OCCASION

This publication has been made available to the public on the occasion of the 50th anniversary of the
United Nations Industrial Development Organisation.

DISCLAIMER

This document has been produced without formal United Nations editing. The designations
employed and the presentation of the material in this document do not imply the expression of any
opinion whatsoever on the part of the Secretariat of the United Nations Industrial Development
Organization (UNIDO) concerning the legal status of any country, territory, city or area or of its
authorities, or concerning the delimitation of its frontiers or boundaries, or its economic system or
degree of development. Designations such as “developed”, “industrialized” and “developing” are
intended for statistical convenience and do not necessarily express a judgment about the stage
reached by a particular country or area in the development process. Mention of firm names or
commercial products does not constitute an endorsement by UNIDO.

FAIR USE POLICY

Any part of this publication may be quoted and referenced for educational and research purposes
without additional permission from UNIDO. However, those who make use of quoting and
referencing this publication are requested to follow the Fair Use Policy of giving due credit to
UNIDO.

CONTACT

Please contact [email protected] for further information concerning UNIDO publications.

For more information about UNIDO, please visit us at www.unido.org

UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION
Vienna International Centre, P.O. Box 300, 1400 Vienna, Austria
Tel: (+43-1) 26026-0 · www.unido.org · [email protected]
L
 .0 H 8 IM
■j; i
щ

Ш
l.l
IR

1.25 1.4

V
 UNITED NATIONS INDUSTRIAL D EVELO PM EN T ORGANIZATION

1 0 5 1 3

YEMEN
ARAB REPUBLIC
FEASIBILITY STUDY FOR A
HOLLOW GLASS MANUFACTURING PROJECT*

ooi :~G

WORLD BANK/UNIDO REPORT No. IS

CO-OPERATIVE PROGRAMME April 1981

•TM» dMMBMrt h tt Im m raptodacad witboat form il «liUa«.

v.i r r m o
 Distr.
LIMITED
ШГООДО.432
29 May 1981
English
 Table of Contents
Pa*e No,

Preface i
Currency Equivalents and Abbreviations ii
SUMMARY iii
PROJECT CONCEPT 1
General 1
Raw Material 1
Capacity anu Volume of Production 2
Power and Uti.'ities 2
Staffing 4

THE MARKET S
General 5
Soft Drink Bottles 5
Milk Bottles 5
Other Returnable Bottles 5
Non-returnable Containers 6
Tableware and Household Glass 6
Other Glass Products 6
Projected Hollow Glass Demand 7
Projected Glass Bottle Price 7
Summary of Findings 8

PROJECT COST ESTIMATE in

Buildings 10
Equipment 10
Other Costs 12
Summary of Fixed Asset Costs 12
Other Assets 13
Working Capital 13
Summary of Project Cost Estimate 14

OPERATING COST ESTIMATE 15

General 15
Raw Materials 15
Other Materials and Repairs 16
Power, Fuel and Water IS
Salaries and Wages 17
Training 18
Packaging Materials 18
Administrative Costs 18
 Page Ho.
V. FINANCIAL EVALUATION 19
Capital Expenditure 19
Revenue 19
Assumptions 20
Financial Projections 20
Financial Analysis 20
Return on Investment 21

VI. ECONOMIC EVALUATION 21

Economic Analysis 21
Foreign Exchange Savings 22

LIST OF ANNEXES

1. Country Data

2. Map of the Yemen Arab Republic

3. Market Analysis - Hollow Glass

L. Production Personnel

5. Building Cost Estimate

6. Report on Glass Sand Deposit, A1 Jiraf

7. Assumptions Underlying Financial Projections

8. Projected Operating Income and Cash Flow

9. Financial and Economic Internal Rates of Return

10. Sensitivity Analysis

11. Projected Income Statement

12. Projected Balance Sheet

13. Projected Statement of Source and Application of Funds

iL. Capital Cost Estimate: Foreign Exchange and Local Currency Jomponents

15. Estimated Foreign Exchange Component of Projected Operating Income

16 . Estimated Foreign Exchange Savings

17. Site Layout and Factory Drawings

(1) Site Plan

(2) Buildings
(3) Raw Material Preparation
 PREFACE

The attached study is one in a series on the construction

industry in the Yemen Arac Republic carried out by the World Bank/
UNIDO Co-operative Programe beginning in 1979 with a general survey
of construction materials. The basis for this study is a pre­
feasibility report and market study prepared by consultant Lennart Konigson
following e field mission in July 1980. The original report was
revised by the consultant in February 1981* After review within
UNIDO, the document was further revised and edited by Mr. Edward Espenhahn
in the offices of the World Bank/UNIDO Co-operative Programme.

The observations and opinions expressed in this report

aie those of the authors and do not necessarily reflect those of
either UNIDO or the World Bank Group.
 11

CURRENCY EQUIVALENTS

Currency Unit: Yeméni Rial (YR)

1 YF = 100 Fils

Currency Equivalent— ^: 1 YR = US$ 0.22

US$ 1= YR L.5

ABBREVIATIONS

CP - World Bank/UNIDO Co-operative Programme

IBY - Industrial Bank of Yemen
LTL - Long Term Loan
Tons - Tonnes (metric)
YAR - Yemen Arab Republic

1/ Official rate of exchange since February 1973.

 -.Ill _

SUMMARY-

The rapid economic growth of the Yemen Arab Republic

(YAR) during the past decade supported the introduction of a
number of modern manufacturing plants producing consumer goods
and building materials. Beverage production increased conside­
rably and imports of bottles rose accordingly, creating a mar­
ket for a small glass bottle plant. A World Bank/UHIDO Co­
operative Programme (CP) survey of the building materials indus­
try in the Yemen Arab Rep lb lie in 1979 revealed the presence of
an extensive silica sand deposit on the outskirts of the capital,
Sanaa. Samples of the sand were investigated by the Mining
University, Leoben, Austria and found to have outstanding che­
mical and physical properties for container and sheet glass
manufacture, and these findings were confirmed by glass making
trials with the sand in tSurope. The CP is commissioning
a more detailed investigation of the deposit to determine the
chemical and physical properties and quantity of the material over
a wider area. Limestone already used by the cement industry,
and feldspar are also available in the YAR.

A consultant, appointed by the CP to examine the fea­

sibility of manufacturing hollow and -ther glass products,
visited the YAR in July 1930, to investigate the local market
for bottles, construction costs and the availability of man­
power, materials and other inputs. A preliminary report pre­
pared by the consultant in October I9 S0 and subsequently re­
vised in February 1931 indicated that there was an opportunity
for a glass container manufacturing facility mainly to supply
bottles to the fast-growing soft d n n K industry in the YAR.
There are also outlets fer milk, vegetable oil and other bottles,
and for domestic glassware vouch the factory could supply at a
later date. The following report presents the plant, machinery,
building and installation costs in some detail. The sales market
data are more limited as national production and import, sta­
tistics have only recently begun to record the data needed to
supplement the information from the beverage producers. A pros­
pective investor will need to conduct a more thorough survey of
the beverage firms’ past and future production plans and of
bottle quantities, types, specifications and costs.

The present report is based on one size of bottle

•which is widely used by the beverage firms. It will event”al-
ly be necessary to make provision for a wider range of bottle
sizes ana types. The standard bottle weighing 0.43 kg with a
content of only O .25 litres has a relatively heavy net weight
-to-contents ratio compared with the returnable bottles normally
used by Coca Cola, Pepsi Cola and Canada Dry bottlers in Other
countries. The proposed market survey should investigate the
possibility of introducing lighter bottles which would be cheaper
to produce.
 IV -

The proposed factory location near the sand deposit has

access to a high tension power line on the Sanaa supply system.
Tne installed load of 910 kW and average load of 55O kW represents
an appreciable proportion of the city’s present generating capacity,
and adequate power may not be continuously aviaiable until the new
thermal power station and connecting power line from the coast are
completed. Power costs, which are high at present, may then be re­
duced because fuel oil is available at a relatively low price from
friendly neighbouring countries. The glass melting operation, a
major user of energy, would also benefit from the low price of fuel
oil.

The project is equipped to produce 14,550 tons of containers

a year, or 34 million standard— size bottles, with a work force of I64
employees. The investment cost is estimated at YR 75 million (USS
16.7 million equivalent) in 1981, the base year for the financial
projections. The cost per employee is approximately YR 457,000
(US$ 102,000 equivalent).

Customs duty on imported bottles is only 15 p 3rcent at

present, and it is assumed in this study that Government will grant
the project a rather larger, but still modest, degree of protection
amounting to 25 per cent of the cif import value during the first
five years of operation. This corresponds to an ex-works sales
price of YR 1.20 per bottle (US$ 620 per ton) during the first five
years, after which the sales price could revert to YR 1.10 per
bottle which is the estimated cost of imoorted bottles in 1981.

The projected financial internal rate of return is lh .5

per cent with an economic rate of return of 10.8 per cent. Intro­
duction of a lighter bottle would increase the rates of return,
which at a bottle weight of 0.3*+kg would be 16.2 and 12.0 per cent
respectively. These rates do not take into account the at-present
unquantifiable savings which will be made in pre-payments and stocks
due to the long import route and port delays, which will be obviated
when the factory can deliver bottles direct to the trade. The pay
back period is about 6.5 years to recover total capital expenditure on
the project.

The project should provide a discounted rate of return of

15 percent after tax to the shareholders as shown in the suggested
financing plan. The plan comprises share capital of YR 30 million
(U3$ 6.7 mil' on equivalent) and suppliers credits and long-term
loans of YR 45 million (US$ 10.0 million equivalent) at prevailing
rates of interest.

Assuming the loans and 20 per cent of the equity were pro­
vided from external sources, the YAR would still need to provide an
estimated YR 4*8 million is foreign exchange during the construction
period. Net foreign exchange savings from project operations would
average about YR 3«4 million per annum during the first five years,
iR 6.1 million during years 6 to 10, and would thereafter increase
to YR 12 million after ccmpletion of the loan repayments.
 I. PROJECT CONCEPT

General

1. The project is for the production of glass containers

to satisfy local demand primarily with respect to soft drink
bottles and possibly milk bottles. A survey has identified the
presence of potentially suitable silica sand at several locations
in the Yemen Arab Republic. One such deposit is situated near, the
capital, Sanaa, and its location is such that a glass plant could
be erected in its immediate vicinity and be serviced by roads,
power, water and severage. The properties of the sil.ca sand de­
posit were investigated at the Institute for Applied Mineralogy
of the Miring University, Leoben, Austria, and this is the subject
of a separate report.

2. The project has an annual capacity of 14,550 tons of bot­

tles per year, which would be adequate for satisfying the YAR's es­
timated annual demand for soft drink and milk glass containers.

3. This study estimates the project to require total out­

lays of YR 75 million (J16.7 million equivalent) prior to start
of commercial operations and is expected to yield a discounted
internal rate of return of 14*5 Per cent.

4. The Glass Forming process assumed to be applied is the

so-called blow-blow method in which the molten glass (gob) is formed
by two consecutive air insertion (d Iow ) sequences in, firstly, a
plunger mechanism which forms the container’s neck and, secondly,
a counterblow mechanism where the container’s body and bottom
plate are formed with a vacuum-assi 3ted system. This method is
versatile and well-suited for a large number of differently shaped
hcllow containers. The other processes are standard and traditional
for +h-j glass industry.

Raw Material

5. The plant would require the following raw materials:

Sand
Soda ash
Limestone
Feldspar
Sodium sulphate
Coloring and other additives
of which the sand would account for 57*7 percent of total raw
material weight followed by soda ash, 18.5 percent, lime 15 per­
cent and feldspar 8 percent. As sand, lime and feldspar
exist locally, imported raw materials should amount by weight
to only 19 percent of total requirements.
 2 -

6. Limestone could be quarried at a c-jment plant near

Hodeidah and may also exist at other locations. Feldspar exists
at several deposits spread throughout the mountainous area but
has hitherto not been exploited due to lack of demand.

7. The sodium sulphate and other components are additives

needed to color the glass. It has, for this purpose, been as­
sumed that primarily green bottles would be produced. Additional­
ly the plant would need to import packaging material, molds,
lubricants and spare parts.

Capacity and Volume of Production

8. The plant is assumed to have a continuous glass melting

fumac' with an inner melting area of 28 m^ and a maximum
daily melting capacity of 52 tons. Such furnaces are available
from several manufacturers. The furnace could produce clear and
colored glass in different batches. The glass making section
would be equipped with an 8 section blow-blow machine with
double gob feeder. It is assumed that the plant would operate
continuously 24 hours per day (4 shifts and 7 days per week) and
that the average number of working days per year would be 330 with
the remaining period being used for maintenance. In addition,
furnace relining would need to be done approximately every fifth
year.

9. Calculation of annual production is based on

the assumption that soft drink bottles with a content of 0.25
litres and a glass weight of 430 grains would be produced as
this is the standard size container in the YAR.

10. The equipment would have a rated capacity of 82 bottles

per minute corresponding to a gross daily production of 118,080
bottles or 5O .8 tons. This would, on an annual basis, correspond
to 39.O million bottles weighing a total oi 16,760 tons. It
is assumed that 75 percent of rated capacity would be reached
after two years of operation, at which time the plant would
produce 12,850 tons of glass containers. Maximum attainable
capacity utilization has been set at 85 percent of rated capacity
to account for defective products, po»er failures, changes in
product mix (colors of glass), etc.

Power and Utilities

11. The total rated electrical power consumption is

estimated at 910 kW. With an average utilization rate of 60
percent in each shift, the power load during 330 working days
would amount to 550 kV. During downtime, power consumption
would decrease to approximately 275 kW, and the annual total
consumption would amount to approximately 4*590,000 kWh. An
11 k7 line passes the area of the proposed site. It has been
assumed that power from this source could be used and that
 - 1 -

the electric power company would install an 11 Jdf/600 V

transformer station at the site of the plant.

12. He-ting of the furnaces could he either by electricity

or by oil. As Yemen’s electrical power is generated by oil the
latter alternative would likely prove most economical. This
study therefore assumes that the furnaces would be oil fired.

