms per capita
Iran: 71 kilograms per capita
West Germany: 60 kilograms per capita
United States: 60 kilograms per capita
United Kingdom: 47 kilograms per capita
If the current Egyptian Five-Year Plan is executed as planned, per
capita consumption of gypsum should reach 30 kilograms per year by 1985
(88).
Total gypsum production in Egypt for the years 1971 through 1978 is
shown in Table 2.1. This table also shows the three primary areas of
usage: agriculture, industry, and building construction (52).
Agriculture:
In agriculture, gypsum is used as a soil conditioner, providing a
source of available calcium and sulfate. This gypsum requires minimal
crushing and screening and no calcining, and may be produced from either
the regular or anhydrous forms. The principal purposes for applying
gypsum Lo agricultural lands are to improve the physical condition of
the soil by breaking up compacted clays, increase porosity, neutralize
sodium compounds in alkaline soils, and stimulate soil microorganisms.
Ground anhydrous or dihydrous gypsum can also be added as an ingredient
to feeds for beef cattle, dairy cattle, and sheep.
Table 2.1 shows that the consumption of gypsum by the agricultural
sector averaged 35 percent during the years 1971-1976. However, over
the last five years, agricultural gypsum production has decreased as
TABLE 2.1
GYPSUM PRODUCTION AND USE
(1000 METRIC TONS)
TOTAL
YEAR PRODUCTION
AGRICULTURE
INDUSTRIAL
CONSTRUCTION
1971 561
222
212
127
1972 516
82
239
195
1973 572
189
219
164
1974 635
224
216
195
1975 583
239
213
250
1976 830
367
213
250
1977 637
92
240
305
1978 742
101
293
348
SOURCE: Egyptian Geological Survey and Mining Authority, Arab Republic of
Egypt, Mineral Map of Egypt, 1979. (Reference: No. 52)
production has shifted to building construction gypsum, which brings
higher prices. Current agricvltural gypsum production is approximately
15 percent of total production.
Industry:
Industrial gypsum can be divided into three broad categories:
calcined, anhydrous, and uncalcined. Calcined industrial gypsum is used
for making molds for the manufacture of sanitary ware and metal casting,
and as a cementing agent in oil ard aatural gas well drilling.
Anhydrous gypsum, with its high affinity for water, is used as a
dessicant in laboratory and commercial applications. Additional appli
cations include use as an extender for rubber, artificial wood, plas
tics, paper, and Keene's cement, and as a carrier for insecticides.
Industrial use has varied from 35 to 40 percent of total production
through the present time, as industrial consumers have been more willing
to absorb the higher prices of recent years.
Construction:
Uncalcined industrial gypsum, sometimes referred to as "raw"
gypsum, is used as a retarder for portland cement. When used in this
capacity, it is usually blended with pure anhydrite.
The consumption of gypsum construction products has comprised 20 to
30 percent of the total market through 1976. Over the last five years,
with the advent of gypsum interior walling products, the market share
for gypsum as a building material has risen to almost 50 percent. Part
of this increase can also be attributed to the ambitious building pro
gram of the Egyptian Government. All gypsum employed in building is
used in its calcined form, as the primary ingredient in the manufacture
of various building products.
As a result of new methods in designing buildings and housing,
which have been based upon more efficient and economical concepts,
architects and engineers are gradually increasing their use of gypsum
nroducts; consequently, these improved methods have introduced new
applications and uses for gypsum and its products to the Egyptian
market. These applications include blocks, partition board, tiles for
suspended ceilings, decorative gypsum products, and plaster.
As is shown in Chapter 3, the consumption of plaster increased at
an average rate of 20 percent per annum over the period 1971-78. Over
the last three years plaster consumption has declined. However, because
this has resulted from limited supplies rather than from depressed
demand, forecasts for future demand appear to be promising. Conserva
tive estimates suggest a rate of growth in excess of 7 percent per
annum.
The use of gypsum in the construction of interior walls and parti
tions has been a more recent development. Several firms, including Arab
Contractors and GYMCO, are currently manufacturing gypsum blocks.
Although production and use are limited, the emergence of gypsum in
terior partition products is seen as indicative of future trends. The
reduced cost and ease of installation associated with gypsum blocks and
panels can provide manufacturers with lucrative markets for these prod
ucts. These products and their associated markets will be further
examined in later sections.
2.2 Opportunities for Expanded Use
The expanded use of gypsum construction products in Egypt can be
attributed to two factors. One, the increased availability of high
grade gypsum ore throughout Egypt has provided manufacturers with an
inexpensive and abundant raw material that can be transformed into
various building products at a low cost. The high profit margins asso
ciated with these products are partially responsible for the plans of
manufacturers such as GYMCO and Arab Contractors to either expand or
build new production facilities.
Two, the use of these products has also been boosted because of the
government's efforts to curb the use of Nile silt brick. As increased
pressure from the Egyptian Government causes Nile silt brick prices to
rise, architects, engineers, and contractors will continue to search for
less expensive substitutes.
2.2.1 Existing Deposits of Gypsum Ore
Egypt possesses a number of gypsum deposits located throughout
the country, in such areas as the northern, or Mediterranean, portion of
the Western Desert, the Gulf of Suez, the Sinai Penninsula, Upper
Egypt and the Red Sea. The locations of these deposits are shown in
Figures 2.1 through 2.4. All gypsum ore that is used in Egypt is ex
tracted from these deposits. Of the deposits listed in these figures,
many have yet to be fully developed (51). The gypsum deposits or
quarries in Egypt can be categorized into active, planned, and
potential. The active or planned quarries include:
1. El Barkan - Western Desert
This deposit, discovered in 1975, is owned by GYMCO. It is
the largest deposit of gypsum ore found in Egypt to date,
with 50 million tons of proven reserves, and 200 million
tons of potential reserves. The entire deposit has yet to
be fully explored.
2. El Ballah - Suez Canal
This is the oldest GYMCO quarry, having been in operation
since 1908. This deposit has 3 million tons of confirmed
reserves, and 2 million tons of potential reserves.
3. Gerza - Helwan
This deposit is currently owned by the Kawmia Cement Com
pany. Confirmed reserves are in excess of 3 million tons.
4. Ras Malaab - Sinai Peninsula
The Sinai Manganese Company (SMC) holds the lease for these
deposits. Confirmed reserves are estimated at 18 million
tons. SMC is currently studying the feasibility of
starting operation at this location.
5. Gharbaniat - Western Desert
This deposit supplies the GYMCO processing facility at the
same location. This quarry has been flooded by seasonal
rains. As a result ore is supplied by the GYCO deposit at
Omayed.
6. Omayed - Western Desert
This deposit is owned by GYMCO. The deposits will be
exhausted within 3 to 4 years, given the current rate of
production at this calcining facility. In future years
gypsum ore will be transported to this plant from El
Barkan.
FIGURE 2.1
WESTERN DESERT GYPSUM DEPOSIT LOCATIONS
m.diterr'anean Sea
-
-
. _. .1 --
300 " Cairn
/
/I
/ 0*
/7
/
/
/
Map Key:
1. atrouh 5. El Barkan
2. Omayed 6. Maryout
3. Hammam 7. Gerza
4. Gharbaniat 8. El Boqirat
SOURCE: Evaluation of Gypsum Deposits in El Fayoum Governorate,
Egyptian Geological Survey and Mining Authority (Reference
No. 51).
FIGURE 2.2
SINAI PENINSULA GYPSUM DEPOSIT LOCATIONS
%ro ~u.' . ... . . eIf
)c')
,,-.\ , /
-\ ,, .N
-AN
...
SAswan
Map Key:
20. El Maasara 23. Abu Ghousoua
21. Koraymat 24. El Ringa
22. Red Sea Coast
SOURCE: Evaluation of Gypsum Deposits in El Fayoum Governorate,
Egyptian Geological Survey and Mining Authority (Reference
No. 51).
10
FIGURE 2.3
NILE DELTA GYPSUM DEPOSIT LOCATIONS
0
0
Md; erranean Se%
'N Port said
Cairo 2 u- I30'
rue
Map Key:
17. Manzala
18. Gamalia
19. El Ballah
SOURCE: Evaluation of Gypsum Deposits in El Fayoum Governorate,
Egyptian Geological Survey and Mining Authority (Reference
No. 51).
11
FIGURE 2.4
RED SEA GYPSUM DEPOSIT LOCATIONS
9. El at1. 07 'l
10. El Rayana 14. Wadi Sudr
11. Ras Makarma 15. Abu Samir
12. Wadi Gharandal 16. El Rayana Extension
SOURCE: Evaluation of Gypsum Deposits in El Fayoum Governorate,
Egyptian Geological Survey and Mining Authority (Reference
No. 51).
12
7. Maryout - Western Desert
This deposit, owned by the Alexandria Cement Company,
supplies the 10 thousand ton per year production facility
located in the same area.
Potential deposits include:
1. Fayoum Governorate
The area, located 62 kilometers southwest of Cairo, con
tains four major deposits. Of these four, only one, Gerza,
has been claimed by the Kawmia Cement Company. The other
three, located at Qaret El Faras, El Tawil, and El Boqirat
are currently available. These represent the only avail
able deposits in Egypt that have not been claimed. Pre
liminary exploration work is still in progress. However,
preliminary reserve estimates of 7 million tons have been
calculated.
2. Red Sea Shore
Several deposits have been found in this area. However, no
further investigation has been done on any of these
deposits.
2.2.2 Shift from Existing Materials
Because of the damage caused to agricultural land, the use
of Nile silt in the production of bricks has been officially forbidden.
As a result, alternative solutions have been proposed. One has been the
use of clay as a raw material in the manufacturing of bricks. Several
large clay deposits have been discovered. Four factories designed to
produce bricks from this clay are still in the planning stages, and
additional plants are also being considered; however, the substitution
of clay brick for Nile silt brick will take some years to achieve. In
addition, yards manufacturing shale and sand-lime bricks are few in
number and are producing well below capacity. As the government con
tinues to curtail the production of red bricks and as "black market"
prices continue to rise, contractors will be seeking less expensive
interior walling products.
13
Over the next ten years a tendency towards larger housing
units and high-rise buildings would favor the substitution for brick in
the construction of interior partitions, as architects and engineers
would desire economy and minimal weight for non-load-bearing partitions.
As discussed earlier, Arab Contractors (ICON) and GYMCO have begun to
produce gypsum blocks and panels, in an attempt to capture this develop
ing market for alternative partition products. Other manufacturers of
gypsum partitions are scheduled to begin production within the next two
years. Despite such problems and limitations as poor water resistance,
the need for a surface coating, and poor impact resistance, gypsum
blocks and panels are gradually being accepted in Egypt. This phenom
enon, together with the availability of low cost gypsum ore throughout
the country, as was described in Section 2.2.1, suggests that the
production of these products in Egypt may be economically feasible.
14
CHAPTER THREE
MARKET ANALYSIS
This chapter is specifically concerned with the supply and demand
of building products used in the construction and finishing of interior
partitions. These products include the numerous types of bricks, gypsum
blocks and panels, and calcined gypsum or plaster.
The chapter covers two major aspects. The first major aspect is to
review the historical supply and consumption of calcined gypsum, and
then use these data to make future projections. In addition, a compre
hensive profile of suppliers is presented, outlining actual output
versus anticipated rates of production.
The second aspect is a supply and demand forecast for both bricks
and gypsum partition products, presenting different scenarios for ex
pected supply. A summary follows, bringing together potential supply
with the expected levels of demand to determine the possible gaps or
surpluses for these products under different scenarios.
The analysis and conclusions derived in this chapter will be subse
quently employed in the case study analysis of Chapter 6. For this
later chapter, the demand and supply projections of Chapter 3 will be
used in the formulation of a marketing and sales strategy and in
determining overall project viability.
3.1 Calcined Gypsum
3.1.1 Demand
The first source of gypsum product demand, the demand for
plaster, can be assumed from the historical average ratio of calcined
gypsum to cement consumption. Table 3.1 shows this ratio has exhibited
an upward trend, from 0.04 in 1971 to a maximum of 0.08 in 1978. (The
average ratio over the last four years, since 1978, has been 0.07.)
This upward trend can be explained by changes caused by (i)
shortages in cement, (ii) the substitutability of gypsum for cement in
certain instances, and (iii) price differentials. This third factor,
perhaps the most significant, has been brought about by the existence of
dual markets. As the gap between the official price and the "real,"
15
TABLE 3.1
RATIO OF CALCINED GYPSUM (PLASTER) TO CEMENT CONSUMPTION FOR EGYPT
(metric tons)
PLASTER CEMENT GYPSUM/CEMENT
YEAR CONSUMPTION CONSUMPTION RATIO (1)
1971 127.,000 2,933,000 0.0433
1972 147,000 2,952,000 0.0498
1973 164,000 3,029,000 0.0541
1974 157,000 3,071,000 0.0511
1975 191,000 3,712,000 0.0515
1976 232,000 4,135,000 0.0561
1977 280,000 4,123,000 0.0679
1978 329,000 4,138,000 0.0795 AverageWO.07
1979 353,000 5,550,000 0.0636
1980 340,000 5,368,000 0.0633
(1) Ratio = Plaster Consumption/Cement Consumption
SOURCE: Construction/Contracting Industry Study
Final Report, Volume 2, July 1981
(Original Source: Ministry of Planning Data)
(Reference: No. 63)
16
i.e., the "black market" price of cement has widened, the demand for
plaster has increased.
Since reaching its peak in 1978, this ratio has undergone a
gradual decline. This decline has been effected by all or some of the
following factors: (1) changes in building design and planning stan
dards, (2) changes in construction methods, (3) quality control improve
ments, (4) managerial improvements, (5) reductions in the wastage of
materials, and (6) the emergence of a "black market" for plaster (31).
These factors have all contributed to relative reductions in calcined
gypsum usage.
Assuming the continuation of this downward trend, a conser
vative demand coefficient of 0.07 has been used. This is lower than
those used by McKee-Kearny (97) and the Ministry of Housing (98) which
used estimates of 0.08 to 0.10 for the ratio of calcined gypsum to
cement consumption.
Table 3.2 shows the relationship of plaster to cement
consumption in the United States for the same period. The period 1971
76 shows this demand coefficient experiencing a 40 percent decrease, as
drywall products have been increasingly substituted for plaster in the
construction of interior walls. In recent years this ratio has remained
relatively stable. It is expected that in future years the ratic for
Egypt may come closer tc that of the U.S., as more plaster is available
and Egyptian contractors adopt the improved construction and management
techniques of the U.S. and Europe.
To calculate future levels of plaster demand, cement demand
forecasts were taken from the Booz, Allen and Hamilton Report (31). The
methodology used in these forecasts began with a consideration of past
construction volume with respect to Gross National Product (GNP) and
investment. These historical dta showed that the average ratio of
investment to GNP was approximately 0.20 to 1. In addition, the average
ratio of net construction volume to total investment was found to be
45.8 percent. These data are shown in Table 3.3. Only the period of
1971-76 has been used in this analysis, as it is indicative of the
latest trends in both domestic economic activity and construction
demand. The study arrived at a correlation of 8000 metric tons (3333
cubic meters) of cement to one million Egyptian pounds (adjusted to 1975
17
TABLE 3.2
RATIO OF CALCINED GYPSUM (PLASTER) TO CEMENT CONSUMPTION FOR
THE UNITED STATES
(metric tons)
PLASTER CEMENT GYPSUM/CEMENT
YEAR CONSUMPTION CONSUMPTION RATIO *
1971 917,000 (1) 76,908,000 (1) 0.0119
1972 841,000 (2) 80,777,000 (2) 0.0104
1973 771,000 (2) 86,200,000 (2) 0.0089
1974 629,000 (2) 79,027,000 (2) 0,0080
1975 535,000 (3) 67,112,000 (3) 0.0080
1976 490,000 (3) 71,150,000 (3) 0.0069
1977 427,000 (4) 77,240,000 (4) 0.0055
1978 526,000 (4) 83,331,000 (4) 0.0063
1979 416,000 (4) 83,357,000 (4) 0.0050
1980 398,000 (4) 74,349,000 (4) 0.0054
1981 392,000 (4) 74,349,000 (4) 0.0056
Ratio = Plaster Consumption/Cement Consumption
SOURCE: United States Department of Commerce, Construction Review.
(1) November 1977 (Reference: No. 131)
(2) May 1979 (Reference: No. 130)
(3) December 1980 (Reference: No. 129)
(4) March/April 1982 (Reference: No. 128)
18
TABLE 3.3
GNP, INVESTMENT, AND CONSTRUCTION VOLUME
(1000 Current Egyptian Pounds)
INVESTMENT/
CONSTRUCTION/
CONSTRUCTION/
YEAR G.N.P. INVESTMENT CONSTRUCTION
G.N.P. (%) G.N.P. (%) INVESTMENT (%)
1969/70 2,552,000 359,520 244,500
14.1
9.6
68.0
1970/71 2,700,500 361,400 245,500
13.4
9.1
67.9
1971/72 2,884,000 374,900 259,000
13.0
9.0
69.3
1973 3,217,000 465,200 277,300
14.5
8.6
59.6
1974 3,751,000 645,100 340,000
17.2
9.1
52.7
1975 4,401,000 1,123,400 521,300
25.5
11.8
46.4
1976 5,396,000 1,115,700 531,500
20.7
9.8
47.6
SOURCE: Booz, Allen and Hamilton, "Strategic Study for Building Materials and Ceramics,"
Part XII, 1977. (Reference: No. 31)
prices) invested in construction. Scenarios, or limits, were developed
for cement demand. The lower limit was calculated, assuming an annual
GNP growth rate of 7 to 9 percent. The upper limit was derived using a
GNP growth rate of 10 to 12 percent. Using the ratio of investment to
GNP and construction volume to total investment, together with the
correlation of cement to construction, the study estimated levels of
cement consumption for the period 1982-90 as shown in Table 3.4. These
forecasts for cement consumption are translated into plaster demand
using the previously defined demand coefficient of 0.07.
B~cause this report is investigating the feasibility of a
panel production facili'y in the Fayoum Governorate, the analysis of the
local Fayoum plaster market is critical. Because data for this region
are somewhat sketchy and unreliable, an alternative approach must be
employed utilizing other available information.
Table 3.5 presents data for 1980 construction output.
These levels of output have been derived according to the 1980-84 Five-
Year Plan, showing a breakdown of public sector work by region. These
regions are defined in Figure 3.1.
Table 3.5 shows that the expected output of the Fayoum
region, referred to as North Upper Egypt, is 33 million Egyptian pounds,
or 4 percent of total national output (63). This table also shows that
the share of total housing and building construction is 3 percent for
this region. This implies Kiat the expected market for construction
within the Fayoum region, would range from 3 to 4 percent of national
demand. This constitutes a small market, particularly relative to that
of Cairo, which consumes approximately 50 percent of all housing and
building construction in Egypt.
These levels of output for Fayoum and Cairo can be con
sidered representative of regional demand for plaster and partition
products. Thus, for this analysis and the one for partition products,
the consumption levels for plaster and partition products around Fayoum
and Cairo are taken as 4 and 50 percent of national demand,
respectively.
20
TABLE 3.4
FORECASTED PLASTER DEMAND IN EGYPT
Cement
Cement
Plaster Plaster
Demand
Demand
Demand Demand
Lower Limit
Upper Limit
Lower limit Upper Limit
(metric tons)
(metric tons)
(metric tons) (metric tons)
YEAR (a)
(b)
(3) (3)
1982 6,035,000
8,060,000
415,000 551,000
1983 6,532,000
8,805,000
443,000 599,000
1984 7,044,000
9,610,000
474,000 650,000
1985 7,655,000
10,495,000
506,000 701,000
1986 8,297,000(1)
11,450,000
548,000 765,000
1987 8,566,000(1)
12,515,000
566,000 837,000
1988 9,049,000(0)
13,666,000(2)
599,000 915,000
1989 9,533,000(1)
14,924,000(2)
632,000 1,002,000
1990 10,018,000(1)
16,297,000(2)
665,000 1,096,000
(1) Extrapolated using Booz, Allen and Hamilton growth rates.
(2) Extrapolated using McKee-Kearney growth rates.
(3) Plaster demand determined by multiplying cement demand by average
demand coefficient of 0.07 taken from Table 3.1.
SOURCES: (a) McKee-Kearney, Development of Ras Malaab Gypsum Deposits
for Sinai Manganese Company, 1979. (Original source:
GYMCO Balance Sheets) (Reference: No. 97)
(b) Booz, Allen and Hamilton, "Strategic Study for Building
Materials and Ceramics," Part XII, 1977. (Reference:
No. 31)
21
TABLE 3.5
BREAKDOWN OF CONSTRUCTION OUTPUT IN 1980 ACCORDING TO 1980-84 FIVE YEAR PLAN*
(1979 Prices
Public
Totl Land Induetey T.n.port Utllltles HOUnir Buildlne
EPOZONS L04 Percent LU Percent LEN Percent LEN recet LM Percent LfN Percent LEN Percent
Public Sector
Al loceted
Cairo 339 33
6 5 71 41 84 43 75 28 54 69
58 42
Al.endri. 201 21 27 23 3. 20 42 22 76 28 10 1 12 10
Delta 89 9 19 16 18 10 i1 6 22 8 5 6 14 12
Sue Cnot 162 t? 23 19 15 9 36 17 61 23 13 16 16 14
worth Upper Egypt 33 4 14 12 4 2 3 2 5 2 3 3 4 1
Scuth Upper Egypt
90 9 23 19 is 9 22 6 19
7 4 4 17 14
AenIUt 42 4 6 5 14 8 7 3 2 3 3 3 S 6
HNtroch to
I I I 1 1 2 1 4 1 1 1 1 1
Total 966 100 119 100 172 100 195 100 269 100 93 200 I16 100
Public Sector
U.n, .rated ... 199 14 en
125 A 7 49
Tetel Public Sector 1165 113 172 320 273 1o 161
Pricete Sector 300 27 36 16
1 218 2
Tet.l Output of
me. Work 1465 160
208 336 274 318
169
Repair ad Molnte
scnce 78
Totel Output 1543
- - - - -
Percent of Totals 200 11
14 23 19 22
II
Totale do not nrcrnerl y
- to
. ,ernd., to rnl41.nt
11 - L.E. 0.74
Fr doflollinn or ee-rtr er, Tahlv 1.2
i inrluee Sb t n ll-rotd end contrel allocation
LIM: illion rgyption rond.
SOURCE: Construction/Contracting Industry Study, Final Report, Volume 2, July 1981.
(Original Source: Ministry of Planning Data), (Reference: No. 63)
FIGURE 3.1
THE REGIONS AND GOVERNORATES OF EGYPT
/. 2 k.:" \
...
...
............
.......
.....
, .... _
.-. .................. ... h.. "
......... ............ _
-- ;-
7 /
1. CAIRO 3. DELTA 5. NORTH UPPER EGYPT 7. ASSIUT
Cairo Manufia Beni Suef Assiut
Giza Gharbia Minya New Valley
Kalyubia Kair El Sheikh Fayoum
Damietta Red Sea (Middle)
2. ALEXANDRIA 4. SUEZ CANAL 6. SOUTH UPPER EGYPT 8. MATROUH
Alexandria Sinai Sohag Matrouh
Behera Port Said Kena
Ismailia Aswan
Suez Red Sea (South)
Sharkia
Red Sea (North)
SOURCE: Construction/Contracting Industry Study; Final Report, Volume
2, July 1981 (Reference: No. 63)
23
3.1.2 Supply Estimates
Historical supply and consumption of calcined gypsum are
shown in Table 3.6. These figures cover the period from 1970-71 to
1980. Throughout most of this period domestic suppliers were able to
cope with the increasing demand for calcined gypsum. Evidence of this
was that besides satisfying local markets, a relatively small amount was
also exported -- 25, 19, and 9 thousand tons in 1977, 1978, and 1979,
respectively. The period since 1977 has shown a gradual decline in the
surplus of calcined gypsum. This surplus seemed to have turned into a
deficit by 1980, because the Ministry of Housing called for import
tenders for 100 thousand metric tons of plaster in that year. Addi
tional evidence is provided by the increasing divergence between the
official price and the black market price. While the official price
ranged from 22 to 25 Egyptian pounds per ton in 1981, the black market
price reached levels as high as 75 pounds per ton.
This shortage of calcined gypsum has apparently influenced
some existing producers to plan to start new operations or expand
existing ones.
GYMCO, the dominant supplier of calcined gypsum, with a
market share of 75 percent, is currently undertaking five projects:
1) The addition of one rotary kiln to the production plant at
Gharbaniat, increasing annual production by 20,000 metric
tons to a total rate of output of 80,000 tons.
2) The addition of one rotary kiln to the processing plant at
El Alamein, increasing production by 20,000 tons to achieve
a total of 80,000 metric tons per year.
3) The addition of two rotary kilns to the processing facility
at El Ballah, increasing annual plaster production from
130,000 to 180,000 metric tons.
4) The construction of a new production facility at
Gharbaniat, with an annual productive capacity of 300,000
metric tons. The construction of this plant began in
April, 1981. The expected production startup date is
April, 1983.
24
TABLE 3.6
PAST CALCINED GYPSUM (PLASTER) PRODUCTION AND CONSUMPTION
FOR CONSTRUCTION USE
(Reference N*: 96)
(metric tons)
YEAR PRODUCTION CONSUMPTION SURPLUS (GAP)
1970/71 127,000 127,000 0
1971/72 195,000 147,000 48,000
1973 (18 Months) 164,000 164,000 0
1974 195,000 157,000 38,000
1975 131,000 191,000 (60,000)
1976 250,000 232,000 18,000
1977 305,000 280,000 25,000
1978 348,000 329,000 19,000
979 362,000 353,000 9,000
1980 340,000 340,000 0
(1) Domestic Consumption = (Domestic Production) - Exports + Imports
SOURCE: McKee-Kearney, Development of Ras Malaab Gypsum Deposits for
Sinai Manganese Company, 1979
(Original source: Booz, Allen and Hamilton, "Strategic Study
for Building Materials and Ceramics," Part XII, 1977.)
(Reference: No. 97)
25
5) The construction of a new production facility at Sadat
City. This plant will produce 300,000 metric tons of
calcined gypsum per year. Initial contracts between GYMCO
and selected contractors were signed in April, 1982. The
expected commissioning and startup is scheduled for April,
1984.
The Kawmia Cement Company has already obtained approval
from the Ministry of Housing to build a new production facility at
Helwan. Gypsum ore will be supplied by existing Kawmia quarries located
60 kilometers south of Helwan at Gerza. Kawmia has access to other
deposits in Fayoum. However, these deposits are contaminated with clay.
Because the reserves at Gerza are estimated to last for only eight more
years, Kawmia has contacted the Sinai Manganese Company (SMC) with
regard to the supply of raw materials from the SMC quarries at Ras
Malaab, located 300 kilometers away.
Another potential producer of calcined gypsum is Mahmoud
Osman. This company is expecting to produce 120,000 metric tons per
year by 1985. Gypsum ore will be supplied by Osman quarries located at
Sidr in Sinai, approximpt-tly 50 kilometers from Ras Malaab.
An additionL amount of 10,000 metric tons per year is
produced by the Alexandria Cement Company, which has no plans for future
expansion.
The future production of calcined gypsum by these producers
is summarized in Table 3.7 providing a breakdown of these data into
existing and additional production. These data provide lower and upper
production limits that can be used in the assessment of future plaster
supply (97).
3.1.3 Demand/Supply Analysis and Summary
The data derived in the previous two sections are sum
marized in Table 3.8 and Figure 3.2, showing the lower level of plaster
demand and the potential for a substantial plaster surplus by 1990.
This level of demand is based on a real GNP growth rate of 7 to 9 per
cent. The upper limit for demand shown in Figure 3.3, assumes a 10 to
26
TABLE 3.7
FORECASTED PLASTER PRODUCTION BREAKDOWN
(metric tons)
GYMCO KAWMIA ALEXANDRIA
CEMENT COMPANY CEMENT COMPANY
YEAR EXISTING M. OSMAN TOTAL
ADDITIONAL EXISTING ADDITIONAL EXISTING ADDITIONAL EXISTING ADDITIONAL
1982 250,000 EXISTING ADDITIONAL GRAND TOTAL
110,000 80,000 10,000 - - 340,000 110,000 450.000
1983 250,000 110.000 80,000 - 10,000 - - 75,000 340,000 185,000 525,000
1984 250,000 335,000 80,000 225,000 10,000 - 102,000 340,000 662,000 1.002.000
1985 250,000 590,000 80,000 225,000 10,000 - - 120,000 340,000 965,000 1,305.000
1986 250,000 665,000 80,000 300,000 10,000 - - 120,000 340,000 1,085,000 1,425,000
1987 250,000 710,000 80,0() 300,000 10,000 - - 120,000 340,000 1,130,000 1.470,000
1988 250,000 710,000 80,000 300,000 10,000 - - 120,000 340,000 1.130,000
1989 1.470,000
250,000 710,000 80,000 300,000 10,000 - - 120,000 340,000 1.130,000
1990 1,470.000
250,000 710,000 80,000 300,000 10,000 - - 120,000 340,000 1,130,000 1,470,000
SOURCE: McKee-Kearny, Development of Ras Malaab Gypsum
Deposits for
Sinai Manganese Company, 1979. (Original
Source: OYMCO Balance
Sheets and Ministry of Housing Statistics)
(Reference: No. 97)
TABLE 3.8
FORECASTED PLASTER CONSUMPTION AND PRODUCTION SUMMARY
(metric tons)
T
PLASTER PLASTER PLASTER PLASTER SURP .US SURPLUS
YEAR PRODUCTION PRODUCTION CONSUMPTION CONSUMPTION (GAP)- (GAP)-
LOWEjt LIMIT (1) UPPER LIMIT (2) LOWER LIMIT (3) UPPER LIMIT (4) MINIMUM MAXIMUM
1982 340,000 450,000 415,000 551,000 (211,000) 35,000
1983 340,000 525,000 443,000 599,000 (259,000) 82,000
1984 340,000 1,002,000 474,000 650,000 (310,000) 528,000
1985 340,000 1,305,000 506,000 701,000 (397,000) 799,000
1986 340,000 1,425,000 548,000 765,000 (425,000) 877,000
1987 340,000 1,470,000 566,000 837,000 (497,000) 904,000
1988 340,000 1,470,000 599,000 915,000 (575,000) 871,000
1989 340,000 1,470,000 632,000 1,002,000 (662,000) 838,000
1990 340,000 1,470,000 665,000 1,096,000 (756,000) 805,000
(1) Assumes that only existing calcined gypsum production will be present in future.
7
From Table 3. -Column 10.
(2) Assumes all planned future production will proceed as scheduled. From Table 3.7
Column 12.
(3) From Table 3.4-Column 4
(4) From Table 3.4-Column 5
SOURCES: McKee-Kearney, Development of Ras Malaab Gypsum Deposits for Sinai Marganese
Company, 1979. (Original Source: GYMCO Balance Sheets) (Reference: No. 97).
Booz Allen and Hamilton, "Strategic Study for Building Materials and Ceramics,"
Part XII, 1977. (Reference No. 31).
FIGURE 3.2
CALCINED GYPSUM SUPPLY/DEMAND - LOWER LIMIT
(Million Metric Tons)
1.60
Expected Supply
of Plaster
1.40 Upper Limit
1.20
1.00 Surplus
0.80
Expected Demand
for Plaster
0.60 0.60 , Lower Limit!
/
f--""- / " -- Gap
0.40
0.20
I -_ - _ -of
G Expected Supply
Plaster-
Lower Limit t
SOURCE: McKee-Kearney, Development of Ras Malaab Gypsum Deposits for
Sinai Manganese Company, 1979. (Original Source: GYMCO Balance
Sheets) (Reference No. 97)
Booz, Allen and Hamilton, "Strategic Study for Building
Materials and Ceramics," Part XII, 1977. (Reference No. 31)
29
FIGURE 3.3
CALCINED GYPSUM SUPPLY/DEMAND - UPPER LIMIT
(Million Metric Tons)
1.60
Expected Supply
of Plaster -
1.40 Upper Limit
Surplus
1.20
Expected Demand
for Plaster -
1.0 Upper Limit
1.00
0.80Ga
0.60
0.40 Expected Supply
- of Plaster-
Lower Limit
0.20
I9 2 i9 E7
SOURCE: McKee-Kearney, Development of Ras Malaab Gypsum Deposits for
Sinai Manganese Company, 1979. (Original Source: GYMCO Balance
Sheets) (Reference No. 51)
Booz, Allen and Hamilton, "Strategic Study for Building
Materials and Ceramics," Part XII, 1977. (Reference No. 31)
30
12 percent rate of real GNP growth. This graph portrays a lower
potential surplus for plaster.
Gross Domestic Product (GDP), has over the last six years
increased at an average 8 percent per annum. Between 1980 and 1981, GDP
grew an estimated 10 percent, with the petroleum sector and service
industries contributing the sharpest gains. For 1982, real GDP growth
is expected to decrease to 8.5 percent, due to substantially reduced oil
revenues (50). Consequently, a GDP growth rate of 7 to 9 percent
appears to be more consistent with current economic forecasts. This
implies that the lower limit for calcined gypsum, depicted in Figure
3.2, provides a more realistic estimate of future demand.
Although the current annual supply of 340 thousand metric
tons is expected to triple by 1990, it is doubtful if such a substantial
increase will occur. GYMCO's addition of two new rotary kilns to the
existing production facilities at Gharbaniat, El Alamein, and El Ballah
has been delayed by one year, extending completion until late 1983 at
the earliest. The construction of new production facilities at
Gharbaniat and Sadat City is still in the preliminary stages, with'
expected completion dates extended to 1986. It is reasonable to assume
that the additional production levels for GYMCO from 1982 through 1990
will lag behind those shown in Table 3.7 by at least ten years.
The construction and operation of new production facilities
for Kawmia Cement Company and Mahmoud Osman have been delayed by two to
three years, as the result of work stoppages and bureaucratic hindrances
(142).
Given the results of this analysis, plaster shortages will
occur through 1984, under the assumption that all additional production
is delayed by two years and that actual demand is represented by the
lower limit shown in Figure 3.2.
3.2 Interior Partition Walling Products
3.2.1 Demand Estimates
Because data for the demand for interior partition products
are currently unavailable, alternative methods must be used. One such
method uses demand forecasts for housing or building units, and converts
these data into a reasonable approximation of partition demand. This
31
process begins by multiplying the number of units by the average floor
area of a typical housing unit, and subsequently translating this number
into wall surface area using Ministry of Housing coefficients. For the
purposes of this analysis, two housing unit forecasts are used, each
representing different rates of growth for the aggregate housing stock.
One estimate of housing demand comes from the Egyptian
Ministry of Housing's "National Policy for Meeting the Housing Problem"
(98). This forecast of demand was based on an assessment of census
data, taking into account the stock of all existing dwellings, regard
less of whether they are officially constructed or not. This unoffi
cial, or informal sector, is defined as all portions of construction
output which do not conform to all applicable laws and regulations.
Although the exact size of this sector is unknown, it is considered to
represent a large share of the output of the private sector.
These Ministry of Housing forecasts for numbers of housing
units, referred to as "Scenario I" are shown in Table 3.9. The Ministry
of Housing assumes that the average area of a typical honlsing unit is
56.6 square meters, and uses this coefficient to translate the number of
housing units into square meters of floor area. In addition it is
assumed that the service buildings described in footnote (2) of Table
3.9 would be required per 1000 new dwelling units. This is roughly
equivalent to 3.5 square meters of service building for each new housing
unit constructed.
An alternative forecast of demand for building has been
presented by the Construction/Contracting Industry Study Group (CIS)
(63). These forecasts have been derived, taking into account current
economic conditions and the capacity of the construction industry in
Egypt. The methodology employed in this process was as follows:
1. Previous levels of output were used as a base for
estimating future demand.
2. The effects of the 1980-84 Five Year Plan on the
construction industry were assessed.
3. The housing sector and its subsequent demand for
construction were analyzed.
32
TABLE 3.9
EXPECTED VOLUME OF HOUSING AND OTHER BUILDING FOR 1982-85
FIVE YEAR PLAN - SCENARIO I
AREA OF AREA OF TOTAL
NUMBER OF UNITS SERVICES AREA
HOUSING square square square
YEAR UNITS meters (1) meters (2) meters (3)
1982 125,000 7,075,000 437,500 7,512,500
1983 135,000 7,641,000 472,500 8,113,500
1984 145,000 8,207,000 507,500 8,714,500
1985 160,000 9,056,000 560,000 9,616,000
(1) Average area of housing unit is 56.6 square meters.
(2) For every 1,000 dwelling units there are 3,500 square meters of
service buildings, assuming:
1500 m 2 of combined sex primary school
600 m 2 of Mosque
1400 m 2 of social, trade, and commercial buildings
(3) Total Area = (Area of Units) + (Area of Services)
SOURCE: Construction/Contracting Industry Study
Final Report, Volume 2, July 1981
(Original source: Ministry of Housing, The National Policy for
Meeting the Housing Problem, 1979) (Reference: No. 63)
33
4. A preliminary estimate of demand was prepared using steps 1
through 3
5. The estimates derived in Step 4 were analyzed with regard
to various macroeconomic constraints, such as the real rate
of growth of the Egyptian economy and the capacity of the
construction industry to produce forecasted levels of
output.
The past output of the construction industry that is used
in Step I is particularly difficult to estimate, as historical data are
generally unreliable. The CIS Report uses the Ministry of Planning
adjusted estimates for output, together with an additional estimate of
150 million Egyptian pounds (1979 rates) for the informal sector.
The 1980-84 Five-Year Plan that is used in Step 2 can be a
useful document, provided adjustments are made, so that it is compatible
with actual economic growth. As the primary source of employment, the
government plays an influential role in support of the domestic con
struction industry. As a result, the Five-Year Plan can provide infor
mation on planned governmental increases in construction output over the
five-year period.
Final CIS housing demand projections have been estimated
using the previous steps and future levels of output based on provisions
for a future population growth of 2.3 percent and the replacement of the
existing housing stock. These projections, referred to as "Scenario
IIV, are shown in Table 3.10.
