Feasibility report on screw market in

Ethiopia

By Mahder Habtu

May, 2018

1
Contents
Why Invest in Ethiopia?...........................................................................................3

Local manufacturers of screw...................................................................................4

Importers of screw.....................................................................................................5

Product description & application.............................................................................8

Market study..............................................................................................................9

Material Selection......................................................................................................9

Manufacturing processes..........................................................................................10

Forming without cutting.....................................................................................11

Machining...........................................................................................................12

Parts of screw............................................................................................................13

Process Description...................................................................................................13

Machinery and Equipment........................................................................................13

Land Building and Civil Work..................................................................................14

Design of screw.........................................................................................................15

Types of screw...........................................................................................................16

Types of screw head............................................................................................17

Shapes of screw head..........................................................................................17

Measuring Screws.....................................................................................................18

Color of Screw...........................................................................................................19

Screw Identification Chart.........................................................................................20

Import procedures......................................................................................................20

Conclusion.................................................................................................................23

2
Why Invest in Ethiopia?
1. Political and Social Stability:-

 Ethiopia is the oldest independent country in Africa, and is among the most stable
countries in the region. The 2012 peaceful transition of power to a new Prime
Minister has proven the stability of Ethiopia’s multi-party political system and
parliamentarian form of government.

2. Growing Economy:-

 Ethiopia has grown at an average rate of 10% since 2010. In 2012, Ethiopia was the
12th fastest growing economy in the world, managing to grow faster than other
African countries such as Rwanda, Mozambique, Zambia, and Ghana, as well as
China and India.

3. Excellent Climate and Fertile Soils:-

 Ethiopia is the 27th largest country in the world by land size and given its diverse
topography and geographical location, it is suitable for the production of some of the
world’s most coveted food crops – cereals, pulses, oil seeds, a wide range of fruits
and vegetables, coffee, tobacco, sugar cane, tea and spices, among others.

4. Strong Guarantees and Protections:-

 Private property is protected by the Constitution and the investment law.

 A foreign investor has the right to make remittances out of Ethiopia in convertible
foreign currency at the prevailing rate of exchange.

5. Abundant and Affordable Labor:-

 Ethiopia’s labor law, which regulates worker-employer relations, is in line with

international conventions. With over 43 million workers, Ethiopia has the second
largest labor force in Africa (World Bank’s Doing Business Report, 2014).

6. Regional Hub with Access to a Wide Market:-

 With a population of almost 85 million people, Ethiopia is the second largest market
in Africa, and is also part of the Common Market for Eastern and Southern Africa
(COMESA) comprising 19 member countries and over 400 million people.

7. Improved Economic Infrastructure:-

 Power production has increased steadily over the last ten years, with 99% sourced
from clean energy in the form of hydropower. Ethiopia has the second largest
hydropower potential in Africa (Deloitte, 2014), and the country’s installed electricity
generating capacity is expected to reach 10,000 MW by mid-2015.
3
Local manufacturers of screw
Yasart Engineering PLC
Yasart engineering is a Private Limited Company which made its presence in the Ethiopian
market in year 2005 in the field of manufacturing screw, consultancy, supply, installation,
testing and commissioning of electromechanical projects. The company has mainly
specialized in screw and bolt, industrial boilers, pumps, generators and other
electromechanical services.

Phone +251 11 8400237

+251 11 420024

Fax+251 11 4425664

Mobile +251 91 1527087

Location:- Debrezeit Road infront of Nefas Silk Paint Factory, Dawi Building II ground
floor, Addis Ababa, Ethiopia

Mulu & Mizan Trading PLC

Mulu & Mizan Trading PLC is an importer and assembler of vehicle spare parts and
manufacturer of screw, rivets, bolts & nuts in Ethiopia. In there export business sector, they
export Sesame, Cereals, Horse-Bean, and pulses & oil seeds to East Africa, the Middle East,
Asia, and Europe. The company is registered under Ethiopian Laws & Procedures for import
& export businesses. The company was established in 2012 GC with a registered capital of
1.3 Million ETB (equivalent USD 60,000) and an annual turnover of over 30 Million ETB
(equivalent 1.2 Million USD).

