Detailed Project Report on aluminium conductors manufacturing factory

ALUMINIUM CONDUCTORS MANUFACTURING FACTORY [3556]

The development and strengthening of the country’s transmission and distribution (T&D) network has always been a key focus area. To this end, a number of government initiatives and programmes have been undertaken such as the Deendayal Upadhyaya Gram Jyoti Yojana (DDUGJY), the Integrated Power Development Scheme (IPDS) and the recently launched Sahaj Bijli Har Ghar Yojana (Saubhagya). All these schemes have created a market for cables and conductors in the country. Power Line takes a look at the cables and conductors market, the trends in designs and technologies, the challenges being faced by the industry and the key demand drivers. Based on the statistics provided by the Indian Electrical and Electronics Manufacturers’ Association, the overall size of the cables industry reached close to Rs 412.50 billion in 2016-17, recording a moderate growth of 5.10 per cent over Rs 392 billion in the previous year. However, growth in 2016-17 was much lower compared to 2015-16, which witnessed an increase of 35.17 per cent. In the first six months of 2017-18 (April to September), a 9.6 per cent growth was registered. Across cable sub-categories, the power cables segment registered a growth of 5.2 per cent in 2016-17, while the control cables segment saw a decline of 3.4 per cent. However, the first half of 2017-18 saw a reversal of trends wherein the high voltage power cable growth plummeted by 7 per cent and the control cable segment grew by 2.9 per cent. Meanwhile, the low voltage power cables recorded a growth of 19 per cent in the period March-September 2017. The overall size of the conductors market saw a decline of 10.76 per cent from Rs 81.25 billion in 2015-16 to Rs 72.50 billion in 2016-17. In the first half of 2017-18 (April to September), the segment again marked a negative growth of 17.40, which was primarily due to the delays in order finalisations by major buyers. With regard to exports, in the first six months of 2017-18, the total value of cable exports stood at Rs 11.96 billion, recording an increase of 2 per cent over the corresponding period in the previous year. Meanwhile, cable imports during the same period stood at Rs 4.59 billion, recording a staggering decline of 50 per cent over the corresponding period of the previous year. During 2016-17, the exports stood at Rs 19.55 billion (a growth of 14.5 per cent) and the imports stood at Rs 5.76 billion (a decline of 1.1 per cent). Thus, the exports have supported the growth in the cable segment. The import of conductors stood at Rs 3.11 billion (April to September 2017-18), recording a significant decline of 41 per cent over the same period in the previous year. Meanwhile, the export of conductors in this period stood at Rs 8.29 billion, recording a growth of 5 per cent. Several technologies have been introduced to enable utilities to augment their capacities without battling right-of-way (RoW) clearances. An emerging technology trend has been the adoption of high temperature low sag (HTLS) conductors. HTLS conductors are made from materials such as INVAR steel, aluminium-zirconium alloys, and metal and polymer matrix composites that offer higher temperature resistance and increased ampacity compared to the traditional aluminium conductor steel reinforced (ACSR) conductors. These conductors are being deployed by utilities not only for enhanced operational efficiency, but also for the purpose of reconductoring the existing lines. Reconductoring enables utilities to transmit a higher quantum of power through existing corridors and can significantly scale down losses as well as instances of power outages. The aluminium conductor composite core, gap type ZT ACSR  and super thermal aluminium clad invar reinforced (STACIR) conductors are some of the preferred options for reconductoring lines. In order to increase the current carrying capacity and scale down the transmission losses, utilities are turning to high temperature superconductors (HTS). As compared to conventional conductors these conductors have 5 to 10 times the current carrying capacity, are compact in size and have a lower RoW requirement. The off-take of HTS conductors in the domestic market, however, has been relatively low. Gas-insulated lines (GILs) are also gaining momentum in the international market, though the domestic market is yet to witness their widespread adoption. GILs serve as a viable alternative to overhead lines where RoW is not available for the transmission of electricity. This is primarily because GILs can be installed under the ground as well as