The CIS Group has also provided an alternative set of
estimates for service buildings, claiming that the Ministry of Housing
has underestimated the demand for these structures. Using the assump
tion of 3,500 square meters of service building per 1000 new housing
units, CIS adds an additional 304 thousand Egyptian pounds (1980 prices)
of central service building, to obtain the estimates shown in Column 5
of Table 3.10.
These estimates as&.'.ne a breakdown of:
1. School and educational building construction - 33%
2. Health and social service building construction - 13%
34
TABLE 3.10
EXPECTED VOLUME OF HOUSING AND OTHER BUILDING FOR 1982-85
FIVE YEAR PLAN - SCENARIO II
AREA OF AREA OF TOTAL
NUMBER OF UNITS SERVICES AREA
HOUSING square square square
YEAR UNITS meters (1) meters (2) meters (3)
1982 129,700 7,341,020 1,839,080
9,180,100
1983 133,000 7,527,800 1,862,069 9,389,869
1984 136,700 7,737,220 1,885,057
9,622,277
1985 139,700 7,907,020 1,908,046 9,815,066
(1) Average area of housing unit is 56.6 square meters.
(2) Based on revised forecasts taken from current
Construction/Contracting Industry study.
(3) Total Area =
(Area of Units) + (Area of Services)
SOURCE: Construction/Contracting Industry Study
Final Report, Volume 2, July 1981
35
3. Administrative and government office building construction
15%
4. Commercial and retail building construction - 14%
5. Maintenance and repair - 25%
The housing areas shown in Tables 3.9 and 3.10 can be
translated into wall surface area using the Ministry of Housing techni
cal coefficient of 55 bricks per one square meter of interior and ex
terior wall and 9000 bricks per 100 square meters of floor area (98).
Calculating the wall area for each 100 square meters of housing yields:
9000 Bricks
2
loom 2 Floor Area = 1.64m 2 of Wall Area per lm
55 Bricks of Floor Area
Im2 Interior Wall
This figure is consieLent with the field observations and
measurements taken of middle income apartments that were visited in Nasr
City by the M.I.T. Gypsum Project Group, where it was found that the
total surface area was approximately 170 square meters for a 96 square
meter apartment. For these typical apartments, the interior partition
wall area was 120 square meters, or 70 percent of total wall area. The
remaining 30 percent was comprised of exterior walls and window and door
areas.
Taking these coefficients as representative of a typical
housing unit, a final quantity of 1.12 square meters of interior parti
tion per square meter of housing is derived. Using this ratio, the
calculated housing floor areas of Table 3.9 and 3.10 are converted into
demand for interior partitions in terms of area. These demand estimates
are presented in Table 3.11.
In order to estimate the technical coefficient for interior
partitions in buildings other than housing, a chart, such as that shown
in Table 3.12 showing the required number of workers to produce one
million pounds of construction must be used. Table 3.12 indicates that
the construction of other buildings uses 56 workers or approximately
three quarters of the masonry work force for housing (120). Assuming
36
TABLE 3 11
EXPECTED DEMAND FOR WALLING MATERIALS IN HOUSING
AREA OF AREA OF
HOUSING HOUSING PARTITION PARTITION
UNITS UNITS AREA AREA
SCENARIO I(1) SCENARIO 11(2) SCENARIO 1(3) SCENARIO 11(3)
YEAR square meters square meters square meters square meters
1982 7,075,000 7,341,020 7,924,000
8,221,942
1983 7,641,000 7,527,800 8,557,920
8,431,136
1984 8,207,000 7,737,220 9,191,840 8,665,686
1985 9,056,000 7,907,020 10,142,720 8,855,862
(1) From Table 3.9 - Column 3
(2) From Table 3.10 - Column 3
(3) Assumes 1.12 square meters of partition per 1 square meter of
housing
SOURCE: Construction/Contracting Industry Study
Final Report, Volume 2, July 1981
(Original Source: Ministry of Housing, The National Policy for
Meeting the Housing Problem, 1979) (Reference: No. 63)
37
TABLE 3. 12
TYPE OF WORKERS REQUIRED TO BUILD 1,000,000 L.E. OF DIFFERING FACILITY TYPES
TYPE OESIDENTIAL
AND or WORKER INDUSTRIAL OTHER 8UI2 tDING N5N-BUILUING
SKILL LEVEL JEItIHT NUMBER(l) WhECI[T w=;. (1) 6.ICIT HSI1EI (2) WEI hiT NUMBER (1)
MASONRT .16D 73 .066 24 .114 56 .242 43
STEEL FIXING .061 32 .071 26 .065 32 .118 21
CAP[
EV[V .111 sa .137 o .122 60 .202 36
CONCRETEPOURING .198 104 .145 53 .225 110 .438 I8
SANITARY WORKS .10 72 .096 35 .059 29 -
PLASTERING .192 95 .181 66 .155 16
PAINTING .027 14 .017 28 .088 43
JOINERY .126 66 .123 65 .129 63 -
ELECTRICAL WOIUS .015 8 .104 38 .061 21 -
SUBTOTAL (2) 522 365 490 178
TOTAL 1.O00 680 1.000 685 1.0OO 652 1.000 396
(1) A:.-* -We of ,orkoto .quIred to build I Mll1on Egyptian pound. of
FaCIlIty waoklng 6. 8 hour bIfte pr weok.
(2) E-cldo8 .can.tin ad at:hwork
SOURCE: "Issues Facing Development of Contractors in Egypt", unpublished M.S.C.E. Thesis, Massachusetts
Institute of Technology. 1978. (Original Source: Ministry of Housing Data)
(Reference: No. 120)
that such a ratio is representative of service building construction,
the coefficient for these partitions would be equal to three quarters of
that of housing, or 0.86 square meters of partition per one square meter
of floor area. The floor areas of Tables 3.9 and 3.10 are translated
into partition area through the use of this coefficient. These
estimates are shown in Table 3.13.
Because data for the floor area of industrial buildings are
unavailable, the CIS Report estimate of 1.5 million square meters of
interior partition per year has been used for both scenarios (63).
Summaries of total demand for 1982-85 for Scenarios I and
II are presented in Table 3.14. Although the projections shown under
Scenarios I and II are roughly equivalent by 1985, the rates at which
this level of demand is achieved are different. The average increase of
2 percent per annum for scenario II is quite conservative compared to
the average annual increase of 7 percent for Scenario I.
3.2.2 Supply Estimates
Interior partition walls in Egypt are constructed with two
major types of products: bricks and blocks, and gypsum blocks and
panels. In this section two aspects of these products are reviewed:
the capacities of existing and planned production facilities; and the
competitive position of individual products in the overall market.
The tricks and blocks category of products includes red
bricks (made of Nile silt), shale bricks, sand-lime bricks, lightweight
block, and hagarite block. The potential domestic supply of these
products is shown in Table 3.15. These estimates assume that all plants
are operational and operating at 100 percent capacity and take into
account the following findings.
Red Brick
A 1976 study (31) estimated the production of red brick at
1.5 billion bricks per year during the period 1982 through 1985. This
estimate assumed a total of 300 factories, each producing 5 million
bricks per year. Since a precise count of the number of brick producing
factories at either a governorate or national level was not possible,
the study used the General Organization for Housing, Building, and
39
TABLE 3.13
EXPECTED DEMAND FOR INTERIOR PARTITIONS IN OTHER BUTLDINGS
AREA OF AREA OF PARTITION AREA PARTITION AREA
OTHER BUILDINGS OTHER BUILDINGS OTHER BUILDINGS OTHER BUILDINGS
SCENARIO I (1) SCENARIO II (2) SCENARIO I (3) SCENARIO II (3)
YEAR SQUARE METERS SQUARE METERS SQUARE METERS SQUARE METERS
1982 437,500 1,839,080 377,300 1,586,023
1983 472,500 1,862,069 407,484 1,605,848
1984 507,500 1,d85,057 437,668 1,625,673
1985 560,000 1,908,046 482,944 1,645,499
(1) From Table 3.9 - Column 4
(2) From Table 3.10 - Column 4
(3) Assumes 0.862 square meters of interior partition for every 1
square meter of building
SOURCE: (1) Construction/Contracting Industry Study, Final Report,
Volume 2, July 1981. (Original Source: Ministry of
Housing, The National Policy for Meeting the Housing
Problem, 1979) (Reference: No. 63)
(2) Construction/Contracting Industry Study
Final Report, Volume 2, 1981 (Reference: No. 63)
40
TABLE 3.14
EXPECTED TOTAL AREA OF INTERIOR PARTITIONS
OTHER
YEAR HOUSING (1) BUILDINGS (2) INDUSTRIAL (3) TOTAL
SCENARIO I (square meters)
1982 7,924,000 437,500 1,500,000 9,861,300
1983 8,557,920 472,500 1,500,000 10,530,420
1984 9,191,840 507,500 1,500,000 11,199,340
1985 10,142,720 560,000 1,500,000 12,202,720
SCENARIO II (square meters)
1982 8,221,942 1,586,023 1,500,000 11,307,965
1983 8,431,136 1,605,848 1,500,000 11,536,984
1984 8,665,686 1,625,673 1,500,000 11,791,359
1985 8,855,682 1,645,499 1,500,000 12,001,361
(1) From Table 3.11 - Columns 4 and 5
(2) From Table 3.13 - Columns 2 and 5
(3) Because data on this building type aLe inconclusive, Construction
Industry Study Group estimates were used.
SOURCE: (1) Construction/Contracting Industry Study, Final Report,
Volume 2, July 1981. (Original Source: Ministry of
Housing, The National Policy for Meeting the Housing
Problem, 1979) (Reference: No. 63)
(2) Construction/Contracting Industry Study
Final Report, Volume 2, 1981 (Reference: No. 63)
41
TABLE 3.15
ESTIMATED DOMESTIC SUPPLY OF BRICKS - BY BRICK CATEGORY
(number of bricks)
LIGHTWEIGHT
YEAR RED BRICK SHALE BRICK SAND LIME AGGREGATE HAGARITE MISC.
TOTAL
1982 1,500,000,000 465,000,000 235,000,000 375,000,000 132,000,000 50,000,000
2,757,000,000
1983 1,500,000,000 490,000,000 290,000,000 450,000,000 132,000,000 50,000,000
2,912,000,000
1984 1,500,000,000 490,000,000 340,000,000 525,000,000 132,000,000 50,000,000
3,037,000,000
1985 1,500,000,000 490,000,000 355,000,000 550,000,000 132,000,000 50,000,000
3,077,000,000
This category includes Mud (green) Bricks and Stabilized Soil Bricks
SOURCE: Construction/Coatracting Industry Study, Final Report, Volume 2, July
1981. (Original Source: Ministry of Housing, The National Policy for
Meeting the Housing Problem, 1979) (Reference: No. 63)
Planning Research (GOHBPR) estimates of 120 factories for the Greater
Cairo area and 300 for the whole country. In 1976, GOHBPR also esti
mated that the 120 factories in the Greater Cairo area were producing
600 million bricks per year, giving an average of 5 million bricks per
production facility.
Shale Brick
Another source of raw material for bricks has been found in
the numerous shale deposits located throughout the Egyptian desert.
Shale bricks have been used extensively in other comntries, and their
use in Egypt has been facilitated by ability to be manufactured with
minimum modifications to existing red brick production facilities.
Presently there are plans for eight major production faci
lities for shale brick, three in the private sector and five in the
public sector. One private sector factory, owned by the Siegwart Com
pany, has gone into production. However, there is no immediate evidence
that any of the other plants are producing according to schedule. Con
sequently, the estimated supply of these bricks given in Table 3.14 may
be questionable.
Sand-Lime Brick
Sand-lime bricks are also considered a viable substitute
for red bricks, particularly in light of the abundance of sand and
limestones in Egypt. Currently there are three factories producing
sand-lime bricks: Al-Abbasiah, Nasr City, and Quesna. Production at
these facilities has faced numerous external and internal technical
problems since start-up, such as lack of spare parts for equipment and
machinery, periodic cut-off of water and electrical supply, and lack of
skilled labor. Because of these problems, it is probable that these
factories will not produce at full capacity production levels. Infor
mation on the status of five other proposed projects is presently un
available, making accurate assessement of future production difficult.
Lightweight Blocks and Hagarite Bricks
Additional types of bricks and blocks include lightweight
concrete aggregate and hagarite bricks. Lightweight concrete blocks are
43
made of portland cement and sand. These blocks are used to a limited
extent for walls and partitions. Hagarite bricks are a special type of
brick native to Egypt. Instead of the sand and lightweight aggregate
that are used in concrete blocks, hagarite bricks use portland cement
combined with fines and limestone aggregate. The estimated production
of lightweight brick is anticipated to come from the existing factories
and extensions to them, and from four proposed new factories. Hagarite
brick production is all from currently existing plants.
The second source of supply for interior partition wall
products is the producers of gypsum blocks and panels. The information
collected concerning the existing or potential producers of partition
walls is summarized in Table 3.16. The largest potential producer of
gypsum partition wall products is GYMCO, followed by Kuwait Egyptian
Company, AZAMCO, ICON and Misro Gypsum. The production of these
gypsum-based walling materials is relatively new to the Egyptian market
and is still in its early stages, with annual output substantially below
that of brick manufacturers.
Table 3.17 summarizes the potential production of interior
partitions. The total number of bricks is translated into square meters
of interior partition using the assumptions that one square meter of
partition requires 55 bricks and that 25 percent of all bricks produced
in the construction of interior partitions.
is used It was assumed that
existing production is comprised of only those production facilities
which were operational or for which construction had begun at the time
of the study. All other facilities were aasigned to the categor:- of
additional production.
3.2.3 Demand/Supply Analysis and Summary
A summary presenting different scenarios for interior
partition product supply and demand is shown in Table 3.18. These
scenarios are represented graphically in Figures 3.4 and 3.5. In these
figures, the minimum expected supply of these products represents the
quantity that would be produced given the existing production facili
ties. The upper limit of supply represents the quantity of partitions
that would be produced if all planned production facilities b.came
operational on the originally scheduled dates.
44
TABLE 3.16
POTENTIAL PRODUCTION OF GYPSUM INTERIOR PARTITION BUILDING PRODUCTS
(square meters)
YEAR EXISTING PRODUCTION ADDITIONAL PRODUCTION TOTAL
G'YCO
1982 -.
1983 - - -
1984 - 675 000 ) 675,000
1985 - 2,775,000 (2) 2,775,000
KUWAIT EGYPTIAN INVESTMENT CO.
1982
1983 - 665,000 665,000
1984 - 936,000 936,000
1985 - 1,170,000 1,170,000
MISRO GYPSUM
1982 75,000 75,000 150,000
1983 75,000 75,000 150,000
1984 75,000 75,000 150,000
1985 75,000 75,000 150,000
AZAMCO
1982
1983 - 216,000 216,000
1984 - 240,000 240,000
1985 - 240,000 240,000
(1) Plant to produce this quantity at Gharbaniat; contract already
signed.
(2) Includes additional production of 1984. Remainder of additional
production to take place at Sadat City. Invitation for bidders
appeared in March, 1981.
SOURCE: McKee-Kearney, Development of Ras Malaab Gypsum Deposits for
Sinai Manganese Company, 1981.
(Original Source: GYMCO Balance Sheets) (Reference: No. 97)
45
TABLE 3.17
POTENTIAL PRODUCTION OF INTERIOR PARTITIONS
(square meters)
EXISTING ADDITIONAL EXISTING ADDITIONAL
BRICK BRICK GYPSUM GYPSUM TOTAL TOTAL
PARTITION PARTITION PARTITION PARTITION EXISTING
YEAR PRODUCTION(I) PRODUCTION(1) PRODUCTION ADDITIONAL TOTAL
PRODUCTION PRODUCTION PRODUCTION PRODUCTION
1982 9,168,182 3,363,636 275,000 75,000 9,443,182 3,438,636 12,881,818
1983 9,168,182 4,068,182 325,000 956,000 9,493,182 5,024,182 14,517,364
1984 9,168,182 4,636,364 375,000 1,926,000 9,543,182 6,562,364 16,105,546
1985 9,168,182 4,818,182 475,000 4,260,000 9,643,182 9,078,182 18,721,364
SOURCE: McKee-Kearney, Development of Ras Malaab Gypsum Deposits for Sinai
Manganese Company, 1981 (Reference: No. 63)
The trends of the last few years suggest that it is un
likely that red brick production will decrease, despite governmental
efforts to curtail its production. It is highly probable that produc.
tion will either remain constant or increase due to the higher prices
the market will be willing to bear.
It is expected also that the efforts to modernize the red
brick facilities to pr"-uce bricks from desert chale will proceed
slowly. It is unlikely that shale bricks will totally substitute for
Nile-silt bricks by 1983, as was originally intended by government
authorities. Complete substitution may occur by 1986 at the earliest
(31). The only means of diminishing future supplies of red bricks is
through stringent governmental pressure to convert from Nile silt to
other materials. The likelihood of such an action is small.
Present shale brick production represents less than 20
percent of total brick production. Because of the high density and
compressive strength of shale bricks, this product is less likely to be
used in the construction of interior partitions. As a result, only 10
to 15 percent of all shale bricks produced would be used for this pur
pose. In addition, as indicated earlier, only the Siegwart Company has
begun production. All other proposed plants are not producing according
to schedule. Presently, less than 25 percent of total anticipated
production is being realized. Given these numbers, only 272 thousand
square meters of interior partition can possibly be constructed using
shale brick, a negligible quantity relative to total supply (135).
It is also expected that sand-lime bricks will capture a
small market share for reasons similar to those for shale brick. As
discussed, many of the existing sand-lime brick production facilities
are operating below capacity, due to various technical problems (74).
Many of the proposed production facilities for these bricks have been
delayed. It is expected that actual sand-lime brick production will
provide 400 thousand square meters of interior partition annually
through 1985.
Lightweight concrete and Hagarite blocks represent a small
share of the total market for interior partition products. Because both
of these blocks are produced from cement, a material in short supply in
Egypt, actual production may fall below that given in Table 3.15.
47
TABLE 3.18
INTERIOR PARTITION CONSUMPTION AND PRODUCTION SUMMARY
(square meters)
EXPECTED EXPECTED EXPECTED EXPECTED
DEMAND (1) DEMAND (2) SUPPLY (3) SUPPLY (4)
FOR FOR OF OF SURPLUS SURPLUS
PARTITIONS - PARTITIONS - PARTITIONS - PARTITIONS - (GAP) (GAP)
YEAR SCENARIO I SCENARIO II MINIMUM MAXIMUM MINIMUM MAXIMUM
1982 9,861,500 11,307,965 9,443,182 12,881,818 (1,864,783) 3,020,218
1983 10,530,420 11,536,984 9,493,182 14,517,364 (2,C43,8020 3,986,944
1984 11,199,340 11,791,359 9,543,182 16,105,546 (2,248,177) 4,906,206
1985 12,202,720 12,001,361 9,643,182 18,721,364 (2,358,179) 6,518,644
(1) From Table 3.7 - Column 5
(2) From Table 3.8 - Column 5
(3) From Table 3.17 - Column 6
(4) From Table 3.17 - Column 8
SOURCE: Construction/Contracting Industry Study, Final Report, Volume 2, July
1981. (Original Source: Ministry of Housing, The National Policy for
Meeting the Housing Problem, 1979) (Reference: No. 63)
McKee-Kearney, Development of Ras Malaab Gypsum Deposits for Sinai
Manganese Company, 1981. (Reference: No. 97)
FIGURE 3.4
INTERIOR PARTITION SUPPLY/DEMAND - SCENARIO I
(Million Square Meters)
19.0 Expected Supply of
Interior Partition-
Upper Limit
17.0
Surplus
15.0
13.0
Expected Demand for
Interior Partitions
\'Scenario I
11.0
Expected Supnly of
Interior Partitions-
9.0 Lower Limit
SOURCE: Construction/Contracting Industry Study, Final Report, Volume
2, July 1981. (Original Source: Ministry of Housing, The
National Policy for Meeting the Housing Problem, 1979)
(Reference: No. 63)
McKee-Kearney, Development of Ras Malaab Gypsum Deposits for
Sinai Manganese Company, 1981. (Reference: No. 97)
49
FIGURE 3.5
INTERIOR PARTITION SUPPLY/DEMAND - SCENARIO II
(Million Square Meters)
19.0 Expected Supnly of
Interior Partition-
Upper Limit
17.0
15.0 1.Surplus
13.0
Expected Demand for
Interior Partitions-
Secnario II
11.0Ga
Gan
Expected Supply of
Interior Partiticns-
9.0 Twjr mit-
SOURCE: Construction/Contracting Industry Study, Final Report, Volume 2,
July 1981. (Original Source: Ministry of Housing, The National
Policy for Meeting the Housing Problem, 1979) (Reference: No.
63)
McKee-Kearney, Development of Ras Malaab Gypsum Deposits for
Sinai Manganese Company, 1981. (Reference: No. 97)
50
Gypsum blocks may represent the strongest direct competi
tion to any new partition product attempting to enter the market.
Assuming GYMCO, Kuwait Egyptian, Misro Gypsum, and AZAMCO all proceed
with current plans, over 4 million square meters of gypsum partitions
will be produced by 1985. These products, as opposed to traditional
brick, offer such advantages as reduced cost and ease of handling and
installation. Given the past history of these public-sector firms, it
is likely that future production plans will proceed behind schedule.
Despite the numerous problems associated with the produc
tion of these wall products, minimum production of approximately 10
million square meters per year can be expected by 1985. Actual pro
duction might be significantly higher, at approximately 12 to 14 million
square meters per year. Many manufacturers of gypsum-based products
have formulated their future production plans, assuming the existence of
a significant production "gap" for bricks (135). Many producers
believed that gypsum blocks would fill 50 percent of that perceived
"gap", as opposed to providing an economically feasible alternative to
brick. This "gap" is most likely an imaginary one, as few buyers of
these products within the construction industry have complained about
actual shortages (140).
Given the two supply/demand scenarios shown in Figures 3.4
and 3.5, it appears that production will exceed demand by 1984. Because
of this, any new product must serve as a substitute for other walling
materials. Substitutions within this market can prove to be difficult,
in light of the long-standing use of brick in Egypt.
51
CHAPTER FOUR
PRODUCTION PROCESS OF GYPSUM CONSTRUCTION PRODUCTS
The production of gypsum construction products can be broken down
into four components: (i) exploration, (ii) quarrying, (iii) processing,
and (iv) panel production. Data and information derived from the explo
ration process could determine the configuration and design of compo
nents used in the later production stages. .lso, by analyzing a
prospective quarry the information thus obtained can be used to design a
quarrying system that is capable of extracting gypsum ore at the least
possible cost. Additional information resulting from chemical and
physical analyses can then be employed to design the optimum processing
and calcining facility. The success of such a project will invariabiy
depend on the capital and operating costs of the above four components.
These components and the available types of equipment used in these
processes are described in detail in this chapter.
4.1 EXPLORATION PROCESS
4.1.1 Mapping and Survey of Site Conditions
Gypsum exploration can be broken down into two main activi
ties - reconnaissance and target investigation, each of which can be
divided into multiple stages as is shown in Figure 4.1.
An exploration sequence begins with the appraisal of large
regions (governorates) for the express purpose of selecting those
potentially rich in gypsum deposits.
This appraisal is followed by the detailed reconnaissance
of these favorable regions in search of target areas. The target areas
are investigated in detail, first on the surface, and then, if
warranted, by three-dimensional test borings.
Some of these exploration stages may be obviated depending
on the availability of previous gypsum surveys done by others.
52
FIGURE 4.1
GYPSUM EXPLORATION FLOW DIAGRAM
STEP #1 S'rrP #2 _STEP 93
'0 - Geologic F - Examination of L - Detailed Geo-
Computation for Outcrops and logic Mapping
"Marketing" Area __ DETAILED Sampling DETAILED of OuLcrops
REGIONAL0 Photography RECONNAISSANCE F - Reconnaissance THREE-DIMENSIONAL L - Minerology
APPRIASAL I OF FAVORABL.E AREAS Drilling for SAMPLING AND I Trace Elemenat
Stratigraphy and PRELIMINARY EVALUATIuN Study of
I Chemical Analyses Gypsum Sample
I * of All Gypsum - F - Detailed
| Samples sPolarization
EXPLORATION ELOTINTIO E Survey of
-- - E Anomalous
< DECISION DCovered Areas
F - Drilling and
*
I Logging
\VI1 L - Chemical
I a Analysis and
REGION NOT AREA REMAINS UNECONOMIC Physical
ATTRACTIVE I Tests
L- FAVORABLE - MINERAL Sample and
AT TIllS TIME BUT NOT ATTRACTIVE DEPOSIT / Cores,
AT THIS TIME and Cuttings
0 - Reserves
L_
REJECT:
REGION 0 - OFFICE STUDY
LEGEN I
a ECONOMIC
MINERAL
J Computation.
F - Investigation.
of Water
Problems and
Water Availa
UNFAVORABLE F - FIELD INVESTIGATION DEPOSIT bi11ty
L - LABORATORY TESTS F - Investigation
of Suita
bility of
Ground for
Plant and
Dump Sites
SOURCE: Surface Mining American Institute of Mining, Metallurgical, and
Petroleum Engineers, 1972. (Reference: No. 110)
Some of the preliminary evaluation steps include:
1. The study of surface geologic maps and surface sample data
including analysis and test work on samples;
2. The review of any previous maps, reports, assays, well and
drill hole records, and the history of the prospect if
recently explored;
3. The study of all test boring information and verification
that the drill pattern is representative of the actual
gypsum quarry;
4. The plotting of all geologic data on general small-scale
maps and an estimation of reserve tonnages by priority and
quality grades. This map should include all transportation
potentials and should show the extent of the gypsum
deposits with respect to property ownership and control;
5. The evaluation of total quarry reserves in relation to the
projected annual rate of production and the estimation of
the lifespan of the proposed quarry. Answers need to be
found to such questions as: Are more deposits and land
available? Is the deposit open-ended laterally and down
ward and would further exploration discover more gypsum?
Because the scale of a general-area map is too small to
show the many pertinent features over a very broad area, a general
quarry map of medium scale must be prepared. This general quarry map
should provide a more detailed delineation of the gypsum deposit, and
for reference to detailed quarry maps, cross sections, and tabular data,
should show the locations of a few of the drillholes.
A detailed, large-scale quarry map should be prepared to
cover the entire quarrying area. This map should contain all data
pertinent to the quarrying problem, including depth, quality of gypsum,
and character of the overburden. Each drillhole must be featured on the
map with its identifying number and surface elevation.
54
4.1.2 Chemical and Physical Testing
Because gypsum requires some post-mine treatment before it
can be processed into building products, the process of transforming
gypsum into a concentrate through physical and chemical treatments must
be studied. This is accomplished through an extensive array of both
physical and chemical laboratory tests.
Because of the basic premise that the crusher must be
stronger than the material it must crush, a material's resistance to
crushing and its elastic properties must be measured. This is accom
plished through uniaxial and triaxial compression, and uniaxial tensile
strength tests.
The two most common chemical analyses in Egypt are differ
ential thermal analysis and X-ray diffraction. Differential thermal
analysis identifies the presence of particular minerals using the
assumption that when certain minerals, such as gypsum, are heated at a
uniform rate, endothermic and exothermic reactions take place. These
reactions can be recorded through the use of a sensitive thermocouple.
A thermally inert substance is subjected to parallel heat treatment as a
reference material. A chart is then constructed to record the differ
ential effect between the inert substance and the substance under
investigation.
X-ray diffraction can also be used for mineral identifica
tion by obtaining a unique X-ray pattern for any particular minera
logical crystalline structure. Records are available through such
organizations as the American Society for Testing and Materials (ASTM),
showing the relationship between these diffraction patterns and specific
minerals.
4.2 QUARRYING PROCESS
There are many factors that can influence the efficiency of a
gypsum quarrying operation. One major factor is equipment selection and
use.
In the planning stages of a new gypsum quarrying operation, the
first task in the proper selection of equipment is the determination of
the tonnage and characteristics of the gypsum to be quarried. This
55
involves tests to determine the density, weight, both broken and in
place, of the waste-material, overburden, and gypsum ore.
Beyond the characteristics of the material to be quarried there are
other factors to consider.
These include:
o Daily desired production rates
o Available capital
o Haul distance
o The working area available
o Climatic conditions
For maximum efficiency or productivity, it is necessary to balance
and match all equipment components to both each other and to haul dis
tance and grade. Because there are different sizes and types of equip
ment and different methods to do the same job, the final choice will
ultimately be based on the equipment and methods which will provide the
greatest production at the lowest cost.
4.2.1 Removal of Overburden and Excavation
In selecting a particular excavation and overburden strip
ping method, the ultimate aim is the removal of material at the least
possible cost. Accomplishment of this goal requires the careful consid
eration of various factors, including geologic and topographic informa
tion and the proximity of the stripping operation to waste-disposal
areas.
Once these factors have been determined, it is possible to
determine the key components of the quarrying operation. Such an opera
tion must begin with the preparation of the gypsum ore for moving. This
loosening of the ore is usually performed through the use of a tractor
mounted ripper.
The digging of the gypsum ore or overburden follows the
basic operation of loosening. The material must be in a manageable form
or properly sized to fit the digging part of the earthmoving equipment.
This step includes moving the material from its original, natural
56
location to the place for its deposit. The distance involved in this
moving may be a matter of only a few feet or several miles.
The final step in an excavation and stripping operation is
that of dumping. This material will be deposited in either a general
area or truck, depending on its final use. For overburden or other
waste, the material will be dumped somewhat haphazardly at a location
adjacent to the quarrying site, and will not be handled again, while
gypsum ore is loaded in an orderly manner into haulage vehicles.
The work cycle for the equipment involved in this operation
can be characterized by the repetitive steps or components of work that
are performed over and over again. For a quarrying operation, the
primary work cycle is the loosening-digging-dumping-hauling-return
process. This may all be done by one selected type of equipment, or it
may be done by a selection of two or more types working as a team. In
the latter option each piece or set of equipment has its own work cycle
which is interdependent with other pieces of equipment.
The nature of the gypsum to be excavated and the estimated
volume per day will narrow the equipment field to several possibilities.
Potentially economically feasible equipment options include bulldozers,
rippers, front-end-loaders, scrapers, and draglines. A listing of the
attributes of the various types of equipment available will be presented
in order to help define and identify the selection possibilities.
Most major equipment manufacturers provide clients with
optimal equipment configurations based on required rates of output, and
geologic and topographic data. These data are entered into computer
simulation and optimization programs, yielding an equipment configura
tion that is capable of quarrying and transporting gypsum ore at the
lowest possible cost.
a. Bulldozer
Bulldozers may be subdivided on the basis of their mount
ings, into crawler-tractor or wheel-tractor-mounted. Some of the
advantages claimed for crawler-mounted bulldozers are:
1. The ability to deliver greater tractive effort,
particularly on soft footing.
57
2. Ability to operate in rock formations, where rubber
tires might be severely damaged.
3. Ability to travel over rough terrain, which may reduce
the cost of maintaining haul roads.
4. Greater versatility.
Among the advantages claimed for wheel-mounted bulldozers
are the following:
1. Higher travel speeds
2. Elimination of hauling equipment to transport the
bulldozer to a quarry.
3. Greater output, particularly where considerable
travelling is required.
4. Less operation fatigue.
5. Ability to travel on paved surfaces without damage to
vehicles.
Under certain conditions bulldozers are satisfactory
machines for moving overburden. In general, haul distances should be
less than 300 feet. Either a crawler-mounted or wheel-mounted tractor
may be used, with a crawler-mounted machine having an advantage on short
hauls with soft or loose overburden, and a wheel-mounted machine having
an advantage on longer hauls and firm ground (109).
b. Ripper
A ripper is a plow like piece of equipment generally
mounted on the rear of a crawler tractor, such as the one described in
the previous section. It is designed to loosen material at the ground
surface by penetrating into and breaking up the ground material as the
ripper is pulled along.
Several types of hydraulically operated rippers are avail
able with one to five shanks. The number of shanks used depends on the
size of the tractor, the depth of penetration required, the resistance
of the material being ripped, and the degree of breakage required (37).
58
Although rippers subject tractors to severe abuse from sudden shocks and
ovcrloads, they are gaining in popularity.
The quickest method of estimating ripper production is
through the use of seismic velocity charts. These charts supplied by
manufacturers, have been developed from field tests conducted in a
variety of materials. Because of the extreme variations among materials
of a specific classification, these charts must be recognized as being
at best only a crude indicator of rippability.
c. Front-End Loader
Front-end-loaders are used extensively to handle and trans
port bulk material, such as gypsum ore and overburden, to load trucks
and excavate earth. There are two types of front-end-loaders, the
crawler-tractor-mounted and the wheel-tractor-mounted.
They may be
further classified by bucket capacities or the weights that the buckets
can lift. The production rate of a front-end-loader can be determined
using manufacturers charts and will depend on:
1. The fixed time required to load the bucket, shift gears,
and dump the load,
2. the time required to travel from the loading to the dumping
position,
3. the time required to return to the loading position, and
4. the actual volume of material hauled each trip.
The process of selecting a wheel loader can be broken down
into five steps:
1. Determining required rates of production.
2. Determining loader cycle time and cycles per hour.
3. Determining required payload per cycle in loose cubic yards
and pounds.
4. Determining required bucket size.
5. Make loader selection using bucket size and payload as the
criteria to meet production requirements.
59
The required rates of production, when calculated, should
exceed by a small margin the other critical units in the gypsum quarry
ing operation (36). Required production should be carefully calculated
so that proper machine and bucket selections can be ma~e.
For loader cycle times, a 0.45-0.55 minute basic cycle time
is considered reasonable for most articulated loaders driven by a com
petent operator, particularly when hauling loose granular material over
a reasonably smooth operating surface (35).
This cycle time includes
load, dump, four reversals of direction, full cycle of hydraulics, and
minimum travel. Material type, pile height, and other factors may tend
to either reduce or improve production, and should be added to or sub
tracted from the basic cycle time when applicable. When hauls are
involved, travel times can be estimated using a travel chart, giving the
ranges to be used for both haul and return times. Haul and return times
can be added to basic cycle time to obtain total cycle time.
Track-type loader production can be estimated using methods
similar to those employed for wheel loaders. However, cycle time for
track loaders must be determined in a different manner. Total cycle
time includes load, maneuver, travel, and dump time. Load time can
range from 0.03 minutes for uniform aggregates to 0.20 minutes for soil
and boulders. Maneuver time includes basic travel, four changes of
direction and turning time. Maneuver time generally averages 0.22
minutes at full throttle with a competent operator (36). Travel time in
a load and carry operation is comprised of hauls and return times.
These times can be determined by using a travel chart. Dump 'ime is
dictated by the size and length of the dump target.
For a typical
gypsum quarrying operation, typical dump times Into either on-
or
off-highway trucks can range from 0.04 to 0.07 minutes (35).
d. Scraper
Scrapers are self-operating to the extent that they can
load, haul, and discharge material, and are not dependent on other
equipment. If a scraper experiences a temporary breakdown, it is not
necessary to -top the job, as could be the case
for a machine which is
used exclusively for one particular task.
60
Scrapers are the result of a compromise between loading and
hauling machines. Draglines will usually surpass scrapers in loading
only, while trucks may surpass them in hauling. However, their ability
to load and haul earth gives them a definite advantage.
There are two types of scrapers, based on the type of
tractor used to pull them - crawler-tractor-pulled or wheel-tractor
pulled.
For relatively short haul distances the crawler-type trac
tor, pulling a rubber-tired self-loading scraper is more economical.
However, as haul distances increase, the low speed of a crawler tractor
can be a disadvantage (38).
For longer haul distances, the higher speed of a wheel-type
tractor-pulled scraper is more economical. Although the wheel-type
tractor cannot deliver as great a tractive effort in loading a scraper,
the higher travel speed will offset the disadvantage in loading when the
haul distance is sufficiently long.
Wheel tractor-scrapers are designed and built in four basic
configurations, each best fitted to a general set of conditions.
Two-axle tractor-scrapers are designed for the majority of
conditions such as average haul distances, moderate to poor grades and
underfoot conditions. Two-axle scrapers can generally develop more
tractive effort than a three-axle scraper with the same size engine.
Two-axle scrapers are also more maneuverable because the two wheels of
the single-axle tractor can
pivot about their midpoint.
In contrast three-axle tractor scrapers are designed for
stability and long-distance haulage at high speeds on well maintained,
near-level roads. In addition, three-axle scrapers
are safer to operate
in case of a blow-out or trouble with the hitch or
other working parts.
Lastly, three-axle scrapers offer the advantage of being more versatile
for a variety of uses as a tractor when detached from the scraper bowl
unit.
Tandem-powered scrapers are available in both three-and
two-axle versions. The two-axle models are generally designed for the
severest of conditons
- steep grades and poor underfoot conditions,
average to
poor haul roads and short to average haul distances. Three
axle units are generally of high capacity, and are primarily used for
61
large-volume, long-distance hauling on moderate grades and moderate
to
good haul roads. Both types of tandem-powered units can self-load under
favorable conditions.
A scraper is loaded by lowering the front end of the bowl
until the cutting edge, which is attached to and extends across the
width of the bowl, enters the ground and, at the same time, raises the
front apron to provide an open slot through which the earth may flow
into the bowl. This operation is continued until the bowl is filled.
The size is specified as the heaped capacity of the haul, expressed in
cubic yards.
Manufacturers of scrapers, such as Caterpillar Tractor
Company, provide performance charts for each of their units. These
charts contain information that enables users to analyze the performance
of a particular unit under various operating conditions.
Cycle time for a scraper is the time required to load, haul
to the fill, dump, and return to the loading position again. Cycle time
can be divided into two elements, fixed time and variable time.
The fixed time is the time devoted to other than hauling or
returning empty. This includes the time for loading, dumping, turning,
accelerating, and decelerating, all of which are reasonably constant
under uniform operating conditions. Because scrapers, like other types
of quarrying equipment, do not operate 60 minutes out of every hour,
operating efficiency and operating factors must be introduced. The
actual rate of production for a scraper can be determined by applying
the appropriate operating factor to the maximum rate of production.
e. Dragline
Draglines can be used effectively in stripping the softer,
less dense overburdens where advantage can be taken of their digging
depths and disposal reach. They are frequently used to cart overburden
directly to a waste-disposal area without the need for auxiliary haulage
equipment.
