DISTRIBUTION TRANSFORMER PRESENTATION

BRIEF NOTE.
Electrical transmission and distribution revolutionized with the invention of transformer. All Power generating units have to transmit and distribute power to the end user with the help of transformer. Distribution transformer is the main equipment for all utility companies, under WAPDA. AJK and KESC. Distribution Transformer demand will increase in Pakistan, Afghanistan and Iraq after war of terrorism. Major manufacturers in Pakistan will yield benefits, if they prepare themselves now for future business. PECO is only company in Pakistan who can yield Maximum benefit through its Transformer and Tower packages. Now is the time for PECO to establish and over come problems by 2010.

PECO investment Pay Back is with in 5 years for this business due to the following advantages. Familiar with Wapda/Kesc utility companies due to tower business Technical manpower available Machinery and Equipment available due to similar work Material similarity will increase price advantage in quatitative purchase. Testing equipment/instrument similarity for Motor andTransformer Civil work will be minimum due to existing premises availability

CONSULTANCY SERVICES FOR PROJECT EXECUTION P.E.C.O. TRANSFORMER MANUFACTURING UNIT.

Objectives: To initiate and provide all necessary technical expertise for establishment of electrical equipment manufacturing capabilities within the existing setup. The work shall be undertaken in phases: Phase1: Manufacturing of distribution transformers for the utility companies having requirement of upto 630 KVA for WAPDA, upto 1500 KVA for K.E.S.C. and for private sector having requirement upto 4000//KVA Transformers. Manufacturing of pad mounted transformers for WAPDA, and Private housing societies, Kiosk (package ) substation and transformers for foreign markets (export) Induction of other equipment in production line like : 11KV and LV instrument transformers Medium Voltage switchgear Low Voltage switchgear Medium Voltage Bus ways EHV instrument transformers Industrial battery chargers MV and EHV line hardware Joint venture with international Known manufacturer for design supports. Consultants are competent and capable of handling the project from conception until completion. They have in house expertise, graduate engineers having over 30 years of working experience with renowned manufacturer of similar equipment. Services shall be provided from Consultants offices and full time engagement of the one expert at works

Phase2:

Phase3:

Phase4: Capabilities of the consultants:

Technical:

Provide design, manufacturing drawings and drawings for wapda approval for 25, 50, 100, and 200 KVA transformer. (It is anticipated that by the time these rating come in regular production, in house capability will be developed for the designing of transformers. Consultants services shall however be available in case design/drawing of more rating are required,), Compilation of all formalities for prequalification with WAPDA. KESC and other public sector organization. Arrange and monitor type testing of transformer in Rawat HV lab and obtain prototype approval from wapda.

Material Supply Chain Management : Make effective material supply chain system to ensure delivery in time, of quality and quantity to ensure timely completion of orders and quick rolling of available funds. Identify vendors for locally made components and locally available materials. Keep track of quality requirement with vendors . Monitor Procurement of imported material in quantities matching the production fore cast
Marketing: Organize and train personnel for aggressive marketing both in public and private sector and for export.

1.

2.

Basic Construction of Distribution Transformer, Almost same from all manufacturers. PECO has advantage due to similar manufacturing units i.e. Motor & Tower, which will share materials and quantitative price benefit will be the Key for success.

Market Analysis

PECO manufacturing unit for Distribution Transformer will be capable of production as per WAPDA, K.E.S.C and Export orders. Also PECO design office will be capable of designing transformers to customers specifications. In fact the production capabilities of PECO will be superior in many respects from others. But the future expansion and justification for higher share will depend on performance of Justin-Time (JIT) supply. ISO 9000 Quality Management Certification is also to be the top priority after Commissioning and production start-up. Engineering design section and test laboratory will be the key for success in this product. Apart from WAPDA and KESC, the private sector industry, Builders and mega projects are the real source of profitable business. Future expansion in the following products will increase the profitability and market share.
1.

Special transformers.
A) Dry type transformer B) Traction Transformer

2. 3. 4. 5. 6.

Furnace Transformers Energy efficient Transformers 11 KV current and Potential Transformers EHV (Extra High Voltage) Current Transformers Load Breaker Switches

1.