in tunnels and trenches. Moreover, the resistive losses of GILs are lower than overhead lines and other types of underground cables, and they offer greater reliability with no risk of fire. Owing to the risks associated with bare overhead cables, covered cables have emerged as an important product in the market. Cross-linked polyethylene (XLPE), high-density polyethylene, aerial bunched cables and spacer cable systems are the most commonly used covered cables. XLPE cables use cross-linked polyethylene as the main insulating material and can operate at higher temperatures, both for normal loading and under short circuit conditions. Extruded XLPE cables are increasingly being deployed by utilities such as Power Grid Corporation Of India Limited for setting up transmission infrastructure in difficult terrains. Overall, the cables and conductors industry has grown significantly in the past few years with investments infused in the power and infrastructure sectors by the government. While the cable segment witnessed a positive growth, the conductor segment experienced sluggish demand last year. One of major drivers for the cables and conductors industry is the need for integration of the new renewable-based capacity being added to the grid. With the development of large-scale renewable energy plants and solar parks, there is a need to lay down lines in order to connect them to the existing grid. Meanwhile, investment in the coming years will continue to be driven by the central government through schemes such as DDUGJY, IPDS and Saubhagya. Even though the DDUGJY scheme is nearing its target, the focus on household electrification through Saubhagya will continue to sustain the demand in the cables and conductors segment. Further, with most of the states adopting Ujwal Discom Assurance Yojana, the state discoms are expected to improve their T&D infrastructure through renewed capital expenditure. Apart from the impetus provided by the government, another key driver for the growth of the cable segment is the shift towards high voltage transmission lines.  This demand is essentially driven by the creation of high capacity long distance corridors to deliver electricity to high demand regions and the development of green energy corridors for integrating the increasing share of renewable energy into the grid. The future growth in the cable segment is likely to be driven by 132 kV and 400 kV lines. Underground cabling too is gaining increased acceptance among state and central transmission utilities as it provides greater safety (against electrocution) as compared to overhead cables. Lastly, the increase in government infrastructural spending, particularly under the Smart Cities Mission, is expected to propel the demand in the country and present new opportunities in the cables and conductors segment. The biggest challenge for players in the cables and conductors segment is input price volatility. Major players in the industry use an array of commodities such as steel, zinc, copper and aluminium, and movements in any one of these has a strong bearing on the company’s profit margins. It is thus imperative to develop requisite hedging mechanisms that can deal with these variations. Delay in the execution of projects is another major impediment. Most projects get delayed due to the requirement of multiple clearances and approvals, and the shortage of manpower. Obtaining a RoW clearance is particularly difficult, given the space constraints in cities. Thus, it is important for the government to develop mechanisms to facilitate a single window clearance for all the players. One issue that is often voiced by some players is that there is a lack of a level playing field in the industry. The tenders released by utilities often specify a pre-qualification criterion pertaining to a particular manufacturing process in the tender that tends to restrict wider participation, especially from the smaller manufacturers. Lack of standardization of the end product is also a challenge for the sector. The cables and conductors market is largely unorganized, as a result of which several manufacturers do not comply with product guidelines and the end result is an asymmetric product quality. There is therefore a need to develop standard guidelines for the industry as a whole. Lastly, the wire and cable segment is dependent on imports from China, the UAE, Russia and Japan, and is thus highly sensitive to exchange rate variations. To sum up, the outlook for the cables and conductors market looks positive owing to the continuing investments by the government through its various schemes and increasing renewable energy capacity additions.