Draglines are also used to excavate gypsum ore and load it
into hauling units, such as trucks. Draglines offer the distinct advan
tage of not having to go into a pit or hole in order to excavate. It
may operate on solid ground while excavating material from a pit with
62
its bucket. For gypsum ore hauled by trucks, the vehicles do not have
to go into the pit and contend with unsatisfactory job-site conditions.
Draglines consist of three types: crawler-mounted, self
propelled wheel-mounted, and truck-mounted. The size of a dragline is
determined by the size of the bucket, expressed in cubic yards. Most
draglines are capable of handling multiple bucket sizes, depending on
the length of the boom and the class of material excavated. Actual
production output will vary with such factors as depth of cut, angle of
swing, job-site conditions, size of hauling units, and operator skill
(33).
4.2.2 Haulage
For handling gypsum ore at the proposed Fayoum quarrying
sites, trucks can appear to be most economical. These hauling units,
because of their high speeds when operating on suitable or even marginal
roads, have high capacities and provide relatively low unit hauling
costs. They also provide a high degree of flexibility, as the number in
service may be increased or decreased easily to permit modifications in
the total hauling capacity of the fleet. Most trucks nay be operated
over any haul road for which the surface is sufficiently firm and smooth
and on which the grades are not excessively steep.
Trucks can be classified according to the following
factors:
o Size and type of engine - gasoline, diesel, butane, propane
o Number of gears
o Kind of drive - twc-wheel, four-wheel, six-wheel, etc.
o Capacity in tons of cubic yards
o On- and off-highway capabilities
Rear dump trucks are generally the most suitable for use in
hauling gypsum ore. The shape of the body, such as the extent of sharp
angles, corners, and the contour of the rear will allow for ease of flow
during dumping.
In loading these trucks, it is desirable to use units whose
capacities balance the output of the excavator. If this is not done,
63
operating difficulties will develop and the combined cost of excavating
and hauling material may be higher than when balanced units are used.
The productive capacity of a truck is determined by the
size of its load and the number of trips it can make in an hour. The
size of the load can be easily determined from the specifications fur
nished by the manufacturers. The number of trips per hour will depend
on the width of the vehicle and the horsepower of the engine. These
production rates are easily translated into performance charts which are
furnished by manufacturers.
4.3 GYPSUM PROCESSING
The processing of gypsum ore can be divided into two basic steps,
ore preparation and calcining. The specific means used to accomplish
each of these steps will be determined by such factors as the quality of
the gypsum ore and the type of product to be manufactured. For the
following discussion, general methods and equipment will be presented.
The entire processing procedure is graphically summarized in the
flow diagram in Figure 4.2.
4.3.1 Crushing
Ore preparation begins with primary crushing. This can be
accomplished through gyratory, jaw, or impact crushers, with the type
used depending upon the original size of the ore, the desired rate of
output, and types of subsequent processing.
Gyratory crushers operate with a vertical shaft which
follows an eccentric path at its lower end. Power is fed through gears
to the working shaft, or in some instances, with a vertical motor cou
pled to a ball and socket eccentric assembly. The crushing chamber is
very steep, allowing for greater throughput (48).
The gyratory crusher is a highly dependable machine that
requires infrequent maintenance. This type of crusher does not have the
strong ability to handle wet or sticky ore. In addition, initial pur
chase and installation costs are high. However, the gyratory crusher is
the most adaptable and dependable relative to other types of crushers.
Slower speeds and limited moving parts mean longer lives for working
64
FIGURE 4.2
GENERALIZED FLOW DIAGRAM OF GYPSUM PROCESSING
GYPSUM ROCK
FROM MINE
G
PRIMARY
CRUSHER
I
POSSIBLE
BENEFICATION
DRYER
(FREE MOISTURE)
SECONDARY
CRUSH & SCREEN
POSSIBLE CALCINING FINE
SCREEN WAS'. (ROTARY OR GRINDING
PRESSURE)
FINE CALCINING
GRINDING (KETTLE)
r STU CCO -1
DRY FLOW
REGRINDING PLASTER MIXES
PROCESS
SOURCE: J.F. Harvard, "Gypsum," Industrial Minerals and Rocks, 1960.
(Reference No. 87).
65
parts. Settings and crushing chamber designs can be altered to meet
widely different conditions (111).
Jaw crushers consist of two basic designs - the Blake type
and the overhead eccentric. Blake machines require a large housing and
heavy parts. The crushing action of a jaw crusher is similar to that of
a swinging door, since it. swing shaft, or pivot point is fixed. Be
cause of the large flywheels and direct push from the two toggle plates
and the pitman, the power relationships are excellent. The straight
crushing action means extremely low wear of the crushing surfaces. This
advantage is generally outweighed by its high original cost and low
overall capacity (48). Under normal circumstances, gypsum is pre
screened prior to entering the jaw crusher. Particle reduction ratios
are usually limited to 10:1.
Overhead eccentric jaw crushers are similar to the Blake
machine, with one key difference: the pivot point is not stationary.
This point follows an eccentric path and creates an elliptical motion,
creating a downward push on the material being crushed (108). Higher
throughput is generally associated with these machines. The majority of
jaw crushers in Egypt are the overhead eccentric type, being lighter,
smaller, and cheaper.
Impact crushers, or hammermills, rely on impact forces, as
opposed to compression for the basic crushing force. Hammermills allow
gypsum particles to free fall into a chamber until they are struck by
high-velocity forces occuring aL right angles to the direction of the
fall. These shattered particles are thrown against a stationary breaker
plate, creating an additional shattering force (108).
The impact action of this type of crusher acts along the
material cleavage lines of the gypsum. Sharp reductions in flat gypsum
particles are possible. Because gypsum contains a relatively large
percentage of softer materials, hammermills are capable of reducing
gypsum to fine particles. Where high percentages of crushed surfaces
are a requirement, as in gypsum processing, impact crushing is superior.
In addi-'oon, where gypsum clay particles create a tendency to clog, the
impact breaker offers superior performance in maintaining particle flows
(109).
66
Secondary crushing is performed through a variety of stan
dard crushing units, with hammermills and cone crushers being the most
popular units in Egypt (142). Cone crushers are similar to gyratory
crushers, with the only difference being the angle of the inner crushing
surface. This allows for greater discharge area and throughput.
Fine grinding of both calcined and uncalcined gypsum is
usually accomplished through grinding or roller mills.
A grinding mill
is a cylindrical, horizontal, slow-speed rotating drum, using metal
bulbs as grinding media. The roller mill, in its general form is
similar to the grinding mill, except that the grinding media consist of
a set of steel rods, rolling freely inside the drum, during its rotation
to give the required grinding action. Both mill types are generally
considered to be granular grinding units, primarily for handling a
maximum feed size of I to 1 1/2 inches, and grinding to a maximum of
65-mesh.
4.3.2 Screening
Because natural gypsum is rarely found in its pure form,
most gypsum ore requires benefication to achieve an acceptable level of
purity. The impurities most frequently found in gypsum deposits include
anhydrous gypsum, calcium carbonate, magnesium carbonates, silica, clay
minerals, and various so'uable salts (87).
Consequently, the low purity of Egyptian gypsum ore
re
quires the use of benefication techniques. The most common form of
benefication is simple segregation by particle size through dry screen
ing (48). This method is generally used to reduce the quantity of clay
and sand impurities.
Screening is usually conducted during the primary and
secondary crushing stages, in part to maximize crushing efficiency and
to reduce the amount of ultra-fines produced. The vibrating screen is
tie most widely used screen in the production of gypsum (134). The
cajacity of a screen is defined as the number of tons of material that I
square foot will pass per hour. The capacity will vary with the size of
the openings, type of material screened, moisture content, and other
factors. Because :f the inability to calculate these factors in
67
advance, it is good practice to select a screen whose capacity is 15 to
25 percent greater than the quantity to be screened (108).
4.3.3 Conveying
Material handling between the previously mentioned types of
equipment is achieved through the use of conveyors. Because the charac
teristics of the material change under different processing stages,
different means are available for handling gypsum at any specific stage.
The three types of conveying systems used in gypsum processing are belt,
bucket, and screw conveyors. Belt conveyors are comprised of an endless
belt operating over idlers. A screw conveyor consists of a steel con
veyor screw or spiral attached to a shaft or ordinary pipe. Its rota
tion moves material forward in a horizontal or inclined trough. Bucket
conveyors provide a continuous direct lift of bulk materials from one
level to another. This type of conveyor is comprised of a single or
double strand of conveyor chain to which are attached a series of cast
or formed metal buckets.
Feeders are often used in conjunction with conveyors.
These machines are used to control the rate of delivery by weight or
volume at which material is fed to conveyors.
4.3.4 Calcining
Gypsum (CaSO 4 . H 20) , the dihydrate form of calcium
sulfate is the most useful form of calcium sulfate. Anhydrite (CaSO4),
the other principal calcium sulfate mineral, has very limited use and is
generally considered to be an impurity.
Although often found in close association, the two minerals
have important chemical differences. Gypsum, possessing the two mole
cules of combined water, will convert to a hemihydrate form (CaSO 4 - 1/2
H2 0) given a modest amount of heat. The hemihydrate form, or plaster of
paris, as it is commonly called, forms the basis for over 90 percent of
all gypsum end products (87).
Anhydrite, on the other hand, is inert at these same tem
peratures, limiting its use to only a few specific cases.
The percent compositions for pure anhydrite and the
hydrates are shown in Table 4.1.
68
TABLE 4.1
CHEMICAL PROPERTIES FOR VARIOUS GYPSUM TYPES
SULFUR COMBINED
LIME TRIOXIDE WATER
COMMON NAME MOLECULAR FORMULA (CaO) (SO3 ) (H2 0)
Anhydrite CaSO4 41.2% 58.8% -
Gypsum CaSO4 ' 2H20 32.6% 46.5% 20.9%
Hemihydrate CaSO4 1/2
1 H2 0 38.6% 55.2% 6.2%
SOURCE: Encyclopedia of Chemical Technology, 1978. (Reference: No. 134)
69
Two forms of hemihydrate, alpha (a) and beta (B), have been
found to exist. The beta form is obtained when the dihydrate is par
tially dehydrated in a vacuum at 100 degrees C or under conditions where
a nearly saturated steam atmosphere does not prevail.
The alpha form is prepared by dehydration of gypsum in
water at temperatures above 97 degrees C. Alpha is distinguishable from
beta by its lower solubility and energy content. Alpha particles disin
tegrate very little when mixed with water. In addition, it requires far
less mixing water to form a workable slurry. Consequently, it has the
ability to produce denser and higher compressive-strength casts and less
excess water, beyond the quantity to be removed after hydration is
complete.
Because high early strength development is preferred in the
production of gypsum wallboard, the more reactive beta hemihydrate is
more uuitable for this purpose. The use of alpha hemihydrate is gen
erally limited to industrial uses where denser, higher strength casts
are preferred (134). A second advantage to beta hemihydrate is its low
cost.
The manufacturing of calcined gypsum is governed by speci
fic standards which are written by such organizations as the American
National Standards Institute, the American Society for Testing and
Materials, the British Standards Institution, and the International
Standards Organization. The standards and specifications of these
organizations are similar. Consequently, those of the American Society
of Testing and Materials (ASTM) may be taken as representative.
The most recent compilation of ASTM standards for the
production of calcined gypsum includes specifications covering the
following areas:
(1) Standard Specification for Gypsum (ASTM C22-77) (3)
(2) Standard Specification for Inorganic Aggregates for Use in
Gypsum Plaster (ASTM C35-76) (5)
(3) Standard Specification for Gypsum Plasters (ASTM C28-80)(4)
(4) Standard Methods for Chemical Analysis of Gypsum and Gypsum
Products (ASTM C471-76) (12)
70
After the gypsum rock from the quarry is crushed and sized,
it is used to feed the calcination process for conversion to
hemihydrate.
Kettle calcination continues to be the most commonly used
method of producing beta hemihydrate. The batch kettle can be operated
on either a batch or continuous basis. A typical kettle is shown in
Figure 4.3.
The batch kettle consists of a cylindrical steel vessel
enclosed in a refractory shell with a plenum between. The kettle is
suspended above a heat source from which heated air flows up and into
the plenum surrounding the steel vessel and through multiple horizontal
flues which completely penetrate the vessel. The plenum and flues
provide the heat transfer to the gypsum before the heated air is totally
exhausted. An agitator with horizontal arms penetrates the depth of the
kettle and is driven from above.
Crushed gypsum is fed from the top, with filling taking ap
proximately 15 minutes. Another 90 to 120 minutes are usually required
for the calcining process. Upon completion, the calcined gypsum, or
stucco, is discharged by gravity through a quick-opening gate located at
the periphery and bottom of the kettle. Approximately 950,000 Btu are
required per metric ton of hemihydrate (134).
An innovation to the batch process has been the continuous
kettle. The continuous kettle contains a continuous perforated grate
charged with a single layer or multiple layers of sized rock, with a bed
passing through the machine, drawing hot gasses through the bed. As a
result, crushed gypsum is fed into the kettle as a continous stream of
stucco is removed. This technique requires carefully controlled
conditions in order to control the degree of dehydration (111).
Other methods used to produce beta hemihydrate include the
rotary kiln. Although only 15 percent of all U.S. production is through
the use of rotary kilns, these vessels are popular in both Europe and
the Middle East.
Rotary kilns range in size from 5 feet in diameter and 60
feet in length to 20 feet in diameter and over 600 feet in length. The
drive is usually of variable speed, giving a range of from one to three
minutes per revolution, depending on the size of the kiln. Most rotary
71
FIGURE 4.3
GENERALIZED SECTION OF A CALCINING KETTLE
u-U.
Kettle shell
-- Kettle shell Sweep arms
_,,..,_,, ,. Outer shell
t nal flue
Horizom
Horizontal flue
Kettle bottomn)
Swew arms Hot Pit
Combustion chamber 0
Burner
SOURCE: Encyclopedia of Chemical Technology, 1978. (Reference No. 134)
72
kilns have a slope of 1/2 inch per foot. The various makes of rotary
kilns are generally alike, with slight variations in their features of
design and construction (19).
Figure 4.4 shows a typical rotary kiln. As this figure
shows, a totally enclosed grate is positioned ahead of the rotary kiln.
The grate and kiln are connected in sequence si that exhaust gases from
the kiln make two passes through the grate.
In operation, th finely ground gypsum is pelletized and
deposited in a layer on the travelling grate. Hot exhaust gasses at
1800 degrees F are drawn from the kiln and pass through the pellets at
the discharge end of the grate.
This first pass ends with the partial
calcination of the pellets.
The second pass, beginning at the feed end
of the grate, consists of drying the pellets and filtering dust from the
gases. The remaining calcination and final burning take place in the
rotary kiln itself (134).
4.4 PANEL PRODUCTION PROCESS
4.4.1 Dryflow Process
In the late 1970s Bevan Associates of London, England
developed a fundamentally new method of producing interior gypsum parti
tion panels, through the use of a dry manufacturing process. This
technology, known under the trademarked name of Dryflow, circumvents the
numerous mixing, compacting, and drying problems associated with conven
tional wet processes. This process also enables gypsum panels to be
produced from inexpensive raw materials.
A range of products which can be made by this process have
been conceived, including hollow-cored, glass-fiber reinforced gypsum
partitinns and liner panels.
The reduced cost associated with the
production of these panels has opened new market opportunities for the
Dryflow process in the United Kingdom. These products are anticipated
to be competitive in England on a total erected cost basis.
This compe
titive advantage is derived from the
ease of installation and the low
production and raw material costs associated with Dryflow panel..
Given the ability to be profitable at low levels of produc
tion, a Dryflow plant would be ideally suited for use in Egypt,
73
FIGURE 4.4
SCHEMATIC DIAGRAM OF ROTARY KILN SYSTEM
SIN & TABLE DRYING FURNACE llY-PASS
FEEDERSTC FA NO. I TRVEIN
GRATE CYCLONE DUST
COLLECTOR
PREHEAT FURNACE
ROTARY K'_N Al-COOLED
O R FEEDER
EF c AIR-COOLED
FEED END DISCHARGE END
FAN NO. 2 C LE
(EXHAUST) Co LTTE SPILLAGE
L___ ~COLLECTION ,
DRYNG WNDOXES PREHEAT WmNDOXES FAN NO. 3 (COOLER)/
SOURCE: Fives-Cail Babcock, Paris, France, 1982.
particularly over the neat five years as gypsum partitions become more
widely accepted in Egypt.
The Dryflow manufacturing process begins with the placing
of longitudinal glass fibers and core formers into position and clamping
the tongue and groove edges and mold facings together to close the
molds. These molds are grouped in batteries of four or more.
The gypsum fecder deposits dry gypsum hemihydrate powder
into the mold while the chopper cuts glass fibers into the desired
lengths and deposits them simultaneously with the powder. During this
step the mold is vibrated, compacting the gypsum powder and chopped
fiber.
When the mold has been filled, the core forming fingers are
withdrawn, with the molds being transported to the next position by
means of a carousel. Sprayers are lowered into the hollow-core spacer,
spraying water .gainst the free standing internal surfaces, converting
the gypsum from a hemihydrate to q dihydrate form. Filling and spraying
requires approximately seven minutes per mold.
The molds are then moved to the final position where the
hardening of the gypsum panels cakes place. The molds are opened, and
the panels are lifted and stacked by means of an overhead crane. This
final step lasts approximately seven minutes. Upon completion of this
step the molds are returned to the original position and the operation
is repeated. Throughout the duration of this process, other batteries
of molds are proceeding through the same steps, resulting in a continu
ous operation, with sets of panels being produced approximately every
seven minutes (28). The process is shown graphically in Figure 4.5.
A ypic-l dry process arrangement calls for three pairs of
molds to form a battery producing six panels per cycle. Because each of
the three steps takes seven minutes, and the carousel employs three sets
of molds, the effective production, or cycle time is seven minutes per
panel (26).
Assuming a cycle time of seven minutes, a typical carousel
with a ten-gang battery of molds will produce 234,000 square meters
(2,523,000 square feet) of 0.9 meters x 2.9 meters (2.0 feet x 9.5 feet)
panels per shift per year (28). This rate of production assumes an
allowance of 3 percent for wastage and 80 percent utilization capacity
75
FIGURE 4.5
DRYFLOW PANEL PRODUCTION STEPS
FILLING AND CORE
COMPACTION WI THDRAWAL
HYDRATION PANEL
AND SETTING EJECTION
SOURCE: C.G. Bevan, "Opportunity for John Laing Limited in Dryflow
Products." Report No. CS/15. March, 1981. (Reference No. 87).
76
for a plant operating 50 weeks per year. For panels weighing 28 kilo
grams per square meter (5.71 pounds per square foot) the annual consump
tion of gypsum per carousel is 6,310 metric tons (6940 short tons) (24).
Annual production rates are summarized in Table 4.2, for one carousel
operating two, eight-hour shifts, three carousels operating two shifts,
and six carousels operating three shifts. Manpower requirements are
summarized in Table 4.3.
The essential pieces of equipment used in the dry manufac
turing process are a carousel, or rotating platform upon which are
placed a gypsum-feeding head, a longitudinal glass fiber feeder, and a
chopper. An overhead crane is employed for placing and withdrawing the
core formers, placing the sprayers in the hollow cores, and withdrawing
and stocking the hardened panels.
Area requirements include covered space for the mold shop,
warehousing, office space, stores and similar activities.
In Egypt,
with its warm dry climate, many of these activities can be performed
outside, as they are often done in similar gypsum block manufacturing
operations. Sufficient open space will be required for external stor
age, vehicle accessories, car parking, and general usa. These area
requirements are summarized in Table 4.4.
Both alpha and beta forms of hemihydrate gypsum may be used
in the dry manufacturing process. However, to reduce cycle time, the
faster-hardening beta form is preferred (28).
Because the process requires quick hardening, no setting
retarder is required. Certain impurities such as marl and clay can be
tolerated in quantities up to 20 percent. Salt will not interfere with
the production process, however, it may promote the corrosion of metal
parts used in the production process.
Ordinary E-glass fibers, or lower-cost A-glass fibers can
be used, as the non-alkali gypsum matrix does not corrode glass. These
fibers are commonly used in reinforced plastics and other high-strength
applications.
Additives such as sawdust and fine sand may be employed.
Although sawdust may contribute to nailability, its hygroscopic nature
may result in some cracking, causing humidity induced expansion and
77
TABLE 4.2
ANNUAL PRODUCTION - DRYFLOW PROCESS
ANNUAL ANNUAL
GYPSUM GYPSUM
NUMBER OF NUMBER OF PRODUCTION PRODUCTION CONSUMPTION CONSUMPTION
CAROUSELS SHIFTS (square meters)
(square feet) (metric tons) (short tons)
1 2 468,000 4,045,000 12,636 13,900
3 2 1,404,000 15,135,000 37,908 41,070
6 3 4,212,000 45,406,000 113,724 125,100
SOURCE.
C.G. Bevan, "Summary of Dryflow Costs and Competitive Standing,"
Report No. CS/16. April, 1981 (Reference No. 29)
TABLE 4.3
ESTIMATED DRYFLOW MANPOWER REQUIREIENTS
NUMBER OF CAROUSELS
Line Staff
1 1 3 3 6 6
Shifts 1st 2nd Ist 2nd 1st 2nd
Number of Shifts 2 2 2 2 3 3
Carousel Operators 1 1 2 2 3 3
Overhead Crane Operators 1 1 1 1 2 2
Forklift Operators 1 - 1 - 2 -
Dispatchers 2 - 2 - 2 -
Laborers I 1 1 1 2 1
Foremen 1 1 1 1 1 1
Maintenance 1 1 2 1 2 1
TOTAL 8 5 10 6 14 8
Administrative Staff
1 3 6
Managing Director 1 I 1
Sales Manager 1 1 I
Production Manager 1 I 1
Accountant 1 1 1
Accounts Staff and Secretarial 3 6 8
Sales Representatives 3 6 8
Production Controller and Staff 1 2 3
TOTAL 11 18 23
SOURCE: C.G. Bevan, "Summary of Dryflow Costs and Competitive Standing,"
Report No. CS/16. April, 1981. (Reference: No. 29)
79
TABLE 4.4
DRYFLOW PRODUCTION AREA REQUIREMENTS
(square meters)
NUMBER OF *NUMBER OF WAREHOUSE (1) OFFICE (2) CAROUSEL STORES, LANDING TOTAL
CAROUSELS SHIFTS AREA
AREA CANTEEN (3) SHOP MAINTENANCE BAY AREA
1 2 400 110 80
70 40 60 760
3 2 1,200 180 96 100 50
80 1,706
6 3 3,600 230 128 140 70
125 4,288
(1) Assumes 200 square meters of warehouse area per carousel per shift
(2) Assumes 10 square meters of office area per staff member
(3) Assumes 8 square meters of canteen area per operator
SOURCE:
C.G. Bevan, "Summary of Dryflow Costs and Competitive Standing," Report No. CS/16. April,
1981. (Reference: No. 29)
-ontraction (26). Sand has one significant drawback: it can lead to
the rapid dulling of saws.
The dry production process offers several advantages over
conventional production process. Because very little water goes into
the panel, there is no wet mixing. Consequently, material cannot cure
in the feed lines and the entire plant can be stopped or started on very
short notice.
Even more significant is the ability to use quick-setting
gypsum mixes, providing high demolding strengths and extremely fast
production rates. Quick setting can be obtained by including 10 percent
or more of uncalcined gypsum, or by undercalcining the material during
processing (28). This option can represent considerable energy cost
savings when totally integrated calcining and manufacturing plants are
used.
Because of the small amount of water added after forming,
thin walled sections are ready for immediate demolding, without waiting
for full chemical cure. These sections can be as small as 2 millimeters
in thickness and can contain reinforcing fibers of over 100 millimeters
in length.
The basic principles of the dry manufacturing process can
be retained even under lower rates of production. Reduced rates can be
achieved by reducing the number of molds to a single mold or set, limit
ing all production steps to one location instead of moving from station
to station, and by simplifying the filling procedure. This last change
can be accomplished through the substitution of labor for some of the
filling mechanisms. Because of the relatively low present wage scales
and availability of labor in Egypt, the increased use of labor-intensive
processes and reduced initial capital expenditures are possible. These
alternatives are particularly attractive for use in Egyptian markets,
where simpler, lower-cost production units could meet the initial low
levels of demand. In addition, a low-volume installation would allow
for greater experimentation and development in the early stages, than
would be possible with full-scale equipment.
81
4.4.2 Other Processes
Over the last few years, the production of gypsum building
blocks in Egypt has increased dramatically. These blocks, or partition
wall panels are manufactured by several domestic organizations,
including ICON and GYMCO.
The basic manufacturing steps are shown in Figures 4.6 and
4.7. The process begins with the feeding of dry hemi-hydrate gypsum
from an elevated silo (4.6a) into a mixing trough where it is combined
with water. The slurry is then poured into a gang mold (4.6b), equipped
with either 18, 15, or 12 cells. These cells are equipped with tongue
and groove edge formers. When the cells are filled, the top groove
formers, shown resting against the mold (4.6b) are placed and hammered
down (4.6c). A hardening period of 10 minutes follows, while the
process is repeated on a second gang mold.
After hardening, the first mold is opened and the hardened
blocks are pushed up (4.6d), lifted by gang fringes (4.7a), and depos
ited on a dolly (4.7b). The dolly is moved into an open storage yard,
where a fork-lift equipped with lifting fingers (4.7c) deposits the
blocks on drying racks (4.7d).
The blocks remain on the racks 14 to 21 days in the open
air and sun until thoroughly dry, at which time they are strapped and
placed upon small pallets for shipment (4.7d).
The block manufacturing process is contained within a small
50 by 50 foot production unit. This small unlL has been designed for
operation on-project sites and can be erected or dismantled within two
days. This plant is intended to serve as a mobile production unit that
can be taken to the location where gypsum blocks are being installed
(140).
A typical block manufacturing process requires 8 workers
per shift, consisting of one plant supervisor and seven manual laborers.
Although this quantity of labor is comparable to that required for the
Dryflow process, the output per day for GYMCO plants is considerably
lower. A block manufacturing process also requires 70 kilograms of
gypsum per square meter of block produced, a significantly high quantity
when compared to dry process requirements (135).
82
FIGURE 4.6
ICON BLOCK PRODUCTION PROCESS
i 7'
P, ELEVATED SILO FOR b. EMPTYING GYPSUM SLURRY
GYPSUM POWDER INTO GANG MOLD
C. PLACING TONGUE FORMERS d. I.IFTING HARI)E:NI)
IN TOP OF MOLD GY'SUM BI.OCKS
SOURCE: Reference No. 140
83
FIGURE 4.7
ICON BLOCK PRODUCTION PROCESS
a. FINGERS LIFTING b. BLOCKS ON TROLLEY
GYPSUM BLOCKS
PLL
c. PACING BI.O(:KS IN d. STRAPPED BLOCKS
SItORAn,: YARD ON PALLET
SOURCE: Reference No. 140
84
CHAPTER FIVE
FEASIBILITY ANALYSIS
The introduction of new huildisg products, such as Dryflow panels,
often encounters resistance because of the natural reluctance of con
tractors, owners, and architects to use products that deviate from
traditional ones. This universal skepticism will usually persist until
considerable hard evidence on performance and cost effectivness becomes
available. At the very least, this entails that these new products are
both technically and economically feasible.
Technical feasibility analysis involves an assessment of the pro
duct's ability to meet specific physical requirements and its compati
bility with existing construction procedures, local cultural considera
tions, and climatic conditions. Economic feasibility analysis must
assess the new product's ability to compete with other products, and the
overall project's ability to compete with other investment opportuni
ties, the latter being affected by such implementational factors as the
availability and cost of capital, site, and infrastructure.
Chapter 5 begins with an assessment of technical feasibility, list
ing and summarizing the various technical characteristics and perfor
mance requirements for partitions and walls that are inherent to con
struction in Egypt. These technical requirements that must be met
include building standards, codes, and regulations, contract specifica
tions, indigenous building practices and systems, the characteristics
and properties of competing products, and cultural and climatic
conditions.
The remainder of Chapter 5 addresses economic feasibility. This
will include an analysis of cost competitiveness and key implementa
tional considerations of the type described above.
5.1 Technical Requirements ior Partitions and Walls
5.1.1 Building Codes and Regulations
In Egypt building codes are promulgated nationally by the
Egyptian government. Many of these codes are merely performance codes,
in that the expected behavior of a building is set forth, with the
specific means and materials left to the discretion of designers and
85
builders. Some of these performance codes have detailed descriptions of
construction methods that comply with international codes. However, in
Egypt the methods specified by these codes are not mandatory.
The requirements for partitions and walls in Egypt are
generally consistent wit*A those of the American Society for Testing and
Materials of the United States (AF'SM) and the Building Officials and
Code Administration (BOCA) of the uited Kingdom. One major requirement
is for cesistance to fire. Both ASTM and BOCA have defined the codes
for fire resistance according to such factors as hours of resistance to
fire tests, classes of occupanc,, and proximity to other buidings.
The BOCA code for fire resistance is shown in Table 5.1.
The maximum standard is 4 hours of resistance to a standard fire test
for critical bearing walls in a fire proof building. The mintidum stan
dard is zero hours. This standlard pertains to specific interior bearing
walls and partitions, and many non load-bearing partitions (32).
The two significant ASTM fire codes are:
1. Surface Burning Characteristics of Building
Materials (ASTM E-84)
2. Fire Tests of Building Construction and
Materials (ASTM E-119)
These specifications set standards for flame propogation,
smoke density, and temperature gradient over time for building
materials.
Because of its chemical composition, gypsum is highly
resistant to fire. Much of the water in its chemical composition must
be driven off before the temperature can rise to a sufficient combustion
level. Gypsum walls and partitions can therefore serve as fire barriers
with various hourly ratings of fire resistance and can meet all ASTM and
BOCA fire codes.
Other major requirements have been established in the BOCA
codes by referring to ASTM gypsum product code specifications. Some of
the more pertinent with respect to the construction of interior Is
are:
86
TABLE 5.1
BOCA FIRE RESISTANCE RATINGS OF STRUCTURAL ELEMENTS (IN HOURS)
TYPE OF CONSTRUCTION
STRUCTURAL
TYPE 1 TYPE 2
ELEMENT
NONCOMBUSTIBLE
FIREPROOF
PROTECTED UNPROTECTED
1A iB 2A 2B 2C
1. Interior Bearing Walls
and Partitions
4 3 2 1 0
2. Fire Walls and Party Walls
4 3 2 2 2
3. Fire Enclosure of Exitways,
Exitway Hallways and
Stairways
2 2 2 2 2
4. Shafts Other Than
Exitways
2 2 2 2
5. Exitway Access Corridors
and Vertical Separation of
Tenant Spaces
1 1 1 1 0
6. Other Non-Load Bearing
Partitions
0 0 0 0 0
SOURCE: British Gypsum, Ltd., "Information Bulletin No. 3," 1980.
(Reference No. 32)
87
(1) Standard Specification for Gypsum Partition Tile or Block
(ASTM C52-74) (8)
(2) Standard Specification for Application of Gypsum Base to
Receive Gypsum Veneer Plaster (ASTM C844-79) (18)
(3) Standard Specification for Installation of Interior Lathing and
Furring (ASTM C 841-81) (15)
(4) Standard Specification ror Application c! Gypsum Veneer Plaster
(ASTM C 843-76) (17)
(5) Standard Specification for the Application of Interior
Plaster (ASTM C842-79) (16)
The specification for gypsum block outlines the requirements
for chemical composition, quantity of aggregates and fillers, and physi
cal characteristics and dimensions. The specifications for installation
and application define specific procedures and such environmental
factors as temperature and humidity.
5.1.2 Contract Specifications
A typical set of contract specifications as put forth by an
Egyptian architect/engineer specifies both the technical characteristics
for materials and the method of use during the construction process. For
example, a specification for building lath and plaster covers all work
activities, products, and materials associated with interior furring,
lathing, plastering, and related items. All materials must be products
of recognized manufacturers engaged in the production of lathing and
plastering materials similar to those produced by the United States
Gypsum Company of Chicago, Illinois.
5.1.3 Installation and Erection Process
The traditional system of wall finishing in Egypt is des
cribed in the network diagram shown in Figure 5.1. This diagram shows
the many interrelationships between individual activities, including
both those of precedence and hierarchy. Each element, or activity,
shown in this diagram is described in Table 5.2.
Any alternative partition system must, at a minimum, be
capable of accomodating activities C, E, G, J, K, M, and 0. These
88
FIGURE 5.1
INTERFACE NETWORK DIAGRAM - EGYPTIAN INTERIOR FINISHING SYSTEM
A. TARTASHA
B. LEVEL POINTS
WALLS
C. ELECTRIC
CONDUITS
% D. HORIZONTAL
LEVEL POINTS
E. 'OOR 9 WINDOW
:RAMES
F. PLASTER.j
........
.... G. PULL WIRES
H. LAY FLOOR
TILES
I. SKIRTING
J.d F1X SASH AN4D
X
RCH|TRAVES
"" ....
K. INSTALL
SWITCHES
L PAINTING
L.
UADERCOAT
M. FIX GLASS
N. PAINTING
FINAL COAT
0.
0 ELECTRIC
COVER PLATES
M P. POLISH
- FLOOR
0 0. PAIT
r ~SKIRT 2.A
SOURCE: Cairo University/M.I.T. Technological Planning Program, "The
Housing and Construction Industry in Egypt - Improvement of
Interior Finishing," TAP Report 81-3. Summer 1981. (Working
Draft: Not to be Quoted.) (Reference: No. 34)
89
TABLE 5.2
ACTIVITY DESCRIPTION FOR NETWORK INTERFACE DIAGRAM
ELEMENT
ACTIVITY DESCRIPTION
A. Tartasha (plasterer)
Thin plaster mix is splashed onto
walls and ceiling.
B. Level points, walls
Using taut strings and plumb bob, flat
(plasterer)
gypsum plaster spots are affixed to
each wall to establish the plan of the
finished wall surface. These are
later removed during the applications
of the wall plaster.
C. Electric conduits
Channels are chiseled into the brick
(electrician)
of walls and the concrete of
the ceiling, and plastic conduits and
wooden or plastic boxes are affixed
with gypsum in such a way that the
conduits will be buried securely
beneath the plaster, and the boxes
will be level with the plaster
surface. Interface: These elements
must be coordinated dimensionally to
the imaginary wall plane established
by the level points.
D. Horizontal level
A water tube level is used to
points (carpenter)
establish reference marks on columns
1 meter above the plane to which the
floor tiles will be laid. These also
serve to establish the heights of
windGw and door units.
E. Door and window
Assembled frame units are inserted in
frames (carpenter)
rough wall openings, and are affixed
by means of metal anchors mortared
into openings chiseled from the
masonry. Interfaces: Frames must be
aligned to level points on the walls
so the architraves will fit, and door
frames must also be aligned vertically
with the horizontal level points.
90
TABLE 5.2 (continued)
ACTIVITY DESCRIPTION FOR NETWORK INTERFACE DIAGRAM
F. Plastering (plasterer) Level strips of plaster are troweled
across the level points to establish
lines across which a board can be
drawn to level the plaster to the
required plane. The level points are
then dug out and replaced with
plaster. The surface is finished with
a trowel to the desired texture.
Interfaces: The plaster touches, and
must come up level with, the window
and door frames. The plaster embeds
the electric conduit and should come
up level with the electric boxes. The
surface of the plaster plane is
established by the level points.
G. Pull wires (electrician) Once the conduit is fully embedded in
plaster and the plaster has hardened,
electric wires are pulled through the
conduits from one box to the next.
Interface: Electric conduits.
H. Lay floor tiles Sand is placed and leveled over the
(floor tiler) floor slab. A bed of mortar is
spread, and tiles are laid in the
mortar. Interfaces: The surfaces of
the tiles must align with the level
points for the floor.
I. Skirting (plasterer) A plaster skirting is troweled onto
the junction between the floor tiles
and the wall plaster. Interfaces:
This skirting must fit tightly to the
plaster and to the wall tiles.
J. Fix sash and architraves Window sash and doors are fitted into
(carpenter) the previously-fixed frames.
Architraves are applied over the
junction between the plaster and the
frames. Interfaces: Floor tiles,
plaster, frames, skirting.
91
TABLE 5.2 (continued)
ACTIVITY DESCRIPTION FOR NETWORK INTERFACE DIAGRAM
K. Install switches
Electric switches and receptables are
(electrician)
connected to the wires and screwed to
boxes. Interfaces: Wires, boxes.
L. Painting undercoat
First coat of paint is applied to
(painter)
plaster and wood components.
Interfaces are not of dimensional
significance.
M. Fix glass (glazier)
Glass is mounted in the sash.
Interface: Sash.
N. Painting final coat
A final coat of paint is applied to
(painter)
all plaster and wood components.
Interface: Care must be taken at all
edges to avoid spoiling of glass,
floor tiles, etc.
0. Electric cover plates
Plastic or metal plates are affixed
(electrician)
electric boxes. Interface: These
plates must align with the switches
and receptacles, with the plaster
surface, and with the screw holes in
the boxes.
P. Polish Floor (floor
The floor surface is ground and
tiler)
polished smooth with abrasive stones.
Interfaces: Care must be taken to
avoid damaging skirting and
architraves.
Q. Paint skirting
The skirting is painted. Interface:
Care must be taken to avoid spoiling
of the floor and wall.
SOURCE: Cairo University/M.I.T. Technolgical Planning Program, "The
Housing and Construction Industry in Egypt - Improvement of
Interior Finishing," TAP Report 81-3. Summer 1981. (Working
Draft: Not to be Quoted). (Reference: No. 34)
92
activities concentrate on the installation of windows, doors, and elec
trical appliances. Window and door frames for interior partitions in
Egypt range from 7.75 to 14 centimeters in thickness. Electrical con
duit is of semi-rigid plastic and is usually 13 millimeters in diameter.
Electrical boxes are 2.5 centimeters in thickness. Other partition
systems must also be compatible with the skills of the laborers used in
the construction of traditional brick walls (34).
