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Pre-Feasibility Study Of
Bar/merchant profiles Hot Rolling Mills
April 24, 2011

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1. INTRODUCTION TO DOCUMENT PRESENTER
FAROOQ AMIR
Used to visit his father’ s Rolling mills Named” MUSLIM
ROLLING MILLS ,” observed how the Mill was running in 1966,
FAROOQ AMIR than experienced to see the Rolling of steel;
Plain Bars, Deform bars, Tee, Zee, and Channels etc.
In 1972 when he was studying in Engineering Collage he
experienced to design the Reduction Gear and the
Straightening Machine in his Family Rolling Mills, After passing
his engineering in Mechanical Technology he design the Railway
Fish Plate, and started to take interest in making parts of the
Rolling Mills, He took part in launching of a Light Beam Mill in
1975, and many more steel related projects.
In 1977 he joined the Jordan Iron and Steel Industries located
in Awajan Jordan.. There he learned Automation of Rolling
Technology.
Since that he is continuously doing his utmost efforts to
provide his consultant services just to transfer his experienced
technology, with pay or without pay but with sincerity to
promote the Rolling technology to enhance the capacity of
individual to exploit the viable business opportunities in better
way.
Promoter

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DISCLAIMER
The Purpose and scope of this Information memorandum is to
introduce the subject matter and provide a general idea and
Information on the side area. All the material includes in this
document is based on data/ Information gathered from various
sources and is based on certain assumptions. Although, due care and
diligence has been taken to compile this document, the contain
Information may vary due any change in any of the concerned factors,
and actual results may differ substantially from presented Information.
The presenting source does not assume any liability for any financial or
other loss resulting from this memorandum in consequence of under
taking this activity. Therefore, contents of this memorandum should
not be relied upon for making any decision, Investment or otherwise.
The prospective user of this encouraged to carryout his/her own due
diligence and other gather information he/she consider necessary for
making an informed decision.
The contents of the information memorandum do not bind the
presenting source of this in any legal or other form.
DOCUMENT CONTROL
Document No. PREF- 1
Revision 0
Prepared by Farooq Amir
Approved by
Issue Date April 2011

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2 PURPOSE OF THE DOCUMENT
The objective of the pre-feasibility study is primarily to facilitate
potential entrepreneurships in project identification for investment.
The project pre-feasibility may from the basis of an important
investment decision and in order to serve this objective; the
document/study covers various aspects of project concept
development, start-up, production, marketing, and finance and
business management.
The document also provides sectoral information, which has some
bearing on the project itself.
This particular pre-feasibility is regarding production of ROUND BARs
and other light section on commercial basis, which comes under
Industrial /Residential construction sector. Before studying the whole
document one must consider following critical aspects, which forms the
basis of any investment decision.
3 CRUCIAL FACTORS & STEPS IN DECISION MAKING FOR
INVESTMENT IN THE PROJECT
Before making any investment decision, it is advisable to evaluate the
associated risk factors by taking into consideration certain key
elements. to Establish Hot Rolling Mills.
Rolling Industries critical factors that should be considered before
launching are described below:
l The market for Bars and others light sections is a growing market,
but offers tough competition.
b Perception / positioning of the New arrival. Usually the top target
market for steel bars follows the perception. If the perception is
positive, the results will be higher sales. The positive perception for
Commercial market for final customers may result from direct
consumer experience, awareness, direct Promotional activities, print
media and TV advertising.
m Distribution is very important for the success of new brand. The
stronger the distribution the more successful will be the new
Industries. The distribution strategy should be designed after a careful
study of the market for going for Regional distribution or for intercity
wide distribution.
w Pre-launch advertising is vital for positive perception of the product,
which will result in higher product acceptance.
w Compliance of the Steel quality standards of International Standards
& Quality
Control Authority and license from the authority.
C Availability of product at A class, B class or C class shops should be
decided before launching the product and availability should be
persistent.

