Facilities Planning Project

Scrap tire recycling and rubber asphalt production unit

Ahmad Al Taher 2070699 Amjad Bashar Issa 0060289

Part A Pre-Feasibility Study

1 INTRODUCTION
1.1 Project Brief This proposed project presents details about the investment opportunity in the area of Recycling scrap tires . The product being focused on is hot mix asphalt. However the unit is also capable of manufacturing asphalt rubber blinders

1.2 Opportunity Rationale

Millions and millions of used tires are wasted every year , experts say that for every 4 people 1 tires is scraped every year , in Egypt for example 40 million kg of tires is destroyed yearly And in Jordan about 30,000 tons of tires is destroyed by different number of ways as in burying, burring or just dumping them in the desert . In Jordan the bad condition of streets and highways indicates the country's need for the use of rubber asphalt (RA) for paving streets and highways , and since the idea of RA is new to Jordan, a large market is expected to grow if a tire recycling and RA producing plant is established .

1.3 The problem

Rubber tires dont decompose if buried; they float to the surface over time, and render the landfill unusable for any development in the future. Further on, when piled up they become subject to fires such fires may be difficult to extinguish if not expensive for that matter, thus emitting dangerous gases and damaging the environment, if they escaped fires and because they have cavities they become a good breeding ground for insects and spread of disease.

1.4 Recycling the solution

Many recycling methods where developed throughout the last few decades each is being considered for a different end product, the most successful and possibility the will be a lasting one is ambient grinding, this method is proved effective when dealing with large amounts of scrap tires at a given time span while the final product is widely used in hundreds of application. Extracting the valuable components of tires through recycling is not an option, it is a must.

1.5 Roads and pavements Asphalt and concrete pavements have long been used to make walking and driving on Smooth and easy, however they dont have any shortage of problems of their own. They Expand and retract under day heat and night drop in temperature, when they retract they dont do that back to their original shape, thus forming cracks first on the surface then cracks become deeper into the structure, when moisture or rainwater fill in these cracks and temperature falls water expands pushing the cracks wider and deeper damaging the pavement. Sound is another issue, most of the noise we hear while driving comes from the contact points of tires and pavements, while some will come from the vehicle driving against the wind, with modern aerodynamic technologies applied to vehicles body the sound of tires hitting the road will still be the major noise source, this is as far as the passengers are concerned and yet there is still the neighborhoods and noise pollution caused by the tiresroad contact. Tires lose 10-15% of their original weight before they are scrapped due to friction between the tire and asphalt pavement, where does this waste go? It goes into the air we breathe and the food and water we consume.

2 MARKET ANALYSIS
2.1 Total Market Size and Growth The target of this unit will be to become the sol producer of AR in Jordan, Expanding the business to exporting the product to other countries is possible within the first 10 years , the market of AR is a big market in the neighboring countries such as Saudi Arabia and the UAE , becoming a major producer of the product in the middle east area is the primary target of this project. The figure below shows the global market distribution of rubber asphalt

2.2 CURRENT INDUSTRY STRUCTURE This industry will be the first of its kind in Jordan, this will Couse extra expenses in order to get the proper licenses and paper work done before starting the plant And the machines will be expensive to import from the USA or Japan

2.3 TARGET COSTUMERS The costumers of this product is the contractors who do the paving of streets and highways

2.4 MARKETING PLAN Conducting meetings with the contactors to explain the improved characteristics of rubber asphalt over regular asphalt, and also meeting with government officials to explain these characteristics in order to assign the contractors who use AR with the paving projects .

2.5 Competitiveness Since this will be the first plant that recycle tires and produce rubber asphalt in Jordan It will have an advantage over any other plant in the future 2.6 Project Cost 2,940,000 JD

3 TECHNICAL ANALYSIS.
3.1 RAW MATERIAL The raw materials used to produce rubber asphalt from scrap tires are shown in the table below Availability local or imported Free Local Scrap tires 50 JD Imported but also available Asphalt cement locally 50 JD Imported but also available Bitumen locally Tire exchange programs can be set up to transport a specific city/county/State's waste tires to a CRM manufacturer. In exchange, a like amount of CRM would be returned to the region for use in asphalt paving projects. Raw material 3.2 MAN POWER REQUIREMENTS Due to versatility of the type of skills, the skilled labor is difficult to get. Expertise is required in the following areas: 1-chemical engineering 2-industrial engineering 3-shearing machine operators 4-grinding machine operators 5-blending machine operators Price/ton

3.3 Process Flow Chart

3.4 Viable Economic Size and Proposed Capacity This feasibility is based on a unit with 4 shearing , grinding and blinding Machines with a capacity of manufacturing 100 tons of RA per day. This unit will not have assembly line operations and will be labor intensive 3.5 MACHINERY DETAILS

Machine type 1- disassembler CP-400B tire/rubber crusher GSB-280 tire bead peeler LXF-250 spiral tire coarse grinder belt magnetic separator box magnetic separator rubber pulverizer XKP-450

Number of machines 2 1 1 1 1 1 1

Price per machine 5,000 JD 11,000 JD 15,000 JD 5,000 JD 7,000 JD 13,000JD 9,000JD

3.6 LAND & BUILDING For Scrap tire recycling and RA production unit with production of about 100 tons per day, Approximately 1120 sq. ft. area is required 3.7 Building Covered Area Requirement Description Factory area Management building Total area required (in sq. ft) Required area (sq. ft) 1000 120 1120

Land & Building Construction Approximate Land cost Factory area Management building Total Building construction cost Total Cost of Land & Building)*

Construction cost 550,000 350,000 100,000 450,000 1,000,000 JD

3.8 Suitable Locations Suitable locations and the selection of the optimum location will be addressed in part B of this project

4 FINANCIAL ANALYSIS
4.1 project costs Projects Costs (jd) Plant & Machinery Machinery Installation Furniture & Fixtures salaries Total Capital Costs Raw material inventory Up front insurance payment Total Working Capital Total Investment in the Project Total Cost 1,070,000 20,000 20,000 120,000 1,230,000 1,460,000 250,000 1,710,000 2,940,000

4.2 Financing Plan

Financing Equity Debt 40% 60% 1,176,000 1,764,000

4.3 Projects Returns

Internal Rate of Return 16.29% JD 255,467 Net Present Value (NPV) 6.196 years Payback Period (Years) From the projects returns table we conclude that the project is feasible and the decision is to go ahead in the project