Figure 5.2 presents a detailed cross-sectional drawing of a
typical wall and floor unit, revealing some of the flaws associated with
this type of construction. Brick walls in Egypt are frequently rough
and out of alignment. Consequently the plaster finish must be suffi
ciently thick to cover these defects (140). Level points must be in
stalled to establish a point of reference from which plaster surfaces,
electrical boxes, and window and door frames can be aligned. Most
frames and electrical boxes are aligned from these level points through
the use of a plumb bob and cord. This is a delicate process that re
quires considerable skill, frequently resilting in misalignments (34).
Many of these problems associated with interior wall con
struction can be attributed to the lack of mandatory and enforceable
building codes in Egypt.
5.1.4 Characteristics of Competing Products
Because of the lack of a mandatory set of performance codes
and specifications in Egypt, new building products are often designed to
replicate the characteristics of existing products. Thus these proper
ties merely represent a minimum standard that can be used in the absence
of specifications. The properties of these existing materials which
were identified in Chapter 3, are outlined in Table 5.3.
Compressive strengths range from 25 to 250 kilograms per
square centimeter for the various walling materials (74). It is safe to
assume that walling products with compressive strengths above 50 kilo
grams per square centimeter would be acceptable by Egyptian standards.
Although specific sound-blocking characteristics for bricks are not
known at this time, they are in the range of 30 to 35 decibels. These
ratings are reduced to 28 decibels with the use of doors and any other
details that pierce a wall or partition (140).
93
FIGURE 5.2
DETAIL OF FLOOR/WALL INTERSECTION
"---"---PICK
lc PLAtSTIR
~COK)U IT
LEVIL POINT
MOSAI TILE
0 ;1 C
0 *:~~LA~0
Interior Finishing," TAP Report 81-3. Summer 1981. (Working
Draft: Not to be Quoted.) (Reference: No. 34)
94
TABLE 5.3
PROPERTIES OF COMPETING PRODUCTS
LIGHTWEIGHT
SAND-LIME
SHALE CONCRETE
ICON
RED BRICK GYBCO
BRICK BRICK BLOCK
BLOCK BLOCK
RAW MATERIAL:
Nile Silt Sand and Shale and Cement and Gypsum with
Gypsum with
Quick Lime
Sand Lightweight
Silicon- Silicon-Based
Aggregate Based
Additive
Additive
DIMENSIONS
(centimeters): 25x12x6
25x12x6
25x12x6 50x12x20
66x5Ox8 66x50x7
AVERAGE COHPRESSIVE
STRENGTH 2
(kilograms/cm):
45
250 75-120 25
n/a 85
AVERAGE WEIGHT
(kilograms/brick):
2.75
3.2 n/a 7.6
23 14.55
Un
AVERAGE BULK
DENSITY
(kilograms/m):
1446 1835 1300
620 n/a n/a
SOUND ABSORPTION: n/a n/a
n/a n/a
50 dB 35 dB
THERMAL RESISTANCE
(m2h/ncal): n/a
n/a n/a n/a
0.27 0.20
n/a: Not Available
SOURCE:
A.S. Grigis and M. El Hifuawi, Rural Low Cost
Housing, Organization for Housing,
Building, and Planning Research, Report No. LCH-E-2, Cairo,
Egypt, 1978.
(Reference: No. 74)
5.1.5 Cultural/Climate Requirements
The climate fn Cairo, the Nile Delta, and northern cities
such
as Alexandria, Ismailia and Suez ranges from cool in winter to hot
in summer, with some rainfall occurring in midwinter. Farther south in
Luxor and Aswan, the climate is dry and hot. The moisture suscepti
bility of gypsum as a result of climatic conditions in Egypt is not a
significant problem. Even if these products are exposed to moderate
amounts of rainfall, hardness and strength will return upon drying.
As is customary in hot climates, ceiling heights are fairly
high. In Egypt they are generally about 2.9 meters (74).
Egyptian housewives and maintenance personnel generally
clean concrete and terrazzo tile floors by splashing water on them.
Often some water comes into contact with the lower parts of partitions
and walls. If these are of gypsum, some softening and erosion may
occur. Consequently, it is necessary to protect walls and partitions
with ceramic tile or similar skirtings, or build upon plinths of brick,
concrete block, or other water-resistant material.
In addition it is customary in Egypt to apply ceramic tile
on wall and partition surfaces in baths and kitchens. This necessitates
the use of a suitable tile base.
5.2 Analysis and Conclusions Re: Dryflow Panel Ability to Meet
Technical Requirement
The technical characteristics and the physical properties of Dry
flow panels and installation procedures make this product feasible for
use in Egypt.
Earlier tests by the British Building Research Establishment (BRE)
have demonstrated that Dryflow panels can be formulated to give very
high strengths. On the basis of these strength tests on small-scale
samples and subsequent engineering calculations, the resistance to
lateral loads and impact was judged to be adequate for use in Egypt.
All Dryflow panels tested were produced using the least expensive gypsum
plaster and a minimal quantity of glass fibers. The panels were de
signed to provide sufficient strength at a minimum cost. Currently,
bending moment capacity and matrix crack strength for the 2.9 meter
spans are satisfactory. However, these strengths represent a minimum
96
factor of safety. In the future, glass fiber contents may need to be
increased by as much as 50 percent, to provide for higher factors of
safety.
Dryflow panels, and gypsum in general, have well known fire perfor
mance advantages. This has been confirmed through BRE tests, which have
also shown that a high glass-fiber content will enhance this performance
considerably. For Dryflow partitions used within a dwelling unit, the
Egyptian code provisions should be satisfied. The same is true for both
party walls and Dryflow liner panels. In the future, fire tests on
full-scale panels will be needed to confirm these preliminary findings.
However, it is safe to assume that the fire resistance properties of
Dryflow panels are well in excess of Egyptian requirements.
Moisture resistance for Dryflow panels is comparable to that for
other gypsum products. The reinforcement in Dryflow panels does not
weaken or debond under wet conditions. Although matrix strength is
reduced, wet panels can still be handled satisfactorily. There is no
progressive weakening under wet conditions and full strength is regained
upon drying. The dry climate of Egypt should not present any problems.
Where floors are to be washed with water, water resistant plinths and
paints can be used effectively.
The installation process does not appear to entail any difficult
procedures, nor does it require intricate or lengthy training.
Dryflow partitions can be installed in the standard concrete frame
and slab construction buildings found throughout Egypt. These panels
can be installed through the use of tees and channels, or alternatively
using strong mortar bonding, dowel nails, clips, and other similar
devices. Outside channels or moldings placed at the tops of panels can
be used to accommodate the irregular ceilings found in Egypt. It is
anticipated that the installation of Dryflow panels will be compatible
with typical Egyptian floor plans.
An attractive feature associated with Dryflow panels is the ability
to eliminate the cost of accessories and all specialist labor operations
associate,' with these. For Egyptian applications it would be possible
to develop a fixing method which requires no special tools or acces
sories, other than the gypsum mortar and the plinths discussed eariler.
In Egypt plinths, such as those described in Section 5.2, could be
97
eliminated as contractors would have the option of protecting the lower
portion of the wall by carrying the floor tiling up to form a water
resistant skirting detail.
In addition, it is possible to skim coat Dryflow panels with plas
ter. This offers an advantage in that rough cutting of panels is far
more compatible with local Egyptian work practices. This would also
guarantee an acceptable finish using existing skills and labor. By
using a skim coat, both sound insulation and strength would increase.
Dryflow panels are compatible with most electrical systems found in
Egypt. The head rails are designed to provide direct access for elec
trical services without drilling. Cables from the ceiling cavity can be
inserted directly into the core slots after panel erection, without
requiring conduits. Socket boxes are simply mortared into place between
the webs. Shallow switch boxes can be held by normal plaster board
clips.
An alternative approach is to hack through the outer layer between
the two webs to produce the equivalent of a chased groove. This 30 by
30 millimeter slot could accommodate a normal conduit if this were re
quired. This approach would be particularly useful for skim coat
applications.
Similar considerations would apply to plumbing pipes, with these
services accommodated in the core slots. However, it is usually prefer
able to design the areas requiring services around double leaf parti
tions. This would provide sufficient access space for pipes. The
additional panel area used for these double leaf zones would be small
relative to the total building panel area.
The estimated sound-reduction factor for single-leaf partitions of
approximately 30 decibels should be satisfactory for Egypt, even though
it is lower than that of the 13 centimeter solid brlrk and plaster
partitions. However, these solid brick partitions and the typical
lightweight doors, with their corresponding flanking transmission
effects, limit the effective insulation to 28 decibels. These light
weight doors are usually found in the typical mass housing of Egypt. At
27 decibels of effective insulation, Dryflow partitions are one decibel
less than standard brick. It is reasonable to conclude that this would
pose few problems, as the Egyptian mass market would be more easily
98
influenced by price, availability, and convenience, rather than the
theoretical specifications given by manufacturers.
5.3 Cost Competitive Analysis
5.3.1 Total Erected Dryflow Cost
The purpose of this section is to summarize and compare the
competitive standing of Dryflow products in Egypt. Cost information
will be presented on all competing walling products. This information
will be used to make a preliminary assessment. The data for Dryflow
products are based on minimum per unit product costs. Labor costs are
calculated assuming an average wage rate of 2 Egyptian pounds per man
hour for a typical work crew (140). The costs for head and base rails
are based on British costs, using the current official exchange rate in
all conversion calculations. In many instances the costs for Dryflow
products have been overestimated. The Dryflow products that are com
pared in this analysis have been limited to non load-bearing partitions
and party walls. However, the production facilities described in Sec
tion 4.4 are also capable of producing lining and insulating panels
should a market exist for these products in Egypt.
A cost summary for the erection of single leaf, 30 decibel,
W1 Dryflow panels is shown in Table 5.4. These estimates assume a
two-man work team, consisting of one skilled and one semi-skilled
worker, giving an average Egyptian wage rate of two pounds per man hour.
These wage rates were furnished by AZAMCO, and apply to a work crew
erecting gypsum block partitions. These wage rates were used because of
the comparable man-hour and skill requirements. In the nonskim coating
application, the finished joints are ready for decoration, hence require
0.70 man hours for panel erection. The skim coating application re
quires only 0.50 man hours for erection, resulting from the exclusion of
all joint filling operations. An additional benefit associated with
this practice is the elimination of labor for trades and finishing at
corners.
Also a large portion of the general making good provision can
be transferred to the skim coating operations. These estimates are
clearly approximate. However, they are accurate enough when related to
the larger labor requirement of 3 man-hours for competing brick
construction.
99
TABLE 5.4
COST SUMMARY - DRYFLOW PANELS
NON-SKIM COATING APPLICATIONS
Material* Cost Per
Egyptian Labor** Square Meter
Pounds per Labor Egyptian Egyptian
Work Description
Square Meter (Hours) Pounds Pounds
1. Partition Panels
3.25 0.70 1.40 4.65
(including bonding
of vertical joints,
taping and finish
ing both sides)
2. Galvanized Steel
0.50 0.20 0.40 0.90
Head and Base
Rails
3. General Making Good
0.15 0.23 0.46 0.46
TOTAL 6.16
SKIM COATING APPLICATIONS
1. Partition Panel
3.25 0.50 1.00 4.25
Erection (excluding
tracks and finish
ing at corners)
2. Galvanized Steel
0.50 0.10 0.20 0.70
Head and Base Rails
3. Skim Coat Plastering
0.90 1.12 2.24 3.14
The procedure for erecting twin leaf, 40 decibel, WI panels
is similar to the previously described process, with the exception of
additional costs fur larger panels and initial panel erection.
The c3st
per square meter for a wall using twin panels is approximately 8.75
Egyptian pounds for non skim coat and 11.49 pounds for skim coat appli
cations. Likewise, twin leaf, 50 decibel, party walls using W2 Dryflow
panels can be installed at a square meter cost of
11.27 and 14.80
Egyptian pounds for non skim coat and skim coat, respectively. Although
initially these costs appear to be prohibitive, they represent a small
quantity relative to total building panel area. Builders are more
likely to purchase cheaper single-leaf partitions, being influenced by
the lower price and greater convenience associated with these panels.
Consequently, double-leaf partitions would be employed sparingly, for
use with plumbing services.
5.3.2 Cost of Competing Products
The total erected cost for red bricks is shown in Table
5.5. These estimates
are based upon 1978 data and were subsequently
adjusted to current rates using information supplied by Arab Contractors
of Cairo, Egypt. The erection of brick walls uses substantial man hours
of labor, requiring the input of two masons, two unskilled laborers
for
the transporting of brick, two semi-skilled workers to prepare and
transport water, one npprentice to patch, and one skilled scaffold
builder.
Shale ane sand-lime bricks have an approximate total erected
TABLE 5.5
COST SUMMARY - RED BRICKS
(Egyptian Pounds)
Total Cost Per
Work Description Materials Labor Square Meter
1. Red Brick Wall 2.93 1.74 4.32
2. Plaster Base - - 3.67
3. Plaster Finish 2.53
TOTAL 10.52
Source: Reference No. 134.
102
The GYMCO panels described in earlier sections are signifi
cantly more expensive, with a unit price of 11 Egyptian pounds per
square meter. These panels can be erected using a two man work crew
consisting of one craftsman, or mason, and one assistant (135).
The cost advantages of single-leaf partitions over brick
walls and GYMCO panels are apparenL from the data presented in this
section, offering savings of as much as 45 percent. Although the compe
titive position of ICON blocks appears initially to be somewhat signifi
cant, there are many problems and limitations associated with the use of
these blocks in Egypt. Problems such as poor water resistance, poor
impact resistance and long and specialized training for work crews has
continually hampered the use of this product in Egypt (140).
The price
summary in Table 5.6 shows that Dryflow panels can compete favorably
with the present array of interior walling products in Egypt.
5.4 Implementational Considerations
5.4.1 Availability of Capital
The Egyptian government has tried to control inflation by
limiting local capital availability dnd credit expansion. The govern
ment has also implemented International Monetary Fund recommendations
for increases in lending rates in an attempt to discourage unproductive
investment. Borrowing rates currently range from 13 to 16 percent per
annum for ordinary operations and 12 percent for export financing (90).
All firms in Egypt, particularly those formed under Law 43,
can obtain local and foreign exchange from either private, joint
venture, or state-owned banks. Public-sector firms may deal with
joint-ventuee and state-owned banks, although they may not do business
directly with private or completely foreign-owned banks. Private-sector
firms are free to deal with any bank (35).
Of the four state-owned banks in Egypt, the largest is the
National Bank of Egypt.
This bank handles the greatest volume of
foreign trade operations, and owns
51 percent of joint ventures with
Chase Manhattan (United States), and Societe Generale and Credit
Lyonnais (France).
The second bank, Bank Misr, is oriented towards
development banking and serves as a holding company for a number of
industrial enterprises. Bank Misr also holds a 51 percent joint venture
103
TABLE 5.6
INTERIOR PARTITION PRODUCT PRICE SUMMARY
(per square meter installed)
Dryflow - Single Leaf (skim-coat applications) L.E. 8.09
Dryflow - Single Leaf (non skim-coat application) L.E. 6.16
Dryflow - Twin Leaf (skim-coat application) L.E. 11.49
Dryflow - Twin Leaf (non skim-coat application) L.E. 8.75
Red Brick L.E. 10.52
Shale Brick L.E. 9.50
Sand-Lime Brick L.E. 9.50
ICON Block (8 centimeter) L.E. 7.50
ICON Block (10 centimeter) L.E. 8.50
CYMCO Panels L.E. 11.00
SOURCE: Comparison of Estimated Erected costs of GRG and Permanent
Panels Report No. CS/05, C.G. Bevan Associates Limited, London,
England. (Reference: No. 21)
(References: Nos. 135 and 140)
104
with the First National Bank of Chicago (United States), UBAF Bank Ltd.
(France), and Banco di Roma (Italy).
Bank Misr is also a partner in
Misr International Bank, Misr-Iran Development Bank, and Misr-Rumanian
Bank. The third state-owned bank is the Bank of Alexandria.
This
institution is responsible for the majority of public. industrial-sector
financing. The Bank of Alexandria has 51 percent equity in a joint
venture with American Express International Corporation (United States),
with authorized local capital of $30 million.
The last bank is the Bank
of Cairo, which deals primarily with the service and construction sec
tors.
It has a 50 percent joint venture with Barclays International
(United Kingdom) and small equity shares with Banque Nationale de Paris
and Banque du Caire et Paris (France).
The largest of these joint ventures between the state banks
and foreign banks is the Chase National Bank. This bank, being
majority-owned by Egyptians,
can operate in both Egyptian pounds and
U.S. dollars. Other joint-venture banks have applied to become 51
percent locally owned, since that would give them the right to operate
in local currency. These applications have been delayed, as the govern
ment is reconsidering its policies toward minority-owned banks and may
soon allow them to deal in local currency.
Two additional banks that were set up to deal exclusively
with foreigners and in local currency are the Arab International Bank
and the Arab African International Bank. These banks are exempt from
Central Bank control, taxes, and disclosure requirements (85).
Short-term funds can be borrowed from most of the above
banks. These are usually in the form of drafts on letters of credit and
are primarily used to finance working capital and seasonal needs.
Des
pite the high inflation rate in Egypt, short-term interest rates are
low. The Central Bank discount rate is currently 12 percent, and
borrowers can usually obtain funds at 13 to
15 percent (136-139).
The primary source of medium- and long-term credit is from
the state-owned Development Industrial Bank. Hard-currency loans are
currently Ii percent per annum, while local-currency loans range from 11
to 13 percent. These funds mainly come
in the form of loans from
foreign countries. Most borrowers of these funds, desiring
to finance
imports, are tied to the suppliers from the lending country.
105
Additional sources of long-term capital include the Misr
Iran Development Bank, a joint venture between Misr Bank and Iranian
capital, and two private banks, the Cairo-Far East Bank and Mohandes
Bank. A cummary of the terms and conditions for some of these lending
institutions is shown in Table 5.7.
Most banks require at least a 1.5 to I debt-to-equity
ratio. One exception to this is Chase National Bank which will go as
high as 2 to 1, contingent upon long-term cash flow streams (138). Some
public sector banks will go as high as 4 to 1. Most banks prefer a
medium-term duration of 3 to 5 years. Occasionally, through a decision
from the bank's board of directors, this will be extended to 7 years.
The grace period varies considerably, but generally ranges from 3 to 18
months, with 6 to 12 months from the start of production being the most
common. All banks grant interest rates on foreign currency of 1.5 to
2.5 percent above London Interbank Overnight Rates (LIBOR). Commitment
fees are generally negotiable. The current interest rate for local
currency loans, as determined by the Central Bank of Egypt, is 13 per
cent per annum for all industrial projects. Fees on these loans, also
set by the Central Bank, are currently 0.5 mille per month.
Once long-term loans have been negotiated, most banks will
extend working capital loans in the form of letters of credit for the
firm, which usually include overdraft accounts (137).
A major obstacle that currently exists, regarding banks'
ability to lend capital, is the ceiling imposed by the Central Bank of
Egypt that requires a loan-to-deposit rate of 65 percent (90). As a
result, banks exhaust their supplies of capital early in the fiscal
year.
To secure credit, Egyptian banks require that the borrower
provide a feasibility study, detailing the economic feasibility of the
product, cost breakdowns, sales and financial projections, a list of the
firms covenants and officers, and information on equipment suppliers
with regard to financial history and credit worthiness. In addition,
loans usually require some sort of guarantee, either mortgages on land
or buildings, or in the case of foreign subsidiaries, a guarantee from
the parent company or a foreign bank (138).
106
TABLE 5.7
LONG-TERM LOAN RATES
MISR/IRAN CAIRO-FAR EAST
CHASE NATIONAL MOHANDES
debt/equity ratio
1.5:1 1.5:1 1.7-2.0:1 1.5:1
duration.(max)
3-5 years 3-5 years 3-5 years 3-5 years
FOREIGN CURRENCY
interest rates
LiBor LiBor
LiBor LiBor
0D
fees
2% 2%
1/2 per mille 2%
per month
commitment fees
none
N/A J% on balance
grace period
1 year 1/2-1 year
1/2 year 3-6 months
LOCAL CURRENCY
interest
13% 13%
13% 13%
fees
1/2 mille per month
(both set by Central Bank)
duration
consistent with foreign currency loans
SOURCE:
Reference Nos.
136, 137, 138, and 139.
Equity capital represents another source of funding in
Egypt. This represents an important source of capital, in light of the
1:1 debt-to-equity ratio required under Law 43. Both Misr-Iran Bank and
Cairo Far East Bank provide equity capital. Misr Iran Bank will provide
up to 20 percent of total equity. Cairo-Far East Bank requires share
holders to raise 20 to 25 percent of equity. Both banks make their
participation contingent upon the shareholders' ability to raise a
minimum portion of the required equity (136, 137).
The best major source of long-term financing is through
arrangements with foreign equipment manufacturers. Most exporting
countries offer some form of export promotion device that allows domes
tic firms to compete in international markets. In the majority of
instances, countries provide lines of credit to companies exporting
equipment to Egypt. The terms and availability of this credit are often
influenced by the relationship between the Egyptian government and that
of the exporting nation. Presently, the United States is the largest
aid donor to Egypt, followed by the European Economic Community coun
tries and Japan. Because the equipment of the United States, Japan, and
the United Kingdom is the most cost-competitive, only the aid programs
of those countries will be described.
The United States offers aid through the Agency for Inter
national Development (AID). The terms and conditions offered by the AID
program are generally the most attractive. AID is the only foreign
agency that has set up an official program to target the Egyptian pri
vate sector. This has been accomplished through the commodity import
program, which covers all AID financed capital and intermediatc goods.
The program finances projects by selling foreign exchange, through the
Egyptian government, to private-sector firms at the official exchange
rate. Cuirently, public-sector commeicial and specialized banks are the
only participants in the program. These banks grant loans for 75 per
cent of the transaction amount with a maximum term of three years. A
loan guarantee is secured by AID in the United States, and the suppliers
deliver the equipment to Egypt after a letter of credit has been ex
tended in the United States. Interest rates for end users are presently
10 percent per annum and 12 percent for wholesale traders (50).
108
Jointly-owned companies, formed under Law 43, are not eli
gible for these loans. Although this program has spent $137 million
over the last five years, it is currently undergoing major changes, and
its programs are expected to be significantly revised for fiscal year
1983. In revising the policies of this program, AID will attempt to
include both joint-venture and private-sector banks. The two major
problems associated with this program are that Egyptian banks require
collateral to exceed the down payment by 25 percent and that bank lend
ing fees are excessive, ranging from 6 to 12 percent (122).
A similar program is available for public-sector firms.
The terms under this program are 10 percent and 5 years for capital
goods and 5 percent and 3 years for intermediate goods. This program
will also be revised for fiscal year 1983. The only major change will
be to lower the duration of these loans and to raise interest rates to a
level more compatible with those for loans extended to the private
sector.
The Export-Import Bank of the United States also provides
long- term financing assistance for U.S. exports. This financing takes
the form of either a direct loan to an overseas buyer, or a financial
guarantee assuring repayment of a private credit. The Export-Import
Bank will frequently combine these two forms of support into a single
financing package. This bank will provide credit for up to 65 percent
of the U.S. export value. The bank requires a cash payment from the
buyer to the U.S. seller of at least 15 percent of the export value.
The balance of the financing is usually provided by private lending
sources.
Repayment of principal and interest normally begins six
months from the date of delivery of the products or completion of the
project. Terms generally range from five to ten years. The bank's
interest rates
are fixed for the life of the loan at the time of author
ization. The current interest rate for these loans is 10 percent.
The United Kingdom does not currently have a program for
assisting Egyptian private sector firms.
The only source for financing
private sector purchases of UK equipment is through the Egypt Credit
Guarantee Department (ECGD). The exporter is responsible for initiating
this process in the United Kingdom under the export credit guarantee
109
policy. The present terms for capital goods under this policy are 5
years and 10 percent, with a down payment of 20 percent. The terms of
this policy allow for 10 percent of the value to be in local capital
goods (120). In Egypt, this could be applied to the erection of gypsum
plant facilities.
Japan offers two types of loans to Egyptian firms. The
first type is extended only to public-sector firms. These are similar
to AID loans, and offer terms of 3 percent and 30 years. The other
source of loans is through the Japanese Export/Import Bank. The policy
of this bank is to extend a line of credit to the Egyptian Ministry of
Investment and International Cooperation, giving the Ministry the res
ponsibility of allocating funds to various projects. The current rate
for these loans is 9 percent per annum, and a down payment of 25 per
cent, with the loan duration and grace period being negotiable (76).
5.4.2 Foreign Investment and Tax Laws
In April, 1974, President Sadat presented a Working Paper
to the Egyptian People's Assembly. This document was subsequently
approved in a national referendum in May of the same year. The funda
mental changes in economic policy, expressed in this Working Paper, led
to the enactment of Law Number 43 of 1974. This represented a departure
from its stance toward foreign investment in the 1960's, during which
time the government nationalized foreign investments in most sectors of
the economy.
The majority of foreign investors who have shown an in
terest in Egypt were motivated by the promulgation of this law, and its
subsequent amendment in 1977. This law encouraging foreign investments,
offers such incentives as guarantees against expropriation, exemption
from many of the nuisance provisions that apply to local firms, and
other favorable legislation on banking, foreign-currency dealings, and
commercial representation. In addition, Law Number 59 of 1979 provides
a ten year or longer tax holiday for all joint ventures located in the
new communities. This legislation has since made foreign capital and
technology more easily available to the Egyptian economy (50). The
following review summarizes the three major provisions of Law Number 43.
110
1. Ownership
All projects must be established jointly, with Egypti(an
capital supplied by either public or private sector firms. A minimum
percentage of local participation is not required.
2. Inflow and Outflow of Funds
All invested capital in the form of foreign currency
brought into Egypt shall be transferred at the highest prevailing ex
change rate, as declared by all applicable Egyptian authorities. All
invested capital may be re-exported or disposed of in full to the extent
of the credit balance in the foreign exchange account or "if the inves
tors had disposed of such capital in exchange for free foreign cur
rency." Invested capital is defined as free foreign currency, machinery
and equipment, intangible assets, and all free foreign currency spent on
preliminary studies, research, and incorporation costs. All earlier
restrictions affecting the marketability of equity have been .bolished.
This may be done provided that five years have elapsed from the date of
importation of the capital. The Investment Board will waive this condi
tion if a project cannot be implemented or continued for reasons that
are beyond the control of the investor. The transfer of invested capi
tal abroad must be done in five annual equal installments at the rate of
exchange prevailing at the time of transfer. Invested capital may be
exchanged in full if the investor has disposed of said capital in ex
change for free foreign currency actually transferred into Egypt. All
investment in favor of a third party shall transfer the privileges of
Law 43, only if the purchase is made in free foreign currency. If the
divestment is made in local currency, the purchaser is denied those
privileges of Law 43 enjoyed by the divesting party (85).
To receive exemption from exchange control regulations, a
project may maintain a bank account(s) in foreign currency with one of
the authorized bhnks in Egypt. On the credit side of such accounts
shall be entered all free currency received from abroad, purchased from
local banks, or received from sales made to the local market in foreign
currencies. This account is utilized for the payments of imported
investment goods and commodities necessary for the operation of the
project, interest and principal of foreign loans, and any other
necessary project expenses (90).
111
3. Incentives and Guarantees
All profits are exempt from all taxes on commercial, indus
trial, and undistributed profits. Distributed profits, or dividends,
are exempted from General Income Tax, proportional stamp duty, and the
tax on the revenues for movable capital. The exemption from the General
Income Tax is conditional upon such income not being transferred. These
exemptions are valid for a period of five years (90).
All interest due on foreign loans made by the project shall
be exempt from all Egyptian taxation.
Tax exempt status for a period of ten years will be ex
tended to projects established in new cities outside the agricultural
area and the perimeters of existing cities. This period may be extended
to fifteen years with the approval of the Investment Authority Board
(53).
All capital assets and components required by projects may
be exempted from, or granted the privilege of, deferred or installment
payments for all or part of the customs duties. If any exempted items
are disposed of within five years from the date of import, all taxes and
duties previously exempted must be paid. All exemptions and deferments
must be negotiated with the Investment Board (55).
Disadvantages associated with operating under Law 43 are
that electricity and fuel costs are at current international prices and
that debt-to-equity ratios must be at least one to one. An alternative
to incorporation under this law is to incorporate under existing local
laws. By incorporating under Law 159, firms may purchase fuel and
electricity at subsidized prices, and may have any debt-to-equity ratio
within the limitations of the lending institutions. In addition, mining
companies formed under this local law receive a five year tax holiday
(54). Disadvantages associated with Law 159 are difficult access to
import markets and foreign exchange and stringent labor laws and duty
regulations.
Despite these problems, it may still be advantageous to
incorporate under Law 43, particularly if a financial institution would
be willing to participate in the equity portion of the project along
with the individual shareholders. Under these circumstances a one to
one debt-to-equity ratio restriction would pose few problems. However,
112
it may be feasible to incorporate under local laws if a firm's inter
action with the import market is not going to be great and if the one to
one ratio is too restrictive.
The new corporate tax law effective January 1, 1981 has
greatly simplified Egypt's corporate tax structure, establishing a flat
32 percent tax rate. This tax applies to all undistributed profits and
as a withholding tax on distributed pLofits. All dividends paid out are
deductible from taxable income. All losses may be carried forward for
five years (53).
Depreciation rates vary both by item and according to area
of use. Industrial machinery and equipment allowances range from 5 to 8
percent. Vehicles for road transportation range from 8 to 25 percent.
Firms may use either straight-line or the declining balance method.
Depreciation may not be delayed until after the tax holiday, because it
is calculated on actual depreciation during the company's fiscal year
(53).
5.4.3 Availability of Infrastructure
An assessment of the local infrastructure can be divided
into three areas: water, electric power, and transportation. Currently
the Fayoum governorae lags behind the regions of northern Egypt in
these areas, as most of the infrastructural network has exceeded its
estimated life arid is unable to cope with present demand.
Fayoum presently relies on two sources for its water
supply - the water treatment plants at Kahafa and at El Azab. The water
treatment plant at Khhafa, established in 1926, feeds the northern
portion of Fayoum City. The plant at El Azab feeds both the sourthern
portion of Fayoum City and the remainder of the Fayoum Governorate. In
principal, the plant at Kahafa was to feed the entire city of Fayoum,
while the El Azab plant would feed all areas within the governorate
located outside of Fayoum City.
The plant at Kahafa consists of four pumps with a total
capacity of 470 liters per second. However, because of frequent break
downs, average outflow is only 200 liters per second. The function of
these high pressure pumps is to pump the purified water through the
distribution nets of the governorate. Because the needs of Fayoum City
113
are 450 liters per second, an additional 200 liters per second must be
directed from El Azab to the city, leaving a shortage of 50 liters per
second.
The water needs of the governorate far exceed the current
level of production. Many areas within the governorate are not reached
by the distribution networks. The only adequate water supply within
close proximity to the quarrying site is located five miles away. This
water supply is usually sufficient, however, at certain times of the day
there is either inadequate water pressure or a complete stoppage of
water flow. Because only small quantities of water are required for
gypsum calcining and Dryflow production, it appears as though the local
water supply will be adequate.
The electric current feeding the Fayoum governorate is fed
from the Fayoum substation. This substation produces a voltage output
of 66/11 kilo-volts and a power output of 30 mega-watt amps. This
substation is fed by the substation at Beni Suef (66/11kv and 132 Mw-A)
through a dual, 66 kv overhead line. One transformer at the Fayoum
substation is used to feed the water purification plant, while the other
two substation transformers feed Fayoum City and the surrounding area,
including the mining site at Gerza.
Future construction plans include a 20 mega-watt gas gen
eration station supplying llkv and a 220/66/11 kv transformer station in
the Darma area. This latter station will receive 220 kv through an
aerial line from Cairo. It is expected that this station will be com
pleted by late 1984 and will replace the present line at Beni Suef. It
is expected that power output will keep pace with increased future
levels of demand, as total output will increase from a current 30 MV-A
to 90 MV-A by the year 2000 (44). Given present conditions, the elec
tric power supply in Fayoum will be adequate for the operation of a
gypsum plant.
The network of roads, including those between Fayoum City
and Beni Suef and Cairo, appears to be more than adequate for the trans
port of gypsum ore and its finished products. The roads connecting the
many towns and villages of the governorate are also adequate, and would
pose few problems.
114
5.4.4 Availability of Site
The availability of the quarrying sites at Fayoum is
governed by the rules and regulations of Law Number 86. According to
this law, all persons, whether natural or nominal, have the right to
explore for minerals on any uncontested quarry property in Egypt, as
long as all necessary permits are secured. Egyptian nationals have
priority over foreigners with respect to quarry exploration (59).
Currently, no such claims exist for most of the gypsum quarry sites in
Fayoum.
Exploration contracts are then issued by the Ministry of
Industry for the time duration requested by the applicant. TIce contract
length must exceed one year and be for no more than thirty years.
Expired contracts may be renewed for a period no longer than fifteen
years. These contracts may be renewed no more than twice, but addi
tional renewals may be granted by the Ministry of Industry. All con
tracts will be revoked for any work stoppages greater than 90 days.
Exemption from cancellation will be granted by the Department of Mines
and Quarries under extenuating circumstances.
Royalties must be paid every six months at the rate of 0.5
Egyptian pounds for each ton of Gypsum or Anhydrite quarried or 0.075
pounds for each cubic meter quarried. Choice of payment is left to the
discretion of the owner. The licensee must pay in advance an annual
rent payment determined by the Minister of Industry and Commerce. In
addition, the Department of Mines and Quarries requires an annual rent
payment on areas used by the licensees outside the area of exploration
for service buildings or other related activities. Rents are collected
at the following rates:
1. 5 Egyptian pounds per hectare or portion thereof used
storage or manufacturing facilities.
2. For water or compressed air pipelines, aerial lines or
public roads, a fee of 0.1 Egyptian pounds per meter for
the first kilometer, and 0.05 pounds per thereafter.
For quarries that have both rent and royalty obligations,
only the higher of the two must be paid (59).
115
5.5 Summary and Conclusions
From the preceeding analysis it is possible to conclude that Dry
flow panels are both technically and economically feasible for use in
Egypt. Preliminary tests for compressive strength, and impact and fire
resistance have shown that Dryflow panels either meet or sarpass all
Egyptian requirements for interior partitions. The simple installation
procedures associaced with these panels enables contravtors to use this
product without resorting to specialized labor. Tradesmen, such as
masons and apprentices, can be easily taught the few basic panel instal
lation steps. In addition, the installed panel system will not be
subject to the defects associated with brick wall construction as were
outlined in Section 5.1.
The cost summary shown in Table 5.6 shows total installed cost
savings of up to 45 percent for single leaf Dryflow panels. It is
assumed that as Dryflow panels become more accepted in Egypt, contrac
tors will switch to less expensive non skim-coat applications, being
influenced by its reduced cost and greater ease of handling. Although
double-leaf partitions are more expensive, their use would be strictly
limited to plumbing service enclosures.
Capital, whether in local or foreign currency, is available to most
credit-worthy investment opportunities. Currently, many options exist
for the borrowing of capital, including leveraging structure and lending
institution. Two options are presently available for incorporation in
Egypt, each with its own inherent advantages. These options will be
assessed individually in Chapter 6, carefully weighing the benefits and
disadvantages for a wide array of financial scenarios. In addition, the
cost and availability of the quarrying site and infrastructure, as
previously described, will be used in the following project analysis.
116
CHAPTER SIX
GYPSUM-BASED CONSTRUCTION PRODUCT MANUFACTURING IN THE
FAYOUM GOVERNORATE - A CJA STUDY
To determine the profitability of gypsum-based product manufac
turing facilities, a case study framework is developed in Chapter 6.
This case study is applied to two integrated production facilities, the
first producing only calcined gypsum and the second producing both
calcined gypsum and Dryflow panels.
For the purposes of thio analysis, a gypsum quarrying site located
within the Fayoum Governorate has been selected. This general area was
selected on the basis of its accessibility to the markets of Cairo and
Fayoum, and its immediate availability to potential investors.
Chapter 6 presents this case study in three steps as follows.
Firstly, a summary of the pertinent market data and conclusions to
Chapter 3 are presented, providing information on future market demand
for plaster and panels. Secondly, optimal quarry sites and equipment
configurations are determined, showing detailed investment and produc
tion cost breakdowns for all selected equipment. The chapter concludes
with a comprehensive financial feasibility analysis.
6.1 Market Assessment for Gypsum-Based Construction Products
6.1.1 Gypsum Plaster
Based on the data in Chapter 3, Table 6.1 has been con
structed showing three scenarios for calcined gypsum demand through
1992. These data are shown graphically in Figure 6.1. The "pessimis
tic" level of demand, as derived by McKee-Kearny (97) is based on a real
GNP growth rate of 7 to 9 percent for the Egyptian economy. The "opti
mistic" forecast, formulated by Booz Allen and Hamilton (31), assumes a
10 to 12 percent real rate of growth. The "most likely" forecast was
calculated as ai average of the two limits. These three scenarios will
be incorporated into the financial feasibility analysis of Section 6.4.
117
TABLE 6.1
FORECASTED PLASTER DEMAND - NATIONAL
(metric tons)
DEMAND - DEMAND -
DEMAND - *
YEAR OPTIMISTIC (a) MOST LIKELY
PESSISMISTIC (b)
1983 599,000 521,000
443,000
1984 650,000 562,000
474,000
1985 701,000 603,500
506,000
1986 765,000 656,500
548,000
1987 837,000 701,500
566,000
1988 915,000 757,000
599,000
1989 1,002,000 817,000
632,000
1990 1,096,000 880,500
665,000
1991 1,129,000* 912,000
695,000*
1992 1,196,000* 961,000
726,000*
*Extrapolated using trend line applied to existing data.
SOURCE: (a) Booz, Allen and Hamilton, "Strategic Study for Building
Materials ane Ceramics," Part XII, 1977. (Reference: No.