Analysis of Distribution of Transformer, Present Share and future Potential: These are established shares of local manufacturers in WAPDA /KESC business and private sector.

Sr. No. 1. 2. 3. 4. 5 6. 7. 8. 9. 10. 11. 12 13

Company SIEMENS PEL Transfo Power ELEMETEC Transfab Hammad Syed Bhais Pan Power A .B. Ampere ACE Indigo Climax MML Johnson & Phillips future

Present Share 28% 28% 14% 10% 2.5% 4% 2.5% 2.5% 2.5% 2.5% 2.0% 1.5% 1.0%

Future Potential Siemens have capacity to take 40% share in WAPDA PEL have enhanced their manufacturing capabilities by adding latest machinery and facilities at new site on Feroz Pur Road Lahore. They have got maximum share, which they can produce They have potential to go up to 15% They will remain same in near future They will remain same in near future They will demand more share next year after proto type approvals up to 10% They will remain with in 2 3% They will remain with in 2 3% They will remain with in 2 3% They are in problem and fading out They can take up to 5% They are out of WAPDA business and no chance to be in near - Siemens & PEL are enjoying this business share. - Transfo power is at its maximum share - Elmetec is at its peak .

Available for new Slice 7 Comers 0% 10% Other 10% ELEMETEC 10%

Siemens 28%

- Short fall is seen in delivery from smaller participant due to financial/manufacturing limitations
PEL 28%

Transfopower 14%

Local Manufacturer's Production in Last Three Year as Per PEMA Assessments

Sr. No.

Company

Present Share 2005

Production in Nos. 2006

2007
23,200
17,400 8,700 3,480 1,740 1,160 380 300 450 1,000 800 600 500 400 300

1.
2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12.

Siemens
PEL Transfo Power Elmetec Transfab Hammad Syed Bhais A. B. Ampere ACE Indigo Climax MML Johnson & Phillips

28%
28% 14% 10% 2.50% 4.00% 2.50% 2.50% 2.50% 2.00% 1.50% 1.50% -

43,800
33,000 16,500 7,000 3,500 2,400 1,400 1,200 1,200

26,000
19,500 9,750 3,900 1,950 1,300

Local Manufacturer's Production in Last Three Year as Per PEMA Assessments

45000 40000 35000 30000

Production No.s (2005)

siemens 43800

PEL 33000

25000 20000
Transfo power 16500

15000 10000
Elmeter 7000

5000 0
siemens PEL

Others 2400

Transfo Elmeter Others power Companies

Domestic Customers:

WAPDA / Utility Companies under WAPDA: Their standard ratings are 10,15,25,50,100,200,400 and 630 KVA and for pad mounted transformers 100,200 and 300 KVA Karachi Electric Supply Company (KESC): Their standard ratings are 250, 500, 1000, 1500 KVA. KESC also purchases transformers of WAPDA ratings. AJK Electricity Department: AJK purchases transformers of WAPDA ratings up to 200 KVA Gilgit and Northern Areas (Works Department) They purchase transformers according to WAPDA ratings. They have also requirements of small step up transformers. Private Housing Societies: These Societies purchase Pole Mounted and Pad Mounted Transformers as per WAPDA ratings. Private Industrial Customers: They purchase transformers non WAPDA ratings, generally 300, 500, 750, 1000, 1250, 1500, 2000, 2500 and 4000 KVA. Steel furnaces have demand of Furnace transformers as well Some other Government and semi government departments and autonomous bodies have occasional requirements like Atomic Energy Commission, WASA, PTCL, Railways etc Export Potential:

SIEMENS and PEL have been and are exporting Distribution Transformers to Middle East. There is still Export Potentials for Countries like Afghanistan, Bangladesh, Kuwait, Iraq , East Africa

Yearwise Wapda orders

Transformer Rating

25 KVA Year

50KVA

100KVA

200KVA

Total QTY

PURCHASE PRICE IN Rs.

QUANTITY IN Nos.

2005-06

54,000

74,000

117,600

176,500

70,000

2006-07

93,000

131,000

209,500

322,000

35,000

2007-08

86,000

121,000

194,000

299,000

40,000

Projection WAPDA Orders

Year 2008-09 25 KVA 50KVA 100KVA 200KVA Rs, 120,000 Rs, 170,000 Rs, 261,000 RS, 403,000 total quantity 40,000 Nos.