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3.1 Project Time Lines
S. No Activity Time (months)
1 Civil Works 2
2 Plant order and lay out 3
The construction of civil works has been estimated to be completed in
Two months
And placing mill order lay out and installation is estimated to have a
time period of Three months. The time required for pre-operations is
two month. It also includes pre-launch
Advertisements, on TV and in print media. The project time line may
extend and cut back depending upon the start of activities on parallel
basis or one after an other.
4 PROJECT PROFILE
4.1 Rolling of Round Bar & light sections
The process of Rolling consists of collecting Raw material (Billet or
Bloom) from a suitable source which we have. Pre-heating, Roughing,
Finishing, cut to Length, Lab Test for standards conformation,
Bundling.
A process for the production of Steel bars in south Punjab, was the
Thought the CHAIRMAN OF SHIEKHO SUGAR MR. SHIEKH ANIS. in
Anwer abad Sanawan. It is very simple process consisting of 250 mm
Diameter Rolls Three Hi, Six stands Mill This Mill will produce Deform,
Bar/light section from R.B 10mm to R,B. 25mm.
The Thought of honorable Chairman Mr. Anis considered being the
right decision in right time as steel rolling ground of south Punjab is
free to play long short but with brilliant business strategy.

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List of Renowned Steel merchants and traders in Multan are as follows;
4.2 Opportunity Rationale
The market for the Rolling mills has been showing a mushroom growth trend
over the last few years. The south Punjab market is very small on comparing
to upper Punjab and was estimated at 135000 Tons per year (Mixed sales of
different sizes) of Round bars only and estimated 81000 Ton, per year sale of
mostly were of round bar 10,12,and 16 sizes. in 2009-2010
Though the international slump affects the Pakistan market and the market
of Multan too, even that the consumption of the steel is a need as no one is
manufacturing locally. Last years shown more growth and the market has
been estimated to grow by 8000 ton more the per capita consumption is
assumed 0.0000066 ton. The annual growth rate of the steel assumed
0.17% according to the market survey on Internet in South Punjab. Where
as there are the chances of expand the marketing circle to North of Sind and
west Baluchistan.
4.3 Project Brief
This proposed project presents an investment opportunity for establishing a
steel Re-Rolling Mills
for providing as per demand products. The proposed product line will consist
Round Bars Deformed/ Plain Low and Hi carbon
1. Dia 8, mm
2. Dia 10mm
3. Dia 12mm
4. Dia 14mm
5. Dia 16mm
6. Dia 20mm
7. Dia 25mm
Merchant Steel
1. Angles
2. Squares
3. Tee
4. Flat

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4.4 Project Investment
The total cost of the project has been worked out to be Pak Rs; 26580000
(2.16 milions)
Period of construction is 2 months for civil works and 3 months for
Machinery, Equipment layout and installation.
4.5 Process
 Buy scrap
 Sorting of scrap
 Melt it in melting furnace
 Mold the required billet
 Transfer to rolling mills
 Re-heat the Billet in Re-heating furnace
 Roll the required shape on Rolling mills
4.6 Project Capacity Rationale
This study has been made with the focus of Multan, South Punjab
especially Multan market has been facing the Problem of availability of
required sizes and quantity in the market, for example the customer
designed requirement of round bar diameter 25 grade 60,25 ton the
customer could not get that from one single trader. unless the
customer go to Lahore and buy the product by paying extra carriage
charges. When the manufacturers enter in the market than it will be in
position of providing the customers on as per their designed
requirement. And quantity without heavy carriage charges.
4.7 Proposed Product Mix
This feasibility has been developed for Rolling Mill with a capacity of
24960Tons per year. The product mix consists of Round Bars and
merchant steel of different sizes 80% and 20% respectively.
Table: Recommended project Parameters
Capacity Human Technology / Location
Resource Machinery
24960 Tons 05 Office Staff Local + Imported If Anwerabd
per year Production on required Sanawan
contract @Rs
700/ ton

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4.8 Proposed Business Legal Status
There are three main forms of business: Sole
Proprietorship, Partnership and
Company. An enterprise can be a
proprietorship or a partnership and even it can
be
Registered under company law with corporate
law authority. Although selection
totally depends upon the choices of an
entrepreneur, but this feasibility study has
been based on a private limited company.