Screw, Rivets, Bolts and nuts are used in several applications, with a primary function to hold
things or components together. Rivets, Nuts and bolts serve as the fundamental components
in several industries, of which automotive industry is one, as they provide strong bonds that
do not break even under great amounts of pressure. Rivets, Bolts and nuts can have several
different styles and types, each suited to match the needs of a particular application or the
needs of the job.

Phone +251114706764

+251 929905677

Fax +251 11 4706763

Location Sofia Mall, Gofa Mazoria, Office # 403/404, Addis Ababa, Ethiopia

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Kombolcha Steel Products Industries Pvt. Ltd. Co. (KOSPI)
KOSPI manufactures galvanized Bolts and Metallic Washers with the standard lengths of
200mm, 250mm and 300mm, which are used to fasten ribbed sheets to roof structure, to wall-
cladding structures or to other similar structures. The Factory also manufactures J-bolts in
various lengths based on customers' request.

Phone +251 11 9783472

Fax +251 11 2354683

Business: Type Private

Location: factory kombolcha, Ethiopia

Importers of screw
Abulkhase PLC.
Abulkhase PLC. is an Ethiopian importer and distributor of construction and agricultural
machineries, screw and bolts, spare parts, building materials, paper and paper products,
textiles, food items, generating sets and electric motors.

Background
Envisaged in 1988, Abulkhase PLC. along with its sister company Abadir Enterprise has
pioneered the supply of quality materials and equipment throughout several industries in
Ethiopia. Using the expertise that has been attained in the last 20 years, Abulkhase PLC.
maintains successful supplier relations ranging from South America, Europe and the Far East.
Furthermore, Abulkhase PLC. A company devoted to the growth of the Ethiopian industry is
an active owner in the Ethio-Danish joint venture of materials manufacturing and trading
PLC., a company created to meet the local and global demand of Ethio-Danish. With an
ethics of providing efficient after sales service for all equipment and goods supplied through
a dedicated staff of mechanics with a 60sqm workshop, sales executives and field trained
professionals, Abulkhase P.L.C has been able to efficiently compete and establish itself as one
of the industry’s market leaders. Moreover , through the excellent level of communication
and relations that it maintains. Phone +251 11 2756471

Fax +251 11 2752903

Business: Type Private

Location: In front of Cinema Ras, New Showroom Addis Ababa, Ethiopia

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Kagnew Shaleka Enterprise PLC
Kagnew Shaleka Enterprise PLC is an importer of screw and wire rods from Ukraine, Turkey,
China, and wherever the material is available and produce nails. Their Nails Manufacturing
Factory called Mars Nails Factory. They need partners and suppliers; in addition they own
large warehouses that can also be used for factories. They have a plan to partner foreign
companies and to set up cheap wood factories, etc. They have a plan to partner with foreign
companies and to set up cheap wood factories.

Phone +251 11 3870321

Phone 2 +251 11 6533884

Fax +251 11 3870321

Mobile +251 91 1217256

Business Type: Private

Location: Wolete, Ethiopia

Primary Category Ethiopian Manufacturers

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Steely R.M.I. PLC
Steely RMI PLC is a private company engaged in steel manufacturing industry in Ethiopia.
We produce and supply reinforcement bars, screw, nails and wire rods to the Ethiopian
market.

The factory is located East of Addis Ababa in Oromia National Regional State, Bishouftu
town (also known as Debre Zeyit). The sales office is located in Akaki-Kality subcity, Near
Kality NOC gas station.

Phone +251 11 4394295

Fax +251 11 4390651

Mobile +251 91 1212640

Business Type Private

Location: Akaki-Kality Near Kality ,Addis Ababa, Ethiopia

Primary Category Steel Products

ASMEN PLC
Phone +251 11 5531994/5517733

Fax +251 11 5517304

Mobile +251 91 1235936

Kebele 14

Business Type Private

Location Addis Ababa

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PRODUCT DESCRIPTION & APPLICATION
Screw is cylindrical piece of metal that fasten objects together. It is a piece of steel forged at
one end to make hexagonal, square or round head and the shank fully or partially threaded at
the other end. And also Nut is hexagonal or square piece with a threaded hole at the center.
Bolts and nuts can be zinc or cadmium plating to resist corrosion.