MACHINERY REQUIRMENT FOR PECO PLANT

PECO has advantage of being in fabrication of Transmission Towers and motor manufacturing therefore have most of the machinery. How ever we are enlisting minimum requirement and suggested requirement for prequalification in WAPDA and efficient manufacturing at PECO

Sr. No.

Machinery

Min. Reqd. WAPDA Approval

Suggestion For Producing 300/ 350 Transformer Month

Machinery Available with PECO

1.

Machine Shop
Central Lath Machine 3, 5, 8, 10, 12 Milling Machine Chuck Head Lathe Tool Grinder Shaper Machine Table Drill Machine 5 1 1 1 1 2 10 3 2 3 3 3 Available do do do do do

2.

Tank Shop
Iron worker 40T Tube cutting machine Tube bending machine Notching machine (Heavy duty). Radial drilling machine Shearing machine 3 Shearing machine 10 Tank rolling machine Hydraulic tank body sizing machine 1 1 1 1 1 2 1 1 2 2 1 1 2 1 1 2 3 1 do do do do Available do do

do
do

Sr. No.

Machinery

Min. Reqd. WAPDA Approval 1 Set for each Rating 1 8 6 3 2 2

Suggestion For Producing 300/ 350 Transformer Month

Machinery Available with PECO

Body sizing jigs Tank Frame Bending Machine Welding Plants Power Press 15 40 Tons With Dies Vertical Drilling Machine Portable Drilling Machine Tool Grinder 1.

2 12 10 5 4 2

Available do do do do do

Shot Blasting and Paint Shop:

Shot Blasting Machine Compressor 1 2 Available do

2.

Core Shop:
Multiple Cutter Core Slitting Machine Single Cutter Core Slitting Machine Power Press With Dies. Cutter For Slitting Machine 12 sets, 1 1 6 24 sets, 2 2 12 Available

Blade Grinder
3.

Available

Insulation Shop:
Manual Paper Cutter Press Pahn Paper Cutter 1 1 2 2 Available do

Sr. No.

Machinery

Min. Reqd. WAPDA Approval

Suggestion For Producing 300/ 350 Transformer Month 1 2

Machinery Available with PECO

Press Pahn Paper Winder

Power Press For Oil Ducts

Ring Cutter Manual Press For L-Rings 1.

1
1 1

2
2 2

Available

Available

Winding Shop
L.T Winding Machine Large L.T Winding Machine Medium H.T Winding Machine Varnish Treatment Of Coils Oven For Coil Drying Medium) Butt Welding Machine 1 2 6 1 1 1 2 4 10 3 2 2 Available do

2.

Carpentry Shop
Band Saw Wood Planner Table band saw machine Tool Grinder 1 1 1 1 2 2 2 2 Available do

do
do

3.

Assembly Shop
Core Stacking Jigs 2 Sets For Each Rating

Sr. No.

Machinery

Min. Reqd. WAPDA Approval 1 1 1 1 1 1 1 1 1 1 1 Set 1 1

Suggestion For Producing 300/ 350 Transformer Month

Machinery Available with PECO

Induced Voltage MG-Set Regulating Transformer Silicon Steel Losses Meter Regulating Transformer Silicon Steel Losses Meter Paint Thickness Meter Tank Pressure Tester (Leakages) Dielectric Test Sets Flash Point Tester Viscosity Meter Acidicity Test Equipment Pour Point Testing Equip. Weighing Scale 1.

Store
Steel Racks To Properly Store Materials And Tools

2.

Other Facilities
Over Head Cranes (5 Tons) 1 3

Transformer Tanks Testing System Small.

Transformer Tanks Testing System Large HPT Trolley Fork Lifter

1
1 6 1

2
1 10 2 Available

Sr. No.

Machinery

Min. Reqd. WAPDA Approval

Suggestion For Producing 300/ 350 Transformer Month

Machinery Available with PECO

Transformer Oil Storage Tank Oil Filtration Plant For Used Oil Stand By Generator 200 KVA Centralized Compressor Large

Weighing Scale 1000 kg

Computer, Printer Photo Copier, (For Store And Testing Lab). Rubber Hammers 3.