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5. MACHINERY & EQUIPMENT REQUIREMENTS
Most of the Steel Rolling Mills being installed in the country are producing
Steel round bars and light sections. This pre-feasibility study is for Steel Re-
rolling mills based on Six operational section. The details of the machinery
& equipment is as following.
Table: Machinery Details
S,No Machinery Name Quantity Weight
1 Billet Cutting Shear 01 No Need
2 Furnace Pusher 01
3 Re-Heating furnace 01
8ton / hour
4 Ejector 01
5 Roller Tables 12
6 Y. Tables 03
7 Section Transfer plate 02
form
8 Rolling Mills Roll 06
dia.250mm three Hi
stands
9 Pinion gear box 3 hi 01
center 250 mm
10 Fly Wheel 8 ton 01
11 Fly wheel shaft 01
12 Fly Wheel Plumber 02
blocks
13 Reduction Gear 1:3 01
14 Complete Set of Rolls 01
15 Wobblers couplings 40
16 Wobblers Spindles 20
17 Foundation bolts 45
18 Conveyor Rolls 30
19 Electric Motors 10 kw 06
900 RPM
20 Main Motors 700 01
kilowatt 1000 RPM

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5.1 MACHINERY COST
S.No Name of the Equipments Cost in Pak Rs
1 Mills 16500000
2 Mill Conveyor and plate form 500000
3 Cooling Bed Optional
4 Over Head cranes 10Ton, 01 No 1300000
5 Electric main motors,kw.700,RPM 1000 1500000
01 Nos.
6 Electric cables , light motors and panels 1800000
Total cost; 21600000 (A)

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6 LAND & BUILDING REQUIREMENTS
For the proposed set up of Steel Rolling Mills, a total area of 5000, sq meters is
Require. This land requirement includes space for the installation of plant, Machinery,
management office, stores, Residence for workers, and for Raw / Finish products.
Table: Covered Are Requirement
S.No Space Requirement Required Area (Sq. Cost in Rs
Meter
1 Mills Hangers expansion 60 ton 4980000 (B)
Total cost with total of A+B = Pak Rs; 26580000
8 PROFIT AND LOSS
Table of profit and loss on the basses of 24960Tons per year.
S.No Heads Expenses in Per Ton Sale Price Difference
Rs / Year Cost, In Pk.Rs In Pk.Rs.
Pk.Rs
1 Raw material 1297920000 52000
2 Burning loss 51916800 2080
3 Fuel cost 93600000 3750
4 Electric 21840000 875
5 Salaries 17472000 700
6 Other 7800000 313
Expenses
7 Taxes 0000000000 000000
8 Total; 1490548800 59718 70000* 10283
*Rate is rising, this rate is for steel bar 40 grade diameter 25mm
For Bar 12.and 10 mm the rate is 71000 per ton

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9 KEY ASSUMPTIONS
Table: Project Assumptions
Period of construction & machinery 5 Months
Total Covered Area 5000 Square Meter
Projected life of the project 10 Years
Table: Operating Assumptions
No of working days in one year 330
No of working hours in one day 8
Table: Revenue Assumption
Mill Capacity Ton per Day 4-5
Production per year 24960
Ratio of round Bars and merchant steel 80 % , 20 %,
Production of round bar 29952 Ton per year
Production Merchant steel On request
Total annual Production 24960
Sale price of Round bar grade 40 (deformed) Rs70000-71000 per ton
Sale Price of Merchant steel Rs. 76000-78000
Capacity utilization in First year 55 %
Sale price growth rate 15 %
Production capacity utilization growth rate 15 %
Maximum Capacity utilization 85%
Table: Financial Assumption
Debit 60%
Equity 40%
Interest Rate ? ( in Pakistan) 12%
Interest rate on short term debit ? ( in Pakistan ) 16 %
Interest on cash in bank ?
Corporate tax rate ?
Turnover tax rate ?
Dividend rate ?
Required rate of return on equity 25%
Down payment on machinery & Equipment leased ?
Interest rate on machinery ?