31)
(b) McKee-Kearny, Development of Ras Mallaab Gypsum Deposits for
Sinai Manganese Company, 1981. (Reference: No. 97)
118
FIGURE 6.1
CALCINED GYPSUM DEMAND - THREE SCENARIOS
1.3
1 .2 Optimistic-
'- 1.0
0
Most Likely
-
L
0.9
S0.8
C 07 -Pessaim istic
0
-0.6
0.5
0.4
0.3 I I
82 84 86 88 90 92 94
Year
SOURCE: Booz, Allen and Hamilton, "Strategic Study for Building
Materials and Ceramics," Part XII, 1977. (Reference: No. 31)
McKee-Kearney, Development of Ras Malaab Gypsum Deposits for
Sinai Manganese Company, 1981. (Reference: No. 97)
119
Actual real Gross Domestic Product (GDP) growth has
averaged 8 percent per annum over the past six years.
In 1981, real GDP
grew an estimated 9.3 percent, with the petroleum sector growing at 12
percent. Agriculture and manufacturing each advanced by only 4 percent,
thus dampening GDP growth. It is expected that future growth will slow
to 7 to 8 percent, due to reduced tourist and oil revenues (90). Conse
quently, it can be assumed that future real rates of GNP growth will
fall within the limits set by the previous scenarios. The actual level
of GNP growth will depend on such factors as revenues from oil and the
growth of the local service industries (85).
Because the demand forecasts of Chapter 3 were provided
only through 1990, an ordinary least squares linear trend line was
employed to obtain data for 1991 and 1992.
As shown in Chapter 3, the markets of Cairo and Fayoum con
sume approximately 50 and 4 percent respectively (63), of the national
total. Plaster consumption data for these regional markets are shown in
Tables 6.2.
Currently, the Kawmia Cement Company (KCC) is supplying the
local market of Fayoum with plaster at a price of L.E. 30 per metric
ton. KCC is the only plaster producing firm located within close prox
imity to these markets, as all other producers are located in Northern
Egypt. Because of the poor quality of its reserves in Fayoum, KCC will
not be able to extract gypsum ore from these quarries after 1984. Con
sequently, KCC has signed a contract with the Sinai Manganese Company
(SMC) for the transport of gypsum from the SMC quarries at Ras Malaab to
Fayoum, a distance of 300 kilometers (97). Because of the additional
transportation costs associated with this, KCC will no longer be able to
provide plaster at their current price. Eventually, KCC will be forced
to sell plaster at a price approaching that of their competitors,
currently 40 pounds per metric ton (143).
As a result, the proposed calcined gypsum production faci
lity selling plaster at a lower price could capture the entire Fayoum
market, which according to Table 6.2 could likely rea:h 38 thousand
metric tons per annum by 1992.
120
TABLE 6.2
FORECASTED PLASTER DEMAND
(metric tons)
DEMAND - DEMAND - DEMAND -
YEAR OPTIMISTIC (a) MOST LIKELY PESSIMISTIC (b)
CAIRO FAYOUM CAIRO FAYOUM CAIRO FAYOUM
1983 299,500 23,960 260,500 20,840 221,500 17,720
1984 325,000 26,000 281,000 22,480 237,000 18,960
1985 350,500 28,040 301,750 24,140 253,000 20,240
1986 382,500 30,600 328,250 26,260 274,000 21,920
1987 418,500 33,480 350,750 28,060 283,000 22,640
1988 457,500 36,600 378,500 30,280 299,500 23,960
1989 501,000 40,080 408,500 32,680 316,000 25,280
1990 548,000 43,840 440,250 35,220 332,500 26,600
1991 564,500* 45,160* 456,000 36,480 347,500* 27,800*
1992 598,000* 47,840* 480,500 38,440 363,000* 29,040*
* Extrapolated using trend line applied to existing data
SOURCE: (a) Booz, Allen and Hamilton, "Strategic Study for Building
Materials and Ceramics," Part XII, 1977. (Reference No.
31)
(b) McKee-Kearney, "Development of Ras Malaab Gypsum Deposits
for Sinai Manganese Company," 1981. (Reference No. 97)
121
Plaster demand in the Cairo region is currently met by
three producers: GYMCO, KCC, and the Alexandria Cement Company (97).
With the existing level of supply, some private-sector consumers have
complained about intermittent plaster shortages. This phenomenon is
further substantiated by the existing "black market" in Cairo, where
prices periodically reach 75 to 90 Egyptian pounds per metric ton (143).
It is assumed that these conditions will prevail, as larger public
sector contractors continue to absorb a disproportionate share of total
output.
As highlighted tn Section 3.1, GYMCO and KCC are currently
expanding existing facilities or are constructing new ones in an effort
to increes! capacity. However, the execution of these plans has been
subject to various delays, extending start-up times by at least two
years (97).
In formulating their future production plans, the Mahmoud
Osman Company has forecasted a 15 percent Cairo market share for all
plaster manufactured by its production facilities in the Sinai (143).
This figure can be regarded as being somewhat optimistic in light of the
substantial production increases planned by the three existing producers
for later years. A more conservative market share of 5 percent appears
to be more reasonable. Assuming a new calcined gypsum production facil
ity located in Fayoum would be capable of capturing that amount, total
sales to the Cairo market could very likely reach 26 thousand metric
tons per year by 1992.
The annual quantities of gypsum plaster that could be sold
to the local markets of Cairo and Fayoum are summarized in Table 6.3.
The data shown in this table play an integral role in determining the
optimal plant output and subsequent configuration in Section 6.3.
6.1.2. Building Partitions
The future demand for partition products has been calcu
lated using the data of Chapter 3 as a basis for forecasting. Because
these earlier data have been estimated only through 1985, a least
squares line has been fitted to the existing data and used to forecast
122
TABLE 6.3
FORECASTED PLASTER SALES FOR PROPOSED PRODUCTION FACILITY
(metric tons)
FAYOUM CAIRO
YEAR MARKET MARKET TOTAL
1983 10,420 13,025 23,445
1984 11,240 14,050 25,290
1985 24,140 15,088 39,228
1986 26,260 16,413 42,673
1987 28,060 17,538 45,598
1988 30,280 18,925 49,205
1989 32,680 20,475 53,155
1990 35,220 22,013 57,233
1991 36,480 22,788 59,268
1992 38,440 24,025 62,465
Extrapolated using trend line, applied to existing data.
SOURCE: Booz, Allen and Hamilton, "Strategic Study for Building
Materials and Ceramics," Part XII, 1977. (Reference: No. 31)
McKee-Kearney, "Development of Ras Malaab Gypsum Deposits for
Sinai Manganese Company," 1981. (Reference: No. 97)
123
future values. The data for two scenarios through 1992 are shown in
Table 6.4.
Scenario I, taken from the Ministry of Housing's (MOH)
forecasts (98), takes into account the current housing stock, both
official and informal. The MOH estimates are derived by assuming that
annual gross investment in housing units is approximately equal to the
fraction of the housing stock that deteriorates each year and must be
replaced.
The method used to obtain these forecasts incorporates a
simple accelerator-capital stock relationship. Although this type of
acceleration relationship provides a reasonable estimate, it does not
fully consider the amount of available capital, government spending, or
the capacity and rate of growth of the local construction industry.
Consequently, these estimates may be biased upwards, and are believed to
exceed future levels of ultimate capacity for the construction industry
in Egypt. Previous MOH estimates have frequently exceeded actual
output.
Many of the shortcomings associated with the MOH forecasts
have been eliminated in the Construction/Contracting Industry Study
(CIS) estimates (63). tese estimates take into account both the
official and informal seors. The CIS Report also assumes that the
current housing stock deteriorates at a given rate. The final forecasts
are calculated based on the 1980-84 Five-Year Plan, and expected popula
tion growth and family formation. These figures are subsequently re
vised to correspond to a realistic level of economic growth and the
actual capacity of the local construction industry. These estimates
appear to be more consistent with the forecasted growth of the Egyptian
economy.
Consequently, the MOB forecasts have been substituted in
this analysis with estimates derived from the more realistic CIS fore
casts. Data for the "most likely" scenario have been taken from these
CIS estimates. Upper and lower limits, or "optimistic" and "pessimis
tic" scenarios, have been calculated as plus or minus 15 percent of this
mean forecast. These limits are within the above CIS constraints. The
124
TABLE 6.4
FORECASTED DEMAND FOR INTERIOR PARTITIONS
(square meters)
YEAR DEMAND - SCENARIO I DEMAND - SCENARIO II
(a) (b)
1983 10,530,420 11,536,984
1984 11,199,340 11,791,359
1985 12,202,720 12,001,361
1986 12,871,640" 12,243,058
1987 13,640,898* 12,476,514"
1988 14,410,156* 12,709,971
1989 15,179,414* 12,943,427
1990 15,948,672 13,176,883
1991 16,717,930* 13,410,340
1992 17,487,188 13,643,796
Extrapolated using trend line applied to existing data.
SOURCE: (a) Construction/Contracting Industry Study, Final Report,
Volume 2, July 1981. (Original Source: Ministry of
Housing, The National Policy for Meeting the Housing
Problem, 1979) (Reference: No. 63)
(b) Construction/Contracting Industry Study, Final Report,
Volume 2, July 1981. (Reference: No. 63)
125
data for the three scenarios are shown in Table 6.5. Figure 6.2 shows
these data graphically.
Despite the numerous problems associated with the produc
tion of interior partition products given in Chapter 3, production may
exceed demand as early as 1983. Because of this phenomenon, Dryflow
panels must serve as a substitute for other walling materials. The
degree to which Dryflow panels can penetrate this existing market can be
ascertained by examining the performance of other new building products
in Egypt. Currently, the only information available for new product
penetratiun rates comes from production data for CANALTEX floor tiles.
These floor tiles, made of PVC resin and asbestos, offer a lightweight
and inexpensive alternative to traditional cement floor tiles. Like
Dryflow panels, the CANALTEX flooring system offers the advantages of
reduced cost and ease of installation. The CANALTEX Company began
operations in 1964 in Ismailia. During this first year of production
8200 square meters of floor tiles were sold to a total market of approx
imately ]25 thousand square meters. This represented a 6.6 percent
market share. Since that time, sales growth has averaged 50 percent per
annum through 1976, resulting from the impact of severe cement shortages
on producers of competitive products (31). Because the production
schedules of competitors were highly erratic, the actual growth of
market share for CANALTEX tiles has also been highly erratic.
The AZAMCO Company, in formulating their marketing strategy
for the sale of gypsum block, uses an initial market share of 5 percent
(143). AZAMCO has used this conservative estimate because of the long
standing use of brick in Egypt and the saturation of the existing parti
tion market with these products. A market share of 5 percent for a
product such as Dryflow panels appears to be realistic in light of the
experiences of these producers of new building products. Consequently,
this market share will be used to calculate the number of Dryflow panels
that can be effectively sold. These sales forecasts derived from the
data of Table 6.5 are shown in Table 6.6.
126
TABLE 6.5
REVISED FORECASTED DEMAND FOR INTERIOR PARTITIONS
(square meters)
DEMAND - DEMAND -
DEMAND -
YEAR OPTIMISTIC (+15%) MOST LIKELY
PESSIMISTIC (-15%)
1983 13,267,532 11,536,984
9,806,436
1984 13,560,063 11,791,359
10,922,655
1985 13,801,565 12,001,361
10,201,157
1986 14,079,517* 12,243,058*
10,406,599*
1987 14,347,991* 12,476,514*
10,406,599*
1988 14,616,467* 12,709,971*
10,803,475*
1989 14,884,941 12,943,427*
11,001,913*
1990 15,153,415* 13,176,883*
11,200,351*
1991 15,421,891* 13,410,340*
11,398,789*
1992 15,690,365* 13,643,796*
11,597,227*
* Extrapolated using trend line applied to existing data
SOURCE: Construction/Contracting Industry Study, Final Report, Volume
2, July 1981. (Reference No. 31)
127
FIGURE 6.2
INTERIOR PARTITION DEMAND - THREE SCENARIOS
20
0 18
w 16 Optimistic-
L 14 Most Likely
(A 12 -Pessimistic
C
0
- 10
8
6 II I I I
82 84 86 88 90 92 94
Year
SOURCE: Construction/Cotracting Industry Study, Final Report, Volume 2,
July 1981. (Reference: No. 63)
128
TABLE 6.6
FORECASTED DRYFLOW PANEL SALES FOR PROPOSED PRODUCTION FACILITY
YEAR OPTIMISTIC MOST LIKELY PESSIMISTIC
1983 663,377 576,849
490,322
1984 678,003 589,568
501,133
1985 690,078 600,068
510,058
1986 703,976* 612,153*
520,330*
1987 717,400* 623,826*
530,252*
1988 730,823* 635,499*
540, 174*
1989 744,247* 647,171*
550,096*
1990 757,671* 658,844*
560,018*
1991 771,095* 670,517*
569,939*
1992 784,518* 682,190*
579,861*
* Extrapolated using trend line applied to existing data
SOURCE: Construction/Contracting Industry Study, Final Report, Volume
2, July 1981. (Reference No. 53)
129
6.2 Gypsum Resources in Fayoum
6.2.1 General Description of Four Deposits
Four areas of gypsum deposits within the Fayoum Governorate
were selected for further investigation. These areas, which include
Qaret El Faras, Gorza, El Tawil, and El Boqirat, are designated as areas
1 through 4, respectively, in Figure 6.3, The location of these areas
with respect to Cairo is shown in Figure 6.4. These four areas were
analyzed on the basis of location and accessibility, topography, nature
of deposit, and chemical composition. Becaotse of the preliminary nature
of this investigation, extensive chemical arLalyses were not performed.
Only tests, such as x-ray diffraction and thermogravametric analysis, as
were described in Section 4.1, were performed as part of this
feasibility study.
6.2.2 Selection of Most Promising Deposit
A summary of the characteristics for the four quarry sites
is shown in Table 6.7. Although the gypsum deposits within the Fayoum
Governorate are of a low grade, two deposits within this region appear
to have some potential for economically feasible production. These are
at Qaret El Faras and El Boqirat. Both locations are comparable with
respect to gypsum content. However, Qaret El Faras offers superior road
access, being within close proximity to a paved road. Quarrying gypsum
at this site will be difficult due to the sporadic occurrence of the
gypsum seams, but this situation will be partially mitigated by the
negligible overburden.
6.3 Recommended Facilities, Equipment, and Manpower
Given the data of Table 6.3 and the analysis and conclusions pre
sented in Section 6.1.1, the optimal capacity for a calcining plant
would be 62 thousand metric tons per year. This quantity represents a
realistic level of output given the previous market assessment as
applied to a ten-year project. Such a rate of output is a minimum
level, and must be subsequently adjusted to reflect less than 100
percent utilization and a certain degree of wastage.
130
FIGURE 6.3
LOCATION OF GYPSUM DEPOSITS IN FAYOUM
47
\ (Or 04Fos
29
30
o- N / /
iZ .1 A/ '1 I
I N /
N, 29 1 1f
320" 30 31"/0E
El Bo po sn F
/
- M
vena
/, E
I
29e Scale 1: 250000 1toiy (Rfrne o
30 20 30140' 3VOW
EfICULTIVATED LAND (DTHE INVESTIGATED AREA
SOURCE: Evaluation 'of Gypsum Deposits in El Fayoum Governorate, Egyptian
Geological Survey and Mining Authority. (Reference: No. 51)
FIGURE 6.4
INSET OF FIGURE 6.1I MAP
k, k,.
alL
i
m,. " lU~,N :
Si
IS
L01AIA
n
i ¥A ii
! v Zabd
,E
.um
0,*,, ,
,I-
" -
Am' ti-"A*
/...
N • '134 /-,
•m OD_ aim," .
7S
r n .LI . 7._.;
Is
L / " _
01,
Ah.14 I K- . I 'aE
:"' ~~g + mi Bush'. "j,,,..i"
+.-:~ ~~ Sua~ F .. _.
" " ~UMM
""
,:+
W
. 1,, ..- :.~-.-:'+ • .
+
Is
1
.. - 4+.+, Umln
;'i.'" "s
:,+-
,, ,,, : _,, ; .--..- " ...' , ,.-,t
_AN,. •- wo. .. . ; ,-+
Map
SOURCE:
Roa of: Egpt
(Refrenc No. 87)
:.':" Bl . . , , . ~ o 13•2++ : --.
TABLE 6.7
QUARRY SITE SUMMARY
SITE 1 SITE 2 SITE 3 SITE 4
CHARACTERISTICS QARET EL FARAS GERZA EL TAWIL EL BOQIRAT
Average Ore Purity: 58 - 79% N/A 26 - 55% N/A
(CaSO . 2H2 0)
Seam Thickness: 0.2 - 0.9 0.2 - 2.1 0.2 - 0.6 0.2 - 2
(meters)
Nature of Overburden: 0.1 meters 0.1 meters 0.2 meters N/A
sand/gravel sand/silt sand/silt
Topography: flat w/ isolated flat w/ flat w/ flat W/
terraces isolated isolated isolated
terraces terraces terraces
Accessibility: Good
Good Fair
Good
Estimated
Usable
Reserves: 3.7 N/A N/A 4.2
(million tons)
N/A: Not Available
SOURCE: Evaluation of Gypsum Deposits in El Fayoum Governorate, Egyptian
Geological Survey and Mining Authority. (Reference: No. 51)
The optimal annual rate of output for a Dryflow panel production
facility, as specified in Section 6.1.2, would most likely range from
577 to 682 thousand square meters over a ten-year period. A panel
production facility producing 682 thousand square meters per year would
require .n additional 18 thousand tons of calcined gypsum. Hence, a
totally integrated plaster and panel production facility would require
approximateiy 80 thousand metric tons of stucco per year by 1992.
Using an average gypsum ore purity of 65 percent for the Qaret El
Faras and a 5 percent wastage factor, required quarry output would be
approximately 131 thousand metric tons of gypsum ore.
A stand-alone
calcining plant would require an annual ultimate quarry capacity of only
100 thousand tons. The output of these two types of production systems
is summarized in the flow diagrams of Figures 6.5 and 6.6.
Given these required rates of output, quarrying, processing, and
calcining systems are selected in the following sections.
6.3.1 Quarrying
a. Configuration
The mining method proposed for the gypsum quarrying sites
in Fayoum is comprised of four steps: overburden removal, ripping,
loading of gypsum, and haulage and transport. Of the five alternative
pieces of equipment listed in Chapter 4 that can be employed in such a
process, two can be eliminated in the preliminary stages. The job-site
conditions present at Qaret El Faras do not warrant the use of a drag
line, as these machines are better suited for applications requiring
greater digging reach and less bearing pressure per unit of area. In
addition, it is more difficult to dump a load from a dragline on a tar
get such as a truck bed than with a front-end loader. The large invest
ment cost associated with these machines requires 24-hour per day use in
order to keep unit costs competitive with alternative systems (109).
Scrapers may also be eliminated, as these units become economically
unfeasible for haul distances greater than 4000 feet (1220 meters) (38).
The removal of overburden will be performed through the use
of a tractor dozer, equipped with a three-shank ripper and a straight
cutting blade. Because of the low quantity of overburden at the Qaret
134
FIGURE 6.5
CALCINED GYPSUM PRODUCTION FACILITY - PRODUCTION SUMMARY
QUARRYING
PROCESSING AND CALCINING
1 Shift per Day
I 3 Shifts per Day
8 Hours per Shift
8 Hours per Shift
L 230 Days per Year
230 Days per Year
100,000 Metric Tons
I 62,000 Metric Tons
Gypsum Ore
Plaster
FIGURE 6.6
PLASTER AND PANEL PRODUCTION FACILITY - PRODUCTION SUMMARY
QUARRYING
PROCESSING AND CALCINING
DRYFLOW PANEL PRODUCTION
• / 62,000 Metric Tonsj
1 Shift per Day
3 Shifts per Day Plaster
8 Hours per Shift
i 8 Hours per Shift
300 Days per Year
300 Days per Year 3 Shifts per Day
131,000 Metric Tons
80,000 Metric Tons
Gypsum Ore
Plaster
682,000 Square Meters
Dryflow Panels
El Faras quarries, the majority of it can be removed through ripping and
dozer stripping. A bulldozer offers the additional advantage of being
able to move waste and overburden to nearby disposal and dump sites.
Using the procedures of analysis outlined in Section 4.2,
the process of ripper and bulldozer selection is shown in Figure 6.7.
These rates are calculated for a totally integrated facility. For the
purposes of this analysis, Komatsu products will be used, as this manu
facturer provides equipment that is the least expensive on a cost/
performance basis, offers favorable credit terms, and provides adequate
repair and maintenance facilities throughout Egypt.
The calculation of required hourly overburden removal and
subsequent dozer selection is constrained by the required hourly gypsum
ore production rate. Hence, the first portion of Figure 6.7 is devoted
to the calculation of this rate. Because of the occurrence of negli
gible overburden, the smallest size ripping unit, the Komatsu D65-E, was
selected and used in this analysis. Because of this constraint on
tractor size, Figure 6.7 shows a somewhat inefficient 90 percent rate of
utilization. For normal quantities of overburden, seismic velocity
charts would be employed in an analysis of this nature.
The gypsum ore will be extracted by means of the ripping
unit and a wheel-mounted front-end-loader. The rates of production for
this process are shown in Figures 6.7 and 6.8. The front-end loader
will be used to load the ripped gypsum ore into a haulage vehicle for
shipment to the processing facility. The analysis of Figure 6.8 shows
that a loading unit with a bucket capacity of 0.54 cubic meters and an
operating capacity of 882 kilograms would be required. Using these
criteria, a Komatsu W30 loader has been selected.
The gypsum ore will be transported by means of one off
highway truck. The truck selection analysis is shown in Figure 6.9.
These calculations show that a truck with a heaped capacity of 22.2
cubic meters would be required. This analysis has assumed that the ore
will be hauled over negligible grades (maximum of 4 percent). Given
this required payload, a Komatsu HD460 has been selected (93).
These proposed equipment requirements are based on operat
ing 300 days per year with one 8 hour shift per day, and production
137
FIGURE 6.7
DOZER AND RIPPER PRODUCTION ANALYSIS
1. Assumptions:
Gypsum Ore (Loose) = 1800 kg/m
Average Density of
3
Gypsum Ore (Bank)
= 3200 kg/m
Average Density of
Average Density of Overburden (Loose) =
1400 kg/m 3
Average Density of Overburden (Bank)
= 1700 kg/m 3
Average Gypsum Seam Thickness
= 0.5 meters
Average Overburden Thickness
= 0.1 meters
Annual Quarry Output (im,0ludes 5%
waste factor)
= 131,000 metric tons per year
Number of Work Days per Year
= 300
Hours per Work Day
= 8
Average Overburden Haul Distance
= 90 meters
2. Gypsum Ore Production:
Required Hourly Producti 131,000
54.6 metric tons per hour
(300)(8)
Required Hourly Volume -54,600 kg/r. 3
1,800 kg/m
Area Excavated Per Hour 3/hr.
= 60.6 m2/hr.
OS303m
0.5m
3. Overburden Removal-Ripping:
Required Hourly Area to be Cleared
= 60.6m 2/hr.
Assume:
Average Dozer and Ripper Speed
= 1.7 km/hr. = 28.3 m/min.
Distance Between Ripper Passes
= 1 meter
Every 100 Meter Requires 1/4 Minute
to Raise, Pivot, Turn, and Lower
Ripper After Each Pass
138
FIGURE 6.7 (Continued)
Area Ripped = loom x im = lOom 2 per pass
lOOm
Time per Pass = 28.3m/min. +
0.25 min. (turn time)= 3.78 minutes per pass
Time Required to Fulfill Area
Requirements =60.6m 2 /hr. x
lom2
lOOm 2
3.78 min. = 2.3 minutes/hr.
Corrected Required Time Using
Factor of 30% = 2.3 m/hr. = 3.3 mi/hr.
0.7
3.3 min/hr=
Hourly Utilization Rate = 60 min/hr 5.45%
60 mmn/hr.
4. Overburden Removal-Dozing:
54 Metric Tons per Hour Gypsum Ore
Production = 60.6m2/hr x 0.1 m = 6.06m3/hr. of Overburden
Output of Komatsu D65-E for Average
Haul Distance of 90 meters = 19.1 m3/hr.
6.06m 3
Dozer Utilization Rate = - 0.32 hr. = 19.04 min.
19.1 m 3 /hr.
139
FIGURE 6.7 (Continued)
Correction Factors:
1. Poor Operator - 0.6
2. Job Efficiency - 0.67
Corrected Output = 19.02 min. = 47.35 min/hr.
0.6 x 0.67
47.35 min/hr .9
Hourly Utilization Rate 6 min/hr.
= 60 m
78.9%
5. Gypsum Ore Excavation - Ripping:
Required Hourly Area to be Cleared = 60.6m2/hr.
Assume:
Average Dozer and Ripper Speed
is equal to 1.5 km/hr. = 25 m/min.
Distance Between Ripper Passes = 1 meter
Area Ripped = lOom x im = loom 2 Per Pass
lO~m
_
Tine Per Pass = 25mlmin. + 0.25 min. = 4.25 Minutes Per Pass
(turn time)
Time Required to Fulfill Area Require
ment60.2m /hr. 42.5 min.= 2.6 Minutes/Hr.
lOOm 2
Corrected Required Time Using
Komatsu Correction Factor of 30% =
2.6 min/hr. = 3.7 min/hr.
0.7
Hourly Utilization Rate =
3.7 min/hr. = 6.19%
60 min/hr.
SOURCE: Komatsu Sales Mates, Komatsu Ltd., Tokyo, Japan (Ref. No. 93.)
140
FIGURE 6.8
LOADER PRODUCTION AND SELECTION ANALYSIS
Required
Hourly Loader Production
= 30.3m3/hr. *
Cycle Time
Basic Time (Load, Dump, Maneuver)
= 0.6 min.
Correction Factors:
Common Truck Ownership
= -0.4
Inconsistent Operation
= +0.04
Small Target (Truck)
= +0.05
Total
= 0.65 min/
cycle
Assume:
Operator
Works 40 Minutes Per Hour
Bucket Fill Factor - Gypsum Ore
= 90%
Gypsum Ore Density
= 1800 kg/m 3
Loader Cycles Per Hour 60 min/hr.
= 92.3 cycles/hr.
0.65 min/cycle
923cle/r
Production Cycles for 40 Minutes Per Hour Efficiency
=
92.3 cyles/hr. x 0.67
= 61.5 cycles/hr.
Required Volume Per Loader Cycle
30.3m3hr.
3
3
61.5 cycles/hr. =.49m3/cycle
= 0.64 yd3/cycle
141
FIGURE 6.8 (Continued)
Required Rated Bucket Capacity =
0.49m3/cycle = 0.54m3/cycle
0.9 Fill Factor
Required Operating Capacity =
0.49m 3 x 1800 kg/m 3 = 883 kg
*Taken from Figure 6.7
SOURCE: Komatsu Sales Mates, Komatsu Ltd., Tokyo, Japan (Ref. 93).
142
FIGURE 6.9
TRUCK PRODUCTION AND SELECTION ANALYSIS
Required Annual Gypsum Ore Production
= 131,000 metric tons per yr.
131,000Otons/yr.
Required Daily Output
300 days/hr.
= 437 tons/day
Average Truck Velocity for 4 Percent Grade
= 30 km/hr.
Average Distance: Quarry to Processing
Facility
= 8 km
8km
Average Travel Time: One-Way = 30 km/hr.
= 0.27 hr.
Average Load Time
= 5 Minutes
= 0.08 hr.
Average Dump Time = 6 Minutes
= 0.1 hr.
Total Time for Complete Cycle = (0.27 x 2)
+ 0.08
= 0.72 hr.
y sPer
ray
8 hr/day
Cycles Per
ay 0.72 hr.
= 11 cycles/day
Required Payload Per Cycle
437 tons/day
= 40 tons/cycle
11 cycles/day
Required Volume Per Cycle
(Gypsum: 1800 kg/m 3)
40 t-ns/cycle
= 22.tm 3 /cycle
1.8 tons/m 3
SOURCE:
Komatsu Sales Mates, Koniatsu Ltd., Tokyo,
Japan (Ref. 93).
143
requirements have been based on the amount of gypsum ore required for
the proposed integrated plaster and panel production facility. Because
some of the components selected in this analysis represent minimum size
production units, they can also be used for a calcin 4 ng plant requiring
only 101 thousand metric tons of gypsum ore. This rate of output would
represent 77 percent of the output required for a totally integrated
facility. Hence, a stand-alone calcining plant would require 231 days
of quarry production.
b. Investment Cost
The investment costs for all equipment specified in the
preceding analysis are shown in Table 6.8. The costs include all
freight charges and tariffs. An additional item required is the con
struction of a service shop building in an area within close proximity
to the processing facility. This shop will consist of a 12 by 15 meter
building with an equipment bay for light repair and maintenance of
quarrying equipment. Any major overhauls or repairs will be performed
at dealer service facilities located elsewhere. Because no per unit
building costs exist for such structures in Egypt, a separate cost
analysis was performed.
Table 6.9 shows a 1976 cost of 34.1 Egyptian pounds per
square meter for a typical Egyptian apartment building as constructed by
a private-sector contractor (148). Means's "Building Systems Cost
Guide" for 1982 (147) shows that the cost for a maintenance facility
inclading all mechanical equipment on a per unit basis is approximately
93 percent of that for a similar type apartment building, using United
States data. Assuming that this relationship is approximately represen
tative of construction in Egypt and that construction costs escalate at
an average of 20 percent per year (63), the 1983 cost for a maintenance
facility is estimated at 113.62 Egyptian pounds per square meter.
For engineering and design costs, this analysis employs a
figure of 6 percent of building costs. This figure has been taken from
"The Housing and Construction Industry in Egypt - Interim Re-ort and
Working Papers 1978" (151).
144
TABLE 6.8
QUARRY INVESTMENT COST SUMMARY
MANUFACTURER COST (1962EGYPTIAN POUNOS)
ITEM £MODEL NUMBER LOCAL FOREIGN
- 120,000 (I)
0 lone ip .. Kow u D65-E
I Front-End Loader Komettu W30 - 60,000 ()
I Off-Highway Truck Komatsu H0460 - 120,000 (I)
L.E. 300,OO
Freight Charges
(2)
(c.l.f. Alexandria)
30,000
Freight Charges - Foyotn
(50 toes 1 315 ka) 448 (3)
(4 )
Tariffs (511) 15,000
L.E. 15,440 L.E. 330,0Oo
I - 15 x.12 Mater
Service Facility
2 2
(180% 0 L.E. 113.48/m 20,426
Engineering & Design
(61 of Total Installed
Cost)
1,226 (5)-
L.E. 37,100 L.E. 330,000
Contingency 110%) 3.710 33,000
SUIB-TOTAL
L.E. 40,810 L.E. 363,000
Dozer Selection Analysis Presented in Figure 6.10
Loader Selection Analysis Presented in Figure 6.11
Truck Selection Analysis Presented in Figure 6.12
Assumes 1982 Cost of L.E. 1.80 per ton plus L.E. 0.05 per ton-kilometer
(6 )
SOURCE: (1) Price quote obtained from interview with I. Bibers, Sales
Rep.,
Komatsu, Ltd. Dokki-Cairo, Egypt. August, 1982.
(Reference:
No. 144)
(2) Freight allowance for heavy equipment; approximate estimate
only.
Coefficient supplied by Source
(1) above. (Reference: No. 144)
(3) Taken from costs
supplied by Egypt Intercity Transportation
Study.
Technology Adaptation Program, Massachusetts Institute of Technology.
Cambridge, HA.
(4) Tariff
allowance for heavy equipment; approximate estimate
only.
Coefficient supplied by Source (1) above. (Reference: No.
144)
(5) Building Sysems Cost Guide 1982. Robert Snow Means Co.,
Inc.
Kingston, MA (Reference: No. 147)
(6) Upper limit provided by "The Housing and Construction Industry
in Egypt," Interim Report Workipg.papers 1978. (Reference: No. 151)
145
TABLE 6.9
PRIVATE SECTOR CONSTRUCTION COSTS FOR A TYPICAL APARTMENT BUILDING
(1976 Egyptian Pounds)
ITEM TOTAL COST
Excavation 201.6
Grading 100.8
Concrete 742.7
Reinforced Concrete 5,998.5
Masonry 1,275.5
Damp-proofing 354.6
Stairs 340.2
Flooring 1,586.6
Plastering and Painting 3,146.8
Metalwork 10.3
Carpentry 3,504.9
Plumbing 1,452.4
Electrical 507.5
SUB TOTAL 19,212.3
Overhead and Profit (20%) 3,842.5
TOTAL
23,054.8
Floor Area (Square Meters)
675.0
Cost per Square Meter
L.E. 34.16
SOURCE: Ministry of Housing - Arab Republic of Egypt
Joint Housing Team MOHR/USAID
Immediated Action Proposals for Housing in Egypt,
June, 1976. (Reference: No. 146)
146
c. Operating Cost
All operating costs for the proposed quarry are shown in
Table 6.10. The manpower requirements and wages for this type of
quarrying system are shown in Table 6.11. Because data for some of the
labor categories shown in Table 6.11 were unavailable, wage rates for
these categories were interpolated using available data for job
categories requiring comparable skill levels (150).
All costs shown in Table 6.10 are based on an annual rate
of output of 131 thousand metric tons of gypsum ore. This level of
output includes the previous 5 percent wastage factor.
6.3.2 Processing and Calcining
c. Configuration
The processing and calcining plant selected was de
signed by Combustion Engineering of Abilene, Kansas. The furnishing and
construction of this plant will be provided on a turn-key basis by the
manufacturer. Such a contractual arrangement has been devised in an
effort to shorten construction times and avoid project cost overruns.
The scope of work under such a contract includes all
work and services, ranging from preliminary studies, engineering design,
construction, supply and erection of equipment and machinery, to commis
sioning the plant and adjusting it to the desired rate and quality of
output. The contract also includes the training of all plant personnel,
technical and managerial supervision of the installation, and assisting
the management of the plant for the first year of operation. Also
included are the supply of spare parts and replacements, and advisory
services required for the successful execution of the project. Combus
tion Engineering provides its own construction management personnel and
uses local labor and equipment in carrying out all construction activi
ties. The only exception to this is the erection of structural steel
which is performed by local contractors (145).
The proposed facility has an ultimate capacity of 80
thousand metric tons per year, assuming 80% efficiency and utilization,
a 5% waste factor, and 24 hours a day operations for 300 days per year.
147
TABLE 6.10
QUARRY OPERATING COSTS - 131,000 METRIC TONS OF ORE PER YEAR
(Egyptian Pounds)
C11 1NTY LAITS W PER YEAR Cr PER MIT
=lNT COST PER YEAR
OpMATMN OSt IM
tburs 2400* L.E. 5.30(") LE. 12,720
(r-ry Wages
Benefits
( Z5%
of Wages) L.E7 3,180
~el..
Fuel:
Liters 33,600P* L.E. 25(2) LE. 8,400
- Dbzer
Liters 18,400 L.E. 0.25 L.E. 4,600
-loader
*
2
Liters 72,000 L.E. 0.25( ) LE.18,000
- Trck
rinta
L.E. 15,000
Faterials
- Ires
- Lube Oils
- Filters
-Grease
- Uiercarriage
- Ripper Ups
- Bucket Teeth
'1UtAL L.E. 61,900
* sMmes operation 300 days per year at 8 hours per day
Fel quirments:
- Dozer 16 Liters/hr x 2100 hr/year
- loader 8 iters/hr Y 2300 hr/year
- Trck 30 Liters/hr x 2400 hr/year
(2)
total equipment cst.
Ierived using Ybmatsu factor of 5%of
SoMUJ: (1) Ntherlands Engineering 0, tnts. Egypt Ntional Transport Study. Final Report,
1981-THase U. Ibllad (Peferen-: b. 148)
(2) vitcee-yearny, Development of Ras
Mlblab 01psum r2posits for Sinai nganese Cpany.
1981 (Referenca b: 97)
148
TABLE 6.11
QUARRY WAGE SUMMARY
(Egyptian Pounds per Hour)
1 Dozer Operator 0.70
1 Loader Operator 0.70
1 Loader and Dozer Oiler 0.50
1 Truck Driver 0.70
3 Miscellaneous Quarry Labor 0.40
1 Equipment Mechanic 0.80
2 Mechanics Helpers 0.50
1 Mine Superintendent 1.00
TOTAL 5.30
SOURCE: Netherlands Engineering Consultants.
Egypt National Transport Study - Final Report,
1981 - Phas II. Holland. (Reference: No. 148)
149
Processing and calcining can be considered the limiting production
factor. Because it is not economically feasible to operate calcining
equipment on a noncontinuous basis, three shifts of production are
required to support one or two shifts of quarry and panel production.
Figure 6.10 shows a flow diagram for the proposed plant.
Raw gypsum ore from the quarry is delivered to the processing facility
by truck where it is emptied into either a raceiving hopper or an adja
cent stockpile. Ore is fed into the main plant by means of an 80 foot
bucket elevator connecting the hopper to a vibrating grizzly feeder.
The grizzly feeder feeds the ore onto a belt conveyor where it is sub
sequently discharged into a hammermill crusher. The hammermill crushr
reduces 4 to 6 inch rock to one inch. The crusher discharge is conveyed
to a three-deck vibrating screen, where the impurities are separated
from the actual gypsum ore. All waste materials are disposed of by
means of a small front-end loader which transports the material to an
appropriate disposal site. This loader serves the additional function
of providing gypsum ore to the processing facility from the raw material
stockpiles adjacent to the plant. A Komatsu WA30-1 front-end loader
with a heaped bucket capacity of 0.4 cubic meters has been selected for
this application.
The purified ore is conveyed by means of a 64 foot
bucket elevator to 100 ton storage bins. This material is then directly
fed into a roller mill crusher. After crushing to Number 100 mesh size,
the ore is fed into a kettle feed bin by means of screw conveyors, where
it is ready for feeding to the calcining kettles.
The calcining process consists of taking the crushed
ore and heating it to 120 degrees centigrade in a cylindrical, enclosed
vessel 12 feet high by 12 feet in diameter. The kettle was selected
over the rotary kiln because it provides a more consistent and superior
quality product. Rotary kilns are extremely difficult to control, and
produce substantial over- anA under-dehydration. Rotary kiln feed must
be closely sized, or else over-dehydration of the particle surface
occurs along with under-dehydration within the core.