And also we can describe Screw, simple machine consisting essentially of a solid cylinder,
usually of metal, around which an inclined plane winds spirally, either clockwise or
counterclockwise. It is used to fasten one object to another, to lift a heavy object, or to move
an object by a precise amount. The ridge forming the inclined plane is called the thread; in
cross section the ridge may be approximately triangular, square, or rounded. The vertical
distance from any point on one thread to a corresponding point on the next successive thread
is called the pitch. A thread can also be placed on the inner surface of a hollow cylinder.

Two screws of the same pitch and diameter, one on the outer surface of a solid cylinder and
the other on the inner surface of a hollow cylinder, can be arranged so that one may be driven
spirally into the other, as in the common nut and bolt. The thread on the surface of the bolt is
called the external, or male, screw; that on the inner surface of the nut, the internal, or female
screw.

The common jackscrew used to lift automobiles, houses, and other heavy objects is an
application of this principle. The internal screw is situated in the base, the external screw on a
metal cylinder; at the top of the cylinder a lever or handle is fastened. As the handle is rotated,
the external screw moves up the internal screw and the object placed on top of the jack is
lifted. The mechanical advantage of the jackscrew, as of any other screw, is theoretically the
ratio between the circumference through which the end of the handle moves and the pitch of
the screw. Since, however, there is much friction in the operation of a screw, the amount of
work put into this machine is much greater than the amount done and the efficiency is small.

On the other hand, the small effort necessary to turn the handle, when compared to the
enormous load raised, makes such a device of great value. The screw is often used for making
delicate adjustments of tools and machines. The self-tapping screw has notches in the first
few threads that can cut female threads in a hollow cylinder. Wood and metal screws, the
carpenter's and machinists vise, the propeller of a boat or airplane, Archimedes' screw, and
many other devices are applications of the screw

Screws and Rivets are items that are used in wood and metal technology for attaching
together two parts of an object. Screws attach two parts of an object usually wood, by the
spiral thread of its body. The rivets in this project are known as pop rivets. They are used to
fasten together two different parts of an object. The wood screws are made in sizes of rod
diameter 1.6-4mm, 3-6mm and 4-8mm with Max lengths of 55mm, 80mm and 115mm
respectively. The pop rivets are made in a model with a length of 7.5 mm and diameter of
5mm Wood screw and rivets.

8
MARKET STUDY
Screws are manufactured by few of the existing metal industries locally. However, there is no
available that that indicates the level of local production. Moreover, since the bulk of the
products supply comes through import.

Import of screw and rivets during the period 2002-2011 was fluctuating from year to year
although there is a general increasing trend. During the first three years, 2003-2005, the
annual average import stood at 118 tones. In the second three years, i.e. 2006-2008, the
annual average level of import has increased to 141 tones. During the recent three years
(2009 -2011) the yearly average has further increased to 197 tones. During the period under
consideration import of wood screw and rivets has registered an average annual growth rate
of 6.66%.

To determine the current effective demand for the products the recent three years average,
which is 197 tones is taken as a base. Then the growth rate registered during period 2002--
2011 i.e. 6.66% is applied to arrive at the current demand. Accordingly, current (2012)
demand for wood screw and rivets is estimated at 210 tones.

Material Selection

Raw material and inputs

The material selection is influenced by required strength, temperature, resistance to corrosion,
joint materials, and cost.

The main required raw materials for the production of screws and rivets are various sizes of
steel and aluminum wires. And also

Zinc plating: Because of steel's tendency to rust, you'll never get bare steel fasteners. The
most common covering is zinc, but this won't stand up to outdoor conditions.

Black Oxide: Most common on socket head cap screws and other machines screws. This
provides very mild protection against corrosion and usually has an oil film added for
additional protection.

Hot-Dipped Galvanized: For outdoor use, this provides the best (common) protection next
to stainless steel.