13« A melting volume of 52 tons pe: day woutd, for the

proposed regenerative J-flame unit melter with recuperators,
require 1,584 kcal per 1 kg of glass. As heavy fuel oil con­
tains 9.6CO kcal/kg, the required volume of oil would be O.I 65
kg per kg of glass, corresponding to approximately 3,100 tons
of heavy fuel oil per year.

14* Light fuel oil would be used for the annealing system,
forehearth and sand drying drum. The forehearth could also be
gasfired, but this is likely to be less economical in the YAR.
Annealing sysxems for this size plant are similarly produced
for electric, oil or gas heating.

15» The estimated consumption of light fuel oil is

approximately 300 tons per year calculated as follows*

Annealing system 18 l/hr I46 ton/yr

Forehearth 15 1 /nr 120 ton/yr
Dryer 10 l/hr 25 ton/yr (one shift)
Mold pre— heater 12 l/hr 9 ton/yr (30 days)

Total 300 ton/yr

Additional fuel would be required for the gob feeder which

should preferably be gas fired. An average volume of 30 kg
propane would be needed per hour. This would correspond to
some 263 tons per year.

16. Water requirements for washing and for sanitary pur­

poses have been conservatively estimated at approximately 8
per ton of glass, or 12.5 m^/hour, which would correspond to
an annual water consumption of approximately 100,000 m3. Water
in the area of the glass sand is drawn from ground water acqui-
fers which are also used for agricultural purposes on adjacent
sites. As most of the water would be r ed for washing, recircu­
lating systems would be possible. A more detailed survey of
water availability and cost woul-i be needed, however, in order
to determine the feasibility of such installations. This study
does not make provision for a recirculation system.
 - 4 -

Staffing

17 . The staff has been divided into three categories:

Administrative staff
Technical management and supervisory staff
Production personnel

18. As production would be carried out 24 hours per day

and 7 days per week, it has been assumed that the production
personnel would work in four shifts, the oersonnel for raw ma­
terial preparation in two shifts, and others in one shift.

19 . In summary, staff requirements would be as follows:

Administrative staff 15
Technical management and
supervisory staff 11
Production personnel 138

Total I64

Allocation of production personnel by departments

is at Annex 4.
 - 5 -

II. THE MARKET

General

20. Available import statistics suggest that the YAR's

glass container imports consist primarily of soft drink bot­
tles, of which an estimated 17.5 million were imported in
1979* Another important category of imports in that year was
tableware glass, the volume of which has been estimated at
some 2,000 tons. In the future there may, in addition, develop
a demand for milk and other foodstuff glass containers and, to
a lesser extent, a demand for non-returnable bottles.

Soft Drink Bottles

21. The projected demand for sof. drink bottles would

be in the form of additions to stock as 30ft drink sales grow
and in the form of replacements. The b e l t . m g industry in
the YAR is not allowed to use non-retuma :le bottles. The survey
of the soft drink industry in the YAR suggests that bottling ca­
pacity is likely to double within approximately one and one-half
years if the industry can realize its present plans for expansion.
In the estimate of future soft drink sales it was assumed that
the rate of expansion would be slower than envisaged by industry
representatives but that it would reach an average of 25 per cent
in the coming years. On this basis, and with the application of
normal industry ratios for glass bottle inventory and replacements,
an average annual demand of approximately 10,000 tons is estima­
ted for the period 1981-1988, as outlined in the Market Analysis
at Annex 3.

Milk Bottles

22. Bottles for milk distribution are estimated to account

for an annual demand of approximately 1,200 tons during the period
1982 to 1988. This assessment is based on the assumption that
the existing dairy project as well as the new project will, con­
trary to present practice, use glass containers for distribution.
If this switch from paper to glass containers takes place, and
it is being advocated by the Government and by the Industrial
Bank of Yemen, the above estimate of demand may prove to be con­
servative.

Other Returnable Bottles

23. Such bottles could be used by the mineral water bottling

company and by cooking oil producers, both of wnich, at present,
use plastic containers. The producers may well resist a switch
to returnable glass bottles on account of higher costs, but envi­
ronmental concerns with respect to disposal of plastic containers
are considerable and would likely result in the Government exerting
pressure on the producers when local glass production comes into
being. The annual demand for such gl?,3s containers is estimated at
approximately 2,000 tons in the latter part of the 1980,s.
Non-returnable Containers

24. Although there is a ban on the use of non-returnable

containers for the food industry ii. the YAR, demand may develop
for certain potential export products. Fruit juices, and in
particular grape juices for which there is a large market in
neighboring Saudi Arabia, could be one such product. To account
for this possibility, the demand projections include some 500 to
800 tons of non-returnable containers.

Tableware and Household Glass

25. This category is impossible to estimate with any

measure of reliability. There is orly data for one year*s
imports, and with this as a starting point consumption is pro­
jected to grow to approximately 2,500 tons in 1988. This cor-
responds to some 2kg glass consumption per family and year and
would include, apart from tableware, also various kitchen glass
utensils and containers.

Other Glass Products

26. This category covers vases, lamps, ornamental blown

glass, ash trays etc., which on the basis of 1979 import data
accounted for approximately 5OO tons. This volume of demand
is assumed to remain relatively unchanged for the projected
period.
 I

Projected Hollo* Glass Demand

27. The table below shows the projected annual demand

for glass for the period I98I-I988 by different users.

Summary of Potential Demand for Hollow Glass

(tons)

1981 1982 1983 1984 1985 1286 1281 1988

Soft drink 8,800 9,700 10,200 10,500 10,100 10,300 10,200 9,700
bottles
Milk bottles - 2,600 900 1,000 1,100 1,200 1,300 1,500
Other retur-
nable bottles - — — 1,700 1,800 1,900 2,000 2,100
Other non-
returnable
containers - 300 400 500 600 700 800

Tableware
and house­
hold glass 2,000 2,100 2,200 2,300 2,400 2,500 2,500 2,500
Misc. other
glass 400 450 500 500 500 500 500 S00

11,200 14,850 14,100 16,400 lo,40Q 17,000 17,200 17,100

Projected Glass Bottle Price

28. The analysis of import statistics contained in the

Appendix suggests that the cost of imported glass bottles is
approximately YR 1,800 - 2,000/ton landed. Information ob­
tained from bottlers indicates that the cost of bottles delivered
Sanaa ranged between YR O .98 and YR 1.03 per bottle.

29. As one ton of g . ’.ss contains 2,325 bottles of 0.43 kg

weight the average landed rice in 1979~1980 per bottle would
be YR 0.78 to which shou] i oe added customs duty of 15 percent
and transport estimated at around YR 0.10 per bottle or YR 230
(approx. JS $50 equivalent) per ton. The delivered cost in
Sanaa would thus correspond to approximately YR 1.00 which com­
pares well wxth the data provided by bottlers.

to. The projected cost of bottles in 1981 , the base year

of this study, is YR 1.10 an increase of ten percent over I98O.
However, this price includes an import tariff of only 15 per­
cent of the cif cost which is considered to be a very low
level of protection on a new industry of this type in a develo-
 _ A _

ping country. It is assumed that a modest increase in pro­

tection will be granted by Government corresponding to an
import duty of 25 percent and a price of YR 1.20 delivered
Sanaa as follows:

Estimated Cost of Imports

At start of
1281 Operat ions

Cost per bottle YR

Cif price O .83 O .84

Import duty 15/6 .12

" » (assumed) 25/6 .21

.95 1.05
Port and clearing
charges .05 .05
Landed cost 1.00 1.10
Transport to Sanaa .10 .10

Delivered Sanaa 1.10 1.20

per bottle
YR per ton 2,558 2,790
US $ per ton (equi­ 568 620
valent)
31. The project income and cash flow projections
are based on the price of YP. 1.20 per bottle during the
five years of operation when the project is building up
production and bearing relatively high interest charges.
From year six onwards the project is expected to yield a
reasonable return at the lowex; existing import duty and
level of protection, and the sales revenue and cash flow
projections are based on the lower price of YR 1.10 per
bottle.

Summary of Findings

32. The market survey concluded that total holiow

glass demand in Yemen would approximate 15,000 tons per
year in 1983- 1984, which would be the earliest possible
time that a glass bottle plant could be in production.
Bottles would account for 80 per cent of the market or
roughtly 12,000 tons/year. As this period would likely
coincide with the start-up of several new bottling plants
and be followed by some years with substantial or pos­
sibly oversupply of bottling facilities, growth of demand
during the latter part of the 1980*s could be expected to
be modest but sustained. It is expected that demand for
 0

g-lass bottles would have reached a level of some 14,000 tons/

year towards the end of the 1930's. The conclusion is thus
that the market for glass bottles from 1983 onwards should be
sufficient to support a plant with an annual capacity cf 13,000
tons/year.

33. Other hollow glass products, which require a slightly

different process for manufacturing, would account for some
3,000 to 4,CC0 tons of annual demand. The basis for estima* m g
this level of demand is, however, highly uncertain. At this
stage it therefore seems advisable to proceed only with a glass
bottle plant and postpone any investment in other glass-forming
equipment until such time as the market can be more accurately
assessed.
 - 10 -

III. PROJECT COST ESTIMATE

Buildings

34» Total covered area of the three buildings: factory,

workshop and office would be approximately 5 ,800 m2 to which
should be added a basement area of 85C m^. It has been as­
sumed that the factory building and the workshop would be
steel ;ctures with light-weight beams and corrugated or
similar steel walls and roofs. No provision has been made for
insulation which is unlikely to be required given the climate
in Sanaa. The office has been assumed to be a traditional stone
masonry structure. Layout of the site and principal factory
section drawings are attached as Annex 17-

35» Estimated costs of the buildings, including land

preparation and fencing as detailed in Annex 5 are:

YR'000 USS '000 equivalent

Factory and workshop 8,960 1,990
Off ice 260 145
Services 280 65

Total building cost 9,900 2,200

Equipment

36. The equipment for which prices have been estimated

includes equipment for raw material handling, furnace, glass
making, treatment, inspection and packaging as well as miscel­
laneous auxiliary equipment.

37» The cost estimate is based on manufacturers' quoted ex-

factory prices in mid-1980. Only a limited number of suppliers
have been contacted and, although the estimated cost is likely
to pro/e realistic, price information from a wider range of
suppliers may suggest a need for revisions.

Equipment Cost Estimate

U3t '000
Batch plant for receiving, storing, conveying, YR'000 equivalent
mixing and weighing of sand, soda ash, lime
and crushed glass. 4,800 1,067

Heavy oil fired furnace 1x4 m for continuous

batch melting including batch charger 2,000 444

Furnace recuperator including high temp,

burners, piping, insulation, flues, etc. 1,000 222

Forehearth, gob feeder and bottle forming

machine with 8 stations 5,100 1,133
 11 -

TR'OOO USS »000

equivalent

Annealing system 650 145

Inspection line including vibrating transfer

plate, single liner, precision inspection
conveyor, visual inspection station, pre­
selector, bore and leak inspector and flow
and jam detector 750 167

Shrink film packaging unit 300 67

Palletizer 200 44

Porte lift 50 11

Maintenance workshop equipment 1,300 289

Laboratory equipment 350 78

Sub-total production equipment 16,500 3,667

'Compressed air, storage and distribution

of gas and oil, distribution of water 5,000 1,111

Electrical installation including transformer

station and reserve diesel electric power unit; 2,400 533

Sub-total auxiliary equipment 7,400 1,644

Excavators 500 110

Dumptrucks 300 67

Delivery vans 125 28

Cars 125 28

Sub-total vehicles 1,050 233

Office equipment 125 28

Telephones and switchboard 25 6

Furniture and furnishings 100 22

Sub-total office and other equipment 250 _____

Total estimated cost of equipment 25.200 5,600

Note: No provision is made for printing equipment, which can be

added at a later stage when printed beverage bottles are
required in the local market.
 _ 1? _

Other Costs

}?. Other costs consist of packing and transport, erection

and enrineei ii.fr services.

Other Cost Estimate

YR’OOO U5S *000

equivalent

¿report packaging AOO 90

Freight and insurance 1,950 435
Local handling and inland transport 675 150
Erection cost 2.150 475
Detailed engineering: process 2,700 Ó00
Detailed engineering: civil 825 180

Total estimated other costs 8.700 1,930

39» The above estimated other costs are based on percentage

rates and should be validated on the basis of weights and volumes
of goods to be shipped in the case of transport and similar charges.
Tne erection cost estimate is an assessment of manpower requirements
whicr. should be checked against eventual manufacturers’ quotations
for such services. The estimated cost for engineering services as­
sumes that, the sponsors would themselves arrange for project design
and procurement. Should the plant be procured on a turnkey basis
the engineering costs would decrease and instead be included in
building and equipment costs.

Summary of Fixed Asset Cost Estimate

YR’OOO US$ ’ 000

equivalent

Land-/ 4,000 890

Construction 9,900 2,200
Equipment 25,200 5,600

Other costs 8,700 1,930

Contingencies 4,800 1,065
Escalation 7,150 1,590

Total fixed assets 59,750 13,275

1/ This cost is uncertain as land costs vary substantially

around Sanaa and have tended to rise very rapidly in re­
cent years.
It is based on the assumption that YR 100/m^ would be a
valid price for 40,000 nr in the area concerned.
 - î; -

40. To the above listed costs has been added a contingency

factor corresponding to 10 per cent and escalation in the amount
of 15 per cent which would correspond to price levels projected
in 1981 .

Other Assets

41 . The costs shown in the balance sheet under the heading

Other Assets cover the cost of additional feasibility studies,
market analysis, legal and other company formation expenses, mana­
gement during implementation, training, staff costs prior to com­
mercial operation, plant commissioning and test runs, as shown
below:

Other Assets Cost Estimate

YR'000 US* ‘000

equivalent

Froject preparation and implementation 7,100 1,580

Feasibility studies 1,000
Incorporation costs 500
Implementation management 5,600

Pre-operating expenses 2,525 56O

Training (l20 man months) 750
Staff costs 1,775

Interest during construction 3,375 750

Total 13,000 2,890

Working Capital

42. The working capital estimate makes provision for raw

material stocks to be built up to four months supply, and for
finished goods to be maintained at two and a half weeks produc­
tion, after the start of plant operation. Appropriate stocks
of packing and other materials, spare parts and molds are provi­
ded for. Sales will be made on a cash basis and no amount for
debtors or receivables is included.

