2011 /12 Project ”Organization of production of non-combustible heat insulation of different densities on the basis of basalt in Kondopoga of the Republic of Karelia, Russia”

 Background and objectives of the project
 Basalt properties
 Application of basalt products
 Mineral wool products market in Russia
 Geography of production distribution
 Project implementation schedule
 Investment indicators of the project
 SWAT-analysis of the project
Appendixes:
 General description of the production line and equipment
 Production process
Проект “Организация производства негорючего утеплителя различной плотности на основе базальта в г.Кондопога, Республика Карелия Россия”

Making basalt products fully complies with the tasks conducted by Government of the Russian
Federation of the development of innovative industries, energy saving and construction of new housing. Technologies for deep processing of mineral raw materials of magmatic rocks of basalt group are increasingly used in the world due to the fact that the basalt products have unique properties and are much cheaper than similar products from other materials. According to their properties, the benefits of basalt and its products in comparison to many other materials are endless, which makes it possible to use their amazing properties in various industries. Meanwhile the culture of using basalt products in Russia is considerably lower than in other economically developed regions of the world and rich reserves of raw basalt available in the country and scientific developments for its application have a huge potential.
Thus, today in Russia there is the possibility of implementing projects to produce basalt raw material products with unique properties and guaranteed demand in the long term prospect.
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The objective of the project is organization of production of non-combustible heat insulation of different densities with subsequent release of basalt based products (superfine basalt yarns (rovings), basalt single crystal casting, etc.) based on the existing industrial site in Kondopoga of the Republic of
Karelia.
Проект “Организация производства негорючего утеплителя различной плотности на основе базальта в г.Кондопога, Республика Карелия Россия”

The porosity
Temperature resistance
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Vapor permeability
Chemical resistance
The porosity of basalt fiber can be 70% of volume and more.
If pores of material are filled with air, then it is characterized by a small thermal conductivity at such porosity.
Temperature resistance is a very important property of thermal insulation materials, especially when used for insulation of industrial equipment operating at high temperatures.
Vapor permeability is the ability of the material to pass water vapor through its pores. In presence of interconnected pores in the materials of basalt fibers, they pass through the same amount of vapor like air. Due to high vapor permeability, these materials during the operation are almost always dry; condensation of vapor occurs mainly in the next layer on the colder side of the guardings.
Chemical resistance. Basalt fibers have good resistance to organic substances (oil, solvents, etc.), as well as to the action of alkalis and acids.
Проект “Организация производства негорючего утеплителя различной плотности на основе базальта в г.Кондопога, Республика Карелия Россия”

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Applications
Aircraft industry Automobile production Mechanical engineering Shipbuilding
Military-industrial establishment
Agriculture and processing of agricultural production
Oil and gas industry
Cryogenic mechanics and equipment
Energetics Highway engineering Metallurgy Electrical engineering and communications
Coal, metal mining and enrichment industry
Civil and industrial engineering Protection of human environment
Chemical, petrochemical, by-product-coking, pulp and paper industry
Проект “Организация производства негорючего утеплителя различной плотности на основе базальта в г.Кондопога, Республика Карелия Россия”

Production of heat insulation based on stone wool in Russia in 2007-2010 quarterly, thousand cubic meters:
Important! Despite the fact that the market for almost all building materials fell significantly after the crisis of 2008 and has not recovered to date, the market for stone wool heat insulation has managed to rise above pre-crisis volumes in just 3 quarters.
•
Manufacturers of mineral wool products in Russia:
Totally about 70 enterprises.
• Market leaders – URSA Eurasia with market share of 18,8%,
Saint-Gobain company has approximately the same share – 18,5%, top three is closed by Rockwool Russia which share is estimated as 8,6%.
• Total production of mineral wool products – thousand m³ (2009).
11 090,3
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Rockwool
Technonikol
Thermosteps
Production volume over 500 th. m3 yearly
Isorock
Isomin
Tisol
Isovol
Linerock
Production volume over 100 th. m3 yearly
Komat etc.
Production volume over 100 th. m3 yearly
About 4% of companies
About 50% of companies
About 46% of companies
Проект “Организация производства негорючего утеплителя различной плотности на основе базальта в г.Кондопога, Республика Карелия Россия”

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KONDOPOGA
GEOGRAPHY OF PRODUCTION
DISTRIBUTION
Given the logistics cost, competitive price can be achieved by distributing finished
product within a radius of 1000 km.
Thus the following major settlements potentially fall into the perimeter of distribution:
- Moscow and Moscow region,
- St. Petersburg,
- Tver,
- Arkhangelsk,
- Murmansk,
- Pskov,
- Velikiy Novgorod,
- Vologda
- Petrozavodsk.
Total population of these towns is about 20 million.
Distribution pathways:
- Railway, local railways owned by enterprises,
- Road transport, 2 km to the federal highway Moscow – Murmansk, St.
Petersburg – Murmansk
- Waterways during navigation using the piers of Lake Onega.
Проект “Организация производства негорючего утеплителя различной плотности на основе базальта в г.Кондопога, Республика Карелия Россия”