Stainless Steel and aluminum: These materials are inherently resistant to corrosion because
they form a tough oxide layer when exposed to oxygen. Note that the strength of stainless is
much less than alloy steel, and even less so for aluminum.

Galvanic Corrosion: When placed in contact along with a humid air, certain metals form
little batteries that corrode each other. It happens when the metals are substantially
electrochemically different from each other.

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Annual raw materials requirement and cost
No Row material Description Quantity(ton) Cost(birr)
1 Steel Wires Dia. 1.6mm 27 389
2 Steel Wires Dia. 2.5mm 60 5054
3 Steel Wires Dia. 4mm 60 1008
4 Steel Wires Dia. 6mm 70 1260
5 Aluminum Wires Dia. 6mm 10 288
Total 7999

 UTILITIES

The Major Utility Requirement of the plant is electricity and water. Annual cost of utilities is
estimated at Birr 200,000.

No Utility Unit Quantity Cost(Birr)

1 Electricity Kwh 250000 150000
2 Water Meter cube 5000 50000
Total 200000

Manufacturing processes
In principle, the following manufacturing processes are differentiated. On the one hand there
is forming without cutting and on the other, machining. With forming without cutting there is
a further differentiation between cold and hot forming.

Production of screw

Machining Forming without cutting

Hot forming Cold forming

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Forming without cutting

Cold forming
This procedure is usually used for large quantities. Because, from an economic aspect, it is
the most rational method.

In modern fastening technology the majority of fasteners are made using the cold forming
procedure. In this procedure, the fastener is formed, usually in multistage processes, by
pressure forging, cold extrusion and reducing, or a combination of these procedures. The term
solid or cold forming was coined for this type of production.

The choice of the suitable forming machine depends on the size of the fastener and on the
degree of forming. The greater the degree of forming, the more forming stages are required.
Sharp-edged transitions or thin profiles are unfavorable for cold forming and lead to
increased tool wear.

A decisive role for the quality of the final product is played by the choice and the quality of
the input material (wire). Screw manufacturers usually receive the wire coiled on rolls that
often weigh over 1000 kg. The wire is normally phosphate treated to enable the wire to be
worked perfectly and to minimize tool wear.

The designer of a screw or a fastener tries during development to harmonies the advantages
and disadvantages of the different materials with the requirements specified for the fastener.
With the materials differences are made, along with corrosion-resistant steels, between
unalloyed and alloyed steels. For example, if increased strengths are required, it is absolutely
essential to subject the parts after pressing to a heat treatment process in order to be able to
influence the mechanical properties specifically.

Advantages of cold forming:

 Optimal use of material

 Very high output

 High dimensional accuracy and surface quality

 Increase of strength properties through strain hardening

 Run of the chamfers in press parts in accordance with the load

Hot forming
This production method is used mainly to manufacture large diameters starting with approx.
M27, and longer pieces starting from approx 300 mm. In addition, parts are possible that
cannot be produced using cold forming because of the very small volumes, or because of a
very high degree of forming.
11
With this procedure, the input material usually bars is heated wholly or partially to forging
temperature. This heating up enables even complicated geometries or very high degrees of
forming to be realized. A typical feature for a hot-formed component is the raw surface
structure. Strain hardening is not carried out during hot forming.

Advantages of hot forming:

 Enables production of complicated geometries

 Low production runs

 Large diameter and length

Machining
Machining is usually understood as processing steps such as turning, milling, grinding or
reaming. The most common method with regard to fasteners is turning, but this has lost a
great deal of importance because of the technical possibilities of cold pressing.

During turning, the required contour of the component is cut from the input material using a
turning tool. The diameter of the input material depends on the largest diameter of the
component. Usually, bars with a length of up to 6m are used. In contrast to cold or hot
forming, the chamfer course of the input material is destroyed.

This production procedure is used either if the production run is not very large or if the part
geometry cannot be complied with in cold or hot forming procedures because of sharp edges,
small radiuses or even nominal sizes. Surface rough nesses of Ra 0.4 or Rz 1.7 can be
achieved with this production procedure without any problems. In the case of large
production runs the blanks are often produced with the cold extrusion method and are then
machined.