43. A small overdraft facility finances part of the current

assets for a short time after the end of the construction period.
Suppliers credits on part of the production materials and spare
parts purchases are included. Estimated working capital at the
start of operations comprises:
 1A
■*-t+

Working Capital Estimate

At end of construction period and start- of operations

Current Assets YR*OOQ

Cash 100
Raw materials 600
Pinishe 1 goods
Packing and other materials 200
Pallets 100
Plastic film, etc. 50
Other materials 50
Molds 300
Spare parts 2,800

4,000

Less: Current Liabilities

Short-term debt 1»150

Suppliers credits 600

1,750

Working Capital 2,250

Summary of Project Cost Estimate

44. The project cost at the end of the construction period

amounts to YR 75 million (US$ 16.7 million equivalent) for which
share capital and long term loans will be required:

Project Cost Estimate

YR'000 US*»000
______ equivalent

Fixed assets 59,750 13,278

Project preparation, pre-
^perational and interest expenses 13,000 2,889
Working capital 2,250 500

75.000 16,667
 - 15 -

IV. OPERATING COST ESTIMATE

General

45. The cost data given below are tentative. Unit rates
and prices have, in some cases, been calculated by adding
escalation to cost inform .tion which is two to three years
old. In other cases costs have been assessed on the basis of
cost data from European plants almost all of which are sub­
stantially larger than the one under study for the YAR.

Raw Materials

46. Silica sand, the main raw material accounting for

over 55 percent of the input weight, is available from a high
quality deposit at A1 Jiraf on the outskirts of Sanaa. A
summary of the report by the Mining University, Leoben, Austria,
commissioned by the World Bank/UNIDO Co-operative Programme in
I979, is attached at Annex 6 . The quartz sand has very suitable
chemical (under 0.03 percent sad only traces of mica and
heavy minerals) and physical properties which were confirmed by
glassmaking trials in Europe. The World Bank/UNIDO Co-operative
Programme is at the present time commissioning a more detailed
study which will plot the chemical and physical characteristics
and determine the reserves of high quality sand over a wider
area of the deposit. The resulting map and report should be
ready for distribution by September 1931.

Raw Material Requirements Per Ton of Glass

Quantity Unit Price YR/ton

___M ___ YR/ton of Glass

Sand 721.5 21 15
Soda ash 231 1,125 260
Lime 186.5 50 10
Feldspar 100.0 1,000 100
Sodium sulphate 5.5 1,500 8
Other 5*5 2,200 12

Total per ton of glass 1,250 405

The cost of sand is based on the assumpt ion that

the glass factory would do the quarrying with its own staff
and equipment, the costs of which aie included in the above
shown fixed asset cost estimate. Labor and direct operating
costs have been calculated at YR 2l/ton of sand. The soda
ash cost is h_oCd on export cost statistics for Kenya and
the Federal Republic of Germany.
 Other Materials and Repairs YR ’OOOp.a.

43. Lubricants, Sundry, etc. 400

Molds, 6 sets each with

340 parts at YR 170,000/set 1,020

Spareparts at approx 5^
of fixed asset cost 1,400

Repair Cost at approx 2#

of fixed asset cost 500

The item "Repair Cost” refers to cost of repairs,

excluding spare parts, effected by persons outside the glass
company. Total annual cost of repairs and maintenance includi
spare parts £ id internal labor would amount to about YR 2.^
m lieu, corresponding to 10% of equipment cost.

Power. Fuel and Water

1*9 . The electrical power rates used are those applied by

the World Bank Cor a rural electrification project currently
under consideration. The heavy fuel oil cost is of critical
importance for the project*s viability. Heavy fuel oil is not
available commercially and would need to be imported by the
company. The price used is projected by IBY to apply for tha.
cement project, based on the favourable prices at which the YAR
obtains its petroleum products from friendly supplier countries.
Light fuel oil (diesel) is currently marketed at YR0.9/litre.

(1) Electrical power at YR 1/foih corresponding to

YR 4,590,000/year or YR 353/ton glass.

(2) Heavy fuel oil at YR 5 9 °Aon corresponding to

YR 1,830,OOO/year or YR 140/ton glass,

(3) Light fuel oil and diesel at YR 900/ton cor­

responding to YR 270,OOO/year or YR 20/ton
glass.

(4) Propane gas at YR 1,600/ton corresponding to

YR 420,OOO/year or YR 32/ton glass.

50. Total power and fuel cost per ton would thus amount
to YR 545. Water at an average cost of YR 2 pei m^ would cost
annually YR 200,000 corresponding to YR 16 per ton of glass.
 - Il -

Salaries and Wages

51. Composition of staff and assumed monthly salaries

and wages are shown below:

Admini 3t rat ive Staff

No Monthly Annual
Salary YR»000 Cost IR*000

Gen. Manager 1 10 120

Asst. Gen. Man. 1 8 96

Accountant 1 4.4 53
Sales staff 2 4.5 108

Clerks 2 3.5 84
Personnel 1 3.5 42
Secretaries 2 3 72

Drivers 2 3 72
Guards 3 3 108

Total 15 755

Technical Management and Supervisory Staff

Expatriate
technicians 3 12 A32
Engineers 4 8 384
Shift super­
visors 4 6 288

Total 11 1,304

Production Personnel

Foremen 11 3.5 462

Skilled
workers 77 2.5 2,310
Unskilled
workers 50 1.5 900

Total 138 3,672

Grand Total 164 5,531

 - 18 -

52. Available dnta on industrial salaries and wages appear

to be largely out of date. Although a substantial margin for es­
calation has been aided to available statistical salary and wagt
data, local demand, which for the Sanaa area has been very high,
may result in salary and wage scales above those assumed in this
report:
YR’O^O
Total annual salaries 2,141
Total annual wages 3,39°

Total cost 5*531

Training

53. The capital cost estimate includes YR 750.000 for the

training of personnel during the construction period prior to
commissioning. T Tther sums are included in the fixed expenses
to cover the cost of local staff training, including expatriate
assistance during the first three years of operation:

YR 350,000 in year 1
YR 175,000 in year 2
YR 100,000 in year 3

Fackaging materials

54. As each pallet would take some 1,400 bottles and on

the assumption that each pallet could be used 5 times per year
a total of 4,262 pallets would be required at full production.
Pallets are likely to require continuous replacement on account
of damage and disappearance in the distribution. A replacement
rate of 25$ has been assumed. The bottles ould be placed on
carton bottoms and the top layer should also be pr-.ected by
kraft paper or carton. The annual carton board requirement would
amount to 127,926 pieces per year. Each pallet load would be co­
vered with shrink-wrap plastic, requiring 21,321 m 2 of film an­
nually.

Packaging Material Cost Estimate

No per Cost per YR Annual Cost/ton

year unit Cost of bottles

Pallets 1,066 50 53,300 4.2

Cartons 127,926 3.50 44,800 3.5
Shrink film 21,321 12.50 266,500 20.7

Total 364,600 28.4

Administrative Costs

55 . Office, travel, insurance, etc. expenses of YR 100,000

per annum are included in fixed costs.
 J

- 19 -

V. FINANCIAL EVALUATION

Capital Expenditure

56. Expenditure over a three year implementation period

is projected as follows:

Y R *000 Year 1 Year 2 Year 3 Total

3,900 3,900
Current Assets

Raw materials 600 600

Packing and other
materials 200 200
Molds and spare parts 3,100 3,100

Fixed Assets 5.000 26,000 28,750 59,750

Land 5,000 5,000

Construction and 8,000 4,5 00 12,500
buildings
Equipment 18,000 24,250 42,250

Other Assets 2,000 3,000 8,000 13,000

Project preparation, 2,000 2,000 3,100 7,100

etc.
Pre-operating expenses 150 2,375 2,525
Interest during construction 85O 2,525 3,375

Total Assets 7,000 29,000 40,650 76,650

Total excluding interest 7,000 28,150 38,125 73,275

Revenue

57, The average cost of imported bottles in 1979-1980

was YR 1.00 per bottle including shipping, 15^ customs duty
and inland transport from Hodeidah to Sanaa. This has been
increased by lOff to YR 1.10 to reflect the factory sales
price at 1981 levels. As explained, a higher price of YR 1.20
per bottle, corresponding to a tariff protection of 25 rather
than 15 per cent, has been assumed during the first five years
of operation after which the sales projections revert to the
import price level of YR 1.10 per bottle.

The revenue calculations provide for a build-up of

finished goods inventory corresponding to 5$ of annual pro­
duction.
 - 20 -

Assumptions

38* The principal as&umpxions underlying the financial

evaluation are listed ax Annex 7*

Financial Projections

59. The capital cost and operating projections are given

at 1981 estimated prices. Annual operating income is shown
after deducting variable and fixed direct costs frcr production
value and before deducting overhead costs or capital charges
of depreciation, amortization of other assets and interest pay­
ments. After examining the financial and the associated economic
rates of return of the project, the report contains a further
set of projections embodying a typical financing plan with an
initial equity: loan ratio of 40:60

Financial Analysis

60. Annual production, revenue, variable and fixed di­

rect costs, and the balance of operating income before
depreciation and interest over fifteen years of operation are
shown at Annex 8. Cash flow before interest charges is also
shown, from which the financial and economic discounted rates
of return of the project are derived.

61. Annex 9 discounts the annual capital expenditure

and operating cash flow figures. The financial internal rate
of return at constant prices is lU.5 per cent. Pay back period
is about 6-5 years to recover total capital expenditure.

62. The sensitivity of the project to changes in capital

cost, production level, and sales and input prices is shown in
the sensitivity analysis at Annex 10. Examples of the change
of rate of return from the basic 14 «5 per cent rate are:

(1) 12 .9$ at capital expenditure overrun of 10$

8.2$ at capital expenditure overrun of 50$

(2) 12 .6$ with a one year delay in operating cash flow

(3) 12.3$ with production level 10$ lower

7 .1$ with production level 30$ lower

(4) 12.5$ with sales price of YR 1.10 throughout

9 .7$ with sales price 10$ lower
18 .9$ with sales price 10$ higher

(5) 13 .8$ with wages and salaries 10$ higher

13 .0$ with wages and salaries 20$ higher

(6) 17.2$ with electricity price 50$ lower (YRO.5O per unit)
13 .4$ with fuel oil price 50$ higher

(7 ) 16.2$ with a 0.34kg bottle weighing 21$ less.

r

- 21 -

Return on Investment

An appropriate financing plan is applied to the fore­

going capital cost and operating cash flow projections. Capital
expenditure is financed by:

YR'000 US$
_____________ equivalent£

Share capital 30.000 6,667 Uo

Long-term loan 1*5,000 10,000 60
75.000 16,667 100

The long-term loan bears interest at 8.5 per cent per- annum
and is repayable over 10 years subsequent to a 1.5 year grace
period from the start of operations. These terms are consistent
with financing arrangements currently available to industry in
the YAR.

64. Projected Balance Sheet, Annex 12 , and Income State­

ment, Annex 11, show a discounted rate of return after tax of
15 per cent on the YR 30 million equity investment.

V. ECONOMIC EVALUATION

65 Introduction of the project to supply bottles to

the local beverage and other industries will provide outlets
for raw materials (sand and feldspar) which are available in
the country but not yet exploited. The present long delivery
times and port charges to which imported bottles are subject
can be obviated.

Economic Analysis

66. With a strong Yemeni currency and the employment

opportunities for Yemeni workers in neighbouring countries,
only two adjustments are made to the financial analysis to
determine the economic rate of return of the project. An­
nual sales values are reduced by the amount of customs duty,
and an economic cost of electricity of YR O. 5O per unit is
as named. This is half the present tariff of YR 1.00 (equi­
valent to US 22 cents) per kWh, which is very high. The cost
of imported petroleum products is, however, comparatively low,
enabling heavy fuel oil to be sold to consumers at YR 0.59 per
kg. Thus fuel, the major component in the cost of electricity
at the new thermal power station, would account for about
YR 0.15 to YR 0.20 per kWh. Including other generation and
distribution expenses, the economic cost of electricity is,
therefore, estimated to be no more than YR O. 5O per kWh.

67» With these adjustments to the financial analysis,

the economic internal rate of return of the project is 10.8
per cent, as calculated at Annex 9»
 _ 99 _

Foreign Exchange Savings

68. Estimated foreign exchange savings are assess! at:

Annex lU, Capital Cost Estimate,
Annex 15, Projected Operating Income,
Annex 16, Estimated Foreign Exchange Savings,
which are based on assumed foreign exchange components of the
capital and operating costs. Sales are valued at the cif cost
of imports.