Volume of investment: 2 257,8 mln. rub.
Own funds: 100 ÷ 350 mln. rub.
Investment loan: 1 950 ÷ 2 150 mln. rub.
PV revenue: 8 576 mln. rub.
NPV (10 years): 1 722 mln. rub.
PI: 1,87
IRR: 28,2
Discount rate: 15%.
Simple payback period: 54 months.
Discounted payback period: 69 months
Conclusion: The project is quite effective for PI and
NPV indicators, despite high discount rate (15%) it has an acceptable payback period (~ 4.5 years) and begins to generate positive cash flow in less than 2 years after the start of implementation (in 20 months).
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3 200 000,0
3 000 000,0
2 800 000,0
2 600 000,0
2 400 000,0
2 200 000,0
2 000 000,0
1 800 000,0
1 600 000,0
1 400 000,0
1 200 000,0
1 000 000,0
800 000,0
600 000,0
400 000,0
200 000,0
0,0
-30% -25% -20% -15% -10% -5% 0% 5% 10% 15% 20%
Изменение выручки
Proceeds change
Прямые расходы (сырьё)
Проект “Организация производства негорючего утеплителя различной плотности на основе базальта в г.Кондопога, Республика Карелия Россия”

Strengths
1. Close proximity of raw materials (10 km). Competitors in Vyborg,
Moscow, Nizhny Novgorod regions, Ryazan, Samara and others are forced to import raw materials from 500 to 1500 km.
2. Existence of own infrastructure (2 transformer substations with capacity of 5,3 MW, connected to Kondopoga hydropower plant with own cables, and 2 valve chambers for gas supply, own water intake).
3. Convenient transportation, possibility to deliver finished products by railroad, highway, waterway.
4. High profitability of the project.
5. Proximity of market in St. Petersburg and surrounding areas, as a rule being actively under construction and solvent.
6. Support of regional authorities.
7. Qualitative characteristics of the equipment to ensure the comparability of consumer properties of products with quality of products of recognized world leaders such as Danish ROCKWOOL or Finnish
PAROC.
Opportunities
Weaknesses
1. Initially high cost of the project, requiring large initial capital investments for modernization and construction of necessary infrastructure gaps.
2. Sufficiently long investment phase of the project related to the production of technological equipment (up to 1,5 years) by Italian company GAMMA MECCANICA
3. The project is implemented in an unstable macroeconomic environment: volatility of stock market, exchange rates of major world currencies, negative expectations of investors, etc.
Threats
1. A large area of the industrial site, which enables the organization to have additional activities in order to obtain additional income and diversify range of basalt products.
2. In period from 2011 to 2014 in the territory of the Republic of Karelia there is planned to implement a number of federal projects, projects of Shtokman gas field development and construction of Vidyaevo-Volkhov gas pipeline.
Kondopoga and industrial site of the company are located directly in the area of planned works, which makes it possible to use existing production, transport and engineering infrastructure in the implementation of this Federal Program.
1.
Emergence of new players – competitors in the market of heat insulation.
2. Geographical expansion of presence of existing competitors and their construction of new facilities.
3. Delay and reduction in the rate of construction in connection with the impact of the economic crisis.
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Проект “Организация производства негорючего утеплителя различной плотности на основе базальта в г.Кондопога, Республика Карелия Россия”

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Проект “Организация производства негорючего утеплителя различной плотности на основе базальта в г.Кондопога, Республика Карелия Россия”

1. Raw materials drive assembly.
2. Weight distribution of raw materials assembly.
3. Smelting unit (electric furnace, gas furnace, cupola).
4. Fiber sedimentation chamber.
5. Synthetic binder drive assembly.
6. Polymerization chamber.
7. Mat cooling table.
8. Longitudinal and transverse cutting unit.
9. Stacker, packer.
10.Incinerator – unit for disposal of production emissions.
Flow chart of technological line on production of mineral wool (stone wool)
Reference data:
Technological production line of GAMMA MECCANICA (Italy)
Parameter
Guaranteed production of fiber
Minimal product density
Maximal density
Maximal mechanical speed of line
Minimal mechanical speed of line
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Value
5,5 tons/hour
38000 tons/year)
35 kg/m3
220 kg/m3
33 m/min
1 m/min
Проект “Организация производства негорючего утеплителя различной плотности на основе базальта в г.Кондопога, Республика Карелия Россия”

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Проект “Организация производства негорючего утеплителя различной плотности на основе базальта в г.Кондопога, Республика Карелия Россия”

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Проект “Организация производства негорючего утеплителя различной плотности на основе базальта в г.Кондопога, Республика Карелия Россия”

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Проект “Организация производства негорючего утеплителя различной плотности на основе базальта в г.Кондопога, Республика Карелия Россия”