To ensure high kettle thermal efficiency, the unit has
been externally insulated in order to limit heat losses due to
150
FIGURE 6.10 ,
PROCESSING AND CALCINING PLANT - PROCESS FLOW DIAGRAM
88 91I 1
12
S19 20
6 '
-161 24
I
13 15 2-
2
17 18
Key to flow diagram contained on following page
SOURCE: Combustion Engineering, Abilene, Kansas, 1983.
FIGURE 6.10 (Continued)
PROCESSING AND CALCINING PLANT - PROCESS FLOW DIAGRAM
PLANT EQUIPMENT KEY
1 - Rock Receiving Hopper
2 - Rock Feeder
3 - Belt Conveyor
4 - Belt Conveyor
5 - Belt Conveyor
6 - Hammermill Crusher
7 - Crushed Rock Bucket Elevator
8 - Crushed Rock Screw Conveyor
9 - Crushed Rock Storage Bins
10 - Roller Mills
11 - Secondary Collectors
12 - Collecting Screw Conveyors
13 - Kettle Feed Bins
14 - Kettle Dust Collecting System
15 - Twin Screw Kettle Feeders
16 - Calcining Kettles
17 - Hot Stucco Collecting Screw Conveyor
18 - Hot Pits
19 - Hot Stucco Bucket Elevator
20 - Stucco Supply Screw Conveyor
21 - Stucco Storage Bins
22 - Stucco Drag Feeders
23 - Hot Stucco Recirculating Screw Conveyor
152
radiation. The calcining area is provided with a dust collection sys
tem, consisting of an electrostatic precipitator, a bag collector with a
screw conveyor, an exhaust fan, and a device connecting the unit to the
calcining kettle.
This type of kettle design allows for the future expan
sion of capacity by the addition of parallel kettles and crushing equip
ment. Other equipment configurations employing 12 by 12, and 10 by 13
kettles and their associated capacities and capital costs are shown in
Table 6.12. The economies of scale associated with increased rates of
production are highlighted in this table.
The calcined gypsum moves by means of a bucket elevator
to storage bins with a 150 ton capacity. This capacity corresponds to
approximately 2.5 days of Dryflow panel productiGn. These bins are
connected to a packing plant by a screw conveyor and a bucket elevator.
The packing plant is equipped with a sack filling and dispatch loading
unit. The sacks are transported manually to an adjacent storage area.
A structural drawing for the proposed plant is shown in Figure 6.11
(145).
Electricity will be supplied to that plant by means of
a transformer connected to the 30 kilowatt high-tension power line that
runs parallel to the proposed site. This transformer will step-down the
available power supply to an operating voltage of 220/380 volts. A
standby diesel generating set of 750 kilowatt-amp capacity, will be
available to come into immediate operation in the event of a power
failure, ensuring that the machinery will not be damaged by a sudden
interruption in the main power supply.
The water required for this plant will be pumped from a
well located close to the site boundary of the plant.
b. Investment Cost
The 1983 investment cost for the proposed plant, ex
cluding foundations, buildings, delivery, and installation is 1.41
million Egyptian pounds. The total installed price is 2.78 million
Egyptian pounds (145). This cost includes such additional items as a
small front-end loader, structural steel, maintenance tools, the
153
TABLE 6.12
CALCINING KETTLE OUTPUT AND COST SUMMARY
12 X 12
BATCH KETTLE
NUMBER OF CAPACITY CAPACITY TOTAL
INSTALLED CAPITAL COST
UNITS (metric tons/hr) (metric tons/year)* COST** PER TON
1 5.8 42,000 L.E. 1,50C,000 L.E. 35.71
2 11.6 84,000 L.E. 1,950,000 L.E. 23.21
3 17.4 126,000 L.E. 2,400,000 L.E. 19.05
10 X 13
BATCH KETTLE
1 4.4 32,000 L.E. 1,400,000 L.E. 43.75
2 8.8 64,000 L.E. 1,750,000 L.E. 27.34
3 13.2 96,000 L.E. 2,100,000 L.E. 21.88
L.E. Egyptian Pounds
* Assumes 300 days per year operation at 24 hours per day
** Represents estimated coat, excludes freight and tariffs. To be used for
Comparison purposes only.
SOURCE: Data obtained from telephone interview with P. Mulenax, Sales Rep.,
Combustion Engineering, Inc. Abilene, Kansas. November, 1982.
(Reference: No. 142)
154
FIGURE 6.11
PROCESSING AND CALCINING PLANT -
STRUCTURAL
DIAGRAM
_Ln_
. -.
T 1
IA
cmrIL
x lo --
FIGURE 6.11 (Coutinued)
PROCESSING AND CALCINING PLANT - STRUCTURAL DIAGRAM
-- . ------... -
I-- - -
IAIM
4-t,
- - L'~R~
I~-N
.r.VJ
w. Ivj I.,
ITI
SOURCE: Combustion Engineering, Inc.
Abilene, Kansas. 1983.
156
services and installation associated with these items, and such main
tenance materials as wearing steel, lubricants, and other consumable
items. Building costs for this plant were computed in a manner similar
to that used in Section 6.3lb, using data from the Ministry of Housing
(148) and Means (147), and CIS (63) cost escalation factors. These
costs are detailed in Table 6.13.
c. Operating Cost
The operating costs for this plant, expressed in 1983
prices, are shown in Table 6.14. Because only 80 thousand metric tons
per year of calcined gypsum are required for an integrated manufacturing
facility, it is assumed that the proposed plant will operate at 95
percent utilization. This rEe has been estimated using the data of
Table 6.13. Such a rate of utilization will allow for a 5 percent
wastage factor, when operating a total of 7200 hours per year. Table
6.15 shows a breakdown of the labor and wage requirements for the pro
posed plant. These wages were computed in a manner siiilar to that used
for computing quarry wages. The operatior. and maintenance of this plant
can be entrusted to local labor, thus ersuring reduced wage rates.
Excluding maintenance and supervisory personnel, shift work in the
processing and calcining plant requires only four operators in
attendance.
6.3.3 Panel Production
a. Configuration
The panel production faciiity used in this project will
conform to the description and specifications given in Chapter 4. The
basic plant will consist of an automated carousel unit, a gypsum-feeding
apparatus, a glass-fiber feeder, a chopper and an overhead crane. For
300 days per year, with three shifts per day, annual output would be
approximately 702 thousand square meters, assuming 80 percent
utilization (28).
157
TABLE 6.13
PROCESSING AND CALCINING PLANT INVESTMENT COST
Cost (1982 Egyptian Pounds)
LOCAL FOREIGN
Buildings (1400m2 @ L.E. 63.54/m2) 88,960 (1) _
Calcining Plant (Turnkey Project)
Equipment:
2 - 12 x 12 Batch Kettles - 350,000(2)
- 200,,OOo(2)
1 - Hammermill Crusher
1 - Roller Hill Crusher
Misc. Equipment - Described in - 650,000(2)
Figures 6.13 and 6.14
Installation *
Engineering and Design
- 750,000(2)
Constructioa Hpnngement
'iL-ight (c.i.f. Alexandria)**
- 292,500(2)
(3)
1,500 -
Freight (c.i.f. Fayoum)***
Tariffs (5%) 97,500(2) -
L.E. 187,960 L.E. 2,242,500
I Komatsu WA30-1 5000
3
Front-End Loader 0.4 yd capacity)
Freight (c.i.f. Alexandria)** - 5,000
3)
Freight (Fayoum) 100 (
( 4 )
Tariffs (5%)
2,500
L.E. 190,560 L.E. 2,297,500
Transformer**** 20,000(2)
(5 )
Diesel Generator
- 12000
(5 )
1,350(2) 2,700
Freight (15%)
Tariffs (5%) 1,350(2) -
L.E. 213,260 L.E. 2,312,200
Contingency (10%) 21,330 231,220
SUB-TOTAL L.E. 234,590 L.E. 2,543,420
6-60
158
TABLE 6.13 (Continued)
PROCESSING AND CALCINING PLANT INVESTMENT COST
* Includes foundations, structural steel, and related services.
** Assumed to be 15 percent of total installed cost
*** 198 tons at 1981 cost of L.E. 1.8/ton plus an additional L.E.
0.018/ton-km. Cost escalated 20 percent to reflect 1982 cost.
**** Includes all messenger cable and installation.
SOURCES: (1) Building Systems Cost Guide 1982. Robert Snow Means Co.,
Inc. Kingston, MA (Reference: No. 147)
(2) Data obtained from telephone interview with P. Mulenax,
Sales Rep., Combustion Engineer, Inc. Abilene, Kansas.
November 1982. (Reference: No. 142)
(3) Taken from costs supplied by Egypt Intercity Transportation
Study. Technology Adaptation Program, Massachusetts
Institute of Technology. Cambridge, MA.
(4) Price quote obtained from interview with I. Bibars, Sales
Rep., Komatsu, Ltd. Dokki-Cairo, Egypt. August, 1982.
(Reference: No. 144)
(5) Data supplied by telephone interview with G. Lythgoe, Sales
Rep., Caterpillar Tractor Company. Peoria, Illinois.
(Reference: No. 146)
159
TABLE 6.14
PROCESSING AND CALCINING OPERATING COSTr - 84,000 METRIC TONS OF STUCCO PER YEAR
(Egyptian Pounds)
OPERATING QUANTITY QUANTITY COST COST
COST ITEM UNITS PER YEAR PER UNIT PER YEAR
Plant Wages Hours 7,200 (1) 36.0 (a) 25,920
Benefits
(25% of Wages) 6,480
Electricity MWH 7,860 (2) 60.0 (b) 471,600
Water Liters 13,100 (3) 0.20 (b) 2,620
#6 Fuel Oil 106 Btu 79,800 (4) 0.75 (b) 59,850
Diesel Fuel Liters 4,800 (5) 0.25 (c) 1,200
Maintenance
Materials (6) 97,500 (d)
- Wearing Steel
- Lubricants
- Hand Tools
- Consumable Items
Polyethylene Lined
Stucco Bags 1 Bag 400,000 (7) 0.25 (b) 100,000
TOTAL 765,170
(1) Assumes operation 300 days per year at 24 hours per day.
(2) Process requires approximately 0.06 MWH of power for each metric ton of ore
(3) processed.
Process requires approximately 0.01 liters of water for each metric ton of
(4) ore processed.
Kiln requires 950,000 Btu per ton of stucco produced.
(5) Assumes front-end loader consumes 4 liters per hour of diesel fuel per hour
of operation and operatea 1200 hours per year.
l9~ Estimated at 5 percent of total plant cost.
Assumes 50 kilogram capacity.
SOURCE: (a) Netherlands Engineering Consultants. Egypt National Transport
Study. Final Report, 1981 - Phase II. Holland (Reference: No.
(b) 148)
Data obtained from interview with Aiman El Sakka, AZAMCO, Ltd.
(c) Cairo, Egypt. September, 1982. (Reference: No. 143)
Komatsu Sales Mates. Komatsu, Ltd. Tokyo, Japan. (Reference:
(d) No. 97)
Data obtained from telephone interview with P. Mulenax, Sales
Rep., Combustion Engineering, Inc. Abilene, Kansas. November,
1982 (Reference: No. 142)
160
TABLE 6.15
PROCESSING AND CALCINING PLANT WAGES
(Egyptian Pounds Per Hour)
4 Machine Operators (4 x L.E. 0.40) 1.60
I Maintenance 0.50
1 Loader Operator 0.50
1 Foreman 1.00
TOTAL L.E. 3.60
SOURCE: Netherlands Engineering Consultants. Egypt Nationa
Study. Final Report, 1981 - Phase II. Hollaad (Re
148)
161
b. Investment Cost
Table 6.16 shows the total investment costs for a
complete panel production facility. The total installed 1982 cost for
this plant, including all plaster and finished product handling equip
ment, carousel units, and other accessories is 1.25 million Egyptian
pounds. Adding all buildings, fees, freights, and tariffs gives a total
plant cost of 1.81 million pounds (28). Buiding Costs were calculated
using the method employed in earlier sections.
c. Operating Costs
A breakdown of all panel production plant operating
costs is shown in Table 6.17. The labor and wage requirements for this
facility have been calculated using the previous method and are detailed
in Table 6.18. The requirements for laborers are higher than those
for production facilities using totally automated carousel units. In
Egyptian plants using inexpensive manual labor, automatic stacking could
be eliminated in favor of manual means. This requirement could be
satisfied through the addition of one extra laborer. In addition, the
longitudinal glass-fiber handling system would require its own operator.
6.3.4 Project Cost and Expense Summary
a. Fixed Capital Investment Costs
A totally integrated Dryflow panel production facility
consists of United States, United Kingdom, Egypt and Japan sourced goods
and services. The total project fixed capital investment cost can be
summarized on a 1982 cost basis as follows:
1982
(1000 Egyptian Pounds)
USA UK JAPAN ARE TOTAL
Installed Equipment Cost 2483 1711 424 377 4994
162
TABLE 6.16
PANEL PRODUCTION PLANT INVESTMENT COST SUMMARY
Cost (1982 Egyptian Pounds)
Local Foreign
Caronsels and Production Accessories:
- Plaster Handling Equipment - 140,000(1)
- Caronsels and Accessories - 700,000(1)
- Finished Product Handling Equipment - 95,000(1)
(1 )
- Services
(Electrical and Mechanical) - 50,000
Erection, Installation of Services and
Commissioning 150,000(1)
Buildings:
- Caronsel Shop (70m2 @ L.E. 64/m 2
4,480(2)
- Stores/Maintenance (40m 2 @ L.E. 64/m 2 ) 2,560(2)
- Canteen (80 m2C L.E. 120/m 2)
9,600(2)
- Office Area (110 m 2 @ L.E. 153/m 2 16,830(2)
- Design Services (6%) 2,010 (3 ) -
License Fee
100,000(1)
Technical Services
150,000(1)
L.E.35,480 L.E. 1,385,000
Contingency (10%) 3,550 138,500
Total: L.E. 39,030 L.E. 1,523,500
SOURCE:
(1) Opportunity for John Laing Limited in Dryflow Products. C.G. Bevan
Associates, London, England, Report No. CS/15, 1981 (Ref. 28).
(2) Building Systems Cost Guide 1982. Robert Snow Means Co., Inc.
Kingston, MA (Ref. 147).
(3) Upper Limit Provided by "The Housing and Construction Industry in
Egypt," Interim Report Working Papers 1978. (Ref. 151).
163
TABLE 6.17
PANEL PRODUCTION PLANT INVESTMENT COST SUMMARY
QUANTITY PER COST PER
COST PER
QUANTITY UNITS
YEAR UNIT
YEAR
OPERATING COST ITEMS
Hours 7,200 4.30(1) 30,960
Plant Wages
Benefits
1
7,740
(25% of Wages)
'lass Fiber* kg 126,360 2.50(2) 315,900
(3)
MWH 3,600 60.00 216,000
Electricity
_(3)
Water
Liters 842,400 0.20 1 168,480
45,00(
Maintenance
616,500
TOTAL
* Assumes 0.18 kilograms of glass-fiber per square meter of panel.
** Assumes power requirement of 0.5 MWH per hour of panel production.
* Assumes 1.2 liters of water per square meter of panel.
**** Estimated at 5 percent of total plant cost.
SOURCES: (1) Netherlands Engineering Consultants. Egypt National
Transport Study. Final Report, 1981 - Phase II. Holland
(Reference No. 148).
(2) Opportunity for John Laing Limited in Dryflow Products.
C. G. Bevan Associates, London, England, leport No. CS/15,
1981 (Reference No. 28).
(3) Data obtained from interview with Airman El Sakka, AZAMCO,
Ltd. Cairo, Egypt. September, 1982 (Reference No. 143).
164
TABLE 6.18
PANEL PRODUCTION PLANT WAGES (L.E./Hr)
(Egyptian Pounds Per Hour)
1 Carousel Operator 0.60
2 Dispatch Laborers (2 x 0.40) 0.80
2 Miscellaneous Labor (2 x 0.40) 0.80
1 Maintenance
0.50
1 Fiber Handler Operator 0.60
1 Foreman
1.00
TOTAL L.E. 4.30
SOURCE: Netherlands Engineering Consultants. Egypt National Transport
Study, Final Report, 1981 - Phase II. Holland (Reference: No.
rT1
165
A breakdown of the above investment costs is shown in
Table 6.19. These capital costs have been based on vendor quotations
obtained by the MIT Gypsum Project Team. These costs include all equip
ment, materials, subcontracts, indirect construction costs, plant start
up costs, and the cost of all professional services involved in the
plant design and installation.
All equipment costs shown are quoted in 1982 Egyptian
pounds. The official exchange rates of 0.8 Egyptian pounds to one
U.S.
dollar and L.E. 1.45 to one British pound were used La all calculations.
The costs for a facility producing only calcined gypsum
would be equivalent to the previous costs, with the exception of the
cost of a panel production facility. The total costs for such a plant,
including a 10 percent contingency can be summarized as follows:
1982
(1000 Egyptian Pounds)
USA UK JAPAN ARE TOTAL
Installed Equipment Cost 2483 424 274 3181
b. Working Capital Investment Costs
The working capital costs for a totally integrated
facility are summarized in Table 6.20. These costs have been determined
by deducting current liabilities from the sum of current assets. The
second step involved determining the coefficient of turnover for these
cost components by dividing 360 days by the number of days of minimum
coverage.
c. Operating Costs
Per unit production costs can be summarized as follows:
166
TABLE 6.19
FIXED CAPITAL INVESTMENT COST SUMMARY
U.S. U.K. JAPAN A.R.E. 1UrAL
Ibzer and ipper - - 120(l) - 120
Front-&d Loader - 60(0) - 60
- 120() - 120
service Facility - - - 21.7(2) 21.7
FreightQCarges - - 30(1) 0"4(3) 30.4
1)
Tariffs - - 0 15
- - 330 37.1 367.1
PRFXSSMIG & CAICININM
Ul.ings - 89(2) 89
( 4)
Calcining Flant 1950 - - 1950
loader and Electrical
Eluipment 12(5) • - 50( l) 20(4) 82
Freight 295.2 ( 4 ) - 5(1) 1 5(3) 301.7
(4)
Tariffs - - - 1014 101.4
2257.2 - 55 211.9 2524.1
PANEL PRODLLTION
Carousels and Production
Accessories - 1135(6) - - 1135
&dldings - - - 33.5(2) 35.5
Iaoise and chnlical Fees - 250(6) _ - 250
( 4)
Freight - 170.3 - -(2) 171.3
(4
Tariffs - - - 56.8 56.8
- 1555.3 - 93.3 1648.6
2257.2 1555.3 385 342.3 4539.8
Cntingency (10%) 225.7 155.5 38.5 34.2 453.9
TOA 2482.9 1710.8 423.5 376.5 493.7
SOURCE: (1) Price quote obtained from interview with I. Bibars, Sales
Rep., Komatsu, Ltd. Dokki-Cairo, Egypt. August, 1982.
(Reference: No. 144)
(2) Building Systems Cost Guide 1982. Robert Snow Means Co.,
Inc. Kingston, MA (Reference: No. 147)
(3) Taken from costs supplied by Egypt Intercity
Transportation Study. Technology Adaptation Program,
Massa-husetts Institute of Technology. Cambridge, MA.
(4) Data obtained from telephone interview with P. Mulenax,
Sales Rep., Combustion Engineering, Inc. Abilene, Kansas.
November 1982. (Reference: No. 142)
(5) Data supplied by telephone interview with G. Lythgoe,
Sales Rep., Caterpillar Tractor Company. Peoria,
Illinois. (Reference: No. 146)
(6) Opportunity for John Laing Limited in Dryflow Products.
C.G. Bevan Associates, London, England, Report No. CS/15,
1981 (Reference: No: 28)
167
TABLE 6.20
WORKING CAPITAL INVESTMENT COST SUMMARY
(Egyptian Pounds)
Coefficient
Days of Turnover Cost
Inventory:
Plaster Bags 15 24 4,170(1)
Finished Goods
90 4 445,830
Quarry Maintenance Materials 180 2 7,500(2)
Processing Plant Maintenance
Materials 180 2 48,750 (3)
Panel Production Plant
Maintenance Materials 180 2 (4 )
22,500
Cash
0 0
0
Accounts Receivable
60 6
336,560
Accounts Payable
0 0
0
TOTAL:
L.E.865,310
SOURCES:
(1) Data obtained from interview with Aiman El Sakka, AZAMCO,
Ltd.,
Cairo, Egypt, September, 1982. (Ref. 143).
(2) Komatsu Sales Mates. Komatsu, Ltd. Tokyo, Japan,' 1982.
(Ref. 93).
McKee-Kearny, Development of Ras Malaals Gypsum Deposits
for
Sinai Manganese Company. 1981. (Ref. 97).
(3) Data obtained from telephone interview with P. Mulenax,
Combustion
Engineering, Inc. Abilene, Kansas. November, 1982.
(Ref.
142).
(4) Opportunity for John Laing Limited in
Dryflow Products.
C.G Bevan
Associates. London, England. Report No. CS/15. 1987.
(Ref. 28).
168
QUARRY WAGES
The 1982 aggregate wage rate for all quarry labor including bene
fits as summarized in Table 6.10 is L.E. 6.63 per hour (142,150). For
an hourly rate of ore production of 54.6 metric tons, this labor cost
translates into a unit labor cost of L.E. 0.12 per ton.
PROCESSING AND CALCINING PLANT WAGES
1982 hourly plant wages, including all benefits, are estimated at
L.E. 4.50 per hour of production (142,150). Assuming a production rate
of 11.7 metric tons of calcined gypsum per hour, this labor rate
translates into a unit labor cost of L.E. 0.4 per ton.
PANEL PRODUCTION PLANT WAGES
Panel production plant wages have been estimated at L.E. 5.38 per
hour. This labor rate converts to a unit cost of L.E. 0.06 per square
meter of Dryflow panel produced.
DIESEL FUEL
Per unit diesel fuel costs were calculated (142) as follows:
A. Quarrying
1. Dozer and ripper - 16 liters/hr. x 2100 hr/year ,
L.E. 0.25/liter = L.E. 8,400
#6 FUEL OIL
Fuel Oil costs were calculated on a unit cost
basis (97,142) as follows:
950,000 Btu/ton-stucco x L.E. 0.75/106 Btu = L.E. 0.71/ton
stucco
ELECTRICITY
Per unit electricity costs (44,97) can be summarized as follows:
1. Processing and Calcining
(0.06 MWH/ton ore)x(131,000 tons ore)x(L.E. 60/MWH) = L.E. 5.90/ton
80,000 tons stucco stucco
2. Panel production
3600 MWH/year - 0.005 MWH/m 2 x L.E. 60/MWH = L.E. 0.31/m2
702,000m 2 /year
WATER
Water costs were estimated using an allowance of 0.1 liters per ton
of ore processed and 1.2 liters per square meter of panel (28,145). The
total annual cost for this usage is L.E. 13,100 for 80,000 tons of plas
ter production and L.E. 168,480 for 702 thousand square meters of panel
production. Unit costs can be translated to L.E. 0.16 ton for proces
sing and calcining and L.E. 0.24 per square meter of panel. These
estimates assume a water cost of L.E. 0.20 per liter.
GYPSUM PACKINC BAGS
Polyethelene-lined packing bags for calcined gypsum with a 50
kilogram capacity cost 0.25 Egyptian pounds per bag (97,142). The
proposed production facility requires 400,000 bags, at a total 1982 cost
of L.E. 100,000, or a unit cost of L.E. 1.19 per ton of stucco.
GLASS FIBER
These fibers must be imported from the United Kingd-m at a cost of
L.E. 2.50 per kilogram, assuming an exchange rate of L.E. 1.45 to )ne
170
British pound. It is assumed that 0.18 kilogram8 of glass fiber are
required per square meter of panel giving a unit fiber cost of L.E. 0.45
per square meter (28).
MAINTENANCE
Unit maintenance costs were calculated (145,146) as follows:
I. Quairy
5% of total equipment cost (L.E. 300,000)/yr. = L.E. 15,000/yr.
L.E. 15,000/yr. = L.E. 0.11/ton/
131,000 tons ore/yr. ore
2. Processing and Calcining
5% of total plant equipment cost (L.E. 1,950,000) = L.E. 97,500
L.E. 97,500/yr = L.E.l.16/
80,000 tons stucco/year ton stucco
3. Panel Production
5% of total plant equipment cost (L.E. 1,135,000) = L.E. 56,750
L.E. 56,750/yr = L.E. 0.08/m2
702,000m 2 /year
d. Miscellaneous Costs, Overheads, and Expenses
ADMINISTRATIVE WAGES
The 1982 aggregate labor cost for all administrative personnel has
been estimated at L.E. 33,500 per year (142,143). Table 6.21 provides a
breaL1ow, of this cost. Total annual costs, including a 25 percent
benefit allowance have been estimated at L.E. 41,880.
TRANSPORTATION
Transportation costs for both calcined gypsum and panels were
calculated as follows:
171
TABLE 6.21
ADMINISTRATIVE WAGE SUMMARY
(1982 Egyptian Pounds)
1 - Managing Director 5,000
1 - Sales Manager 4,000
1 - Production Manager 4,000
1 - Accountant 3,000
3 - Secretarial (3 x 1500) 4,500
2 - Sales Representatives (4 x 2500) 10,000
1 - Production Controller 3,000
TOTAL L.E. 33,500
SOURCE: Data obtained from interview with E. El Sattar, GYMCO.
Gharbaniat, Egypt. September, 1982. (Reference No. 142)
172
Fixed Charge = 1.80 x Number of Tons
Variable Charge = 0.05 x Number of Tons x Distance (kilometers)
Assuming:
1. Production Plant to Fayoum city = 45 kilometers
2. Production Plant to Cairo = 125 kilometers
These costs have been taken from data supplied by the "Intercity
Transportation Study," conducted under the Technology Adaptation Program
at M.I.T.
LIGHTING
Lighting requirements for office and canteen areas have been esti
mated using data from Means's "Systems Cost Cuide - 1982" (147). Means
provides an allowance of 3 watts per hour per square foot (32.3 watts
per square meter) of lighting for i typical office and canteen area.
For a total area of 190 square meters operating 24 hours per day and 360
days per year, this translates into an annual requirement of 4.9 MWH.
For a current cost of L.E. 60 per MWH (97,142), the annual cost is
estimated at L.E. 295.
TELEPHONE/OFFICE SUPPLIES
Because current data are unavailable for these costs, an allowance
of L.E. 20,000 per year was used. This cost is based on one provided by
a preinvestment study for the GY14CO project at Gharbaniat (142).
INSURANCE
The cost of insurance has been estimated using the McKee-Kearny
allowance of one percent of total plant cost (97). Using this coeffi
cient provides an annual cost of approximately L.E. 50,000.
MARKETING
Marketing costs excluding wages for all sales personnel have been
estimated at L.E. 60,000 per year. This figure has been taken from the
GYMCO preinvestment study, and includes the cost of product literature,
173
mailings, and sales presentations (142,143). These costs would also
include the cost of an erection advisory service. This service would be
available to make on-site visits to users in order to ensure that the
cost and time savings claimed by Dryflow panels are fully achieved by
the user.
These overhead costs are summarized in Table 6.22.
DEPRECIATION
Depreciation for all equipment was calculated using straight line
methods for the following periods (55):
1) Quarrying Equipment - 5 Years
2) Processing, Calcining, and Panel Production Equipment - 10
years
3) All Buildings - 20 years
Using the above durations, the following depreciation expenses were
determined:
1) Quarrying Equipment - L.E. 69,080 per year
2) Processing, Calcining, and Panel Production Equipment -
L.E. 404,820 per year
3) All Buildings - L.E. 7310 per year
TAXES
Taxes were excluded because of the ten to fifteen year tax exemp
tion granted under Law 43 and the New Communities Act (53, 55).
ROYALTIES
Royalties payable to the Egyptian Government were calculated (59)
according to the guidelines set forth in 5. Royalties were computed as
follows:
Production Royalties
131,000 tons ore x L.E. 0.041/ton = L.E. 5371
Rent-Land = L.E. 20
Service Royalties-Electricity and Water = L.E. 400
TOTAL L.E. 5791
174
TABLE 6.22
OVERHEAD COSTS
Administrative Wages L.E. 33,500
Benefits L.E. 8,375
Lighting (4.9 MWH @ L.E. 60/KWH) L.E. 295
Telephone/Office Supplies L.E. 20,000
Insurance L.E. 50,000
Marketing L.E. 60,000
TOTAL L.E. 172,170
SOURCE: Data obtained from interview with E. El Sattar, GYMCO.
Gharbaniat, Egypt. September, 1982. (Reference No. 142)
McKee-Kearney, Developm-nt of Ras Malaab Gypsum Deposits for
Sinai Mangaaese Company, 1981. (Reference No. 97)
175
6.4 Financial and Economic Evaluation
This portion of the study addresses the financial feasibility of
the quarrying, processing, calcining, and panel production facilities
outlined in Section 6.3. The viability of the two proposed production
facilities has been judged on the basis of the results from the Inter
active Financial Planning System (IFPS) computer simulation program.
This software is available on the PRIME 850 minicomputer available at
the MIT Sloan School of Management. IFPS is a simple modeling language
that is capable of performing most financial eomputations in a fast and
convenient manner. IFPS contains such built-in financial analysis
capabilities as net present value, internal rate of return, deprecia
tion, loan amortization, risk analysis, and forecasting and mathematical
functions. A listing of .he IFPS financial simulation programs used in
this report is presented in Appendix I.
6.4.1 Calcined Gypsum Production Facility
a. Selection of Optimal Leveraging and Incorporation Strategy
The first step of the financial feasibility analysis re
quired financial simulations under an assortment of scenarios. Six
scenarios, or leveraging ana incorporation options, were analyzed. The
first three scenarios consisted of debt-to-equity ratios of 1:1, 2:3,
and 1:2 under the foreign investment law, Law No. 43 that was di,-ussed
in Chapter Five. The remaining scenarios were derived usir. ebt-to
equity ratios of 2:1, 1:1, and 1:2 under the local incorporation law,
Law No. 159. These six scenarios along with the terms and sources of
credit are highlighted in Tables 6.23 and 6.24.
The rate of return for incorporation rv-der Law No. 159,
with a debt-to-equity ratio of I to 2 was found to be the most satis
factory. The rates of return and net present values associated with
each of the six scenarios are summarized in Table 6.25. Although this
rate exceeds those calculated under Law No. 43, there are several dis
advantages associated with local incorporation. Under local incorpora
tion laws, investors are subject to numerous foreign currency and legal
restrictions and to the restriction that spezifies that 49 percent of
176
TABLE 6.23
LAW NO. 159 - LEVERAGING SCENARIOS/CALCINED GYPSUM PRODUCTION FACILITY
LOAN AMOUNT INTEREST DURATION DOWN PAYMENT
EQUIPMENT FINANCED SOURCE OF LOAN (Egyptian Pounds) RATE (2) (Years) M
1. Quarrying Equipment Japan Export/Import 317,625 9 5 25
Bank
Scenario E
Debt/Equity 2:1 2. Processing and U.S. Agency for 1,862,175 10 5 25
",Ic 'ning Equipment International
Development
3. Buildings Chase National Bank 309,540 15 5 25
of Egypt
1. Quarrying Equipment Japan Export/Import 317,625 9 5 25
Scenario 2 Bank
Debt/Equity - :1 2. Processing and U.S. Agency for 1,549,380 10 5 25
Calcining Equipment International
Development
Scenario 3 1. Quarrying Equipment Japan Export/Import 217,625 9 5 25
Debt/Equity 1:2 Bank
2. Processing and U.S. Agency for 927,045 10 5 25
Calcining Equipment International
Development
SOURCE: Reference Nos. 39, 76, 117, 126, and 149.
TABLE 6.24
LAW NO. 43 - LEVERAGING SCENARIOS/CALCINED GYPSUM PRODUCTION FACILITY
LOAN AMOUNT INTEREST DURATION DOWN PAYNENT
EQUIPNENT FINANCED SOURCE OF LOAN (Egyptian Pounds) PATE(Z) (Years)
1. Quarrying Equipment Japan Export/Import 317,625 9 5 25
Scenario 4 Bank
Debt/Equity - 1:1
2. Processing and U.S. Export/Import 1,517,715 10 5 35
Calcining Equipment Bank
Scenario 5
( 1. Quarrying Equipment Japan Export/I-iort
Bank
317,625 9 5 25
Debt/Equity - 2:3
2. Processing and U.S. Export/Import 1,175.979 10 5 35
00 Calcining Equipment bank
( 1. Quarrying Equipment Japan Export/Import 317.625 9 5 25
Scenario 6
Bank
Debt/Equity - 1:2 2. Processing and U.S. Export/Import 927,045 10
5 35
Calcining Equipment Bank
SOURCE: Reference Nos. 39, 76, 117, 126, and 149.
TABLE 6.25
FINANCIAL CALCULATIONS FOR SIX LEVERAGING AND INCORPORATION SCENARIOS -
CALCINED GYPSUM PRODUCTION FACILITY
Net Present Value Internal Rate of Return
Scenario (Egyptian Pounds) (%)
Law No. 159
2:1 492,140 20.9
1:1 581,678 20.9
1:2 635,399 21.1
Law No. 43
1:1 272,233 17.7
2:3 276,465 17.8
1:2 297,953 17.9
179
the firm must be owned by Egyptian nationals. Under Law No. 43, inves
tors are not subject to these restrictions.
Having determined these optimal parameters, the second
evaluation phase concentrates on some of the more pertinent financial
calculations used to assess overall project viability, including net
present value, internal rate of return, pro forma cash flow statements,
pay
back period, breakeven analysis, and sensitivity analysis. A sum
mary of the program's output data is described in the following
sections.
b. Revenues
Total project revenues are defined as those revenues that
are '-!crued through the sales of calcined gypsum, or plaster. The three
scenarios, optimistic, pessimistic, and most likely, were derived using
the data of Table 6.2. Table 6.3 shows the data used for the "most
likely" scenario. For this analysis it was assumed that 5 percent of
the Cairo market, and after 1985, 100 percent of the Fayoum market could
be captured.
Plaster is sold to the Cairo market at the 1982 government
regulated price of 40 Egyptian pounds per metric ton. The remainder of
the plaster produced is sold in the local markets of Fayoum and Beni
Suef at the current price of 30 pounds per ton. Total project revenues
for the three scenarios are shown in Table 6.26.
c. Pro Forma Cash Flows
Pro forma cash flow statements for all three scenarios are
shown in Table 6.27. Because plant construction occurs in the first
year of the project, these tables show cash flow from revenues starting
in 1984. These tables also include data for total revenues, operating
and overhead costs, royalties, and debt service.
The revenue streams shown in these tables are based on the
following financing arrangements:
1. Goods from the United States, including the calcining and
processing plant and all services are financed through a loan with the
United States Agency for International Development (AID) at a rate of 10
180
TABLE 6.26
REVENUE STREAMS - CALCINED GYPSUt. .RODUCTION FACILITY
1984 1985 1986 1987 1988 1989 1990 1991 1992
OPTIMISTIC: 1,040,000 1,542,200 1,683,000 1,841,400 2,013,000 2,204,400 2,411,200 2,483,800 2,631,200
MOST LIKELY: 899,200 1,327,800 1,444,400 1,543,400 1,665,400 1,799,400 1,937,200 2,006,000 2,114,200
PESSIMISTIC: 758,400 1,113,200 1,205,600 1,245,200 1,317.800 1,390,400 1,463,000 1,582,000 1,597,200
TABLE 6.27
PRO FORMA CASH FLOWS - CALCINED GYPSUM PRODUCTION FACILITY
SCENARIO: OPTIMISTIC
19114 191t,
M,, 1Y
I 911/ 191E8 19119 1990 1991 199.
l. t tt3lt 2320200 28533.% 3020!-62 3204460 34015t,0 36 184 75 3',0773 39411890 412171111
tWtot RA IItt :OtS IS 1351t2'7 1573012 16491 3H 1 /11 3-1 18196/2 1915644 2u I1740 2065700 2143839
IV IA
E (:();I S 1 /20H1 170f1 1 72ofi 1 1 /2011 172001 172081 1 .2001 172081 17201J
I II AL kIi fAI I 3613 4730 ,0 S4 "A373 5738 614-2 e",76 6745 10.,1
lit F1I St f.UIL -1306 / "1.5069 ,1 3?)"/
3t0. 306/ '1.067 0 0 0 0
LIASH f LOW '1u7y 13 Y,904.,': 611242 711.0 / t1, I(t) 1t 246,08 '. .'16 1 704365 1 /91111'.'
SCENARIO: MOST LIKELY
1914 19f, 19116
3 1907 1988 1989 1990 1991 1992
ItI tol Id V 11Il 20193113 24"/. 3 ;
.' .41) 5 72166R
27.t :107:1850 3029023 3188906 3279988 34"10361
1 (Ill I
t111M I f-; ('Il 1,; 11 y3 1/0 1 .:t9 '4 4 I 4 .6.',01 1411243 15471192 1618190 1 9t004 5 1733963 179 .31020
l''I llt fill I11; 1 7:1)081 1 /7 0111 1 /201111 17:0131 1 !20811 172081 11"21081 172081 172 01"I
Il(d 1.:11lt'l I 1 3117 4141 43191" 491: 4975. 51A2 5457 5615 1;150
IV 1 .I I I 13i(), 7 1 3(l0 1 .' 1, 513067 513067 0 0 0 (
It I |,.3/" 1', 41I '0 1 41,';, 55A471 1,349935 1233591 1321414 1368330 1 3|/.l10
SCENARIO: PESSIMISTIC
1 1,
I'
91416;1;;
l t 9117 198V 19S9 1 ?To 1991 ! "1
1 I 1111l 17101,47
111l(, '0fI:'314 :'t94' . 2252679 2344131 2435590 25270308 2610886 26913 ..4
1l' IIl;I AF 1 Ilfl5 994800 1 I1111'5; 1:0..90 123 30 65 1 :276103 1319147 13621013 1402146 1443io0
SIlt
Ri ll 'I Il ;
S I 72'01311 I 1:1O.9l l ,.* l81 17.'l11 172081 172081 172011 172081 1 '' 1
1 |(1 I.:tllYI 1 :,:!6O 33 1P.5 3W5,1 4013 4175 ,337 4484 4,3
1
III lt' 1.'ll I 513067 .130/; .,30.' 51306 5130'17 0 0 0 0
lAS-4 fI lt. 2,' 241
49 7'-9 301Q.;4 330616 37867 940187 9881F437 1032175 10/11414
percent per annum and a down payment of 25 percent. The loan duration
is 5 years with no grace period. Loan: L.E. 927,041.