69. Making allowance for estimated indirect as well as

direct foreign exchange costs of project inputs, there should
be an appreciable foreign exchange saving, amounting to YR 9*1
million equivalent before capital charges in the first year of
operation, rising to YR 13.3 million a year at full production.
The resultant benefit to the YAR will depend on the method of
financing and on the foreign exchange components of the share
and loan capital. It is assumed at Annex 16 that twenty per cent
of the share capital and the entire long term loan are provided
and serviced in foreign exchange. On this basis the YAR would
be required to devote about YR 5 million equivalent in foreign
exchange to the capital cost of the project. After servicing
the foreign equity and loan capital, the project should repay
the initial foreign exchange contribution from within the
country (est. YR h .75 million) in the first year of operation.
The annual foreign exchange benefit should average:
YR 3-U million equivalent in years 1 to 5
YR 6.1 million equivalent in years 6 to 10
thereafter rising to YR 11.9 million a year when the loan has
been repaid.
 ANNEX 1
Раге 1

- л-ЧЯ. T3LIC : HOLLOW GLASS PROTECT

COUNTRY DATA

Ш А population pasrn (1979)

195.000 aq. km. 5-8 million (cod 1979) 30 per sq. km.
Kite of Growth: 2.9 percent

POPULATION CHARACTERISTICS (1978) HEALTH (1978/79)

Crude birth rate (per 1,000) A® Population per Physicien 12,510

Crude death rate (per 1,000) 75 Population per hospital bed 2,065

ACCESS TO SAFE WATER (1977) ACCESS T0 ELECTRICITT f!977)

Occupied dwellings without Z of urban population 37

safe water (Z) $

NUTRITION (1977) EDUCATION (1977)

Calorie intake aa percent Adult llteracy rate percent 13

of requirements 91 Primary school enrollment percent 26
Per capita protein Intake
(grama/day) 66

GCT РЕЯ CAPITA IH 1977/78 : $ *10^

NATIONAL ACCOUNTS (US5 Kin)

(1978/79 Price.) ЛХИЧЛ! BATE OF GROWTH
(Cenatane prlcea)
1978/79 I f ГПУ-19

3.810 13
CCT ac Harket Priera
2,800 10
GDP at Harket Prlcea
900 33
Croaa Dosatele Inveterante
52* 27
Croat Hatlonal Savin»»
107 10
Exporta of CCTS
1.490 28
laporte of CCTS

СОУЕЮВШГГ FINAMCE (YEla Kin)

I of CMP
1975/76 1976/77 1977/78 1978/79 1978/79

Current Revenue 605 1,293 1.985 2,188 13

Current Expenditure 617 8*1 1,250 1.8*0 11
Current Deflclt/Surplua -12 *52 735 3*8 2
Capital Expenditure 603 1.167 2,670 i*
161

External Assistance, Net 606 697 1,90* 11

635

HONEY CREDIT AMD PRICES ------Y M » Million Out atending End Period-

Honey Supply 2,509 4,370 6,205. 7,583

tank Credit to Cove. Sector, net -407 -939 -990 "609
Benk Credit to Non-Govt. Sector 566 1.474 1.555 2.199

Annuel Percentege lncreeac In:

Honey Supply 120 74 42 22
Conguaier Price Tndex 17 24 19 22

1 / Calculated by the World Rank Atlas conversion technique.

All other conversions to dollars In this table are at the average exchange rate
prevailing during the period covered.

2/ Tentative World Bank estimates

Source : тьрг- j'o. 2 8 5 6 - Y Aft, October 23, I960.

 ANNEX I
Page 2

BALANCE OF PAYMENTS (US$ Min)

1972/73 1975/76 1976/77 1977/78 1978/79

Exports of Goods, fob 7 12 19 7 3
Imports of Goods, cif 120 382 730 906 -1,405
Trade Balance -113 -370 -711 -899 -1 ,4 0 2
Non Factor Services, Net -11 21 -10 -21 19
Factor Income, Net 105 479 896 1,160 1,007
Workers' Remittances, Net (102) (457) (842) (1,090) (898)
Investment Income, Net (3) (22) (54) (70) (109)
Balance on Current Account -19 130 175 240 -376
H i LT Capital, Net 22 153 146 165 435
Official Grants, Net 14 114 104 103 312
Official Loans, Net 8 39 42 62 123
Disbursements (12) (42) (46) (68) (133)
Repayments (-4 ) (-3 ) (-4) (-6 ) (-10)
Other Capital (including
errors and omissions), Net 25 -11 133 -32 144
Increase in Reserves (-) -28 -272 -454 -373 -203
Cross Reserves (end FY) 65 520 974 1,347 1.55C

MERCHANDISE EXPORTS
(A verse« 1 9 76/77-1978/79)
EXTERNAL PUBLIC DEBT. JUNE 30, 1979
US$ Min.

Total Co*»itments 1 ,075 Cotton 4 Cotton Products 2

Of which Disbursed 543 Coffee 5
Hldea 6 Skins 16
Biscuits 6 Confectionary 20
All other CoModities 57

100

DEBT SERVICE RATIO FOR 1978/79 ; 1.72 1 /

1/ Include« workers' remittances.

r

Annex 2

YIM3I ARAB RBPJBLIC: HOLLOW GLASS PROJECT

 ANNEX 3
Page 1

YEMEN ARAB REPUBLIC

A MARKET ANALYSIS FOR HOLIOW GLASS

by Lennart Königsson

Methodology

The methodology employed involved, firstly, identification

of sources of demand, secondly, analysis of past consumption
data for hollow glass in the YAR and, thirdly, a matching
of future demand which could reasonably be expected to be
generated by each source using growth rates extrapolated
from past data.

The aemand sources identified were the following:

(1) Food processing industries such as soft drink

bottlers, dairies and Juice producers and producers
of cooking oil;

(2) households using glass for storage, as tableware

and for decorative purposes.

Other industrial users of hollow glass were not identified.

Obtaining data on past consumption from sources such as
import statistics was fraught with a number of difficulties,
the major ones being (a) that time series were not complete,
(b) that only value had been recorded and not quantity and
(c) that the definitions of various groups of products were
changed between 1977/78 and 1979- Additionally, it is
probable that different exchange rates have been applied with
respect to values for different periods.

A gross approximation of observable import trends

on the basis of import statistics is shown below:

Glassware; SITC No. 66500

(YR ’000)

1976
12 months 11,U18

First 6 months
of 1977 N.A.

Last 6 months of
1977 and first 6 (reduced by 20 per cent on
months of 1978 12,197 account of probable exchange
rate error)

Last six months

of 1978 N.A.

1979 (See Table 8 , SITC

12 months 28,976 Nos. 665II, 665OC add 66589)
r

AMEX 3
Page 2

It has therefore been possible to use past consumption data,

such as import statistics, only as a rudimentary check on the
aggregate demand data developed as a esult of analysis of use and
of growth of demand.

Returnable Soft Drink Bottles

This category would be of two types, namely additions

and replacement of returnable containers and supply of non-
returnable containers. For returnable containers the consumers
would consist primarily of bottling companies and dairies.

The table below shows existing and planned bottling

industries in the YAR. Those industries shown as planned are
under actual construction and are .'.ikely to be in operation
within twelve to eighteen months.

Table 1

Existing and Planned Soft Drink Bottling Capacity in the YAR, 1980

Brand Rated Capacity Location

Existing Plants (cases/day)

Pepsi 9,000 Sanaa

Pepsi Cola— ^ 2,500 Hodeidah

Canada Dry 17,500 Hodeidah

7-up 9,000 Sanaa

Coca Cola etc. 15,000 Taiz

Sub-total 53,000

Planned new plants

Pepsi Cola 17,500 Hodeidah

Cemada Dry 17,500 Damar

RC Cola 10,000 Sanaa

Other approx.15,000 N.A.

Sub-total 60,000 -

Total (less plants to

be closed) 110,000

1j To be closed with opening of new plant.

 AHWEX 3
Page 3

Total soft drink bottling capacity in the YAR at present is

thus 53,000 casesi/per day which is expected to increase to
approximately 110,000 cases/day in one to one and one-half
years. The capacities shown above are generally based on
operating two shifts per day during 300 days of the year.
The bottlers in the YAR are presently operating at full
capacity during nine months of the year and some 70 to
85 per cent of capacity during the three winter months.
It is the expectation of the industry that the additional
capacity, to be brought or stream in the near future, will
be utilized in the same manner.

On a yearly basis present production amounts to

11.3 million cases, or 270 million bottles, whereas production
in one to two years' time would increase to 23-5 million
cases (560 million bottles) per year. On a per capita basis,
consumption of locally bottled soft drinks would thus be
51 bottles per person and year, or approximately 1 bottle
per person and week. With the expected increase in
productive capacity, consumption would need to expand to
103 bottles per person and year or 2 bottles per person and week.

This consumption could be compared to known

approximate rates per person in neighbouring countries:

Saudi^Arabia 35 bottles/week
Egypt- 0.8 bottles/week
Kuwait 7 bottles/week
Bahrain 20 bottles/week

The market analysis also involved a comparison with projected

soft drink consumption rates made by the Industrial Bank of
Yemen for the purpose of assessing the viability of a new
Canada Dry bottling plant. The data obtained through this
study, conducted in 1979 , is shown and compared with industry
data in the table overleaf.

1/ Each case containes 2k bottles of 25 cl content.

2/ An average consumption rate in countries with similar gross

national product and similar climate as Egypt was 1.1* bottles
per week in 1977-
 ANNEX 3
Page~U

Table 2

Comparative Data on Estimates of

Soft Drink Bottling Capacity in the YAR

Plarts and Industry IBY Feasibility

Brands Estimates-1980 Study Estimates-1979

Pepsi Cola-Sanaa:
cases/hr - -

cases/day 9,000 -
cases/year 2 ,025,000 2,331,000

Pepsi Cola-Hodeidah:
cases/hr - -

cases/day 2,500 -

cases/year 565,000 -

Canada Dry-Hodeidah:
cases/hr - 5OO
cases/day 17,500 -

cases/year 3 ,307,500 1 ,1*1*0,000

7-up-Sanaa:
cases/hr - -

cases/day 9,000 -
cases/year 2 ,025,000 -

Coca Cola-Taiz:
cases/hr - 650
cases/day 15,000 -
cases/year 3,375,000 1 ,872,000

Total (cases/year) 11,297,500 5,61*3,000

In addition to the capacities of some of the existing plants,

the feasibility study also detailed the level of the YAR imports
of "carbonated soft drinks" during recent years.

The statistics are not complete in that only value

and not quantity is shown for some years.
Table 3

Imports of Car'jonated Soft Drinks 1975-1979

Year No. of Bottles Value (YR)

1975 270,000 1*78,000

1976 126,000 83,000
1977 1 ,500,000
1978 9,600,000
1979 6 ,000,000 (est.) 8 ,158,000

Imports in recent years have thus reached a level of

approximately YR 9 million corresponding to some
250,000 cases. It is probable that some proportion of these
soft drinks were imported as cans although this has now been
banned for environmental reasons, with the result that
smuggling of canned soft drinks, according to industry
sources, has taken on considerable proportions.

The above-mentioned IBY feasibility study reached

the conclusion that demand for soft drinks in 1979 corresponded
to 9-6 million cases, although the basis for the conclusion
vas not clear from the report. Rate of growth of demand
was projected to be 2.5 per cent p.a. which IBY officials conceded
was a highly conservative estimate.

Our conclusions with respect to the present status

and future development is as follows:

Current rate of consumption: Approx. 250 million

bottles/year. (10 .1* million cases).
Estimated annual rate of growth in the immediate
future: 20 per cent-30 per cent.
Level of consumption in 1983-1981*: Approx. 1*00 million
bottles/year (16.5 million cases).

The latter estimate assumes that the industry's expansion rate

will be slower than presently expected due to delays in
implementation of new plants.

Volume of Soft Drink Bottle Replacement

Interviews with bottling industry representatives

suggested that reliable statistics were kept with respect
to losses and breakages of bottles. They were as follows:
 ANNEX 3
W- _ _"/
ro^c u

The average number of times in a year that a bottle

is used is l6 to 19 which, incidentally, is a very
high rate in comparison to that of other countries.
Therefore, a bottle is returned after about 22 days.
Bottle breakage in production amounts to 0.5 per cent
of the number of bottles sold.
Bottle rejection in production (during vashing and
subsequent inspection) amounts to 1 per cent of the
number of bottles sold.
- Losses of bottles in the course of distribution
amounts to 22 per cent cf the number of bottles in stock.

As the stock of bottles would normally correspond to approximately

10 per cent of sales, annual purchases of glass bottles for
the YAR's bottling industry should average 3.7 per cent of bottles
sold.

A comparison with similar data for other Middle Eastern

countries suggests that the bottle replacement rate in the YAR
is high at present. It is important to note that statistics
exist only for the last two years during which time the industry
has expanded rapidly and during which time distribution has
reached many areas previously not serviced.

Egypt, for example, in 1977 had the following data for

soft drink bottle use and replacement:

Average number of times per year that a bottle was used: 10.
Bottle breakage in production: 0.5 per cent of sales.
Bottle rejection in production: 0.5 per cent of sales.
Bottle losses in distribution: 2 per cent of sales.

It is thus likely that the bottle replacement rate will decline

in the YAR as the distribution improves and as the market's
need for empty containers becomes satisfied.

In order to project future demand for glass containers,

the following assumptions have been made:

Table h.

Assumptions for Replacement of Bottles

{% of sales)

1980 1981 1982 1983 198U 1985 1936 1987 1990

Breakage 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5
Rejections 1.00 0.95 0.90 0.85 0.80 0.75 0.70 0.60 0.50
Losses 2.2 2 .1 2.0 2.0 2.0 2.0 2.0 2.0 2.0

Total 3.70 3.55 3 .U0 3.35 3.30 3.25 3.20 3.10 3.00
saxs axss
r

ANÎTEX 3
Page T

The bottling industries would require glass bottles

not only for replacing broken or lost containers but also for
sustaining growth of sales. A normal ratio between stock
of bottles and sales volume for the bottling industry is 1:10.

An assessment of demand for bottles resulting from

increased sales volume vould also necessitate assumptions
with respect to growth of consumption more detailed than
those made above.

As a hypothesis ve have thus assumed a development

as follows.

Table 5
Hypothetical Growth of Demand for Joft Drinfcs in the TAB, 1980-1988

I960 1981 1982 1983 198* 1985 1986 1987 1988

Ho. of Plants 5 6 6 7 8 8 8 9 9

Total daily
capacity
(caaea/day) 53.000 70,500 85,500 95,500 110,500 110,500 110,500 125 ,000 125,000

Total yearly
capacity!/
(million bottles) 381.6 507.6 615.6 68T.6 795.6 795-6 795.6 900.0 900.0

Capacity 70 70 70 72.5 70 75 80 75 76
utilization (?)
Total output/year
(million bottles) 270 350 *30 500 560.0 600 6*0 670 690

Anonal Increase (?) - 30 23 16 12 7 6.5 *.5 3.0

Consisption per
person per vee*
(bottles) 1.00 1.25 1.50 1.70 1.85 1.90 2.00 2.05 2.10

1/ Xeiuaiog two ahifte per day 300 days/)ear.