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Parts of screw
There are three parts of a screw; they are the head, shank and thread.

The Head – has the slots for the turning tool to fit into.

The Shank – is the smooth part above the thread and below the head.

The Thread – is the tapering groove that spirals towards the tip. This cuts into the wood as it
is turned then pulls the screw into the hole.

Process Description
The process required in the manufacture of screws is:

Head formation:- The different wire coils are fed into the proper double stroke heading
machines for head formation and wire cutting.

Head slotting:- The formed heads are fed to the head slotting machine where the head of
each piece of the product is slotted.

Head shaving:-The slotted pieces are fed to the slotting machine where the burrs are
removed and smoothed out.

Threading:- The shaved and smoothed pieces are fed to the thread rolling machine, where
the threads are rolled.

Finishing:- The threaded pieces are fed in the polishing barrel, where the surface is smoothed
from burrs.

Machinery and Equipment

 Automatic double Stroke cold heading Machine

 Automatic double Stroke Cold heading Machine

 Automatic double stroke cold heading Machine

 Rivet heading machine

 Nail forming machine

 Head shaving machine

 Automatic thread rolling machine

 Automatic head slotting machine

 Hand tools

13
Land Building and Civil Work
The total land required by the project is about 800 m2, of which 300 m2 is built-up area.
According to the Federal Legislation on the Lease Holding of urban land permit by lease is
on auction or negotiation basis, however, the time and condition of applying the proclamation
shall be determined by the concerned regional or city government depending on the level of
development.

The legislation has also set the maximum on lease period and the payment of lease prices.
The lease period ranges from 99 years for education, cultural research health, sport, NGO ,
religious and residential area to 80 years for industry and 70 years for trade while the lease
payment period ranges from 10 years to 60 years based on the towns grade and type of
investment.

In Addis Ababa, the City’s Land Administration and Development Authority is directly
responsible in dealing with matters concerning land. However, regarding the manufacturing
sector, industrial zone preparation is one of the strategic intervention measures adopted by the
City Administration for the promotion of the sector and all manufacturing projects are
assumed to be located in the developed industrial zones.

The new regulation classified the city into three zones. The first Zone is Central Market
District Zone, which is classified in five levels and the floor land lease price ranges from Birr
1,686 to Birr 894 per m2. The rate for Central Market District Zone will be applicable in most
areas of the city that are considered to be main business areas that entertain high level of
business activities. The second zone, Transitional Zone, will also have five levels and the
floor land lease price ranges from Birr 1,035 to Birr 555 per m2. This zone includes places
that are surrounding the city and are occupied by mainly residential units and industries.

The last and the third zone, Expansion Zone, is classified into four levels and covers areas
that are considered to be in the outskirts of the city, where the city is expected to expand in
the future. The floor land lease price in the Expansion Zone ranges from Birr 355 to Birr 191
per m2 Human resource requirement The envisaged plant requires 22 workers of whom 13
workers are technical workers.

Industry Park Development Program is a useful instrument for effective land usage, eliminate
the problems in logistics and custom service, expand investments and transform them quickly
into production, create linkage among middle and large scale industries as well as for the
transfer of technology.

Some of industrial parks within the coming five years are Bole lemi–I and Hawassa Industrial
parks which are closes to Addis ababa, kombolcha and Mekele Industrial parks the
construction completed, Adama and Dire Dawa Industrial parks are also there.

14
Incentives for lease payment of industrial project

Break-even Analysis
The break-even analysis establishes a relationship between operation costs and revenues. It
indicates the level at which costs and revenue are in equilibrium. To this end, the break-even
point for capacity utilization and sales value estimated by using income statement projection
are computed as followed.

Design of screw
On a single thread screw, the lead and pitch are identical; lead is twice the pitch on a double
thread model, and three times as much on a triple thread. The pitch of a screw is the distance
between two threads (or grooves) from the same point on each thread. It is also more
commonly known as the number of threads per inch or centimeter. The lead of the screw
measures how far it is driven in for each revolution.