Factory Tools
Scissors 9, 12 Rubber Hammers Wooden Hammers Nose pliers. Wire cutter Hammer 100g 1kg Ring spanner sets Screw wrenches. Screw Drivers. Key spanners Available do Available Available

Available
do do do do

Vanier calipers
Micro meter

Sr. N o.

Machinery

Min. Reqd. WAPDA Approval

Suggestion For Producing 300/ 350 Transformer Month

Machinery Available with PECO do do do do do do do

Drill machine with drills Steel measuring tapes Insides calipers Steel rulers Smooth files Half round files Angle scales Portable disc grinders Hole punch Pipe wrench Cable knife Vice

do
do do do do

Copper strip cutter

C Clamp Center punch Hand tape sets with handle Chisel for wood work Available

Chisel for steel work

Hack saw with blades Paint brushes Spray guns Wood saw

Available
do

Available do

Tip cutter

MATERIAL RATES
Copper Silicon Steel : Oil Mild Steel : : : Rs. 800 / kg Rs. 420 / kg Rs. 143 / kg Rs. 90 / kg

Which gives material cost as under:

KVA 25 50 100 200 400 630 copper 32,000 464,00 71,200 109,600 231,200 336,800 S.S 33,600 48,720 74,760 115,080 243,180 354,060 M.S 9,000 13,050 20,070 30870 65,160 94,860 Oil 10,585 15,515 23,780 36,395 77,140 112,085 Total 85,185 123,685 189,810 291,945 616,680 897,805

Generally Material Cost is 70% of the selling price of a transformer. Based on this selling prices should be: 25KVA 50 KVA 100 KVA 200 KVA 400 KVA 630 KVA : : : : : : Rs. 121,692 Rs. 176,692 Rs. 271,157 Rs. 417,064 Rs. 880,971 Rs, 1,282,578

Note : These Selling Prices should yield minimum 10% Profit.

Manufacturing Flow Diagram

Tanks Fabrication Core Clamp Fabrication Core Steel Sitting & Cutting Winding L.V. Coil Winding H.V .Coill

Short Blasting De-Rusting

Core Building & Clamping Assy. of L.V. Coil on Core

Varnishing

Assy. of H.V. Coil on Core Preliminary Painting Ratio & Inside testing

Complete Internal Assy. Inspection Tanking & Oil Filling

Bushing Connection Testing

Final Painting & Finishing Customer Inspection

Delivery

Capital Investment:

1.

Cost of development of manufacturing facilities: Civil work: Buildings and Structures (new or modification), floors, trucking pathways, foundations for machines. Mechanical works: Overhead cranes, steel structures or shed as required. Electrical Works: Electrification, lighting, connections to machines. Utilities: Electrical power, 400-500 Amps load of fully equipped and operational Facilities, gas, water.

2.

Cost of machinery, available in house, shifting, cleaning, making good for work if lying idle. Cost of new machinery, plants, equipments, tools, instruments, jigs, fixtures. Their installation and commissioning

3.

.
4.

Initial Consultancy fee

All incidental or contingency expenses to be made for assets and facilities of permanent nature The Major Portion of anticipated capital cost will be required and utilized during the first six month as concentration during the last six months of twelve months period shall be on production of prototypes and prequalification with WAPDA.

5.

SUMMARY OF TOTAL ESTIMATE FOR PECO MANUFACTURING UNIT

Machinery Local Machinery and testing Equipment (Import) Rs, 1,75,00,000/= Rs, 2,50,00,000,/= (Most of them are available in PECO.) These are testing equipment and basic Wapda Requirement for prequalification.

Local Installation Utilities etc.

Rs. 17,00,000/=

Labor, civil work, oven & tanks.

Rs. 50,00,000

Capital Coat Investment TOTAL

Rs. 4,92,00,000

Running Expenses:
These expenses are to be worked out in 3 steps. Running expenses during the first 12 months (1st year), during the next 12 months ( 2nd year) and for 5 next years. 7 years period should be kept for the total return of capital investment as well.