COST ESTIMATION

Plant Capacity                                              67 MT/Day  
Land & Building (12000 sq.mt)               Rs. 13.84 Cr
Plant & Machinery                                      Rs. 4.65 Cr
Working Capital for 2 Months                  Rs. 61.61 Cr
Total Capital Investment                          Rs. 80.78 Cr
Rate of Return                                           37%
Break Even Point                                      39%



INTRODUCTION    
TYPES OF ALUMINIUM CONDUCTOR    
(1) AAC–ALL ALUMINIUM CONDUCTOR    
CHARACTERSTICS    
(2) ALL ALUMINIUM ALLOY CONDUCTORS (AAAC):    
AAAC (ALL ALUMINIUM ALLOY CONDUCTOR)    
(3) ACSR CONDUCTOR:    
ACSR (ALUMINIUM CONDUCTOR STEEL REINFORCED)    
ACSR (ALUMINIUM CONDUCTOR STEEL REINFORCED)    
ADVANTAGES OF AAAC OVER ALUMINIUM CONDUCTOR STEEL
   REINFORCED (ACSR) CONDUCTOR ARE AS FOLLOWS:    
USES AND APPLICATION    
(1) FOR AAAC CONDUCTOR    
(2) FOR ASCR CONDUCTOR    
B.I.S. SPECIFICATION    
PROCESS FLOW CHART FOR AAAC    
PROCESS FLOW CHART FOR ACSR    
MANUFACTURING PROCESS    
(A) PROCESS OF AAAC    
SOLUTION TREATMENT    
DRAWING    
AGING TREATMENT    
STRANDING    
TESTING    
TYPE TESTS:    
ACCEPTANCE TESTS:    
ROUTINE TESTS:    
QUALITY ASSURANCE PLAN    
(B) PROCESS OF ACSR    
MATERIAL:    
WIRE DRAWING OPERATION:    
SPOOLING OPERATION:    
STRANDING OPERATION:    
QUALITY CONTROL    
MATERIAL:    
TOLERANCES:    
JOINTS IN WIRES:    
STRANDING:    
INSPECTION:    
TEST REPORTS:    
TYPE TEST:    
PACKING & MARKING    
TOLERANCE IN QUANTITY:    
MARKING:    
MARKET POSITION    
TRENDS & GROWTH DRIVERS IN THE CABLES & CONDUCTORS INDUSTRY    
MARKET SIZE AND GROWTH    
TECHNOLOGY TRENDS    
DEMAND DRIVERS    
ISSUES AND CHALLENGES    
TRANSMISSION SECTOR WILL RECEIVE AN INVESTMENT
   OF RS.1.20 LAKH CRORE    
INDIA: STRONG ALUMINIUM CONDUCTOR DEMAND DESPITE HURDLES    
SIGNIFICANT INVESTMENT IN THE TRANSMISSION SECTOR    
RURAL ELECTRIFICATION    
CHALLENGES FACING THE MARKET    
LOWER SOLAR TARIFFS PLACE PRESSURE ALONG THE CHAIN    
GROWTH OPPORTUNITIES FOR ALUMINUM RODS AND CONDUCTOR COMPANIES SET TO BOOM AS ELECTRICITY GRID QUADRUPLES BY 2040    
ABOUT FROST & SULLIVAN    
CABLES & CONDUCTORS – MARKET OVERVIEW & OUTLOOK    
MARKET OVERVIEW:    
TRENDS: MARKET & TECHNOLOGY    
OPPORTUNITIES AHEAD:    
ISSUES & CHALLENGES    
WAY FORWARD    
THE MAJOR MANUFACTURERS    
DEMAND IN FUTURE    
EXPORT DATA OF ALUMINIUM CONDUCTORS    
PLANT LAYOUT    
MANUFACTURERS/SUPPLIERS    
OF ALUMINIUM CONDUCTOR    
SUPPLIERS OF RAW MATERIALS    
SUPPLIERS OF ALUMINUM WIRE RODS    
SUPPLIERS OF ALUMINIUM ALLOY ROD    
SUPPLIERS OF GALVANIZED STEEL WIRE    
SUPPLIERS OF LUBRICATING OIL    
SUPPLIERS OF WOODEN CABLE DRUMS    
SUPPLIERS OF PLANT AND MACHINERIES    
WIRE DRAWING MACHINES    
SUPPLIERS OF TUBULAR STRANDING MACHINE    
SUPPLIERS OF POINTING MACHINE    
SUPPLIERS OF BUFFING MACHINE    
ANNEALING FURNACE    
WIRE STRATNING MACHINE    
SUPPLIERS OF WRAPPING, BANDING & BUNDLING MACHINES
   AND EQUIPMENT    
EOT CRANE    
POWER TRANSFORMER    
ELECTRICAL PANEL    
ELECTRIC MOTOR    
COOLING TOWER    
EFFLUENT TREATMENT PLANT (ETP PLANT)    
AIR POLLUTION CONTROL EQUIPMENTS    
AIR CONDITIONING EQUIPMENTS    
AIR COMPRESSORS    
PLATFORM WEIGHING MACHINE    
MATERIAL HANDLING EQUIPMENTS    
FIRE FIGHTING EQUIPMENTS    
SHOT BLASTING MACHINE    
JIGS AND FIXTURE    
SUBMERSIBLE WATER PUMP    

APPENDIX – A:

01.    PLANT ECONOMICS    
02.    LAND & BUILDING     
03.    PLANT AND MACHINERY    
04.    OTHER FIXED ASSESTS    
05.    FIXED CAPITAL    
06.    RAW MATERIAL    
07.    SALARY AND WAGES    
08.    UTILITIES AND OVERHEADS    
09.    TOTAL WORKING CAPITAL    
10.    TOTAL CAPITAL INVESTMENT    
11.    COST OF PRODUCTION    
12.    TURN OVER/ANNUM    
13.    BREAK EVEN POINT     
14.    RESOURCES FOR FINANCE    
15.    INSTALMENT PAYABLE IN 5 YEARS    
16.    DEPRECIATION CHART FOR 5 YEARS    
17.    PROFIT ANALYSIS FOR 5 YEARS    
18.    PROJECTED BALANCE SHEET FOR (5 YEARS)