Projected demand for additions and replacement to and of

soft drink bottles can thus be calculated as fellows :
 AHHEX3
Page 8

Table 6

Projected Demand for Soft Drink Bottles in the YAR, 1980-1988

(million bottles)

1980 1981 1982 1983 1984 1985 1986 1281 1288

Additions to
stock . 8.0 8.0 7.0 6.0 4.0 4.0 3.0 2.0

Replacements 10.0 12.4 l4.6 I 6.7 18.5 19.5 20.5 20.8 20.7

Total 10.0 20.4 22.6 23.7 24.5 23.5 24.0 23.8 22.7

Total weight
(tons)l/ 8,800 9,700 10,200 10,500 10,100 10,800 10,300 9,7'

1/ One 25 centiliter bottle weighs 0.43 kg.

Other Returnable Bottles

The YAR's other major user of bottles is likely to

be the dairy industry, which also mixes and distributes
fruit Juices. Data compiled by the Industrial Bank of Yemen
suggests that this industry will expand considerably in the
near future.

Planned daily production after completion of now

initiated expansions is to be 72,000 litres of milk and
40,000 litres of Juice. Both products can be expected to be
distributed in glass containers each with a weight of
0.56 kg.

At present Yemen Dairy Products Ltd, which, apart

from milk and Juice, also produces ice-cream and yoghurt,
packages all its products in ei .her plastic or paper.
As the issue of littering and environmental protection has
become politically very important in the YAR, it is probable
that this company and possibly other foodstuff producers
would be required to switch to returnable bottles.

There is a large unsatisfied demand especially for

”iilk in the YAR, and the Government could reasonably be
expected to strongly promote its consumption as a measure to
improve health. Given continued favourable prospects for
growth and increased per capita income, a consumption growth
rate of 10 per cent per annum for both of these products
could well be achieved in the short term. It is worth
noting that the presently planned production level would
yield an annual per capita consumption of 4 kg which is
one of the lowest in the world.
 ANNEX 3
Page 9

Annual milk and juice production is expected to

reach 33.6 million litres per year when the new facilities
are completed in one to two years time. The bottle additions
and replacements would, using the same assumptions as for soft
drink bottles develop as follows:

Table 7

Projected Demand for Milk Bottles, 1980-1988

(million bottles)

I 98O 198I 1982 1983 1981» 1985 1986 1987 1988

Additions
to stock 3.1+ 0.3 O.U 0.1» 0.5 0.5 0.5
Replacements - - 1.2 1.3 l.U 1.6 1.7 1.9 2.1
II fr ­
II ON

Total - 1.6 1.8 2.0 2.2 2.1* 2.6

it .

Total weight
(tons) 2,600 900 1,000 1,000 1,200 1,300 1,500

Two new dairy projects are planned, one at Dhamar

supported by the British ODA and another at Mufrah. It is
likely that both of these projects would use returnable
hollow glass for distribution of products which, in due course,
could more than double demand for milk bottles, as these
two projects together were estimated by officials at the
Industrial Bank of Yemen to reuch an annual production
in excess of 50 million litres. Both projects are, however,
in the early planning stages and it would appear premature
to take their eventual demand into consideration at this stage.

Other foodstuff producers which may in the future

be required to change over from plastic to glass containers
could be the mineral water bottling company and cooking oil
manufacturers. Shamlan, the mineral water bottler, has a
daily production capacity of 52,000 litres corresponding to
15 million litres per year. The commercially distributed
volume of ccoking oil, as opposed to smuggled oil, amounts
to 36 million litres per year, and this may increase with the
advent of a new project presently in the planning stage.

Using similar assumptions as for milk and Juice

containers, the consequences of these industries shifting to
returnable glass containers would be an increase in demand
for glass bottles of 1,700 tons per year which would gradually
increase to approximately 2,000 tons. The demand
for glass containers generated by the pharmaceutical industry
is, Judging by recent import statistics, nearly negligible
and would likely be confined to a few hundred tons per year.
 ANNEX 3
Page 10

Household Hollov Glass

Hollow glass for household use is a potentially

large source of demand albeit near impossible to estimate.
A hypothetical discussion would, however, illustrate the
possible upper and lower ranges for household demand for
Jars, bottles and similar food containers.

A 1975 census estimated the number of households

in the YAR at 951,600. The population is estimated to have
increased by some 10 per cent since that time, and it
thus appears realistic to assume that the number of households
may by now have increased by approximately 3 per cent to 980,000.

On the assumption that each household would

annually buy only one glass container of approximately
1 litre content, annual demand for hollow glass would
increase by 550 tons. An annual household consumption of
four to five such containers would increase demand by over
2,000 tons per year, which would be sufficient to balance
possible shortfall of demand from the mineral water and
cooking oil industry.

Import statistics in the YAR were harmonized with

the SITC nomenclature first in 1979, and they show imports
of glass for that year as follows :

Table 8 Glass Imports, 1979

SITC Value Volume

No. for Glass (YR ’000)

66UlU glass misc. lU

661*30 drawn or blown 12,671

66U5O cast or rolled 185
66U8O mirrors,etc. 3,011
665II bottles, etc. 1 6 ,6 2 k (est. 17.5 million bottles)
66520 tableware glass 10,261*

66589 other glass 2,088

66UOO-500 Total 1*1*,857

Volume is not recorded as shipping documents usually specify

number of gross, pieces, sheets of certain sizes, etc. bu* not
weights. From the above, however, it can be seen that tableware
glass corresponded in value to some 60 per cent of glass bottles,
the weight of which would roughly correspond to 7,500 tons.
 ANNEX 3
_11
r o ^ c J-l.

The assumption that tableware costs two to three times as

much per kg as do bottles on account of higher packing
cost, shorter series of production and costlier raw
material would indicate an import volume of around 2,000 tons.

Non-returnable Bottles

Yet another potentially large source of demand

for a hollow glass manufacturing industry could be non-
returnable bottles. The soft drink industry is likely
to strongly support a development in that direction as it
views the introduction of non-returnable bottles as highly
favourable for increased soft drink consumption. In the case
of the YAR this is probably due to the very sophisticated
but also specialized transport system which has evolved
with the rapid increase in consumption of qat. Qat is
harvested in the early mornings and transported, often long
distances, to the urban centres where it is consumed fresh
the same afternoon. An ideal return cargo would be soft drinks,
provided the empty bottles did not have to be transported
back. This is believed to be one of the reasons for the
popularity of canned soft drinks which can be found in
very remote villages. Parallel with this, there are in
the YAR very strong sentiments against non-returnable
plastic containers such as those used by cooking oil
and mineral water distributors as they have caused
losses to cattle herds.

The adoption of non-returnable glass bottles

may come as a compromise in the future for this and
for other reasons, the main one being a desire to export
processed agricultural products such as various juices
and fruits. One possibility which struck the author
during the visit to the YAR could be that of exporting
grape Juice.

Grape Juice has found a large market in Saudi Arabia

which today imports its entire consumption. The same may
be the case in the Gulf countries. The YAR produces a good
quality grape which with relatively simple means could be
pressed and bottled. As no data is available for the
rate of consumption in Saudi Arabia, an hypothetical
discussion would give an indication of potentialities for
the YAR.

On the assumption that per capita consumption of

grape Juice in Saudi Arabia would be 1 litre per year,
total annual demand would be approximately 5,000 tons
(compare Saudi Arabian soft drink consumption of
35 x 52 x 0.33 = 600 litres per year per capita). If
the YAR were to capture 10 per cent of the market, this
would correspond to 500,000 litres per year, all of which
would need to be shipped in non-returnable bottles each
weighing 0.56 kg i.e. a total annual demand for glass of
 ANHEX 3
Paxe 12

280 tons. If the grape Juice market in Saudi Arabia

would correspond to 1 per cent of the soft drink market,
demand for non-returnable glass bottles in the YAR wculd,
assuming the same Yemeni market share, amount to
1,700 tons.

Grapes are, of course, only one of the many

fruits grown in the YAR and for which outlets could be
found both inside and outside of the YAR once suitable
containers for transport were made available.

Other Glass

Table 8 above contains one item called "other glass".

This covers a multitude of products such as lamp covers,
various types of bottles and containers, for example,
pharmaceutical products, demijohns, vases, ashtrays, etc.
Import statistics suggest that some YR 2 million worth of
such glass products were imported in 1979- On the
assumption that such products would cost two to three times
as much per kg as would bottles (bottles cost approximately
YR 2.2/kg) the present annual volume of such imports would
correspond to some UOO tons.

The table overleaf summarizes the above discussion

of market potential. It should be emphasized again that
the YAR's brief history of modern development in combination
with the multitude of hindrances and bottlenecks which
exist with respect to imports, shipping and distribution
enables, at best, an educated guess with respect tc future
levels of consumption. To this should be added one general
observation: Past experience in many developing countries
suggests that demand for products not previously produced in
the country and which are used by a large number of people
is as a rule substantially underestimated. This has been
the case for everything from domestic airline service to
local production of Kleenex.
 А И Д 3
Fege 13

Table 9

Si— ary of Potential Demand for Hollov Glass

*2. Different Users
(tons)

1981 1982 1983 1?81» 1285 1286 1987 1988

Soft drink
bottles 8,800 9,700 10,200 10,500 10,100 10 ,30c 10,200 9,700

Milk bottles - 2,600 900 1,000 1,100 1,200 1,300 1,500

Other
returnable
bottles . . 1,700 1,800 1,900 2,000 2,100

Other non-
returnable
containers . 300 uoo 500 600 700 800

Table and
household
glass 2,000 2,100 2,200 2,300 2,U00 2,500 2,500 2,500

Misc. other
glass 1*00 1*50 500 500 500 500 500 500

Total 11,200 lU,850 l U ,100 i6,Uoo l6,U00 17,000 17,200 17,100

The above projections should be compared vith available

data for actual imports and for licenses for imports. The
Ministry of Economy is,since the beginning of 1979, the
authority which issues licenses for imports. Applications
for import licenses must be supported by proforma invoices,
and the Ministry of Economy on the basis of such invoices
keeps statistics on the volume and value of issued import
licenses. Unfortunately, such statistics have not yet
changed to the same SITC nomenclature as have the import and
export statistics kept by the Central Planning Board;
therefore care must be taken in interpreting the data. The
license and import data exist, however, only with respect to
value. In order to determine the approximate value of
imports the mission therefore reviewed a sample of import
invoices kept with the Ministry of Economy. The main
conclusions with respect to value per itg were as follows:
 AJIHEX 3
Page 1^

Soft drink bottles TR 0.98-1.03/bottie

or TR 2.03/kg (ample
site 5, 19Ö0 price level).

Tableware TR TO to 90 per set of

59.65 pieces
weighing lfc-18 kg or
TR k.00 to 6.50 per kg.

Other manufactured glass TR 19-23 per dozen weighing 10-11 kg

TR 13O-l60 per gross weighing 80-90 kg
or between TR 1.60 to TR2.10 per kg.

Aggregate data on values and volimes for which licenses had

been granted were as follows:

Manufactured Glass

Feb 1979 to Dec 1979 2»»,972, 160 items-TR U3,931,019

Jan 1980 to May 1980 10,737, 751» iteas-YR 22,533,763

A comparison with Table 8 suggests that demand for manufactured

glass as expressed in the form of import licenses granted
exceeded actual supply during 1979 by approximately 50 per cent
(YR 28.9 million in imports versus YR U3.9 million for which
licenses were granted).

The value of projected demand expressed in 1980 prices

would be as follows using the above calculated costs per kg
of glass.

Table 10

Demand for Hollow Glass in the YAR, 1981-1983

(YR millions)

1981 1982 1983

Soft drink bottles 17.9 19.7 20.7

Milk bottles - 5-2 1.8

Other non-returnable
containers - 0.6

Tableware 10.5 11.0 11.5

Misc other glass 0.7 0.8 0.9

Total 29.1 36.7 35.5

ZCZ1 33=S

This vould tend to support the contention that the projected

level of demand for 1980 and the following years may be realistic
if not conservative.
 ANNEX 4

YEMEN ARAB REPUBLIC: HOLLOW GLASS PROJECT

PRODUCTION PERSONNEL

Shifts Fore- Skilled Unskilled

men workers workers

Raw material receiving station 1 1 6

Raw material storage and internal
transport 2 3 8
Stores 4 1 4
Raw material preparation 1 1
a) sand washing 1 2
b) sand drying 1 2
c) lime calcining 1 2
d) glass crushing 1 3

Mixing plant 2 2
a) raw material mixers 2
b) chemical mixers 2
c) transport 2

Production
a) 8-station bottle blowing machine 8
b) sorting & packing 4 16
c) quality control 4
d) finished goods transport 4 4
e) return glass handling 8

Furnace operations 4
a) furnace monitoring 4
b) mechanical support staff 2 2
c) electrical support staff 2 2
d) compressor operations 2 2

Laboratory 1 1 1
Finished goods storage and dispatch 5
Maintenance and repair 1 1
a) mechanical 5
b) welding and steel smiths 3
c) electrical 2
d) refractories 2
e) carpentry 2
f) mold making 2 1
g) other 2

Total Production Personnel 11 77 50

Grand total: 138

d
 a inrex 5
» m i r • r* * t \ n n n r m r t . tt/ ^ t t/v .r r t r i c f T~>rv*> T .'»/’v n Pa^e 1
I i-.riH »r« A i l A i J r\ r « i U U 4 J _L W . u w L J U V 1 U U A J iJ 4 IW Ü U V I
BUILDING COST SSTIMATB

Building Dimensions

Factory sections 0-7 42.00 x 181.60 = 7,627.20 m3

7-17 60.00 x 30C.ÜÛ = 18 ,0 00 .0 0

7-17 42.0x20.0x5.0 = 4,200

(basement) i(42.0x5.bx5.0= 525
4,725 4.725.00
17-21 24.00 x 140.00 = 3,360.00
54.00 x 181.60 = 9,806.40

Total factory 42,518.60

Workshop 48.00 x 15.00 x 4.00 2 ;880.00

Office 40.00 x 20.00 x 4.00 3,200.00

Total building volume 49,600.00 m3

Floor areas would be as follows:

Factory 4,290 (plus basement 850m^)

Workshop 720
Office 800
Total 5.810 m2

Concrete works; factory 4.290x0.5 + 850x0.5 = 2,570 m^

(2x42 + 2x25)0.25 x 5 = 167

Total factory 2,737

Workshop 720 x 0.35 252

Total concrete 2,989 m3

Wall and roof areas:

2
Outer walls; factory 3,733 m
workshop 630
roof: factory 4,622
workshop 800

Total sheet covered area 94785 nr

2

Steelcontent:
Steel structure factory 33 x 4.290 = 142 tons
Steel structure workshop 35 x 720 = 25 tons

Total 167 tons

à
 Ann e x 5
Page 2

BUILDING COST ESTIMATE YR ’OOO equivalent

Land levelling and

excavation 5.000 m3 a 23.12 115
Trenches and backfill 1.300 a 15.25 20
Close timbering 4.125 m^ a 32 130
Hard standing areas 4.800 x 0.20 m2 a 640 830
Reinforced concrete slabs and
walls 2.989.5 a 1.407 4,200
Structural steel 167 a 9.702.5 1,625
Steel doors 18 x 16 + 9x2.5 = 311.5 & 410 130
Louvers 252 a 121 30
Roofing 5.422.40 m2 a 111 600
Flooring 6660 m^ a 58 385
Walls 4.367.80-311-252=3.804.80 m2 a 126 480
Ventilators 70x2x2 = 280 m2 130 35
Plumbing 5 units 400 m pipe + lab inst. 175
Electrical 1 main 100A, 4 main 30A, 210
2 main 15A, 22, 20A etc.
Telephone 4 circuit a 766 5

Sub-totalifactory and workshop 8,960 ± > 3 2 1

Office floorslab 800 x 0.20 a 640 100

Masonry walls 600 - 78 a 168 (hollow block) 90
Plastering 600 - 78 3 70 35
Roofing 900 a 111 100
Ceiling 800 a 64 50
Windows & doors 78 a 510 40
Plumbing 30 units a 2600 80
Partitioning 1300 a 108 140
Painting 1300 a 18 25
—

Sub-total office 660 147

Settling tank 16.70 m3 a 1.407 + 32 + 23.12 25

Gas storage 115
Fencing 200 x 4 a 114 90
Pumping station 50
Sub-total other 280 62
TOTAL estimated cost of construction 280
(see footnote) 9.900 2r200

Note:AI unit prices have been taken from "Analysis and Escalation
of Costs of Building Materials and Labor in Yemen Arab Republic"
by Project Implementation Unit, IDA Education Project and from
"Builder’s Price Book, Sana’a" prepared by UNDP in Yemen
Arab Republic.
 INSTITUT rOR GESTEINSHOTTENKUNDE
ANNEX 6
UND rEUERFESTE BAUSTOFFE DER
MONYANUNIVERSrrXT, A-S700 LEOBEN * »»rt 1
*

VORS" AND o. PROF. DR. PHIL. FEU X TROJER

YEMEN ARAB REPUBLIC: HOLLOW GLASS PROJECT

YAR: GLASS SAND AL J I R A F , S A N A * A

prepared by Dr.Dipl.Ing.
A. Mayer and
Dipl.Ing.W. Pistora
Mining University Leoben

November 1979
 Annex 5
Page 2

R e f .: Glass Sand S a na ' a , YAR

We recieved a sand sample "Sana'a" f r o m Mr. Schiissler

in O c t o b e r 1 97 9 w h i c h w a s - as arranged - investigated for its

common usability.

In c o n s i d e r a t i o n of the geographic and economic situation

in Y A R it w a s possible to find out two m a i n fields f or a n

economic use.

A - For the glass industry -for m a n u f a c t u r e of g l a s s wares

of qualities "table ware" and "crystal glas s ",

B - For foundry industry -as h i g h quality molding and core

s a n d as u s e d in the m e t a l as w e l l as the iron and steel

foundry.

Note: An extract is also attached at page 10 of a report by VOEST—ALPINE,

Austria of a further analysis and investigation of the sand sample.
 Annex 6
Pa g e 3

The analysed sand is a v e r y pure quartzsand with following

chemical composition (fractions between 0.09 mm and 0.5 ram) :

more than 9 9 % SiO^

less than 0.03 % Fe^O^ ,

O.k % a 1 2° 3

0.1 % Alkalies

0.3 loss on ignition

and other minerals s u c h as feldspar, mica and heavy minerals

s u c h as rutile, anatas, garnets, disthene, chromite, magnetite,

hematite and m a n g a n e s e w h i c h are only present in t r a c e s .

The analysed sample can be c l a s s i f i e d as first q u a lity glass

sand d ue to its excellent purity and very good grainsize

distribution.

D i a g r a m 1: G r a i n s i z e d i s t r i b u t i o n o f the s a n d " S a n a ' a " in

c o m p a r i s o n to a I - A q u a l i t y s a n d f r o m the F e d e r a l R e p. o f G e r m a n y

mm-screen
 Annex 6
Page 4
i
In the c a s e of c o n s t a n t quality after dry c l e a n i n g (screening

to 0 . 5 m m a n d i f n e c e s s a r y dedusting) it is s u i t a b l e a s glass

sand not only for a pro d u c t i o n of c o l o u r e d g l a s s (eraarald-amber)

but ciso for table w a r e and crystal g l as s .

As a result of screen analysis and elutri. Lion b e t w e e n 9^S

and 98 # o f t he r a w m a t e r i a l c a n be u s e d d e p e n d i n g on the

projected q u ality of the final product without regard to t he

technically possible usability of the o v e r s i z e a n d t he slam

matter.

M e l t i n g Tests

The time for melting and clearing was close to t he c o r r e s ­

ponding values of spar-free, ¥ e s t e u i o p e an , first quality

glass s a n ds .

Blisters, seedes, streaks, cordes and other degasificaticn

effects reducing t he quality could not be d e t e c t e d in

laboratory t e st s.

The attached test glass melting s a m p l e s 'J '( s a n d Sana'a) and

'D' (sand Fed.Rep,of Germany) were melted under the s a me

conditions and it m u s t be a d d e d that the fractions more than

0.5 m m and less t ha n 0 . 0 9 m m of the sample 'J' were separated.

Chemical Analysis of b o t h Glass Samples

Mass# Sand 'J'__________ M a s s # S a n d 'D'

Si02 59.30 59.20

N a 2° 25 Ao 25.^ 0
O
O'
0

L i 2° 0.90
fO •

CaO 12.30
•
O

MgO 1 ,9 0 1.90
traces 0. 10
>

O
to

Fe^O^ a n d K^O traces t r a ce s

V9.80 99.80
 Annex 6
Page 5

Sand Sana'a - Use as m o l d i n g m a t e r i a l in the m e t a l iron

and ste el foundry

The i n v e s t i g a t i o n o f t he sand s a m p l e 'S a n a 'a ' f o r its

u s a b i l i t y as m o l d i n g m a t e r i a l showed following foundry-

technical values:

Sand Sana'a ( cr ud e) typical comparative sands (BR'J)

(g r a d e d )

screening portion mass# mass# mass#

more t ian 1 m m O.O5 - -

1 .0 - ( .5 m m 3.05 2.5 2 .0

0 .5 - 0 .2 m m 6 0 .8 5 7 6 .O 39.0

0 .2 - 0 .1 2 5 m m 3 2 .6 5 1 8 .O 54.0

0 .125 - 0 . 0 9 m m I .9 0 1 .6 3 .0

0.09 - 0.063 mm O . 3O 1 .0 1 .0

less t h a n O . O 63 O .2 5 .0.5 0.4

slan. latter # O . 6O 0.3 0.4

real specific
s u r f a c e c m 2 /g 147 135 160

number of p e r m e a ­
bility to gas 220 250 200

24 h o u r s bending
2
strength N/mm 260 290 25 O

AFS - value 58 51 6l

Beginning of
sintering 15 0 0 ° C i450°C more than 15 0 0 ° C
 Annex 6
Page 6

Quartz sand of the s a m e c o m p o s i t i o n as s a nd sample 'Sana'a'

is e ve n as r a w m a t e r i a l suitable for the m e t a l as w e l l as the

i r on a n d steel f o u n dr y .

It c a n be u s e d as m i d d l e fine foundry sand wit h high

refractoriness and high sintering point. It c a n be e x p e c t e d

that even values n ot h a v i n g b e e n i n v e s t i g a t e d w h i c h a r e of

interest f o r c l a y or C'>rb«n>r.ate b o n u m o l d s and cores will

show similar positive results.

Photos 1 and 2 show edges

curved grains w ith high degree

of u n i f o r m i t y a n d a m o n g them

by nature s o me splintery grains.

kb x

200 x
 annex 6
Page 7

Photo 3 s ho w s the surface q u a l i t y of a g r a i n from sample 'Sana'a'

1000 x

Examples f or T y p i c a l Glass B a tc h e s

Window G la s s - Sh ee t Gl a ss ( p r o d u c e d by M e t h o d of F o u r c a u l t )
t yp i ca l analysis w t .% typical batch (parts)
s a n d ...................
S i 0 2 ...................
a i 2 o 3 ................. soda a s h ............... ----- 370
Na^SO^ (salt c a ke)..._____ k
F e 2 ° 3 .................
C a O .................... calcined d o lo m i t e . . . .
M g O .................... burned l i m e ...........

N a 2 ° ...................
f e l d s p a r ............... _____ 60
• . 0 .3
s o 3 ....................

Container Glasses - Bottles - C a ns etc.

Container Glasses Amber Bottles

Crystal G la s s
typical analysis w t .% typical analysis wt .%

S i C 2 ................... -----7 3 . 0
S i 0 2 ....................
A 1 0 . ................. A1 0 „ .................. ._ _ _ . O . ~
ro

2 3 ..................
----- 0.5
F e 2 ° 3 ................. F e 2 ° 3 ...................
C a O .................... C a O .....................
M g O .................... M g O ..................... ----- 1 .5
N a 2° + K 2 ° ........... N a 2° + K 2 ° ............
M n O .................... M n O .....................
 1

vOfcO
Annex
Page

Laboratory Ware tipil

typical analysis wt.ji

S i 0 2 .................
Al 0 . .......... .....
2 3 ...............
C a O ..................

N a 20 + K 2 ° ............
B„0„
2 3
....................................
As 2-0 3 ..................................
........ ..........

Typical Batch for Bottles, Laboratory ware and Lead Crystal

amber bottles lab w a r e lead crystal

sand 10 0 0 .0 10 0 0 .0 10 0 0 .0
1 ¿mestone 1 9 2 .0 - -

dolomite l44.0 - -

soda ash 383.0 - 6O . O

N-syenite 1 2 5 .0 - -

N a 2 S° 4
1 6 .0 - -

Fe-oxide 3.0 - -

coal 3.0 - -

NaCl - 42.0 -
03

I 9 6 .O
o

- 4.0
to

pyrobor - I8 1 .O -

l e p i d o l i te - 99.0 mm

borax - 30.0 -
PbO - - 5 1 0 .0

K 2 C °3
- - 2 3 7 .0
A s 2° 3 - 8 .0 0.9
 Annex 6
Page 9

Cost of Raw Materl>ls - Average Values 1979

for Middle - Europe

US t/tcnne'
lime powder 0.01596 FegO^. • . l8

soda a s h ................................... • 15^

unburned dolomite powder................... .

BaCO^......................................... . 231

. 77
N a 2 S<\ .............................................
N a N 0 3 .............................................. . 2^6

Na-feldspar. .38 - 92

.923-1231

borax calc. . 65 ^

Decolourizers US $/kg'

zinc-selenite.... ......... ........................ 28

cobaltoxide..................................... 11

A s 2°3............................................... 1
*

* original values were given in Austrian Shillings

1 US 8 - 13 AS

t
 Annex 6
Page 10

AMOUNT AND COST OF ENEKG1 SEEDED

Today's maximum temperatures in m o d e r n tanks f or glass with

hi g h flow rates are supposed to be approximately between

15 5 0 ° a n d 1600 ° C .

The Feeder-temperature for today's produced sorts of h o l l o w

glass ware is indicated to be 1300 0 °n the a v e r a g e .

On the o t h e r h a n d soft lead crystal glass (crystal glass or TV

bulbs) reaches the v i s c o s i t y needed f o r p r o c e s s i n g at 1200 °-

1250°C.

The amount of energy n e e d e d f or m a n u f a c t u r e of saleable

p r o d u c t s w il l therefore extremely depend on the sort of gla s > .

the r a w m a t e r i a l s , the r e c y c l i n g of h e a t , insulation, the

type of the o v e n and many other factors. Therefore one can only

assume average empirical values which partly exceed the

theoretical values of energy consumption.