First year is for establishing the facilities, staff and workers training and familiarization with the place and importance of work. Second year will be for consolidation and preparation to takeoff. Third year on ward, the company should stand by the leading manufacturers of transformer

Running expenses during the 1st two years need to be carefully calculated, preferably for every month and then added for the year. From 3rd year onward, these will be pretty smooth except for the material cost . Running expenses during the 1st 12 months shall include:
1. 2. 3. 4. 5. 6. 7. 8.

Salaries for assigned staff / workers, temporary or permanent. utilities: water, electricity, gas. Transportation, communication. Cost of materials for prototypes 25-200 KVA. Testing fee, retesting if required. WAPDA related fees and cost. Consumable Material. Contingency expenses like entertainment, public relations costs (rather WAPDA relations), pre-qualification visits expenses. Material for educational orders (which will be recovered from the sales) Income during this time will be from execution of educational orders. Running expenses during 12-24 months period

It is anticipated that factory will be in regular production. If expenses are maintained to achieve break even In these 12 months, it will be a big achievement as orders will be less and cost to get the orders will be more. Workers and staff strength shall still be growing during this period. Material requirement shall be based on quantity anticipated for break even, with funds rolling of minimum thrice in the year. Financial charges as expenses are needed to be added accordingly. Cost to be shared with the other productive units of the company needs to be carefully taken care of in the feasibility as it will have impact on profitability.

Profitability

Total weight of transformers are: 25KVA 50 KVA 100 KVA 200 KVA 400 KVA 630 KVA 285 kg 415kg 638kg 980kg 20698kg 31010kg

Generally the material used has the following percentage: Copper, brass Silicon Steel Oil Mild Steel etc: : : : : 14% of the total weight 28% 23% 35%

Hence material used shall be: KVA 25 50 100 200 400 630 copper Kg 40 58 89 137 289 421 Silicon Steel Kg 80 116 178 274 579 843 Mild Steel Kg 100 145 223 343 724 1054 Oil Kg 65 96 147 225 476 692

(Lit) (73) (107) (164) (251) (532) (773)

Profitability based on above:

For regular production of 100 Transformer of 100KVA (or equivalent ) per month during the first year of regular operation, after approval of prototype, means ; Material to be consumed during the year : 100 x 189.810 x 12 = 227,772,000. based on above selling prices, selling income should be 100 x 271,157 x 12 = 325,388,400 and 5% gross profit during the first year of operation will be : Rs. 1,62,69,442

Five year production plan and running costs

Below mentioned ratting and quantities have been considered for calculation of material cost.

YEAR

25 KVA

50 KVA

100KVA

200 KVA

First year

15

15

15

15

2nd year

150

150

150

150

3rd year

300

300

300

300

4th year

450

450

450

450

5th year

500

500

500

500

Production of Transformers can also be expressed in terms of KVA.

YEAR

Production KVA / year

Production KVA / month

First year

5625

469

2nd year

56250

4688

3rd year

112500

9375

4th year

168750

14063

5th year

187500

15625

Summary:Five Year Projections

Category Key detail Staff and workers salaries, utilities, all non production expenses. Design / drawing s of 25,50,100 & 200 KVA, prototype approvals. Complete technical, organization, procedural support. For production including consumables year 1 year 2 year 3 year 4 year 5

Over head

5.45

18.6

25.4

25.5

25.5

Consultancy fee & expanses

4.5

3.6

2.4

1.2

1.2

Materials

10

117

257.4

424.71

519

Total Cost of production & selling Sale value of production

19.95 14.8

139.2 150

285.2 330

451.4 544.5

545.2 665.5

Net Profit & Loss

5.15

10.8

44.8

93.1

119.8

Pay back with in 5 years .

Note:
1. The following sales values have been taken: 25KVA: 50 KVA: 100 KVA: 200 KVA: 2. 3. 4. 5. Rs. 121,692 Rs. 176,692 Rs. 271,157 Rs. 417,064

sales values are increased 10% each year. Overheads shall remain more or less constant during the last three years Increased production will result in increased profitability. Accurate estimates of material requirements, timely order in bulk quantities shall result in reduction in material costs hence increase in profitability.