Economical, Technical and Environmental Proposal

Excellence Company for Business

studies and consultation
Proposal Objectives

The overall objective of the present proposal is to provide and highlight the basic facts behind
operating Crushing Unit in terms of market analysis, financial analysis and environmental
analysis. However this have done through prime market survey and reviewing of existing
research in the same domain.

This work proposed by Excellence Company for Business studies and consultation, we assure
the most accurate inclusive information and real facts behind proposed work.

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Executive Summary

Quarries, crushers and stone industry represent a significant industrial sector in Palestine in
terms of production and exports. Construction industry development projects in west bank
have grew in last two decades, where this growth led to increase demand for crushed stones
products and overall industry. However, statistics reviled that almost 220 quarries and
crushing units operate in west bank distributed on different cities .

Continues growth in constructions sector and development projects and dependency of

nearby countries on Palestinian crushed stones and quarrying materials considered as market
opportunity for this industry, while Israeli control over areas in which classified as Area C,
this areas may contain of quarries is the basic threat of the industry.

Financial summary

Total capital investment costs 1,223,000

Total operating costs 853,447

Total annual revenue 1,313,520

Net profit or loss (TR-TC) 460,073

Return on investment rate 37.6 %

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1. Crusher's production process and types

The main machinery involved in the stone crushing industry is Hammer Crusher, Screen,
Conveyers etc. The process involved is to feed the stone into the Hammer Crushers to
make it further smaller in size as required by the customer. In the hammer crusher, the
stone is crushed. The crushed stone is screened to separate the produce in different sizes
by the separator. The crushed stone is conveyed by the conveyors to trucks for transport
to the market place or storage area. The stone crushing process flowchart is illustrated in
figure (1) and (2) below.

Figure (1): Stone crushing process flowchart

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The big stones in the stone production line are coarsely crushed in the jaw crusher sent by the
vibrating feeders through the bunker evenly. The coarsely crushed stones are sent to the impact
crusher by the belt conveyor for further crushing. After tertiary crushing, the materials are
screened in the vibrating screen through the belt conveyor to classify several sizes of stones.The
stones which can meet the requirements will be sent to the finished product material piles by
the belt conveyor, while the left stones will be sent to the impact crusher for another further
crushing to form a closed circuit cycle. The finished product can be classified and combined
according to the customers' needs. The dust removal equipment can be added in order to protect

the environment

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 Crushers and stones breakers can be divided into two categories in terms of mobility, static
and mobile crushers. Static or immobile crushers usually operates in a location in which
quarry locates. Not like static crushers, mobile crushers can operates in different locations
where quarries do exist. Figure 3 illustrates the two different types of crushers.

Figure (3): Immobile and mobile crushers, Upper Picture: Immobile crusher, lower picture:
Mobile crusher.

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1.1. Proposed crushing Unit
We proposed for present work to use Lokotrack® LT1213S™, it provides complete process
plant on tracks, can be used both in open and closed circuits, on-board transportable
screen module and hydraulic opening makes servicing of the screen easy. Figure (4)
describes general architecture of Lokotrack® LT1213S™.

Lokotrack® LT1213S™ is a common unit in recycling applications such as top soil,

concrete, asphalt and demolition waste. It is also a perfect choice for limestone quarry
applications. The LT1213 goes well with other Metso Lokotrack plants and it can utilize
Metso ICr™ remote monitoring based wireless interlocking or interlocking cable.

Figure (4): General architecture of Lokotrack® LT1213S™.

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Lokotrack® LT1213S™ Key features

Crusher Nordberg® NP1213M™

Feed opening 1 320 x 900 mm (52 x 35 ½”)
Engine CAT®, 310 kW (415 hp)
Weight 55 000 kg (112 000 lbs)

2. Market analysis
In this context, SWOT analysis has been examined in order to understanding Strengths
and Weaknesses, and for identifying both the Opportunities open to the project and the
Threats in which Quarrying and stone crushers faces.

 Strengths
- Provide excellent quality of crushed stone in terms of stone hardness.
- Offer good value to customers through the longtime of experience and law
overheads.

 Weaknesses
- Company has little market presence or reputation, so lower revenue in the first
stages of operation.
- Cash flow will be unreliable in the early stages.