2. The bulldozer, quarry loader, calcining plant loader, and
off-highway truck imported from Japan are financed at 25 percent down,
no grace period, and 9 percent over a period of five years on a loan
extended by the Japanese Export/Import Bank. Loan: L.E. 317,625.
The remaining balance of L.E. 2,489,340 is financed through
company equity. Table 6.28 shows the debt service schedule for these
loans.
d. Net Present Value
Net present values for the equity capital for the ten year
period 1983 through 1992 were generated using a discount rate of 15
percent for each of the three production scenarios. These data are
shown in Table 6.29. The results, ranging from a low of L.E. -527,519
to a maximum of L.E. 1,122,090, show that it is possible for profita
bility to fall below tL:e cutoff rate.
The calculation of the net present value for the total
investment costs shows a range of L.E. -1,512,904 to L.E 121,060.
Because these rates are based on a discount rate of 15 percent, individ
ual investors and lenders should be encouraged to calculate net present
values based on their own particular discount rates.
e. Internal Rate of Return
Because the selection of an appropriate discount rate is
often difficult when calculating net present value, the internal rate of
return (IRR) is used in an effort to avoid this difficulty. Data for
the IRR for the equity capital outlay for the three scenarios are also
shown in Table 6.29. The lowest value, that associated with a
"pessimistic" scenario, is
9.5 percent.
The "most likely" value of 21.1 percent is somewhat below
the generally accepted cutoff, or hurdle rate for firms presently in
vesting in Egypt. Whether such a rate of return is above the lowest
acceptable investment rate must be left to the discretion of individual
investors. The internal rate of return for the total investment outlay
183
TABLE 6.28
DEBT SERVICE SCHEDULE - CALCINED GYPSUM PRODUCTION FACILITY
(Egyptian Pounds)
PROCESSING & CALCINING
QUARRY EQUIPMENT EQUIPMEar
TOTAL
ANNUAL ANNUAL ANNUAL TOTAL TOTAL
PAYMENT PRTNCIPAL INTEREST PAYMENT PRINCIPAL INTEREST PAY4ENT PRINCIPAL iNTEREST
PERIOD 1 81,659 53,073 28,586 244,552 151,843 92,705 26,211 204,920 121,291
PERIOD 2 81,659 57,849 23,810 244,552 167,032 77,520 326,211 - .,882 101,329
PERIOD 3 81,659 63,056 18,603 244,552 133,736 60,816 326,211 246,791 79,420
PERIOD 4 81,659 68,751 12,928 244,552 202,109 42,443 326,211 270,840 55,371
PERIOD 5 81,659 74,917 6,742 244,552 222,320 22,232 326,211 297,237 28,974
TOTAL 408,295 317,625 90,669 1,222,760 927,045 295,715 1,631,055 1,244,670 386,385
*Nt-..bers may not sum due to rounding
TABLE 6.29
NET PRESENT VALUE AND INTERNAL RATE OF RETURN
CALCINED GYPSUM PRODUCTION FACILITY
NET PRESENT VALUE INTERNAL RATE OF RETURN
SCENARIO (EGYPTIAN POUNDS (%)
Optimistic 1,122,090 24.9
Most Likely 635,399 21.1
Pes imistic -527,519 9.5
185
ranges from 2.9 to 15.8 percent. This rate of return is somewhat below
the cutoff of many lending institutions.
One fallacy associated with this analysis technique is the
assumption that the cash flow received in any year can be reinvested at
the calculated rate of return until the end of the investment. It is
unlikely that any rate of return calculated at this time will remain
unchanged in the future.
f. Pay Back Period
The project pay back period represents the number of yeara
over which the investment outlay will be recovered or paid back from
project profits. These profits are defined as net profit after tax,
with financial costs and depreciation deducced.
This variable has one significant drawback in that it does
not take into account the magnitude or timing of cash flows during the
pay back period. Instead, it merely considers only the recovery period
as a whole. Pay back periods for the three scenarios are as follows:
Optimistic: 5.8 years
Most Likely: 6.8 years
Pessimistic: 9.4 years
These moderately long pay back periods indicate that the
proposed project is somewhat risk) and is characterized by a low level
of liquidity. The early recovery of invested funds will not be possible
for this particular project. These pay back periods are better suited
as a constraint for individual investors than as a profitability
measure.
g. Breakeven Analysis
Breakeven analysis determines the breakeven point, or the
point of production at which sales revenues equal production costs. The
breakeven point is determined by the relationship between fixed costs
and the difference of the unit sales price and variable unit costs.
For a per-unit sales price of 30 Egyptian pounds per metric
ton, the breakeven point occurs at approximately 12.6 thousand tons,
For a price of 40 pounds, the breakeven point is 7.3 thousand tons.
186
Figure 6.12 shows graphically the relationship between price and
breakeven quantity. These relatively low breakeven points are the
result of differences between the sales price and the variable unit
costs. For this case the fixed cost is rapidly absorbed through this
difference. These breakeven producticn rates represent 15.8 and 9.1
percent of full plant capacity, respectively.
h. Sensitivity Analysis
For financial calculations, some items have a greater
influence on the final result than others. For this specific project it
is important to determine the items that have an important influence on
the final results so that they can be subjected to special scrutiny.
The technique used to do this is commonly referred to as sensitivity
analysis.
To use this technique, each cost element was independently
varied by 25 percent. The resulting variations in the internal rates of
return were measured for each cost element. The sensitivity of the
internal rate of return for the "most likely" scenario is summarized as
follows:
CHANGE IN VARIABLF IRR CHANGE
(percent) (percent)
Quantity of Plaster Sold -25 to +25 -37 to +34
Quarry Equipment Capital Cost -25 to +25 +2.3 to -.2.2
Calcining Plant Capital Cost -25 to +25 +24.6 to -17.8
Working Capital Cost -25 to +25 +2.9 to -2.8
Quarry Production Cost -25 to +25 +1.3 to -1.3
Calcining Production Cost -25 to +25 +15.8 to -16.3
Transportation Cost -25 to +25 +10.4 to -10.6
Overhead Cost -25 to +25 +11.1 to -11.4
As expected, plaster quantity, processing and calcining
plant capital cost, and calcining production costs have the greatest
impact on internal rate of return. If these costs should deviate sub
stantially from those that were t imated in this report, the overall
187
FIGURE 6.12
CALCINED GYPSUM PRODUCTION FACILITY - BREAKEVEN ANALYSIS
C
0
o 100
L
1-
80
L
a)
-o 6 L
- 3
0C
0)
D 20
ii
0)
0 5 10 15 20
L
0_
Thousand Meiric Tons
project viability coild be severely impacted. Costs for utility ser
vices, fuel, and transportation are stringently controlled by the
Egyptian government. In light of this fact and the lower sensitivity
values associated with these costs, any impacts resulting from increases
in these covts could be negligible. Plaster price has been omitted from
th13 analysis because of the similar governmental price controls placed
on this product.
i. Probabilistic Analysis
For the probabilistic calculation of project net present
value and internal rate of return, Monte Carlo simulations were used.
Monte Carlo simulations are highly appropriate, because of the diffi
culty encountered in assigning a deterministic value to a variable such
as cost. Using this method, values for all cost variables are obtained
from probabilistic distributions that describe the behavior of the
variable. The cost variables used in this analysis have been incorpo
rated into probabilistic distributions in an effort to capture overall
project risk. These distributions represent variations in cost result
ing from such factors as changes in prices and foreign currency exchange
rates and inflation. Because reliable historical data for these costs
were unavailable, crude approximations were used for distributional
variance. Despite this, these simulations provide a valuable mechanism
for assessing the merits of a risky investment.
Because of the virtual non-existence of down-side risk for
costs and Egyptian pound exchange rates, a skewed triangular distribu
tion was used. For this distribution, the lower limit was bounded
within a one-half standard deviation of the mean, while the upper limit
was bounded within two standard deviations. Such a distribution is
shown in Figure 6.13.
Net present values for a ten year period and their corres
ponding distributions were generated using a discount rate of 15 percent
for the "most likely" production scenario. The statistics for these
values, includin6 mean, standard deviation, and 10 and 90 percent confi
dence intervals are shown in Table 6.30. A frequency table of percen
tile values for net present value is also presented in Table 6.30. The
189
FIGURE 6.13
10/90 TRIANGULAR DISTRIBUTION
10% Most 90%,
Probable
SOURCE: IFPS Users Manual. Execucom Systems Corporation. Austin,
Texas. 1979. (Reference No. 89)
190
TABLE 6.30
MONTE CARLO SIMULATION RESULTS
NET PRESENT VALUE (Egyptian Pounds)
SAMPLE STATISTICS
STANDARD 10% 90%
MEAN DEVIATION SKEWNESS KURITOSIS CONFIDENCE INT. CONFIDENCE INT.
93,703 1,125,964 .1 3.0 10,443 176,913
FREQUENCY TABLE: PROBABILITY OF VALUE BEING GREATER THAN INDICATED
90 80 70 60 50 40 30 20 10
-1,231,000 -818,000 -517,000 -254,000 45,000 319,000 613,000 1,134,000 1,568,000
INTERNAL RATE OF RETURN (percentage)
SAMPLE STATISTICS
STANDARD 10% 90%
MEAN DEVIATION SKEWNESS KURITOSTS CONFIDENCE INT. CONFIDENCE INT.
13.92 16.36 -4.1 28.5 12.68 15.17
FREQUENCY TABLE: PROBABILITY OF VALUE BEING GREATER THAN INDICATED
90 80 70 60 50 40 30 20 10
2.2 6.9 9.9 12.5 15.4 7.9 20.6 25.0 28.8
results showing a net present value of L.E. 93,703 appear to be only
marginally satisfactory. The distribution for this value is generally
characterized by a large dispersion, indicating that a high degree of
inherent risk is present for such an investment venture.
A distribution for IRR is also shown in Table 6.30. The
IRR of 13.9 percent with a standard deviation of 16.8 shows the overall
financial risk associated with such a project.
6.4.2 Integrated Panel Production Facility
a. Selection of Optimal Leveraging and Incorporation Strategy
The financial evaluation of a plant producing both plaster
and Dryflow panels has been performed in a manner similar to that em
ployed in the analysis of the plaster production facility of Section
6.4.1.
Six scenarios, utilizing a variety of leveraging and incor
poration schemes were analyzed. The first three scenarios consisted of
debt-to-equity ratios of 2:1, 1:1, and 1:2 under the local incorporation
law. The remaining three scenarios were derived using ratios of 1:1,
2:3, and 1:2 under the foreign investment law, Law No. 43. These six
scenarios and the associated terms and sourcea of credit are highlighted
in Tables 6.31 and 6.32.
The rate of return under local incorporation, or Law No.
159, with a ratio of 1:2 was again found to be the most satisfactory.
These rates of return and their associated net present values are shown
in Table 6.33.
b. Revenues
Total revenues are defined as those revenues resulting from
thL sale of plaster and Dryflow panels. The revenue streams for each of
the three scenarios are shown in Table 6.34.
Plaster is sold to the Cairo and Fayoum markets at the 1982
government regulated prices of 40 and 30 Egyptian pounds per ton, res
pectively. This analysis, in determining total plaster sales, uses
quantities identical to those used in the previous analysis of Section
6.4.1.
192
TABLE 6.31
LAW NO. 159 - LEVERAGING SCENARIOS/PLASTER AND PANEL PRODUCTION FACILITY
LOAN AMOUNT INTEREST DURATION DOWNPAYMENT
EQUIPMENT FINANCED SOURCE OF LOAN (Egyptian Pounds) RATE (2) (years) (2)
1. Quarrying Equipment Japan Export/Import 317,625 9 5 25
Bank
SCENARIO 1
Debt/Equity -2:1 2. Processing and U.S. Agency for 1,862,175 10 5 25
Calcining Equipment International
Development
3. Panel Production U.K. E.C.G.D. 1,368,640 10 5 20
Equipment
4. Buildings Chase National 357,377 15 5 25
Bank of Egypt
1. Quarrying Equipment Japan Exp t/Import 317,625 9 5 25
Bank
SCENARIO 2
Debt/Equity 1:1 2. Processing and U.S. Agency for 1,862,175 10 5 25
Calcining Equipment International
Development
3. Panel Production
Equipment U.K. E.C.G.D. 749,705 10 5 20
1. Quarrying-Equipment Japan Export/Import 317,625 9 5 25
Bank
SCENARIO 3
Debt/Equity -1:2 2. Processing and U.S. Agency for 1,635,375 10 5 25
.Calcining Equipment International
SOURCE: Reference Nos. 39, 76, 117, 126, and 149.
TABLE 6.32
LAW NO. 43 - LEVERAGING SCENARIOS/PLASTER AND PANEL PRODUCTION FACILITY
LOAN AMOUNT INTEREST RATE DURATION DOWN PATMENT
EQUIPMENT FINANCED SOURCE OF LOAN (Egyptian Pounds) (2) (years) (M)
1. Quarrying Equipment Japan Export/ 317,625 9 5 25
Import Bank
SCENARIO 4
Debt/Equity - 1:1 2. Processing and U.S. Export/Import 1,368,640 10 5 35
Calcining Equipment Bank
3. Panel Production U.K. E.C.G.D. 1,243,240 10 5 20
Equipment
1. Quarrying Equipment Japan Export/Import 317,625 9 5 25
SCENARIO 5
Bank
Debt/Equity -2:3
2. Processing and U.S. Export/Import 1,368,640 10 5 35
Calcining Equipment Bank
3. Panel Proauction U.K. E.C.G.D. 657,640 10 5 20
Equipment
1. Quarrying Equipment Japan Export/Import 317,625 9 5 25
Bank
SCENARIO 6
Debt/Equity 12 2. Processing and
U.S. Export/Import 1,368,540 10 5 35
Calcining Equipment Bank
3. Panel Production U.K. E.C.G.D. 266,735 10 5 20
Equipment
SOURCE: Reference Nos. 39, 76, 117, 126, and 149.
TABLE 6.33
FINANCIAL CALCULATIONS FOR SIX LEVERAGING AND INCORPORATION
SCENARIOS - PLASTER AND PANEL PRODUCTION FACILITY
NET PRESENT VALUE INTERNAL RATE OF RETURN
SCENARIO (EGYPTIAN POUNDS) (%)
Law No. 159
2:1 -9,235 14.9
1:1 70,653 15.9
1:2 222,543 16.5
Law No. 43
1:1 -445,086 10.0
2:3 -295,520 11.8
1:2 -127,246 13.4
195
TABLE 6.34
REVENUE STREAMS - PLASTER AND PANEL PRODUCTION FACILITY (Egyptian Pounds)
1984 1985 1986 1987 1988 1989 1990 1991 1992
SCENARIO: OPTIMISTIC
PLASTER REVENUE 1,040,000 1,542,200 1,683,000 1,841,400 2,013,000 2,204,400 2,411,200 2,483,800 2,611,200
PANEL REVENUE 1,288,200 1,311,152 1,337,562 1,363,060 1,388,558 1.414,075 1,439,573 1,465,090 1,490,588
TOTAL REVENUE 2.328,200 2,853,352 3,020,562 3,204,460 3,401,558 3.618,475 3,850,773 3.948,890 4.121.788
SCENARIO: MOST LIKELY
PLASTER REVENUE 899,200 1,327,800 1.444.400 1.543,400 1,665,400 1,799,400 1,937,200 2,006.000 2.114.200
PANEL REVENUE 1,120,183 1,140,133 1,163,085 1.185,268 1.207,450 1,229,623 1,251,796 1,273.988 1. 296,161
TOTAL REVENUE 2,019,383 2,467,933 2,607,485 2,728,668 2,872,850 3,029,023 3.188,996 3,279,988 3,410,361
SCENARIO: PESSIMISTIC
PLASTER REVENUE 758,400 1,113,200 1,205,600 1,245,200 1,317,800 1,390,400 1,463,O0 1,528,000 1,597,200
PANEL REVENUE 952,147 969,114 988,627 1,007.475 1,026,323 1,045,190 1,064,038 1,082,885 1,101.734
TOTAL REVENUE 1,710,547 2,082,314 2.194,227 2,252,675 2,344,123 2,435.590 2.527.038 2,610,886 2,698.934
For the purposes of this analysis it is assumed that Dry
flow panels will be sold at an ex-factory price of 1.90 Egyptian pounds
per square meter. This represents a 20 percent mark-up over the total
manufactured cost of 1.58 pounds. The three production scenarios have
been derived using the partition consumption data of Table 6.6.
c. Pro Forma Cash Flows
Pro forma cash flow statements for the three scenarios are
shown in Table 6.35. As in the previous section, these statements also
include data for total revenues, operating and overhead costs,
royalties, and debt service.
These revenue streams have been based on the following
financing arrangements:
1. All United States sourced goods, including plaster produc
tion equipment and all related services are financed through a U.S. AID
loan. This loan is provided at a rate of 10 percent per annum and a
down payment of 25 pprcent. The duration of this loan is 5 years with
no grace period. Loan: L.E. 1,635,375.
2. All Japan sourced quarrying equipment, and calcining plant
loader are financed through a loan extended by the Japanese Export/
Import Bank. The terms of this loan are 5 years and 9 percent, with a
25 percent down payment and no grace period. Loan: L.E. 317,625. The
debt service schedule for these loans is shown in Table 6.36. The
remaining balance of L.E. 3,906,010 is financed through company equity.
d. Net Present Value
Net present values for equity capital were generated
through 1992 using a discount rate of 15 percent for each of the three
production scenarios. These data are shown in Table 6.37. These re
sults, which range from a minimum of L.E. -833,587 to a maxium of L.E.
1,277,322, are slightly below those obtained for a facility producing
only calcined gypsum.
Net present values for total investment outlay were also
calculated. These values ranged from L.E. -2,352,862 to L.E. -1,313,890
197
TABLE 6.35
PRO FORMA CASH FLOWS - PLASTER AND PANEL PRODUCTION FACILITY (Egyptian Pounds)
SCENARIO: OPTIMISTIC
1984 1985 1986 1967 1988 1989 1990 1991 1992
TOTAL REVENUE
1040000 1542200 1683000 1841400 2013000 2204400 2411200 2483800 2631200
TOTAL OFERATINI COiSIS 430037 640694 699188 764994 836283 915799 1001712 1031873 1093109
OVERHEATD COISS 172169 172169 172169 172169 172169 172169 172169 172169 172169
TOTAL ROYALlY 2384 3479 3758 4073 4413 4793 5203 5347 5639
[IEDT SERVICE 326211 326211 3126Ui 326211 326211 0 0 0 0
CASH FLOW 109199 399647 4B1674 573954 673924 1111640 1232116 1274411 1360-83
SCENARIO: MOST LIKELY
1984 1985 1986 1987 1988 1989 1990 1991 1992,
IOTAL REVENUE 899200 1327800 1444400
1543400 1665400 1799400 1937200 2006000 1114200
TOrAL OFENAIING CnSTS 371816 5r1622 600063
641191 691876 747533 804792 833378 878326
OVERHEAD COSIS
172169 172169 172169 172169 172169 172169 172169 172169 172169
STOTAL ROYALTY 2118 3054 3285 3481 3724 3989 4263 4399 4614
%0ETIET SERVICE 326211 326211 32"211 326211 326211 0 0 0 0
CASH FLOW 26899 274744 34! 612
400347 471420 875710 955976 996054 1059091
SCENARIO: PESSIMISTIC
1984 19j5 1986 1987 1988 1989 1990 1991 1972
totAL REVENUE
758400 1113200 1205600 1245200 1317800 1390400 1463000 1528000 1597200
T10A. OPERArItIr COSTS 313596 462469 500856 517307
547468 577630 607791 634800 663543
IVRHEAT COSTS 172169 172169 172169 172169 172169 172169 172169 172169 172169
TOTAL ROYALTY 1852 2628 2811 2890 3034 3178 3322 3451 3588
TEDT SERVICE 326211 326211 326211 326211 326211 0 0 0 0
CASH FLOW -55428 149723 203552 226622 268917 637423 679718 717579 757900
TABLE 6.36
DEBT SERVICE SCHEDULE - PLASTER AND PANEL PRODUCTION FACILITY* (Egyptian Pounds)
PROCESSING & CALCINING
QUARRYING EQUIPMENT EQUIPMENT
TG2AL
ANNUAL ANNUAL ANNUAL TOTAL TOTAL
PAYMENT PRINCIPAL INTEREST PAYMENT PRINCIPAL INTEREST PAYMENT PRINCIPAL INTEREST
PERIOD 1 81,659 53,073 28,586 431,408 267,870 163,538 513,067 320,943 192,124
PERIOD 2 81,659 57,849 23,810 431,408 294,657 136,750 513,067 352,507 160,560
PERIOD 3 81,659 63,086 18,603 431,408 324,123 107,285 513,067 387,179 125,888
PERIOD 4 81,659 68,731 12,928 431,408 356,535 74,872 513,067 425,266 87,801
PERIOD 5 81:659 74,917 6,742 431,408 392,189 39,219 513,067 467,105 45,961
TOTAL 408,295 317,625 90,670 2,157,040 1,635,375 521,665 2,565,335 1,953,000 612,335
*Numbers may not sum due to rounding.
TABLE 6.37
NET PRESENT VALUE AND INTERNAL RATE OF RETURN
PLASTER AND PANEL PRODUCTION FACILITY
NET PRESENT VALUE INTERNAL RATE OF RETURN
SCENARIO (EGYPTIAN POUNDS) ( )
Optimistic 1,277,322 22.8
Most Likely 222,543 16.5
Pessimistic -833,587 9.1
200
for the three scenarios. These values are generally below the cutoff of
most lending institutions.
e. Intcrnal Rate of Return
Internal rates of return for the three scenarios are also
shown in Table 6.37. The lowest value, 9.1 percent, falls below the
most pessimistic forecast for a plant producing plaster. The "optimis
tic" forecast for IRR of 22.8 percent is also below the lowest
acceptable investment rate for many inveetors.
f. Pay Back Period
Pay back periods for the three scenarios as follows:
.ptimistic: 6.4 years
Most Likely: 7.5 years
Pessimistic: 9.2 years
These long pay back periods are indicative of a project
with considerable risk and low liquidity. As in the previous example,
the early recovery of invested funds is generally not possible for this
type of project.
g. Breakeven Analysis
Breakeven points have been determined in a manner similar
to that used in Section 6.4.1. For a unit sales price of 30 Egyptian
pounds per metric ton of plaster, the breakeven point occurs at approxi
mately 4.9 thousand metric tons. For a price of 40 pounds, the break
even point is 2.8 thousand tons. Figure 6.14 shows the relationship
between price and bre>.even quantity graphically. These levels of
production represent 6.1 and 3.5 percent of full plant capacity,
respectively.
The breakeven point for Dryflow panel sales, given a unit
price of L.E. 1.90 per square meter, occurs at approximately 328 thou
sand square meters. This rate of production represents 47 percent of
full plant capacity. Figure 6.15 shows the relationship between
breakeven quantity and price.
201
FIGURE 6.14
PLASTER AND PANEL PRODUCTION FACILITY - BREAKEVEN ANALYSIS
o
--
100
L
57 80
L 0
a)
(I)
"3 60
0 C
C- 40
0) 20
Ll
0) 0 II I I I
00
0 10 20 30 40 50 60
L
0_
Thousand MetriC Tons
FIGURE 6.15
PLASTER AND PANEL PRODUCTION FACILITY - BREAKEVEN ANALYSIS
L
a,
.+.,
8
L
"7
(U
L 6
5
0
c
0
ai_
c
3
(U
()
0 I I I I I I
aD
o 0 200 200 300 400 500 600 700 800 900
Thousand Square Meters
h. Sensitivity Analysis
The sensitivity of the internal rate of return for the
"most likely" scenario is summarized as follows:
Change in Variable (percent) IRR Change (percent)
Panel Price -25 to +25 -41.2 to +40.8
Quantity of Panels Sold -25 to +25 -8.3 to +8.1
Quantity of Plaster Sold -25 to +25 -28 to +26
Quarry Equipment Capital Cost -25 to +25 +1.6 to -1.6
Calcining Plant Capital Cost -25 to +25 +16.3 to -13.2
Panel Plant Capital Cost -25 to +25 +10.2 to -8.9
Working Capital Cost -25 to +25 +3.2 to -3.1
Quarry Production Cost -25 to +25 +1.4 to -1.5
Calcining Production Cost -25 to +25 +17.1 to - 17.6
Panel Production Cost -25 to +25 +22.8 to -22.7
Transportation Cost -25 to +25 +12.3 to -12.5
Overhead Cost -25 to +25 +6.1 to -6.1
Utilities and Fuel Cost -25 to +25 +22.3 to - 22.7
As is evidenced by the above data, panel price, plaster
quantity sold, panel production costs, and utilities and fuel cost have
the most significant impact on project internal rate of return. The
costs for utilities, fuel, and transportation are subject to price
controls and are heavily subsidized by the Egyptian government. Should
these prices achieve parity with current international rates, overall
project feasibility will be somewhat impacted. However, even under
these circumstances, a project such as this will still provide a
satisfactory rate of return.
i. Probabilistic Analysis
This probabilistic analysis has been performed in a manner
similar to that of Section 6.4.1. All cost variables have been assigned
probability distributions which describe the behavior of the variable.
A skewed triangular distribution has been used in this analysis, with
the lower limit bounded within a one-half standard deviation of the mean
and the upper limit bounded within two standard deviations.
Table 6.38 shows a probabilistic estimate of net present
value and its corresponding distribution, using a discount rate of 15
percent and a frequency table for these values. The results shown in
204
TABLE 6.38
MONTE CARLO SIMULATION RESULTS
NET PRESENT VALUE (1000 Egyptian Pounds)
SAMPLE STATISTICS
STANDARD 10% 90%
MEAN DEVIATION SKEWNESS KURITOSIS CONFIDENCE INT. CONFIDENCE INT.
-716,456 1,478,886 .1 2.8 -825,747 -607,165
FREQUENCY TABLE: PROBABILITY OF VALUE BEING GREATER THAN INDICATED
90 80 70 60 50 40 30 20 10
-2,615,000 -1,902,000 -1,4Y43,000 -1,122,000 -753,000 -410 56,000 489,000 1,229,000
INTERNAL RATE OF RETURN (percentage)
SAMPLE STATISTICS
STANDARD 10% 90%
MEAN DEVIATION SKEWNESS KURITOSIS CONFIDENCE INT. CONFIDENCE INT.
16.36 -4.1 28.5 12.68 15.17
13.92
FREQUENCY TABLE: PROBABILITY OF VALUE BEING GREATER THAN INDICATED
70 60 50 40 30 20 10
90 80
2.2 6.9 9.9 12.5 15.4 7.9 20.6 25.0 28.8
this table, show a net present value of L.E. -716,456. Table 6.38 shows
a high standard deviation, indicating that there is a high probability
of achieving a negative net present value. A distribution for internal
rate of return is also shown in Table 6.38. The IRR of 8.35 percent
with a standard deviation of 16.1 indicates a fair amount of risk in the
project.
206
CHAPTER SEVEN
SUMMARY, CONCLUSIONS, AND RECOMMENDATIONS FOR FURTHER STUDY
Dryflow partition panels are a relatively recent innovation that
are characterized by a unique dry production process.
This process
offers several advantages over conventional production processes.
Because very little water goes into the panel, the wet mixing that is
associated with the manufacture of brick, traditional gypsum block, and
drywall is eliminated. The Dryflow process provides users with
substantial time and energy savings.
Through multiple configurations, Dryflow panel production facili
ties are economical at all levels of production. A small-scale Dryflow
plant could be effectively adapted for use in Egypt. Given the emerging
acceptance of gypsum partitions in Egypt, the operation of a Dryflow
plant appears to be economically feasible.
The demand for gypsum construction products in Egypt can be dis
aggregated into two building materials: gypsum plaster and gypsum blocks
or panels. The demand for calcined gypsum, or plaster, is generally
taken as a function of the demand for cement. Over the last ten years
the ratio of plaster consumption to cement consumption has remained
relatively stable. It is anticipated that future ratios will not change
significantly. In light of this phenomenon, it appears as though future
cement demand can be used effectively to forecast demand for plaster.
Cement demand will ultimately be influenced by economic growth and the
resulting demand for construction.
Current economic forecasts predict that real GDP for Egypt will
grow at a rate of approximately eight percent per annum for the coming
years. Given this rate of growth, demand for plaster will reach 665
thousand metric tons per year by 1990.
Plaster production is currently at 340 thousand metric tons per
year. GYMCO, the largest producer of calcined gypsum in Egypt, is
currently in the process of expanding production. The Kawmia Cement
Company and Mahmoud Osman are also in the process of either expanding
existing facilities or building new ones. Despite these ambitious
207
plans, many of the proposed expansion operations have been subject to
numerous delays. Consequently, future demand will exceed supply at
least through 1985 and perhaps even several years longer.
Gypsum blocks and panels are currently competing in the market for
interior partitions against such traditional products as Nile-silt
brick, shale brick, sand-lime brick, and lightweight concrete aggregate
block. Gypsum blocks are presently being produced by ICON,GYMCO, Kuwait
Egyptian, Misro Gypsum, and AZAMCO. Because of the many interior wall
ing products that are either present or are on the verge of entering, it
is anticipated that this market will be saturated by 1984. This implies
that the successful marketing of Dryflow panels in Egypt will be contin
gent upon its lower costs and greater ease of handling relative to other
products.
Given the alternative quarrying, processing, and calcining systems
available, a configuration producing calcined gypsum at the lowest per
unit cost was selected. The quarrying system, consisting of a dozer
with ripper, a wheel-mounted front-end-loader, and an off-highway truck,
is capable of extracting 131 thousand metric tons of gypsum ore per
year. The total 1982 capital cost for such a system, including a 10
percent contingency is estimated at 404 thousand Egyptian pounds.
The processing and calcining plant, consisting of a hammermill
crusher, a roller mill, and two batch kettles, carries a total installed
cost of 2.78 million Egyptian pounds. Such a plant, operating three
shifts per day is capable of producing 80 thousand metric tons of stucco
per year, assuming a 5 percent wastage factor and an average ore purity
of 65 percent. A Dryflow production facility adds an additional 1.8
million Egyptian pounds to the total capital costs.
Implementational considerations such as infrastructure and capital
availability appear to be favorable. Sufficient power and water are
available within close proximity to the proposed site. Capital is
available through either local banking institutions or foreign export
credits.
Two types of production facilities have been financially and eco
nomically analyzed. The first, producing only calcined gypsum, has a
total investment cost of approximately 3.7 million, including the costs
208
of quarry, plant, and working capital. Per unit manufacturing costs for
the individual units are:
Quarrying L.E. 1.38 per metric ton of plaster
Processing and Calcining L.E. 17.18
per metric ton of plaster
These costs include the costs associated with personnel, transportation
and infrastructure.
Based on local incorporation under Law No. 159, a debt to equity
ratio of 1:2, and 1982 selling prices and capital costs, the "most
likely" internal rate of return for this project is 21.1 percent.
For a plant producing both plaster and Dryflow panels, total in
vestment costs in 1982 prices are approximately 5.9 million Egyptian
pounds. Per unit manufacturing costs for plaster are comparable to
those presented above. Dryflow panel production costs have been esti
mated at 0.88 Egyptian pounds per square meter, giving a total unit cost
of 1.58 pounds per square meter.
For an integrated production facility, incorporated under Law No.
159, with a debt to equity ratio of 1:2, the "most likely" internal rate
of return is 16.5 percent. Although this rate is lower than that shown
for a facility producing only plaster, it is possible to obtain rates of
return that are beyond tOia level. The analysis of Chapter Six shows
that the internal rate of return for an integrated production facility
is extremely sensitive to changes in the price of Dryflow panels. For
the purposes of this analysis a price of L.E. 1.90 per square meter was
used. This price represents a 20 percent mark-up over production costs.
However, the analysis of Section 5.3 shows that Dryflow panels can be
sold at prices over three pounds per square meter and can still remain
cost competitive. This would substantially improve the project's inter
nal rate of return and make a totally integrated production facility
the more viable investment opportunity.
A small-scale Dryflow production facility would offer the following
additional advantages:
209
1. Because the ultimate Dryflow plant capacity of 702 thousand
square meters for a facility with one carousel represents
approximately 5 percent of the aggregate interior partition
market, all panels produced at this rate should encounter
little difficulty clearing the market. This statement assumes
that the demand for partition products will grow at a rate
comparable to that forecasted in Chapter Six.
2. Revenues from plaster sales could also be realized within one
year of project initiation. Thus plaster sales would be gen
erating significant revenues early in the project during the
time Dryflow panels were gaining market acceptance.
3. Quarry operations can be expanded to three shifts, providing
continuous daily production of 24 hours.
Any surge production
resulting from this expansion can be stockpiled at sites adja
cent to the quarry, for use as agricultural gypsum. This
gypsum offers the advantage of not requiring further processing
or calcining. Since a market for this product currently exists
in Egypt, the revenues resulting from its sale would likely
outweigh the incurred costs of production.
4. Additional batch kettles could also be added to the present
calcining facility, and increase plaster production at a low
marginal cost. Any excess plaster produced from such an
expansion could clear the market through 1986 under a
worst-case scenario.
The success of this project in Egypt depends heavily on how well
Dryflow panels can compete with existing products on a cost/performance
basis. This in turn is contingent upon the ability of the marketing and
sales program to convince users to convert to gypsum partitions.
Any successful marketing strategy for Dryflow products must high
light Dryflow's inherent advantages through evidence of appropriate
material properties and characteristics, and comparisons with other tra
ditional materials. In addition, cost data for material and installa
tion must be provided so that buyers may assess the tradeoffs between
210
the various products. Such information will demonstrate the time and
cost savings associated with Dryflow panels.
The traditional method for introducing new building products in
Egypt is through large scale presentations, sales visits to the offices
of prospective buyers, and newspaper advertisements. Of these three,
only the first two are regarded as being effective. Large-scale presen
tations can be given for the benefit of local architects, engineers, and
contractoro, and attract attendance often in excess of three hundred
people. Most, if not all of these presentations should be given in the
Cairo area. Sales personnel should then make follow-up visits to the
offices of presentation attendees. Local newspaper advertisements,
which are usually employed in the marketing of such traditional products
as cement and plaster, are rarely used for new products such as Dryflow
(140).
The quickest way for Dryflow to capture a share of market is
through a marketing strategy that initially focuses on architects and
engineers. Because these individuals specify what products are to be
used in all building construction, their acceptance is essential to the
success of Dryflow panels in Egypt. In an effort to speed up market
penetration rates, it is also recommended that this strategy be sup
plemented with special supIy arrangements with local Egyptian
contractors.
While it might take several years to obtain large scale commitments
from these contractors, this would be compensated for by increased
market penetration rates. The rate at which these firms would adopt
Dryflow panels would probably depend on the price discounting offered
with these special orders.
There are currently two directions in which future research on the
feasibility of Dryflow panel production facilities in Egypt might take
and which this study might serve as an integral part. The first, the
preparation of a full-scale feasibility analysis, would provide an in
depth document and definitive conclusions on all the basic project
issues. Such an analysis should begin with using many of the procedures
211
associated with large-scale target investigations such as three
dimensional test borings, and the construction of small-scale, general
area, and large-scale quarry maps.
Additional up-to-date information on the plans and progress of all
competitors must be obtained.
This includes information on the status
of pending projects for producers of calcined gypsum, shale brick,
sand-lime brick, concrete aggregate block, and gypsum blocks and panels.
Lastly, this analysis must also explore two additional areas that
may have a significant impact on overall project viability.
The first
factor concerns the price and availability of locally produced process
ing and calcining equipment. In the past, the cost for such equipment
has been 20 to 30 percent below that for equipment imported from abroad.
Because processing and calcining capital costs constitute more than 50
percent of total costs for a project of this nature, a reduction in
these costs can contribute to increased project profitability.
The other area of investigation involves an analysis of the market
in Egypt for agricultural gypsum. The revenues received from the sales
of such a product could be significant should such a market exist.
The second direction in which future research might take would be
an analysis of this project within the economic framework of Egypt.
Such research would go beyond the microeconomic criteria of profita
bility that are used in the investment analysis portion of this report.
Such a study would analyze the benefits of plants in a macroeconomic
context, or more definitively, the effect and role of such plants in the
development priorities of countries such as Egypt.
212
APPENDIX I
IFPS FINANCIAL SIMULATION PROGRAMS
Figures I.1 and 1.2 present a listing of the IFPS computer simula
tion program used in the financial calcula:ions of Chapter 6. Both
programs have been broken down into twelve modules that correspond with
specific parts of Section 6.4. The structure of the two programs is
similar, with variations resulting from differences in input data and
the omission in one program of all cost modules pertaining to Dryflow
panel production. The twelve program modules include:
1. Revenue Module
This module computes total revenues, which are comprised of either
plaster or plaster and panel revenues. The number of tons of plaster
sold in the Fayoum and Cairo markets is given in Table 6.3. It is
assumed that plaster is sold to the Cairo market at the government
regulated price of 40 Egyptian pounds per metric ton. All other plaster
is sold in the local Fayoum market at 30 pounds per ton. The panel
quantity shown in the listing of Figure 1.2 is for the "most likely"
scenario that was given in Table 6.6. Panel prices are assumed to be
1.90 pounds per square meter with no price differential for different
regional markets.
2. Quarry Investment Cost Module
This module calculates all quarry fixed capital investment costs as
were described in Section 6.4. This module concludes by breaking down
quarry investment costs into foreign and domestic components.
3. Processing and Calcining Plant Investment Cost Module
This module calculates processing and calcining inveitment costs in
a manner similar to that employed for computing quarry investment costs.