Administration

 Plant Manager

 Secretary

 Accountant

 Salesman/purchaser

 Clerk

 General Service
15
Production

 Foreman

 Machinery Operators

 Assistant Operators

 Mechanics

 Quality controller

 Laborers

Types of screw
Sheet Metal Screws: Usually threaded all the way to their head, these will work in wood, but
wood screws shouldn't be used in metal (this is based on hardware store
employee advice, not experimental evidence). Most of these screws are self-
tapping in that they only require a pre-drilled hole (pre-drill sizes), but some
come with self-drilling or self-tapping tips. Here's a large list of different types
of tips, the more common ones appear to be A, AB (pointed) and B (no point). .

Drywall Screws: The coarse thread version is meant to secure drywall to wood while the fine
thread version is for attachment to metal studs (commonly used in office
construction). The head-to-shaft junction is more curved than in a wood screw
to prevent tearing of the dry-wall. These can also come with self-drilling tips.

Machine screws: are generally stronger than wood screws, have finer threads and are made
more precisely. They're used with nuts or tapped holes.

Socket Screws: While many hex cap screws may be found in vehicles, socket head screws
are becoming more popular and have some space saving advantages over hex
cap screws. Socket heads take up less space themselves and don't require side
room for wrenches. They also are usually made from stronger alloy steel vs.
hex cap screws, but this depends on the grade and manufacturer.

Allen / Hex Socket vs Torx: Most socket head screws accept a hex or Allen wrench 6 sided,
but Torx heads (loosely, a 6 pointed star) are also available. Torx sockets were
originally designed to prevent the driver from coming out, and can transfer
more torque than a Phillips or slotted driver. They don't require large amounts
of pressure to keep the bit in the socket. Some people say that it's faster to
insert a bit into a Torx screw than a hex socket, which would be advantageous
in manufacturing environments.

Button Head: This head is largely decorative and somewhat similar to a round head, but
flatter.
16
Flat head: These require a pre-drilled counter sink, and are typically angled at 82 degrees,
which, by the way, is not the angle created by most drill bits 118 degrees.
Metric flat heads have 90 degree angles.

Shoulder Screws: These have precision ground shanks that remain above the head of a hole
and provide a simple way to make an axel for a wheel. They are also used
when something must be secured, but not clamped.

Set Screws: These are threaded along their entire length and are typically used to secure a
shaft from rotating. They're used in pulleys, sprockets, collars and knobs
among other things.

Types of screw head

 Hex head

Has Allen key type socket on head, uses hex screwdriver

 Slot head

Has single slot head, uses flat blade screwdriver

 Cruciate head

Has cross head, uses + head screwdriver

Shapes of screw head

 Spherical Head

- This type of Head is rounded

- Found in Cortical & Cancellous screws.

- Works with compression plates

17
  Conical Head

- Found in Sherman self tapping screws

 Threaded Conical Head

- Locking screws

- Screw thread on head engages locking plate

Types of screw point

• All screws need a thread to engage in bone when they are tightened, which stops them
pulling out.

• Either the screw cuts its own thread as it is driven in – self tapping screw

• Or a separate tap is used to cut the thread for a non self tapping screw

• Self tapping screw tips have 1 or more ‘flutes’ in the tip which cut the thread as the screw is
driven in

• Some cancellous screws (4mm) have a self tapping ‘pigtail’ sharp point

• Non self tapping screws have a blunter, more rounded tip and no flutes

Measuring Screws
Length is measured from where the surface is assumed to be, to the end of the screw.
Therefore, pan head screws are measured from under the head, and flat head screws are
measured overall.

18
There are 2 standard ways of measuring the length of a screw

• Sherman self tapping screws (ST codes) are measured from the top of the conical section of
the head to the tip

• All other screws are measured from the top to tip this is the full length including the head

Color of Screw
 The vast majority of screws are stainless steel

 The only exceptions are titanium screws

 These are colored as a safety feature to distinguish them from stainless

 Mixing stainless & titanium implants in an op could be dangerous for the patient.

