27-28 April 2015 Eng. Mubarak Yusuf Al-Kawari Presented by: Energy Expert Industrial Investment Department - GOIC

CORRUGATED HDPE PIPES PROJECT

Corrugated HDPE Pipes Product Overview Production Routes & Process Why this project for Qatar Production Process Production Units and Key Machinery Production Inputs Market Analysis Market Overview Key Project Parameters Project Development Overview Key Project Indicators Conclusions

Product Overview Corrugated Pipes are manufactured from HDPE resins. High-density polyethylene (HDPE) is a versatile material and has some ideal characteristics for use in underground structures. HDPE pipe is relatively lightweight allowing for easier and less costly transportation and installation costs. HDPE corrugated double wall pipes of ring stiffness SN 8 with diameters ID range of 150 to 700 mm with reinforced inline belling. The main properties which enable the pipes to perform satisfactory after an extended period of operation under typical service conditions are as follows: Due to the low weight, the production speed of corrugated pipes is clearly higher compared to smooth pipe The specific structure of a corrugated pipes result in a saving of weight of up to 60% (compared to smooth pipes of same diameter and ring stiffness) Corrugated pipes are easier to handle and can be installed without heavy equipment. Pipes made of HDPE offer a higher resistance to aggressive substances. High-quality corrugated plastic pipes resist a deflection of up to 30%. Corrugated pipes have a much higher ring stiffness than smooth pipes of the same weight. The smooth surface of the inner layer of double wall corrugated pipes guarantees an excellent water flow.

Production Route & Process The technology is a modern thermoplastic extrusion technology. High output, latest technology extruders and matched ancillary equipment are utilized. Full automatic, centralized lubrication system guarantees maintenance-free operation. Production Process Production Process The production line consists of two large extruders, dies, corrugators, cutting saw, and stacker. A comprehensive array of product sizes is possible through the simple replacement of molds and dies. Raw materials-HDPE resin, fed into the extruder. This is then placed in corrugated molds. After cooling, an automated sensor cuts the pipes to desired lengths and stacks them for transportation to the stockyard. The production process can be broadly divided into 5 stages: Compound Mixing Extrusion Corrugation Cooling Cutting

Why This Project for Qatar ? There is no production facility for Corrugated HDPE Pipes in Qatar. Due to boom on construction the demand is growing. Corrugated HDPE Pipes mainly be used in the construction sector for the drainage system. Input materials are available in Qatar /GCC Key Applications Sewer systems both urban and industrial Rainwater / Storm water drainage Various special solutions for industry and business Resident housing construction Water Pipes (not for drinking), agriculture pipes, industrial pipes

Production Main Process Process Flow Chart Mixing Extrusion Corrugation Cooling Cutting Dispatch Process Flow Diagram

Production Units & Key Machinery HD 1200 Corrugated Pipe Production line

Production Inputs MATERIALS UTILITIES HDPE: 2000 Tons/y. Master batch: 20 Tons/y Steel Band: 2 Tons/y MATERIALS Electric Power : 8.8 million kWh /year Process Water : 1,750 M3/year UTILITIES

Expected After 5 years-2018 (Ton) Market Analysis Expected After 5 years-2018 (Ton) Project Sales (T) Current Import (T) Year 2013

2013 Market Overview Region Demand (T) Supply (T) Gap (T) Qatar 191 Other GCC 1342 All GCC 1533

Employment Creation (Nos.) Key Project Parameters HDPE 2,000 t/y Corrugated HDPE Pipes 2,000 Tons/y Plant Area CAPEX Employment Creation (Nos.) ROI Installation Period Skilled : 9 Unskilled: 8 3,650 m2 57.59 QR Million 25.8% 17 Months Total : 17

Total CAPEX is QR 57.59 Million Project Development Overview Total CAPEX is QR 57.59 Million Plant & Machinery Buildings & Civil Preoperative Cost Other Fixed Assets Working Capital Capex Parameters 37.0 (QR Million) 14.97 (QR Million) 0.46 (QR Million) 0.75 (QR Million) 4.41 (QR Million) Total Production Cost Raw Material Cost Operating Cost Sales Revenue Expectation Net Profits Annual Financial Information on: 21.10 (QR Million) 11.68 (QR Million) 15.9 (QR Million) 34.14 (QR Million) 13.04 (QR Million)

Key Project Indicators Project Appraisal Means of Financing Parameters Base Case IRR on total Investment (Project) 26% Return on Equity (ROE) 39% NPV on investment at 10% 49.32 QR Million Break Even Point (% of Sales) 36% Project’s Payback Period 3.8 years Mode Distribution of Debt Equity (50%) QR 28.8 Million Term Loan (50%)

Conclusions No similar plant in Qatar Availability of raw materials locally/GCC Fast growing market Good market & profitability

Thank you Gulf Organization for Industrial Consulting Po Box: 5114 – Doha – State of Qatar Tel: (+974) 4485 8888 Fax: (+974) 4483 1465 e-mail : goic@goic.org.qa – Website: http//goic.org.qa