 Opportunities
- Increasing demand for crushed materials from building industry & construction
fields.
- Continues growth in constructions sector and development projects.
- Dependency of nearby countries on Palestinian crushed stones and quarrying
materials.

 Threats
- Strong competition in the same domain.
- Israeli control over areas in which classified as Area C, this areas may contain of
quarries.

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3. Crushed stone and Aggregates Industry in Palestine
Stone and quarries industry considered as playing significance economic role in Palestine,
and contributes considerably in GDP in terms of production, employment and exports. On
the same track, it plays important role in satisfying local demand of raw materials for
constructions and development projects. According to (Palestinian Ministry of National
Economy, 2014), Stone and quarries industry ranked internationally as # 12th at as
predefined international standards.

According to (Palestinian Investment Promotion Agency , 2015), approximately total

number of 220 firms operates in Stone and quarries industry, it makes a combined
contribution of 6% to the value added of the industrial sector and employs 3.5% of all
workers in the industrial sector. However, Stones industry which includes quarries and
stone crushers contributes 4.8% in gross domestic product GDP, with approximately total
sales of 600 million$. More specifically, quarries and stone crushers gives a share 11% of
total contributes within the same industry, which means total revenue of 66 million $.

Over the last 10 years, the Construction sector has been registering strong growth rates in
the range of 7-8%. Housing and construction is one of the major drivers of growth in more
than 40 allied industries including STONE CRUSHING. In addition, for the building of
roads, flyovers and bypasses, there is a mass and consistent need of crushed stone across
the country. The term crushed stones "aggregates" refers to sand, gravel and crushed rocks.
However, the angle of view in this study focuses on stone-based aggregates and crushers
Not “stone and marble” industry.1

The crushing industry is spread throughout Palestine. Before the seventies, the industry
consisted of small firms using simple manual and mechanical tools. However, in the early
seventies investment in crushers increased dramatically in response to demand from the
construction sector. A major factor in the expansion of production was high demand from
Israel. Quarries and crushers rely totally on domestic raw material (stones). The cost of

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the raw materials depends on quality, the location of firms and the availability of the
necessary production tools. The quality of crusher output depends on the characteristics
of the stones used, in particular their hardness. Experts believe that the best locations for
crushers (in terms of stone hardness) are Hebron, Bethlehem.

Crushers rely on internal staff aided by local experts to deal with 55% of maintenance
problems while 27% are dealt with by Israeli experts and 18% by foreign experts.
Maintenance costs made up 33.4% of the costs of industrial services (PCBS 1996a). The
high maintenance costs reflect the nature of the production process performed by
machinery which is often old or second-hand. This also has detrimental effects on
productivity and quality (Palestine Economic Policy Research Institute, 1999).

4. Financial Analysis
The economic aspects of the stone crusher was discussed with several crusher owners in
terms of fixed capital investment of setting up a stone crusher unit and typical annual
operating costs and profit margins. Based on the information provided by the crusher
owners (as reported), following tables are prepared which provide typical details on capital
investment and annual operating costs of a small size stone crusher unit having
production capacity of 1800 Tons per day.

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 4.1. Capital Investment and Operating Costs
4.1.1. Fixed Capital Investment

ITM No ITEM Cost (€) Sub-Total

Land and Land Preparation

A -Civil work &Land preparation 5,000

-Buildings, Furniture & Fixtures & 20,000
Office Equipment 25,000
Crusher& Screen
B - Jaw Crusher Lokotrack® LT1213s 650,000
- Vibratory Screen 650,000
Transportation & Operating Equ
-Loader (CAT 950) 140,000
C -Excavator (CAT 330 DL) 200,000
-Water Tank 4,000
- 2 Trucks (100,000 for each) 200,000 544,000
Power Equipment
D - DG set 62 KVA (Captive Power 4,000 4,000
Generation)
Total Capital Investment
E 1,223,000
(A+B+C+D)
Notes:
- The proposed crushing unit has the following characteristics: 2

2
For more information see about Crusher unit, see: http://www.metso.com/products/lokotrack-mobile-
plants/lokotrack-lt1213s-mobile-crushing-and-screening-plant/

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4.1.2. Annual Operating Costs