Zinc plating: Because of steel's tendency to rust, you'll never get bare steel fasteners. The
most common covering is zinc, but this won't stand up to outdoor conditions.

Black Oxide: Most common on socket head cap screws and other machines screws. This
provides very mild protection against corrosion and usually has an oil film added for
additional protection.

Hot-Dipped Galvanized: For outdoor use, this provides the best (common) protection next
to stainless steel.

Stainless Steel and aluminum: These materials are inherently resistant to corrosion because
they form a tough oxide layer when exposed to oxygen. Note that the strength of stainless is
much less than alloy steel, and even less so for aluminum.

Galvanic Corrosion: When placed in contact along with an electrolite like humid air, certain
metals form little batteries that corrode each other. It happens when the metals are
substantially electrochemically different from each other. For instance, brass and zinc plating
wouldn't be a good choice.

19
 Titanium stainless

Screw Identification Chart

Import procedures
Information on import procedures in Ethiopia in relation to the pre-shipment inspection on
goods; applications submitted to commercial banks in Ethiopia to obtain import permit;
modes of payment allowed for import, documentation requirements to effect payment and
document checking and verification.

20
Pre-shipment Inspection
Goods imported are not required to be inspected prior to shipment except when they are
imported from China or if the importer and the supplier have an agreement for pre-shipment
inspections.

Pre-shipment Inspection on goods imported from China: The Ministry of Trade has made
arrangements with China Inspection and Quarantine Bureau (CIQ) so that the latter would
carry out the inspections prior to shipment and issue the quality certificates.

Requirements
1. Pre-shipment Inspection requirement on all goods purchased from China implemented in
effect since January 1, 2007

2. Pre-shipment inspection certificate is one of the documents required to effect import

payment from China.

3. Pre-shipment Inspection certificate requirement is mandatory for all import purchases

made from China.

4. Banks are required to insert requirement in the LC and also to insure that purchase order
transmitted clearly depict to have CIQ inspection requirement.

5. Banks cannot accept documents without CIQ certificate if goods are imported from China.

Import Payment
Foreign exchange can be availed by banks to any importer provided they can present one of
these

1. Import License issued by Ministry of Trade

2. Industry License issue by Ministry of Industry

3. Investment License issued by Investment Agency

Applications submitted for import should be accompanied by the Pro forma Invoice contracts
from suppliers stating

1. The type of commodity

2. Quantity of the commodity

3. Price per unit

4. FOB amount

5. Freight if any
21
6. Other charges

7. No insurance payment is allowed for payment in Foreign Exchange, so the importer should
make insurance arrangement locally.

Mode of payment allowed for import

1. Letter of Credit

2. Cash against document

3. Advance payment

Documentation requirements to effect payment:

It is important that the required sets of documents that should be presented by the supplier to
demand payment should be mentioned in the LC or Purchase order. The following are
mandatory for payment and always mentioned in the LC or Purchase order:

1. A final invoice (commercial invoice) attested by the chamber of commerce of the country
of the supplier

2. Original sets of Bill of lading, Airway Bill, Truck way bill, Railway Manifest (depending
on the mode of transportation)

3. Country of origin invoice attested by the chamber of commerce of the country of the
supplier

4. Packing list

5. Certificate of quality where appropriate

Importers who wish to import using CAD

1. Should first get approvals of the their Bank on the purchase order they wish to pass to the
supplier

2.The purchase order should clearly sate document requirements and certificate to be attached.

3. Shipping documents normally required for import payments

4. Payment can only be released on CAD provided the importers get the prior approval from
its bank.

22
Conclusion
 The demand for screw & rivet is met entirely through import. The present day
demand for screw & rivet is estimated at 210 tones. The demand for screw is
projected to reach 338 tons and 545 tons by the year 2017 and 2022, respectively.

 There is always need for screw and it is not seasonal so there is always a demand in
the market so it’s very profitable.

 At this time the most of Ethiopian screw demand is covered by imported from other
countries so it’s good if its manufactured locally.

 Because of the shortage of screw supply and high demand investing in

manufacturing is a very satisfying business opportunity

 The market for screw is very good so this business will generate large income

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