Amount of E n e r g y N e e d e d for kcal/kg KWh

hollow glass - saleable 5000-15000 6-20

plate g la s s (window panes

produced by using Fourcault process) 4300-6000 5-7

plate glass (window panes produced

with Float-method 5O O O - 6O O O 6 -7

raw glass- f ul l electrically melted 6 90 -210 0 0 . 8 - 2.*1

raw glass- oil and gas fired 3000-4000 3.5-4.7

(D i p l .I n g . W . P i s t o r a )
 Annex 6
Page 11

Translation (not literal)

Glass Sand AI Jiraf Yemen

VC5EST-ALPINE
Research, Development, Quality and Raw Material Technology
RPR Leoben
Report Nr.86/79
Ref.DI Dr.H.Kolb
Leoben 1979 11 14
A sand sample, provided by Prof.Schmidt, MUL was
investigated for su itab ility as raw material for glass production.
Sample materia! about 2 kg, fine grained, dry.
Granulometric Analysis:
The sieve analysis of the sample is contained in Tab.1,
the graphic representation is given in Pig.1.
Chemical Analysis:
Pe203 0.035*
Si02 98.5695
A1203 0.4795
K20 0.10895
Na20 0.02795
According to these results the sand is very well suited
for the glass industry (white glass products) without sorting.
Mineralogical Investigation:
Prom the sample a heavy minerals concentrate was obtained
by means of floating and heavy liquids. In this concentrate the
following minerals were found, in order of frequency:
Monazite
Zirkon
Hematite
Ilmenite
Rutil.
Conclusions for Dressing:
The iron content of the raw material is su fficien tly low
for the production of white glass. If the small content of feldspar
remains constant, this constituent needs not to be removed.
If a lower iron content is desired in the fin al product,
a simple dressing method, by floating or floatation can achieve
th is. With an Oxidfloatation the above mentioned minerals could be
removed to a fair degree. Simpler and cheaper can this be achieved
also by floating (heaich), as the content of heavy minerals is very
low. In both cases a sorting of the material is necessary fir s t.
In Pig.2 a procedure proposal is presented, before any further
considerations, though, the intended final product has to be ascer­
tained. When receiving sufficient data, as outlined in the investig­
ation sheets for dressing installations by V(3EST-AL?INE AG, further
proposals can be worked out.
 iSSSL 7
Page 1
TEME» ARAB REPUBLIC: HOLLOW GLASS PROJECT

ASSUMPTIONS UNDERLYING FINANCIAL PROJECTIONS

A. Financial Cash Flow

1. Capital costs are based on 1980 price quotations for equipment

and building plus escalation of 15 ^ to arrive at mid-1981 esti­
mated costs. A 10^ contingency allowance is included. Planning,
construction and commissioning cover three years.

2. Input prices of materials and spare parts are at estimated 1981

levels. Manpower costs comprising about 255^ of direct expenses
will need to be reviewed in the light of actual manpower avai­
lability and cost in I98I.

3• Customs duties on capital equipment and imported materials

and spare parts are assumed to be exempt for the entire life
of the project in as much as the project is likely to have
approved investment status.

4» Sales income is based on a bottle price of YR 1.20 ex works

during the first five years of operation. This corresponds to
a 25fc protective duty instead of the present I5C, to which the
project reverts in year six onwards with a sales price of YR 1.10
per bottle, equivalent to US$ 620 and t 568 per ton respectively.

5. Production of a standard-size O .25 litre bottle weighing O .43 kg

as used by the beverage firms is assumed.

6. Capacity utilization in tons and numbers of standard bottles

is 60f, in year 4, the first year of operation, in year 5 ,
increasing by 2.5^ per year to a maximum of 85^, when output
amounts to 33.8 million bottles weighing 14,550 tons.

7. Furnace rebuilding will reduce production to 77-5/£ of capacity

in the :ixth year of operation and in each succeeding fifth year
thereafter, resulting in reduced profitability and net cash flow
in those years.

8. Maintenance. There is a generous provision for maintenance, in­

cluding replacement, of fixed assets such as furnace refactories
and vehicles, which are included in the operating rather than
the capital account for the sale of simplicity.

9» Operating cash flow comprises sales revenue (after build-up of

finished stocks), less variable and fixed direct costs which do
not include capital charges (depreciation and loan interest and
repayments). All prices are at constant, I98I es '.mated prices.

10. The financial rate of return and sensitivity analysis are derived
from the operating cash flow summarized ai. Annex 8.

B. Economic Rate of Return

11. In view of the strength of the Yemeni currency only two adjust­
ments are made to the financial cash flow:
 Annex 7
Page 2

(1) Sales income is reduced by the amount of the customs duty

on imported bottles.

^2) Power charge. The conomic cost of electricity is assessed

at YR O. 5O per k»fh, based on the comparatively low price of
petroleum products from neighbouring supplier countries.
As explained in paragraph 66 of the report, the cost of ge­
nerating and distributing electricity from the new thermal
should be of the above order using heavy fuel oil at the
prevailing price of YR 0.59 per kg*

C. Balance Sheet and Profit and Loss Projections

12. Financing Plan. An appropriate financing plan is employed to

give prospective investors an indication of the return expected
on the share capital.

Equity: Loan Ratio of 40:60 is assumed at the end of the construe-

tion period:
US$ million
YR million equivalent I
Share capital 30 6.7 uo
Long term loans 45 10.0 60
— —
—

Total finance 75 16.7 100

— — — -

14 . Loan terms. The average principal terms and conditions for

the loans are:

Interest: 8.5$ p.a.

Grace period: 1.5 years from start of operations
Repayments: over 10 years subsequent to the
grace period

The terms, with the possible exception of the grace period,

are generally consistent with export credit financing con­
ditions available for projects in the YAR.

15 . Depreciation of fixed assets at YR 2.8m per annum averages 5$

of the initial total fixed asset value.

16. Amortization of other assets (pre-production expenses

including interest, etc.) is YR 1.3 million p.a. over ten years.

17 . Corporate Tax. As an approved investment, complying with Law

No. 12 of 1970, the project is assumed to be exempt from profits
tax during the first five ^ears of operation. Thereafter, tax
of 35$ is deducted from annual profits after depreciation and
amortization. Actual tax allowances may be higher or lower than
this.

18. Distribution of Profits. After-tax profits are mainly distributed

as dividends. Retained profits are maintained at a low level on
the assumption that a separate financing plan will be made for
project expansion.
 UWSX 8

T5XSS AiUE REPUBLIC: HOLLOW CLASS PROJECT

Projected Operating Incoat and Cash Plow
(TR'OOO)
Operation*! Period
Tear 1/ i 2 3 4 5 6 7 8 to 10 11 12 13 to 15
ll y

Production Data

Capacity utilization (^) 60 70 75 7 7 .5 80 77.5 85 85 7 7 .5 85 85

No. of bottles (million) 23.9 27.8 29.8 30.8 3 1.8 30.8 33.8 33.8 30.8 33.8 33.8
Bottle production (tons) 10,277 11,975 12,835 13,265 13,695 13,265 14,550 14,55° 13,265 14,550 14,550

Revenue

Net sales revenue j/ 27,250 33,180 35,800 36,970 38,160 34,125 37,075 37,235 34.095 37,075 37,235
Increase in finished goods 1,430 240 130 50 40 - 190 160 - 160 160

Production value 28,680 33,420 35,930 37,020 38,200 33,935 37,235 37,235 33,935 37,235 37,235

Variable Direct Costs

Raw materials 4,400 4,970 5,200 5,265 5,340 5,265 5,890 5.890 5,265 5,890

Power, fuel, water 6,040 6,870 7,195 7,440 7,685 7,440 8,160 8,160 7,440 8,160

Molds 825 970 1,0 15 1,045 1,080 1,045 1,050 1,050 1,045 1,050 >18,925

Packing materials 305 360 385 400 410 400 435 435 400 435
Wages 2,880 3,220 3,390 3,390 3,390 3,390 3,390 3,390 3,390 3,390-

Total 14,450 16,390 17,185 17,540 17,905 17,540 18,925 18,925 17,540 18,925 18,925

Fixed Direct Costs

Salaries 2,140 2,140 2,140 2,140 2,140 2,140 2,140 2,140 2,140 2,140]

Lubricants, etc. 400 400 400 400 400 400 400 400 400 400

Spare parts 350 700 1,400 1,400 1,400 2,400 1,400 1,400 2,400 1,400 > 4,540

Repairs 100 250 500 500 500 1,000 500 500 1,000 500

Training, office, etc. costs 450 275 200 iOC 100 100 100 100 100 100

Total 3,440 3,765 4,640 4,540 4,540 6,040 4,540 4,540 6,040 4,540 4,540

Total Direct Costs 17,890 20,155 21,825 22,080 22,445 23,580 23,465 23,465 23,580 23,465 23,465

Operating Income before

interest and depreciation 10,790 13 ,26 5 14 ,10 5 14,940 15,755 10,355 13 ,770 13,770 10,355 13 ,770 13,770

Cash Plow before interest

charges 9,360 13,025 13,975 14,890 15,715 10,545 13 ,6 10 13,770 10,515 13, ¡10 13,770

Furnace relining in sixth year of operation repeated in eleventh year of operation.

y
Per annum in years {^10 and 13~15*
y
Sales price Yft 1.20 in years 1 through 5 and YR 1.10 therafter.
y
 ANNEX 9
TIMES ARAB REPUBLIC: HOLLOW GLASS PROJECT
Financial and Economic Internal Rates of Return
(TR’OOO)
»

A. FINANCIAL RATE OF RETURN B. ECONOMIC RATE OF RETURN

Capital Expenditure No adjustments to Financial Capital

Expenditure
Tear 1 7,000
2 28,150
3 38,125
Adjustments to Financial Cash Flow:
Total: 73,275 Deduction âcpenses Net Net
fre^Sales (POW^) Deductions Cash Fl<
Operating Cash Flow 1/

Year 1 9,360 1*.992 1,761* 3,228

2 13,025 6,080 2,007 1*,073

3 13,975 6,562 2,098 It,1*61*

k 1U.89Û 6,778 2,169 1*,609
5 15,715 6,988 2,239 l*,7l»9
6 10,51*5 3,81*1* 2,169 1,675
7 13,610 It,01*1 2,379 1 ,6 6 2

8 13,770 M59 2,379 1,680

9 13,770 M59 2,379 1,680
10 13,770 1*,059 2,379 1,680
11 10,515 3,716 2,169 1,51*7
12 13,610 l*,0l*l 2,379 1 ,66 2

13 13,770 M59 2,379 1,690

ll 13,770 1*-059 2,379 1,680
15 13,770 1*,059 2,379 1,680

203,685
16 16,135

Total: 2lU,000 71,396 33,61*7 37,71*9 176,251

Present Value Present Value

Discounted Capital Operating HFV Discounted Net NFV

at Expenditure Cost Flow at Deductions _

0% 73,275 211»,000 + 11*0,285 0* - 37,71*9 102,536

•••¥ 60,880 92,512 31,662 8* - 19,21*1 +12,1*21

10* 58,275 77,126 + 18,851 10* - 15,702 + 3,11*9

13* 5**,627 59,717 + 5,090 13* - 13,1*75 - 8,385

15* 52,1*39 50,893 - 1,51*6 15* - 11,135 -12,681

Internal Rate of Return: Financial ll*t.5* Economic 10.8*

1/ Sales revenue less direct costs from Annex 8 , Projected Operating Cash Flow.
2[ Operating years 1 to 15 represent years 1* to 15 subsequent to the planning and
construction period.
y Protective tariff deducted; 25* in years 1 to 5 and 15* of cif value thereafter.
i*/ Economic cost of electricity is estimated it 50% of the tariff (TR 1.00 or US
cents 22 a unit), representing a deduction of approximately 23* of the fuel,
power, and water charge.
¿/ Pay back of the project capital expenditure is effected in ths sixth
year of operation. Cash flow at end of sixth year amounts to YR 7 T .510
million.

1
 A N N E X 10

Tgmew tgjg RgpnBT.TC; HOLLOW GLASS PROJECT

Sensitivity Analysis

Discounted rate of return on expenditure of YR 73,275 million over

fifteen years following three year planning and construction
period (Annex 9)

Financial Internal Rate of Return

Base case 14-556

Capital expenditure plus 10$ 12.9$

plus 20$ 11.6$
plus 50$ 8.2$

Operating cash flow delayed one year 12.6$

Sales prico plus 10$ 18.9$

minus 10$ - 9.7$
Sales price at Yfi 1*10 per bottle throughout 12.5$

Total direct costs plus 10$ 11.7$

minus 10% l"7.2$

Variable direct costs plus 5$ 13.4$

plus 10% 12.3$
minus 10$ 16.7$
minus 12.5 1' 17.2$

Vages and Salaries plus 10$ 13.8$

plus 20$ 13.0$
plus 50$ 10.9$

Electricity minus 30$ 17.2$

Ffciel oil plus 50$ 13.4$

Production lower by 10$ 12.3$

20$ 9.7$
30$ 7.1$

Bottle weight reduced to 0.34 kg 16.2$

Economic Internali Bate of Return

Base case 10.8$

Bottle weight reduced to 0.34kg 12.0$

 YEMEN ARAB REPUBLIC: HOLLOW GLASS PROJECT
Projected Income Statement
(YR'OOO)

Operational Period

1 2 3 4 5 61/ 7 8 9 10 1 1 -V 12 13 14 15
Tear

Ooeratin* Income 2/ 10.790 14.105 14*3.4° ■U.I55 10.355 13JJQ LLZZP 13.770 13.770 12*155 1 9 ,m 11*212 13.770 li *77°

Less: Overhead Costa 7.925 7.830 7,070 6,690 6,310 5,930 4.790 3 .1 1 0 2,900 2.800 2,900 2 .800
h m

Depreciation, Amortization 4,100 4,100 4,100 4,100 4,100 4,100 4,100 4,100 A, 100 4,100 2,800 2,800 2,800 2,000 2,800

Loan Interest 3,825 3,730 3,350 2,970 2,590 2,210 1.830 1 ,4 5 0 1,070 690 310

8,600 8,980 10,970 10,970 10,970 10,970

6,6,55 7,870 9,065 i>,0U5 7,8140 8,220 7.21*5
Income before Tax 2,685 5,1*35
2,71*5 2,875 3,010 3,190 2,535 3.81*0 3,81*0 3,8i*o 3,8U0
1,1*15
Tax Liability

7,870 9,065 2^620 1*225 5*2k5 5.590 5.790 1*.710 7,130 7,130 7,130 7,130
Earnings After Tax .1*1*31

Retained Earnings 1,000 1,000

8.130 7.130 7,130 7,130
Available for Dividends 2.865 5,1*25 6.655 u m 9.065 2,630 5,.025 I*lii5 5jl52P_ 1*120 .2,11°

Percentage Return on
Share Capital

Earnings 9.5 18 .1 22.2 26.2 30.2 8.8 1 7 .0 1 7 .8 1 8 .6 19.3 15 .7 23.8 23.8 23.8 23.8

Dividend- 9-5 1 8 .1 22.2 26.2 30.2 8.8 17 .0 1 7 .8 1 8 .6 19.3 12 .7 . 7.1 23.8 23.8 23.8

1/ Furnace relining in sixth year of operation repeated in eleventh year of operation.