 Typical Manpower/Employee Salary Costs

Average
Total
Type of No of Average Total annual salary
monthly
Employment Employee Salary € €
salary €
s
Management
- Manager 1 1200 1200 14,400
- Supervisor 1 1000 1000 12,000
-Sales Manager 1 700 700 8400
-Accountant 1 700 700 8400
-Secretary 1 450 450 5400
Total 48,600
Transport
-Crusher Operator 1 1000 1000 12,000
- Loader Driver 1 1000 1000 12,000
- Excavator Driver 1 1000 1000 12,000
- Vehicle Driver 1 600 600 7200
Total 43,200
Operations
-Crusher in charge 1 500 500 6000
-Casual Labor 3 500 1500 18,000
Total 24,000
Total annual 115,800
Salaries
Notes:

- Crushing unit planned to work one shift, 10 hours per shift.

- Total working days per month is 26 day.

 Land Rent

Item Type Cost Total Annual cost

Land Rent, 3 Acres 13,000 *3 (rent Annually) 39,000
Note:
- Land for setting up the proposed stone crushing unit would be acquired on
lease for a period of at least 15 years.

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 Power/Electricity consumption
Type of power Unit/ day Cost/ Total Total Total Annual
Liter cost Monthly cost
€/day cost
Transportation
(Diesel)
-crusher 450 Lt/D 1.5 675 17,550
- Loader 300 1.5 450 11,700
- Excavator 250 1.5 375 9750
Total 39,000 468,000

Electricity 300 Kh/day 54 1388 16,661

Total Power/Electricity 484,661
consumption

Notes:
-Diesel cost per liter = 5.5 NIS which is 1.5 Eur
-KH cost is 0.75 NIS which is 0.178 Eur
-Total consumption in month is equal total consumption in 26 days.

 Other operating costs

Item Type Unit Cost/day Cost/ Total Annual cost

€ month
Water 10 m3/Day 60 1,560 18,720
maintenance & - 300 7,800
93,600
others
Depreciation
- crusher 10% Annually 65,000
- Bulldozer 6.66% Annually 9,333
- Excavator 6.66 % Annually 13,333

Total 87,666
Social and Health
5,000
Insurance fees
Medical Expanses 1,000
Legal Expenses ( Lawyer + Official documentation)
8,000
Total of other
213,986
operating cost
Note:
- (lifespan of 10 years for Crusher and 15 years for Loader and Excavator)

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 Overall Operating costs

Type of operating cost Total cost per Year

Typical 115,800
Manpower/Employee
Salary Costs
Land Rent 39,000

Power/Electricity 484,661
consumption

Other operating costs 213,986

Total Operating cost 853,447

Per Year

 Overall capital investment and operating costs for the first year

Capital Investment 1,223,000

Operating costs 853,447
Total costs 2,076,447

4.2. Crusher unit production

Working with the proposed plant and machinery, the project will be capable of producing
1350 ton of crushed stone at 75% capacity utilization with single shift of 8 to 12 hours a
day. All projections are based on 26 working days a month. The proposed plant and
machinery will be able to produce a maximum production of 1800 ton reach full capacity.

Item Type Product Name % age share in Selling Price € Quantity ton/day
1 mm2 Very Soft crushed 4.44% of 3.5 60
Stone production
5 mm 2 Soft crushed 2.96% of 5 40
stone production
2 cm2 Crushed gravel 3.7% of 4 50
production
1-6 cm2 Brick chips 88.88% of 3 1200
production

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 The Total annual revenue of operating crushing unit, 26 day a month is presented in
below table:

Product Type Daly sales € Monthly sales Annual sales

1 mm2 60*3.5= 210 5,460 65,520
5 mm2 40*5=200 5,200 62,400
2 cm2 50*4=200 5,200 62,400
1-6 cm2 1200*3=3600 93,600 1,123,200
Total Annual 1,313,520
Revenue

4.3. Net Profit or Loss

However, Net profit or loss can be calculated as the difference between total annual
revenue and total annual costs, Results suggest that the factory generates 128,320 € as a
net annual profit. Details are presented in the down table.

