Roofings Rolling Mills Limited

completed

Roofings Limited (“Roofings” or “the Company”) was founded in 1994 and produces various steel products. The Company’s operations are located in Lubowa, on the outskirts of Kampala, the capital city of Uganda. In addition, Roofings is in the process of implementing a 3-phase expansion program which includes a wire galvanizing plant, hot rolling mill complex and cold rolling mill complex (the “Project”). The Project is being developed on 12 hectares of land Roofings have acquired in the Kampala Industrial Business Park (KIBP) located in Namanve, Kampala. The industrial park is in the process of being established by the Ugandan Investment Authority (UIA), with Roofings being the first business in the park. IFC is considering a $25 million loan to support the expansion program. The Company’s existing operations in Lubowa occupy an area of some 15 hectares of which 30,000m2 is occupied by warehouses and factory operational areas. This facility manufactures a variety of products for the building industry using cold steel forming. All the steel for this facility is imported from Malaysia. About 250 differing products are manufactured, with a total annual output of 110,000 tons per annum. Products include steel bar, angle iron, door and window profiles, barbed wire, nails, chain link, reinforced steel bars and roofing accessories, including sheeting. Roofings bought the land in the KIBP from the UIA and have received all the necessary Government approvals to proceed with the development. Although the UIA are responsible for the provision of services in the KIBP, these are yet to be constructed. Such services include the road network, stormwater and sewerage infrastructure, a waste water treatment plant, and electricity and water supply. Currently Roofings has access to electricity and water; electricity is provided by the municipality and water by the National Water and Sewerage Corporation. In addition, the access road to the Roofings facility has been constructed, although it is unpaved. Construction of phase 1, the wire galvanizing plant, is largely complete with one wire line operational and a second line expected to be installed by June 2010. The facility constitutes a building enclosed with steel cladding with core ancillary services such as the water cooling system and liquefied petroleum gas (LPG) storage tanks located externally. Roofings have acquired the latest technology for the production process whereby galvanized wire is manufactured from rolled low carbon steel. Once fully operational, the plant will produce around 11,000 tons of galvanized wire per annum. The process commences with annealing to soften the steel. This requires the transfer of the steel wire through a fluidized bed of aluminum oxide. The furnace operates at temperatures of around 7500C and is heated by LPG. Thereafter, the wire passes through a pickling line which requires cooling the wire in water, transfer through a hydrochloric acid (20%) solution, rinsing with water and finally pre-treatment using a flux process (ammonium chloride) to remove impurities from the wire. The wire is then zinc galvanized using an immersion burner galvanizing furnace which is heated with LPG. Finally, the wire is wiped with nitrogen gas, cooled in water and a wax coating applied to prevent corrosion. Phase 2 of the Project is currently under construction with the earthworks largely complete and steel fabrication and erection of the building’s structural support in progress. The facility is anticipated to commence operations in September 2010. Operations will include a scrap steel separation plant, induction furnace, billet caster, reheating furnace and hot rolling mill. Scrap steel will be heated in an induction furnace to a temperature of 16500C. The furnace will have a capacity of 3000 tons per month, with the option of increasing this in the future. Thereafter, alloys would be added to achieve the desired physical properties of the final steel. The molten metal is then poured into a billet caster and cooled. These billets, along with imported billets at a ratio of about 30%/70%, are then reheated in an oil-fired furnace. The heated steel is then passed through high speed rolling units to obtain the required dimensions of the final product which will include rebar, angle and flat bar, amongst other products. The hot rolling complex will produce 36,000 tons of products per annum. The cold rolling mill complex constitutes phase 3 of the Project with construction anticipated to commence in 2011. Imported hot rolled carbon steel strips form the raw material for this process. The initial phase involves pickling whereby the raw material is cleaned using a hydrochloric acid (20%) solution to remove the metal oxides. The metal is then rinsed with hot water and passed through an air drier. Subsequently, the coils are transferred through pairs of weighted hardened steel rollers. By passing the coils backwards and forwards through the rollers, the desired thickness of the coil is achieved. The coils are then cleaned with high velocity jet sprays and brushing and pass to a non-oxidation furnace heated with LPG. The heated coils are then galvanized by means of passing the coils through a pot containing zinc which is applied as a metal coating. The coils are then cooled and pass through a skin mill which shapes and improves the surface condition of the coil. The final stage involves painting. The galvanized strips are cleaned with alkali and hot water before application of a base chemical coating. Subsequently, a prime coat is applied and the painted strips then transferred to a LPG fired oven and cooled using water quenching. The strips are then cleaned with an air drier before packing. The total production of phase 3 will be 120,000 tons per annum. The existing facilities operate on a 24 hour basis for approximately 300 days a year. Down time occurs as a result of planned and unplanned maintenance. Phases 2 and 3 will operate on a similar basis.