I-I
FIGURE I.1
IFPS FINANCIAL SIMULATION PROGRAM -
CALCINED GYPSUM PRODUCTION FACILITY
5 PERIODS I
10 COLUMNS 1984-1992
12
13 * REVENUE MODULE
14 *
20 TOTAL REVENLiE=PLASTER REVENUE+O
30 PLASIER REVENUE=(CAIRU FLASTER*40)+(FAYOUM PLASTERN.30)
40
45
47
49
75 22 5 2279 2 4 2 5
50 AA=14050,15090P16415,17540,18925,204 , Ol , O, 0
51 CAIRO PLASTER=AA*DUMHYI
28 3 26 8 3522 3 6 48 3 8 4 4
3
52 BB=11240,2414022660,2OOO, O O, O, O O, O
5: FAYOUM PLASTERBII*IUMMYI
6.
61*
70 PLASTER QUANTI=CAIRO PLASTER+FAYOUM PLASTER
72 PLASTER OUANT=PLASTER 0UANTI*I
75 PUMY1=NORRAND(I1,.25)
80
90
100
110 * QUARRY INVESTMENT COST MODULE
120 *
130
140 DOZER COST=120000
150 LOADER COST=60000
160 TRUCK COST=120000
165 EOUIPMENT FREIGHT COST=(DOZER COST+LOADER COST+TRUCK COST)*0.
166 LOCAL FREIGHT COST=450
167 EQUIPMENT TARIFFS=(DOZER COST+LOADER COST+TRUCK COST)*0.05
170 SERVICE BUILDING COST=180*113.50
175 BUILDING DESIGN COST=0.06*SERVICE BUILDING COST
176 JAPAN QUARRY INVST COST=SUM(LI50 THRIJ L165)
177 ARE QUARRY INVST COST=SUM(L166 THRU L175)
178 * ** ************
********~
179 *
180 *
PROCESSING AND CALCINING PLANT INVESTMENT COST MODULE
181 *
182
1P3 BATCH KETTLE COST=350000
184 CRUSHER COST=200000
185 MISC EQUIPMENT COST=650000
186 INSTALLATION AND DESIGN=750000
187 FREIGHT COST=292500
188 PLANT BUILDING COST=1400*63.50
139 PLANT LOADER TARIFFS=2500
190 *
191 GENERATOR FREIGHT COST=2700
192 PLANT TARIFFS=?7500
193 TRANSFORiER COST=20000
194 LOADER LOCAL FREIGHT COST=IO0
195 ELECTRICAL LOCAL FREIGHT COST=2700
196 PLANT LOADER TARIFFS=2500
197 DIESEL GENERATOR COST=12000
19B PLANT LOADER COST=50000
199 PLANT LOADER FREIGHT COST=5000
200 US CALC PLANT INVST COST=SUMH(LI3 THRU L187)
202 ARE CALC PLANT INVST COST=SdIM(LI8O THRU L196)
204 JAPAN CALC PLANT INVST COST=3UM(L197 THRU L199)
1-2
FIGURE I.I (continued)
IFPS FINANCIAL SIMULATION PROGRAM -
CALCINED GYPSUM PRODUCTION FACILITY
240 *
242 *
244
***
A***********************$**
246 *
248 * WORKING CAPITAL INVESTMENT COST MODULE *
250* *
252
260 WORKCAP COST1=PLASTER BAG COST/24
270 WORKCAP COST2=(GUARRY PRODUCTION COSTS+PLASTER PRODUCTION COSTS+OVERVEAD COSTS)/4
200 WORKCAP COST3=OUARRY MAINTENANCE/2
290 WORKCAF' COST4=PLANT MAINTENANCE COST/2
300 *
310 WORKCAP COST6=O
320 WORKCAP COST7=TOTAL REVENUE/6
330 TOTAL WORKING CAPITAL=SUM(L280 THRU L320)
331
332 *
333 * LOAN AMORTIZATION MODULE *
334*
335
340 JAPAN INT=NORRAND(.09r,"2)
350 AID INT=NORRAND(.IO,.02)
360 UK INT=NORRAND(.10,.02)
370 *
380 LOCAL INT=NORRAND(.15,.02)
390 AMORT(XXOJAPAN INT5t,1,1,F'AYIPAYINTIPPRINIIALI)
400 XX=T1090RAND(311273,317625,397030)
410 AMORT(YYOAID INT,5,1,1,pF'AY2,PAYINT2,PRIN2,BAL2)
420 YY=T!O90RANII(1824932,1862175,2327720)
430
44) *
450
460 *
470 *
480 AMORT(HHO,LOCAL INT,5,1,1,PAY5,PAYINT5,PRIN5,BAL5)
9 5
485 HH=T1O9ORAND(303350P309540,386 2 )
490 INTEREST pAYMENT=PAYINTI+PAYINT2+PAYINT5
495
500* *
510 * EXPENSE MODULE
*
520 *
530
540 STLINE DEF'R(TOrINVlO,5,EEPR1,BKVAL1,CUMDEPR1)
545 TOTINV1=345400,O
550 STLINE DEPR(TOTINV2,0,10,DEPRECIATION2,BKVAL2,CUMtIEPR2)
555 TOTINV2=2435100,O
560 STLINE iEPR(TOTINV3,0,20,DEPRECIATION3pBKVAL3pCUMDEPR3)
565 TOTINV3=110700,O
570 GU4RRY ROYALTY=0.041*131000*(PLASTER OUANT/80000)
1-3
FIGURE 1.1 (continued)
IFPS FINANCIAL SIMULATION PROGRAM -
CALCINED GYPSUM PRODUCTION FACILITY
572 SERVICE ROYALTY=400
575 LAND ROYALTY=20
577 TOTAL ROYALTY-SUM(L570 THRU L575)
578 DEPRECIATION1 =DEPR1+DEPRLCIATION2+DEPRECIATION3
579 DEPRECIATION-DEPRECIATIONI*DUMMY2
580 DUMMY2=T109ORAND(.98p1,l.25)
590 *
600 * QUARRY PRODUCTION COST MODULE *
610 * *
617 QUARRY WAGES=2400*5.30
619 QUARRY WAGE DENEFITS=OUARRY WAGES*0.25
620 *
621 DOZER FUEL COST=33600*0.25*.75*0.85
623 LOADER FUEL COST=18400*0.25*.75*.85
625 TRUCK FUEL COST=72000*0.25*.75*.85
627 ObARRY MAINTENANCE=15000
628 QUARRY PROD COST=SUM(L617 THRU L627)
629 QUARRY PRODUCTION COSTSI=QUARRY PROD COST*('(0/37.04)+PLASTER OUANT)/80000)
630 **** ** ****************
632* *
634 * PROCESSING AND CALCINING PRODUCTION COST MODULE
636 *
638 ** * * ** * * ** * * ** * * ********
640 PLANT WAGES=7200*3.60
641 PLANT WAGE IENEFITS=PLANT WAGES*0.25
642 ELECTRICITY COST=7060*60.00*.75*.85
644 WATER COST=13100*0.20*.75*.85
646 FUEL OIL COST=79800*0.75*.75*.85
648 DIESEL FUEL COST=4800*0.25*.75*.85
650 PLANT MAINTENANCE COST=97500
652 PLASTER DAG COST=100000
653 COSTS=SUM(L640 THRU L652)
654 PLASTER PRODUCTION COSTS1=COSTS*((UO/37.04)+PLASTER GUANT)/80000)
656 *
658 *
660 *
662 *
664 *
666 *
668
670
672 *
674
676 *
678 *
680*
681 *
682 *
683 *
686*4
6B6 *
688 * OVERHEAD COST SUMMARY *
690 *
692 ************************************************
694 ADMINISTRATIVE WAGES=33500
696 ADMINISTRATIVE WAGE BENEFITS=ADMINISTRATIVE WAGES*0.25
698 LIGHTING COST=4.9*60.00
700 OFFICE SUPPLIES=20000
702 INSURANCE=50000
704 MARKETING=60000
706 OVERHEAD COSTSI=SUM(L694 THRU L704)
710 QUARRY PRODUCTION COSTS=OUARRY PRODUCTION COSTS1*tUMMY2
720 PLASTER PRODUCTION COSTS=PLASTER PRODUCTION COSTSI*DUMMY2
730 OVERHEAD COSTS=OVERHEAD COSTSI *DUMMY2
1-4
FIGURE I.1 (continued)
IFPS FINANCIAL SIMULATION PROGRAM -
CALCINED GYPSUM PRODUCTION FACILITY
760
770 TRANS COSTI-CAIRO PLASTER*7.8
780 TRANS COST2=FAYOUM PLASTER*4,05
790 TOTAL TRANS COSTI1SUM(L770 THRU L7BO)
795 TOTAL TRANS COST=TOTAL TRANS COSTltDMlMY2
810 *
820 * NP'V AND IRR CALCULATION MODULE *
830*
840 * * * * ** * * *
841 TOTAL OPERATING COSTS=OUARRY PRODUCTION COSTS*1+PLASTER PRODUCTION COSTS*l'
842 +TOTAL TRANS COST*I
850 BEFORE TAX PROFIT=TOTAL REVENUE-OVERHEAD COSTS*1-TOTAL OPERATING COSIS-TOTAL ROYALTY'
851 -DEBT SERVICE-riEPRECIATION
860 AFTER TAX PROFIT=BEFORE TAX PROFIT-(BEFORE TAX ;'ROFIT*TAX RATE)
865 TAX RATE=O
870 CASH FLOW=AFTER TAX PROFIT+DEPRECIATION
99O NPV CASH FLOW=NPVC(CASH FLOW.15,EOUITY)
890 IRR CASH FLJW=IRR(CASH FLOWEOUITY)
895 INVESTHENI COST=JAPAN GUARRY INVST COST*1+ARE DUARRY INVST COST'
896 +US CALC PLANT INVST COST*IARE CALC PLANT INVST COST+JAPAN CALC PLANT INVST COST'
897 +I*TOTAL WORKING CAPITAL
900 EQUITY=INVESTMENT COST/PRCNT,O,OvO,O,vO,OO
910 PRCNT=3
92V *
i'30 *
940 *
950 *
960 *
1-5
FIGURE 1.2
IFPS FINANCIAL SIMULATION PROGRAM -
PLASTER AND PANEL PRODUCTION FACILITY
5 PERIODS I
10 COLUMNS 1984-1992
12 *
13 * REVENUE MODULE
14 *
20 TOTAL REVENUE=PLASTER REVENUE+PANEL REVENUE
30 PLASTER REVENUE=(CAIRO PLASTER*40)+(FAYOUM PLASTER*30)
40 PANEL REVENUEPANEL OUANT*PANEL PRICE
45 *
47
49 PANEL PRICE=1.90*1
50 AA=l405O,15O90,16415t17540,18925,2O475,22015,22790,24025
51 CAIRO PLASTER=AA*DUMMY1
52 B!=11240,24140,2260,28060,302a0,32680,35220,36480,38440
53 FAYOUM PLASTER=BDB*tUMMYI
60 PANEL QUANT1=589570, 0070, 612150,623825,635500,647170,658i,670520,O682190
61 PANEL OUANT=PANEL OUANTI*DUMMY1
70 PLASTER OUANT=CAIRO PLASTER+FAYOUM PLASTER
72 *
75 ]IUMMYI=NORRAND(1,.25)
80
100 *
110 * QUARRY INVESTMENT COST MODULE
120 *
*
140 DOZER COST=120000
150 LOADER COS1=60000
160 TRUCK COST=120000
165 EOUIPMENT FREIGHT COST=(DOZEh COST+LOADER COST+TRUCK COST)*0.1
166 LOCAL FREIGHT COST=450
367 EOUIPMENT TARIFFS=(DOZER COST+LOArtER COST+TRUCK COST)*0.05
170 SERVICE BUILDING COST=1801113.50
175 BUILDING DESIGN COST=0.06*SERVICE BUILDING COST
176 JAPAN QUARRY INVST COST=SUM(L150 THRU L165)
177 ARE QUARRY INVST COST=SUM(L166 THRU L175)
179 *
180 * PROCESSING AND CALCINING PLANT INVESTMENT COST MODULE
181 *
*
183 PATCH KETTLE COST=350000
184 CRUSHER COST=200000
185 MISC EOUIPMENT COST=650000
186 INSTALLATION AND DESIGN=750000
107 FREIGHT COST=292500
188 PLANT BUILDING COST=1400*63.50
189 PLANT LOADER TARIFFS=2500
190 *
191 GENERATOR FREIGHT COST=2700
192 PLANr TARIFFS=97500
193 TRANSFORMER COST=20000
194 LOADER LOCAL FREIGHT COST=100
195 ELECTRICAL LOCAL FREIGHT COST=2700
196 PLANT LOADER TARIFFS=2500
197 DIESEL GENERATOR COST=12000
198 PLANT LOADER COSr=50000
199 PLANT LOADFR FREIGHT COST=5000
200 US CALC PLANT INVST COST=SUM(LI83 THRU L187)
202 ARE CALC PLANT INVST COST=SUM(L188 THRU L196)
204 JAPAN CALC PLANI INVST COST=SUM(L197 THRU L199)
1-6
FIGURE 1.2 (continued)
IFPS FINANCIAL SIMULATION PROGRAM -
PLASTER AND PANEL PRODUCTION FACILITY
206
20* *
210 * PANEL PRODUCTION PLANT INVESTMENT COST MODULr
*
212 *
214
216 PLASTER HANDLING EQUIP COST=140000
216 CAROUSELS COST700000
220 PROD HANDLING E0UIP=95000
222 SERVICES=50000
=
224 PLANT INSTALLATION 150000
226 LISCENSE FEE=10000
228 TECHNICAL SERVICES=150000
230 BUILDING SHOP COST=70*64
232 STORAGE BUILDING COST=40*64
234 CANTEEN DUIL.ING COST=80*120
236 OFFICE BUIILDING COST=110*153
238 DESIGN COST=2010
240 UK PANEL PLANT INVST COST=SUM(L216 THRU L22B)
242 ARE PANEL PLANT INVST COST=SUM(L230 THRU L238)
244
246 *
248 *
WORKING CAPITAL INVESTMENT COST MODULE
250* *
252
260 WORKCAF' COSTI=PLASTER RAG COST/24
PRODUCTION COSTS
270 WORKCAP COST2=(UUARRY PRODUCTION COSTS+PLASTER PRODUCTION COSTS+PLANT
280 WORKCAP COST3=PUARRY MAINTENANCE/2
290 WORKCAP COST4=PLANT MAINTENANCE COST/2
300 WORKCAP COSTS=MAINT COST/2
310 WORKCAP COST6=0
320 WORKCAF' COST7=TOTAL REVENUE/6
330 TOTAL WORKING CAPITAL=SUM(L2BO THRU L320)
331
332*
333 * LOAN AMORTIZATION MODULE
334*
335
340 JAPAN INT=NORRAND(.0?.02)
350 AID INT=NORRAND(.10,.02)
361 UK INT=NORRAlND(.I0,.02)
3".e *
380 LOCAL INT=NORRAND(.15,.02)
390 AHORT(XXOJAPAN INT,5,1,1,PAY1,PAYINT1,PRINIBAL1)
97
400 XX=T1090RAND(311273,317625,3
030)
410 AMORT(YYOAID INT,5rl,,pF'AY2,PAYINT2,PRIN2,BAL2)
420 YY=Ti090RAND(1824932,1862175,2327720)
430
440
450
460 AMORT(KK,O,UK INT,5,1,,PAY4,PAYINT4,PRIN4,BAL4)
470 KK=T1O9ORAND(13412671368640,1710800)
490 AMORT(HH,OLOCAL INT,5,1,1,PAY5,PAYINT5,PRIN5,DAL5)
4 4 6 7 2
405 HH=T109ORAN11(350230,35738O,
0)
490 INTEREST FAYMENT=PAYINT+PAYINT2+PAYINT4PAYIT5
495
500 *
510 *
EXPENSE MODULE
520* *
530
540 STLINE DEPR(TOTINVI,0,5,DEPR1,BKVAL1,CUMDEPR1)
545 TDTINV1=345400,OOOO,OPOOO
550 STLINE DEPR(TOTINV2,0,10,DEPRECIATION2,BKVAL2,CUMDEPR2)
555 TOTINV2=4048200,OOO,OOOO
560 STLYNE DEPR(TOTINV3,0,20,DEPRECIATION3,BKVAL3,CUMDEPR3)
565 TOTINV3=146200,0,O,,0,0,00,OO
570 QUARRY ROYALTY=0.041*(((PANEL OUANT/37.04)+PLASTER fLIANT)/90000)*131000
1-7
FIGURE 1.2 (continued)
IFPS FINANCIAL SIMULATION PROGRAM -
PLASTER AND PANEL PRODUCTION FACILITY
572 SERVICE RQYALTY=400
t,75 LAOD iI0YALTY=20
577 TOTAL ROYALTY=SUM(L570 THRU L575)
578 DEF'RECIATIONI =DEPRI+DEPRECIATION2+DEPRECIATION3
579 DEPRECIATION=DEPRECIATIONI*'UMMY2
580 DUMMY2=T1090RAND(.98.1.1.25)
590 *
.600 OUARRY PRODUCTION COST MODULE
610* *
615 *******************************************************************
617 QUARRY WAGES=2400*5.30
619 OUARRY WAGE BENEFITS=QUARRY WAGES*O.25
620 *
621 DOZER FUEL COST=33600*0.25*1*,,85
623 LOADER FUEL COST=18400*0.25*1*.65
625 TRUCK FUEL COST=72000*0.25*1*,.85
627 QUARRY MAINTENANCE=15000
628 QUARRY PROD COST=SUM(L617 THRU L627)
629 OUA!;,%' PRODUCTION COSTS1=OUARRY PROD COST*(((PANEL QUANT/37.04)+PLASTER OUANT)/80000]
630 ******************************************************************
632* *
634 * PROCESSING OND CALCINING PRODUCTION COST MODULE
636* *
638 *********************************************************************
640 PLANT WAGES=7200*3.60
641 PL.ANT WAGE DENEFITS=PLANT WAGES*0.25
642 ELECTRICITY COST=7860*60.O0*1*.85
644 WATER COST=13100*O.20*1*.05
A46 FUEL OIL COST=79800*01*.75*.85
648 DIESEL FUEL COST=4000*0.25*1*.85
650 PLANf MAINTENANCE COST=97500
652 PLASrER BAG COST=IO0000
653 COSTS=SUM(L640 THRU L652)
654 PLASTER PRODUCTION COSTSI=COSTS*( ((PANEL QUANT/37.04)+PLASTER OUANT)/80000)
656 *********************************************************************
658 *
660 * PANEL PRODUCTION COST MODULE *
662 *
664 *****************************************************************
666 PANEL PLANT WAGES=7200*4.30
668 PANEL WAGE BENEFIRS=PANEL PLANT WAGS*0.25
670 GLASS FIBER COSTS=126360*2.50
672 PLANT ELEC COST=3600*60.00*1*.85
674 PLANT WATER COST=842400*0.20*1*,.85
676 MAINT COST=45000
678 *
680*
681 *
682 TOTAL PANEL COSTS=SUM(L666 THRU L676)
683 PLANT PRODUCTION COSTSI=TOTAL PANEL COSTS*(PANEL OUANT/702000)
684 *****€**************************************************************
686* *
6B8 * OVERHEAD COST SUMMARY *
690* *
692 *********************************************************************
694 ADMINISTRATIVE WAGES=33500
696 ADMINISTRATIVE WAGE DENEFITS=ADMINISTRATIVE WAGES*0.25
698 LIGHTING COST=4.9*60.00
700 OFFICE SUPPLIES=20000
702 INSURANCE=50000
704 MARKETING=60000
706 OVERHEAD COSTS1=SUM(L694 THRU L704)
710 QUARRY PRODUCTION COSTS=OUARRY PRODUCTION COSTS1*DUMMY2
720 PLASTER PRODUCTION COSTS=PLASTER PROIUCTION COSTS1*DUMMY2
730 PLANT PRODUCTION COSTS=PLANT PRODUCTION COSTSI*DUMMY2
1-8
FIGURE 1.2 (continued)
IFPS FINANCIAL SIMULATION PROGRAM -
PLASTER AND PANEL PRODUCTION FACILITY
740 OVERHEAD COSTS-OVERHEAD COSTSI*DUMIY2
750
760 TRANS COSTI-CAIRO PLASTER*7.B
770 TRANS COST2=FAYOUM PLASTER*4.05
780 TRANS COST3-PANEL QUANT*0.20
790 TOTAL. TRANS COST1=SUM(L760 THRU L790)
795 TOTAL TRANS COST=TOTAL TRANS COSTl*DUMMY2
810*
820 * NPV AND IRR CALCULATION MODULE *
B30* *
041 TOTAL OPERATING COSTSQOUARRY PRODUCTION COSTS*14PLASTER PRODUCTION COSTS*1'
842 +PLANT PRODUCTION COSTS*I+TOT'AL TRANS COST*l
850 BEFORE TAX PROFIT=TOTAL REVENUE-OVERHEAD COSTS*I-TOTAL OPERATING COSTS-TOTAL ROYALTY'
851 -DEBT SERVICE-DEPRECIATION
860 AFTER TAX PROFIT=BEFORE TAX PROFIT-(BEFORE TAX PROFIT*TAX RATE)
865 TAX RATE=O
870 CASH FLOW=AFTER TAX PROFIT+DEPRECIATION
800 NPV CASH FLOW=NPVC(CASH FLOW,.15,EOUITY)
890 IRR CASH FLOW=IRR(CASH FLOWEGUITY)
895 INVESTMENT COST=JAPAN GUARRY INVST COST*l+ARE OUARRY INVST COST'
896 +US CALC PLANT INVST COST*l+ARE CALC PLANT INVST COST+JAPAN CALC PLANT INVST COST'
897 +UK PANEL PLANT INVST COST*l+ARE PANEL PLANT INVST COST+TOTAL WORKING CAF'ITAL*l
898 *
900 EOUITY:INVESTMENT COST/PRCNTO,0,0,0,0,0,,0
910 PRCNT=3
920 *
930 *
96u
1-9
4. Panel Production Plant Investment Cost Module
All panel production plant investment costs, including costs for
carousels, product handling equipment, technical services, and service
buildings are factored into both foreign and local currency costs.
5. Working Capital Investment Module
Working Capital requirements are computed in conformance with the
procedure outlined in Section 6.3.4.
6. Loan Amortization Module
This module calculates all loan amortization payments for the
outstanding loans described in earlier sections. These loan payments
are subsequently broken down into interest and principal.
7. Expense Module
All depreciation expenses are computed in this module, including
annual depreciation, book value, and cummulative depreciation. Total
royalty payments are also calculated, based on the rates given in
Section 5.5.
8. Quarry Production Cost Module
9. Processing and Ca! ning Production Cost Module
10. Panel Production Cost Module
11. Overhead Cost Summary
All individual production and overhead costs outlined in Section
are factored to compute total costs.
6.3
12. Net Present Value and Internal Rate of Return Calculation Module
This module calculates project before and after tax profits, cash
flow, net present value, and internal rate of return.
Readers interested in using this program on-line should consult the
"IFPS Users Manual" shown in the list of references (89). Further
questions regarding the implementation of this program on other computer
systems should be directed to:
I-10
Execucom Systems Corporation
3409 Executive Center Drive
Austin, Texas 78731
(512) 345-6560
I-Il
APPENDIX II
LIST OF INTERVIEWS AND OTHER SOURCES
The following is a list of the names and addresses of all firms and
organizations that were interviewed or provided information to the
M.I.T. Gypsum Project Team, between April and Novenber, 1982. These
ertries are broken down as follows:
1. Local Government Agencies
Dr. Mahmoud A. Zatout, Chairman
Geological Survey and Mining Authority of Egypt
Cairo, Egypt
Dr. M. Tag, Director
Fayoum Geological Survey
Fayoum, Egypt
Dr. Mohamed Ramez
General Organization for Housing, Building, and Planning
Research
Cairo, Egypt
Mr. Monir El Kholy
Arab Consulting Bureau
Cairo, Egypt
2. Quarrying, Processing, Calcining, and Panel Production Equipment
Manufacturers and Dealers
Quarrying:
Mr. Nashat Boutros, Division Manager
Electessadia (International Truck)
Cairo, Egypt
Ms. Iman Bibars, Sales Administrator
Komatsu
Dokki-Cairo, Egypt
Mr. Graham Lythgoe
International Sales Division
Caterpillar Tractor Corporation
Peoria, Illinois
(Telephone Interview)
Mr. J. W. Kell
Middle East Sales Division
TEREX Corporation
Hudson, Ohio
(Telephone Interview)
II-1
Construction Equipment Division
J.I. Case, Inc.
Racine, Wisconsin
Ms. Rita Carlson
International Sales Division
American Hoist and Derrick, Inc.
St. Paul, Minnesota
(Telephone Interview)
Mr. Joseph Hagemann
International Eales Division
WABCO Trade Company
Peoria, Illinois
(Telephone Interview)
Processing and Calcining:
Mr. Christopher Rettew
Pennsylvania Crusher Corporation
Broomall, Pennsylvania
(Telephone Interview)
Mr. Thomas Mulanex
Raymond Division
Combustion Engineering, Inc.
Abilene, Kansas
(Telphone Interview)
Mr. Felix Baldas
The Fuller Company
Bethleham, Pennsylvania
(Telephone Interview)
Babbitless, Ltd.
Paris, France
Panel Production:
Mr. C. G. Bevan
C.G. Bevan Associates, Ltd.
London, England
3. Gypsum Building Products/Manufacturers
Mr. M. Fahmy
Engineering and Projects Sector
Egyptian Gypsum, Marble, and Quarries Company (GYMCO)
Dokki-Cairo, Egypt
Arab Contractors
ICON Block Production Facility
Helwan, Egypt
11-2
Mr. Aiman El Sakka, Project Manager
AZAMCO
Giza-Cairo, Egypt
Mr. Hussein Tawfik, Vice President for Technical Affairs
Study Construction Industrial and Building
Dokki-Cairo, Egypt
Mr. Ahmed El Azhari, Architect
Kuwaiti Egyptian Company for Building Materials
Cairo, Egypt
Eng. Mohammed Ebd El Sattar, Director
GYMCO Gypsum Processing Facility
Gharbaniat, Egypt
4. Gypsum Building Products/End-Users
Mr. Ibrahim Osman
Construction Division
Arab Contractors
Cairo, Egypt
5. Sources of Credit
Mr. Robert Van Home, Director
Division of Public Sector Financing
United States Agency for Internatioual Development
American Embassy
Garden City-Cairo, Egypt
Mr. William Binns, Director
Investment and Finance Division
United States Agency for International Development
American Embassy
Garden City-Cairo, Egypt
Mr. Gary Imhoff
Office of Industrial Resources
United States Agency for International Development
American Embassy
Garden City-Cairo, Egypt
Mr. Michael Harvey, Commercial Attache
British Consulate
Cairo, Egypt
Mr. Hans-Jochen Schmidt, Commercial Attache
Embassy of the Federal Republic of Germany
Dokki-Cairo, Egypt
11-3
Mr. Olivier Mauny, Commercial Attache
French Embassy
Cairo, Egypt
Mr. Masayoshi Amano, First Secretary
Japanese Consulate
Cairo, Egypt
Mr. Seif El Kilani
Citibank N.A.
Garden City-Cairo, Egypt
Mr. Samir El Seloviri
Misr Iran Development Bank
Cairo, Egypt
Mr. Safwat Rashed
Cairo-Far East Bank
Cairo, Egypt
Mr. M. Nawar
Mohandes Bank
Cairo, Egypt
11-4
APPENDIX III
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III-I
15.
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16.
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111-2
28. C.G.Bevan Associates, Ltd., Opportunity for John Laing Limited in
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[Confidential: Not to be Quoted].
30. C.G.Bevan Associates, Ltd., Dryflow-Processing Technology and
Products. London,England [Confidential: Not to be Quoted].
31. Booz, Allen and Hamilton, Strategic Study for Building Materials
and Ceramics, Report prepared for General Organization for
Industrialization, Cairo, Egypt. June, 1977. (5 Volumes)
32. British Gypsum, Limited. "Information Bulletin No. 3".
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33. "Cable Controlled Power Cranes, Draglines, and Shovels," Technical
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40. Compagnie Francaise d'Assurance pour le Commerce Exterior,
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41. Cummins, Arthur B. and Given, Ivan A., SME Mining Engineering
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42. Day, David A., Constructio:, Equipment Guide, John Wiley & Sons,
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111-3
1#
43.
De Conink, W. and G. Marlin, "The New Mazanderan Gypsum
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New
York, 1975.
48. Dunning, Peter B., Crushing Review. National Sand and
Gravel
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Egypt," Cairo, Egypt. 1979.
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November 2, 1981.
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Companies,
Partnerships Limited by Shares, and Limited Liability Companies."
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Cairo, Egypt. (Arabic).
55. El Ahram El
Iktisadi, "Decree of Ministers of Investr,!-
and
International Cooperation Affairs No. 96 for 1982."
No. 706.
July
26, 1981. Cairo, Egypt. (Arabic).
56. El Ahram El Iktisadi,
"Law 120 for 1982 to Organize Commercial
Representation and Some Aspects of Commercial Intermediations."
No. 710. August 23, 1982.
Cairo, Egypt. (Arabic).
111-4
57. El Lotif, Abd, Engineering Encyclopedia of Raw Materials Design
Specifications and Labor Rates, Technical Press. Cairo, Egypt,
1979. (Arabic).
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(Arabic).
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Estimates of Future Demand for Building Bricks, Cairo, Egypt.
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Arab Republic of Egypt, "Finance and Energy in the Brick
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Arab Republic of Egypt, "Ministry of Housing Plan for Providing
Bricks," Cairo. 1982. (Arabic).
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Arab Republic of Egypt, Construction/Contracting Industry Study,
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Research and Studies Department. "Consumption Estimates of Some
Building Materials in A.R.E. up to the year 1982." Cairo, 1974.
65. General Organization for Unified Measurement, Ministry of
Industry, Arab Republic of Egypt, "Standard Specification for
Acid-Resisting Bricks," No. 41, 1965. (Arabic).
66. General Organiv''tion for Unified Measurement, Ministry of
Industry, Arab Republic of Egypt, "Standard Specification for
Red-Clay Bricks," Nos. 44-46, 1965. (Arabic).
67. General Orgainzation for Unified Measurement, Ministry of
Industry, Arab Republic cf Egypt, "Standard Specification for
Anti-Acid Clay Bricks," No. 41, 1960. (Arabic).
68. General Organization for Unified Measurement, Ministry of
Industry, Arab Republic of Egypt, "Standard Specification for Sand
Lime Bricks," No. 42, 1960. (Arabic).
69. General Organization for Unified Measurement, Ministry of
Industry, Arab Republic of Egypt, "Standard Specification for
Facing Clay Bricks," No. 43, 1960. (Arabic).
111-5
70. General Organization for Unified Measurement, Ministry of
Industry, Arab Republic of Egypt, "Standard Specification for
Engineering Clay Bricks," No. 44, 1960. (Arabic).
71. General Organization for Unified Measurement, Ministry of
Industry, Arab Republic of Egypt, "Standard Sepcification for
Mechanically Formed Bricks," No. 45, 1960. (Arabic).
72. General Organization for Unified Measurement, Ministry of
Industry, Arab Republic of Egypt, "Standard Specification for Hand
Made Clay Bricks," No. 46, 1960, (Arabic).
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Industry, Arab Republic of Egypt, "Standard Specification for
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111-6
7S)
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101. Ministry of Industry. Egyptian Geological Survey and Mining
Authority. "List of Pullications," Cairo, 1981.
111-7
102. Ministry of Industry. Egyptian Geological Survey and Mining
Authority "Geology of the Red Sea Coast Between Ras Shaya and
Mersa Allam" Cairo, 1966.
103. Ministry of Planning, Arab Republic of Egypt, "The Five Year Plan
1978-1982," Cairo, August, 1977.
104. "Mining Activity in Sinai-A Survey" Cairo Today, Volume 3, No. 4
April 1982. pp. 30-33.
105. Mishriky, Anis Artaki, The Customs Guide, Addendum.
Published by
El Kalmia El Hadissa lil Tebaa, 1982. (Arabic).
106. Mohandes Bank, "Annual Report 1981," Cairo, Egypt.
107. Olson, Delbert L., Screening Material, National Sand and Gravel
Association, NGSA Circular No. 128., Silver Spring, Maryland,
January 1982.
108. Pennsylvania Crusher Corporation, Handbook of Crushing, Bulletin
No. 4040, Broomal, Pennsylvania. 1979.
109. Peurrifoy, R.L., Construction Planning, Equipment, and Methods,
McGraw-Hill, New York 1979.
110. Pfleider, Eugene P., Surface Mining, American Institute of Mining,
Metallurgical, and Petroleum Engineers, Inc., New York, 1972.
111. Pit and Quarry Handbook & Buyers Guide, Pit and Quarry
Publications, Inc., Chicago, Illinois, 1981.
112. PLANTECON Overseas Research Ltd., Total Expenditure fur Construc
tion and Constructoin Equipment in Egypt 1978-82, London, England.
[Confidential Report: Not to be quoted].
113. Potter, John R. A Model for Foundry Moulding Equipment Selection
in Developing Countries. Unpublished M.S.M.E. thesis,
Massachusetts Institute of Technology. September, 1975.
114. Pressler, Jean W., Gypsum, U.S. Government Printing Office, No.
1980-311-740:4, Washington, D.C.
115. Pressler, J.W., "Gypsum," Bureau of Mines Minerals Yearbook, 1979.
116. Pressler, J.W., "Gypsum," Bureau of Mines Minerals Yearbook, 1980.
117. "Rules for Using the U.S. Commodity Imports Program by the Private
Sector," General Circular No. 2, U.S. Agency for International
Development. 1982.
118. Sanchez, Ronald. Bagasse Particle Board: A Production Study and
Investment Analysis. Unpublished M.S.C.E. thesis, Massachusetts
Institute of Technology. June 1972.
111-8
119. Scientific and Technical Center for Construction, "Trimester
Review," Review No. 3, Brussels, Belgium, September 1981.
(French).
120. Selim, Tarek S., "Issues Facing the Development of Contractors in
Egypt," Unpublished M.S.C.E. Thesis, Massachusetts Institute of
Technology, Cambridge, Massachusetts 1978.
121. Soliman, Abd El Azzim Mahmoud & Said Helmy Ahmed "The Group of
Laws and Decrees for Foreign Trade", First Edition. Published by
El Wikale El Alamia lil Sihafa wa al nashr. Cairo 1982 (Arabic).
122. "Status Report of Activities Financed by U.S. Economic Assistance
to Egypt for Fiscal Years 1975-81," U.S. Agency for International
Development International Memorandum. Cairo, Egypt. November,
1981.
123. Taggart, Arthur F., Handbook of Mineral Dressing. John Wiley &
Sons, Inc., New York, 1945.
124. Tazairt, A. "The New Gvrsum Plant at Azurus, Algeria,"
Zement-Kalk-Gips International. Translation ZKG No. 6/78.
125. Thomas, L.J., An Introduction to Mining, Hicks Smith & Sons,
Sydney, Australia, 1973.
126. United Kingdom Trade Agency, "Promoting Trade Expansion," London,
England. 1982.
127. United Nations Industrial Development Organization, Manual for the
Preparation of Industrial Feasibility Studies, United Nations, New
York, 1978. Sales No: E.78.II.B.5.
128. United States Department of Commerce, Bureau of Industrial
Economics, "Construction Review," Volume 28, No. 2, March/April
1982.
129. United States Department of Commerce, Bureau of Industrial
Economics, "Consruction Review," Volume 26, No. 10, December 1980.
130. United States Department of Commerce, Bureau of Industrial
Economics, "Construction Review," Volume 25, No. 5, May 1979.
131. United States Department of Commerce, Bureau of Industrial
Economics, "Construction Review," Volume 23, No. 7, November 1977.
132. U.S. Department of Interior, Mineral Industry Surveys -Gypsum
Mines and Calcining Plants in the U.S. in 1980, September, 1981.
133. Van Horne, James C., Financial Management and Policy. Prentice
Hall, Inc., Englewood Cliffs, New Jersey. 1977.
111-9
'/
134.
Wenk, R.J. and P.L. Henkels, "Calcium Sulfate," Enclycopedia of
Chemical Technology. 3rd Edition.
John Wiley & Sons. New York.
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135. Interview with M. Fahmy, GYMCO Engineering and Projects Sector.
Cairo, Egypt. April 10, 1982.
136. Interview with Samir El Seloviri, Misr-Iran Development Bank.
Cairo, Egypt. September 1982.
137. Interview with Safwat Rashed, Cairo-Far East Bank.
Cairo, Egypt.
September 1982.
138. Interview with Mohamed Sadek, Chase National Bank of Egypt.
Cairo, Egypt. August 18, 1982.
139. Interview with M. Nawar, Mohandes Bank.
Cairo, Egypt. September,
1982.
140. Interview with Employees At Arab Contractor's Icon Panel
Production Plant. Helwan, Egypt. April 8, 1982.
141.
Interview with Tag El Deftar, Director Fayoum Geological Survey
and Fayoum Gypsum Deposits. Kom Oshim-Fayoum, Egypt. August 14,
1982.
142.
Interview with E. El Sattar, Director GYMCO Gypsum Processing
Facility. Gharbaniat, Egypt. September 8, 1982.
143. Interview with Aiman El
Sakka, Project Manager. AZAMCO. Cairo,
Egypt. September 7, 1982.
144. Interview with Iman Bibars, Sales Administrator, Komatsu Ltd.
Dokki-Cairo, Egypt. September 7, 1982.
145.
Telephone interview with P. Mulenax, Middle East Sales Representa
tive, Combustion Engineering, Inc. Abilene, Kansas.
November,
1982.
146. Telephone interview with Graham Lythgoe, International Sales
Divi
sion, Caterpillar Tractor Company.
Peoria, Illinois. July, 1982.
147. Building Systems Cost Guide 1982.
Robert Snow Means Company,
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148. Arab Republic of Egypt
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June,
1976.
149. Export-Import Bank of the United States.
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III-10
150. Netherlands Engineering Consultants. Egypt National Transport
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151. Cairo University/Massachusetts Institute of Technology, Technology
Adaptation Program. Joint Research Team on the Housing and
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Spring 1979.
III-lI
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