Total Revenue € 1,313,520

Operating Costs € 853,447

Total Net profit or loss € 460,073

4.4. Return on Investment

ROI can assess and evaluates the performance of the project, this can be calculated
through:

𝐺𝑎𝑖𝑛 𝑓𝑟𝑜𝑚 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡 – 𝑐𝑜𝑠𝑡 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡

𝑅𝑂𝐼 = ∗ 100
𝑇𝑜𝑡𝑎𝑙 𝑐𝑜𝑠𝑡 𝑜𝑓 𝐼𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡

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From the above formula we can observe that the return on investment rate is about 37.6 % of
the capital invested in the project. The project is considered economically reliable and
profitable.

5. PRODUCT MARKETING CHANNELS

In the manufacturing industry, marketing is considered to be of significant importance.
In the Stone Crushing industry, marketing parameters are very limited and usually in
some degree associated with the construction sector. Some of the marketing promotion
activities which should duly be rendered are given below:

- Connection development with the building material suppliers, well known builders
and contractors.
- Update information on civil and construction works initiated by local, provincial
and central government.
- Draw linkages with material suppliers to the housing industry at town level.
- Establish contacts with local civil engineering firms, individuals and professionals.

6. Proposed Location
The proposed location for setting up crushing unit locates at industrial area in Bethlehem
city. The land is 3 Acres surface area. The area is highly accessible from internal and
external rods and close enough to the city center so the proposed location is economically
frugal.

7. Environmental Aspects
All quarrying and stone processing operations including surface mining, crushing,
screening, material handling and transfer operations are potential sources of particulate
emissions. However the typical emission sources during stone processing are summarized
as the following:

 Emission during Mining Activity.

 Emission during Crushing Operation.
 Emissions During screening.

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  Emissions During material handling.
 Emission during Transportation.
In addition to emissions generated from crushers processing operations, Noise Pollution
is a considerable problem. There are a number of sources from which high noise level are
generated, some continuously and some intermittently. The vibratory screen is the most
predominant source of continuous noise. Especially vibratory screens are operated at
higher frequency and without enclosures can give rise to abnormally high noise levels.
Intermittent noise level is also generated at the crusher during the time of the breaking
of stones. Intermittent noise is also generated during un-loading and loading operations.
Belt conveyor movement is also a source of continuous noise, especially the ill-maintained
and cheaper end conveyor system make more noise.

Some of this environmental aspects could be controlled through reduction techniques

adopted in crushers, this techniques includes:

 Liquid injection (water or water plus a wetting agent). Capturing and venting
emissions to a control device.
 Wet-dust suppression systems. Capturing and venting emissions to a control
device.
 Sound dampening equipment be installed as required.

8. Conclusion
This work focuses on studying economic feasibility of operating a crushing unit at
industrial area in Bethlehem- West Bank. Continues growth in constructions sector and
development projects and dependency of nearby countries on Palestinian crushed stones
and quarrying materials considered as market opportunity for this industry, while Israeli
control over areas in which classified as Area C, this areas may contain of quarries is the
basic threat of the industry .

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Stone crushing industry is an important industrial sector Palestine. The crushed stone is
then used as raw material for various construction activities i.e. construction of roads,
bridges, buildings and canals.

Financial analysis of operating crushing unit suggests that the proposed project is
economically feasible, then investment in this project considered as good market
opportunity. The project is highly profitable with high return of investment rate 122%. In
addition to financial feasibility, the project proposed to operates at least 8 employee, thus
to contributes in increasing employment rate in Palestine.

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References
- Palestine Economic Policy Research Institute. (1999). Quarrying, Crushing and Stones
industries in Palestine current situation and prospects. Ramallah: Palestine Economic
Policy Research Institute
- Palestinian Investment Promotion Agency. (2015). Palestine.
- Palestinian Ministry of National Economy. (2014). Palestine. Ministry of National
Economy: http://www.mne.gov.ps/DesktopDefault.aspx?lng=2
- Sardar Shahid Farid, Investment opportunity profile for stone crushing unit in nwfp,
2007.
- Central Pollution Control Board, Comprehensive Industry Document Stone Crushers,
Shahdara. 2007.
- Basim Makhool and Mahmoud abu-alrob, Quarrying, Crushing and stone industries in
Palestine: Current situation and Prospects, 1999. Palestine.

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