2/ Annex 8: Projected Oper ating Income
S
X
M
3// Depreciation 2,800 p.a. and Amortization (in years 1 to 10) 1, 3 0 0 p.a. w
I f

TEMBI ARAB REPUBLICi HOLLOW 0LA53 PROJECT

Projaoted Balance 3h«at
(TK'OOO)

('onstru ction Pen o d — — — ------ -Operational Period- — —

Year 1 2 1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

A333TS

Current Assets 1,000 4,000 7.150 9.000 8.200 8,1*00 8.000 9 ,0 15 9.91*5 9,673 9.1*10 9.190 7 ,835 8,690 11,1*90 ll* ,290 17,0 90

Cash and bank deposits 1,000 100 1*50 1,8 6 0 1,3 8 0 930 21*0 1,1*1*5 2,215 1,91*5 1,6 8 0 1 ,1*60 265 960 3 .760 6,560 9,360
Haw materials 600 1,40 0 1,6 0 0 1 ,7 5 0 1,750 2,000 2,000 2,OCX, 2,000 2.U00 2,000 2,000 2,000 ■I
Finished goods 1,4 3 0 1,6 7 0 1,800 1,850 1,8 9 0 1,70 0 1,860 1,860 1,860 1,860 1,70 0 1,860 L 7,7 3 0 7,73 0 7,73 0
Packing and other naterials 200 420 420 420 420 420 420 420 420 420 420 420 420
Molds and «para parts 3,100 3,450 3,450 3,450 3,450 3,450 3,450 3,450 3,450 3,450 3,450 3,450 3,450 1

Fixed Assets 5,000 31,000 59,75° 56,950 54.150 5 1 ,3 5 0 1*8,550 45.750 42,950 40.150 37,350 34,550 31.750 26,950 26.150 23.350 20.550 -11,750

At cost 5,000 31,000 59,750 5 9 ,75 0 59,750 5 9 ,75 0 59,750 59,750 59 ,750 59,750 59,750 59,750 59,750 59,750 59,750 59 ,750 59 ,750 5 9 ,75 0
Less: accumulated depreciation 2,800 5,600 8,400 11,200 14,000 16,800 19.600 22,400 25,200 28,000 30,800 33,600 36,400 39,200 42,000

Other Assets 2,000 5.000 13.000 11 .7 0 0 10,400 9.100 7,800 6,500 5.200 3,900 2,600 1,3 0 0

Project preparation, pre-op. 2,000 5,000 13,000 13,000 13,000 13,000 13,000 13,000 13.000 13,000 13,000 13,000 13,000
interest aad expenses
Less: Accumulated depreciation 1,300 2,600 3,900 . 5,200_ 6,500 7,800 9,100 10,400 ll.fOO 13,000

Total Assets 8,000 36.000 76,75.0 15,-800 13*5£Q 6 9 .21,0 60,250 ¿7.16.5 53.995 1*9.625 1*5,260 1*0 .91*0 36.785 3l*,8)*0 3i*,8i*o 31*»51*0 31« ,81*0
S'* »252

LIABILITIES

Current Liabilities 1.750 ■ 3.050 5,300 5.50 0 5,500 .2,500 6,915 8,245 8,375 8,510 8,690 5,785 4.2 .0 4,840 4,840 1,8 4 0

Short-term debt 1 ,1 5 0
Accounts Payable 600 800 800 1,000 1,0 0 0 1,000 1,000 1,000 1,000 1,000 i,too 1,000 1,000 1,000 1,000 1 ,000
Current maturities: L.T. debt 2,250 4,500 4,500 4,500 4,500 4,500 4,500 4,500 4,500 4,500 2,250
Tax payable 1 ,4 1 5 2,745 2,875 3,010 3,190 2,535 3,840 3,840 3,840 :,,840

Loriiff-Terta Debt 10,000 45.'X» 42.750 38,250 33,75° 29,250 24,750 20.250 15,750 11,250 6 ,750 ...1*2 50

Long-term loans 10,000 45,000 45,000 42,750 38,250 33,750 29,250 24,750 20,250 15,750 1 1 ,2 5 0 6 ,75 0 2,250
Less: current maturities 2 ,2 50 4,500 4,500 4,500 4,500 4,500 4,500 4.5CO 4,500 4,500 2,250

Share Capital and Reserves 8,000 26.000 30.000 30.000 30,000 30,000 30,000 30.000 30.000 30.000 30.000 30,000 30.000 31.000 30.000 50,000 30.000 30.000

Share capital 8,000 26,000 30,000 30,000 30,000 30,000 30,000 30,000 30,000 30,000 30,000 30,000 30,000 30,000 30,roc ,000 30,000 3C.000
Retained earnings 1,000
,,

8.000 61*.750 60.250 57oi6i 53,9?5 1*9.625 *5.260 1*0.91*0 36*785 31.,81*0 31*.81*0 ■>!*,81*0 3l< ,81*0
Total Liabilities 36,000 76 .75 0 75,80 0 12*550 69,21*0

a
K
 -------- - г '. * :
V'V', «jW.’í. VjTTT^T ott/í nfT*! oüiíTi O '« 9 * 0 V ¡tp O 0 ,1 4 . iíT T '" o i :

ÒTTI >7ГтТ1 i)U‘b (OTTI ^ i T 7, Ь 0 (Т Г 7 ', n > ‘ 0 óóo r o bfj'c W õ W ï

onу/‘о ont,* r/,'[ - oo; - OC'*! - ’ O it - ООП - 0 ■ *1 • t - OC‘i - 0 Ч-\ -

Ttí““ - o lí - 0 T T ~ õ T T r f- o ríV

,, -
09T :;-Л - 0' ; -
< .. _
■/jit'-: ооч * ono4-: v)o V'T'T- 0■0' - 0 ¿ < .‘ •“ '■'U. Co? ‘ T

;-„-j . ‘ „
c.',V <"■ ory;4»t OOÓ ‘*1 n e o **- 0 0 ' - 1 t; н

'

J-T'í w77, ГiV.'L •J0i)‘(i otyFZ ,1n 'í ‘ Л zr.i^r Õ T ^O v r i T í ü I W T

ÕU7Z 00777' ñZ¡7Z ~V?1 "cZõ^n rjt\ <' o V V ’J W u L O 4 IT

~ Г ‘
— Г*г^ соW ó' ooíT t ■XOj’.í “ono‘T õõT^ Õ TT^õ 0 0 1 * -i О 0Тт й ” ( Г Р ~ ;;
'' 001*0
AA' L OV.T'i. 0> I*L ’Л :4A 0Ti.1n o a ‘:i O '' i 4 0- V i i 1 -, V „o4 У90л 6 .¿ O L

Vi ‘fi ОТ u ОТ b L )

yoi.iJ.i p.u^T^iijvá

;■ 'ил)
■Туun л ,;с U ” ì ^иот fl Ту- i ui; 7T7“ \ V “ 'JT“

;.0;тл-кТ ТТТ;
 A N N E X lU

YEMEN ARAB REPUBLIC: HOLLOW GLASS PROTECT

Capital Cost Estimate: Foreign Exchange and Local Currency Componentb
(YR million)

Capital Expenditure over three year implementation period:

Estimated

Total In Foreign In Local

Currency Currency

Current Assets 3.90 3.58 .32

Raw materials •50 .38 .12

Packing and other materials .30 .25 .05
Molds and spare parts 3.10 2.95 .15

Fixed Assets 59.75 1*5.12 lU.63

Land 5.00 5.00

Construction and buildings 12.50 5.00 7.50
Equipment U2.25 UO.12 2.13

Other Assets 13.00 7.05 5.95

Project preparation, etc. 7.10 2 .U8 U .62

Pre-operating expenses 2.53 1.20 1.33
Interest during construction 3.37 3.37

Total Capital Cost 16.65 55J5 20^90

 YEMEN ARAB REPUBLIC: HOLLOW GLASS PROJECT

Estimated Foreign Exchange Component of Projected Operating Income

(YR million)

Year 1 2 3 1* 5 6 7-10 11 12-15

Production Data

Capacity Utilization {%) 60 70 75 77.5 80 77.5 85 77.5 85

No. of bottles (million) 23.9 27.8 29.3 30.8 31.8 30.8 33.8 30.8 33.8

Production V a l u e ^ 19 -8U 23.12 21».78 25.61 26 .1*1* 25.61 28.10 25.61 28.10

Variable Direct Costs 9 .0U 10.28 10.78 11.05 11.30 11.05 12.12 11.05 12.12

Raw materials 3.30 3.73 3.90 3.95 3.97 3.95 i*.1*2 3.95 1*.1*2

Power, fuel, water U.T1 5.35 5.60 5.79 5.97 5.79 6.35 5.79 6.35
Molds, packing materials 1.03 1.20 1.28 1.21 1.26 1.21 1.35 1.21 1.35

Fixed Direct Costs 1.70 1.99 2.77 2.70 2.70 2.70 2.70 2.70 2.70

Salaries .60 .60 .60 .60 .60

Lubricants, etc. .35 .35 .35 .35 .35 - 2.70 2.70 2.70 2.70
Spare parts, repairs .1*2 .85 1.70 1.70 1.70
Training, office, etc. .33 .19 .12 .05 .05

Total Direct Costs 10 .71* 12.27 13.55 13.75 li*.00 13.7? li*.82 13-7? li*.82

Estimated Foreign Exchange 9.10 10.85 11.23 11.86 12 .i»l* 11.86 13.28 11.86 13.28
Income before Interest and
Deoreciation

1/ At CIF cost of imported bottles = YR 0.83 per bottle

 ANNEX 16

YEMEN ARAB REPUBLIC: HOLLOW GLASS PROJECT

Estimated Foreign Exchange Savings
(YE million)

Construction Period

Foreign Exchange Less: Loans SET F.E.

Component in. , Equity Expenditure
Capital Cost—

Year 1 1.00 1.60 - .60

2 20.00 3.60 10.00 6 .1*0
3 3U.75 .80 35.00 - 1.05
Total 55-75 6.00 1*5.00 l*.75

Operating Feriod
Sales^, Less: Direct Operating Less : Loan Dividends NET F.E.
Value— Expenses 1/ Cash Flow Servicing Savings
Year 1 19.81* 10 .71* 9.10 3.82 .1*8 1*.80
2 23.12 12.27 10.85 6.23 l.ll* 3.1*8

3 2U.78 i:.55 11.23 7.85 1.32 2.06

1* 25.61 13.75 11.86 7.1*7 1.50 2.89
5 26 .1*1* lU.00 12 .1*1* 7.09 1.50 3.85
6 25.61 13.75 11.86 6.71 .90 1+.25
7 28.10 ll*.82 13.28 6.33 .90 6.05
8 28.10 ll*.82 13.23 5.95 .90 6 .U3
9 28.10 ll*.82 13.28 5.57 .90 6.81
10 28.10 lU.82 13.28 5.19 1.20 6.89
11 25.61 13.75 11.86 l*.8l 1 .1*0 5.65
12 28.10 ll*.82 13.28 2.50 1 .1*0 9.38

13 28.10 "I r 11.88

ll* 28.10 1- lU.82 13.28 -
1 .1*0 11.88
15 28.10 J 11.88

1/ Assumed foreign exchange components of capital expenditure from Annex ll*.

2j Sales at cif value of YR 0.83 per bottle.

3/ Foreign exchange content of direct expenses is shovn in Annex 15.

 GAS

WATCH­
MAN

I Q

e------- ì f ---- r

RMI5HÎL PfT.ru.'TS

'

J \_______ V____

"‘I
I
I
I
I
I
I
I

SO 000
t

Drawn , ji
--------------- T - ---------------
SW EDISH Checked

D EVELO P M EN T Approved
COR PO R ATIO N Date
AB lb -*I-<1<>
Assignm no
Stockholm, Sweden
^ v- l

ANNEX 17(1)

SECTION 2 YEMEN ARAB REPUBLIC

SANA’A GLASS BOTTLE PROJECT
SITEPLAN
 \ l _ #»0
rr>c n f\ IC *—
A* r
WA» lwHwP.

rrw^.
--irr - -
I
||l!'!!!1'i' i!|J;:ir
i|:l;!'':' '^ r
i

FRONT FACADE

PLAN VIEW
___ 4*Of>________ a *>'oo

SECTION 1
f 1
 FRONT O

FRONT 30

•TOR

T— --1 ■ -■
L___-_
s— -
ÌL
[ b r ic k w o r k

Ufr
I t
S W E D IS H Choc hod
UNDER ELECTRICITY TOILETS MANUFACTURING
1
STA TIO N 1 OF PALLETS D EVELO PM EN T Approvo^

it y
C O R P O R A TIO N
■'RTIL
AB D"Ï6-<?-?0
At$ignm. no
Stockholm, Sweden
>*:k film FINISHED prooocts storage Wchoov
ACINO
ANNEX 17 (2)

lc Y E M E N ARAB R E P U B U C
SANA A GLASS BOTTLE PROJECT
BUILDINGS
f 1

PLAN VIEW

SECTION 1
 7

..1

r®
n «T
PROFILE C-C PROFILE 0-0

E.
T i ”

Ä 1
BAGGING

! i
1
B.JLL

T
PROFILE E-E PROFILE F-F

-> — 4— - f-
= a : 1
---------- j ; ,
■i--T -A-

(M/
Kr
r‘rÄL« I
!J
&
FJNNEISCALE
¡ai®
i SWEDISH
DEVELOPMENT
Checked

Appro^d^.
mi« • . f'ö:
,0 JÈL- S , CORPORATION
C i)" I -Ep >
L.GL 0*1* „ _ „
AB /6 - T- ÎÔ
EXTPACT0R1 Aisifinm no
Fi;:,,:rL'CAl,E il)9 Stockholm, Sweden
<̻3J T'
■? c

*J> J - ♦ ANNEX17(3)
■}
ÊÎ& MIXER
»
y
'-
. ,.7k -— YEMEN ARAB REPUBLIC
(*■—
D * _i
0 SANA A GLASS BOTTLE PROJECT
RAW MATERIAL PREPARATION

SECTION 3
i