Holland Car's assembly line to evolve
Holland Car Plc is making preparations to take its car assembly process a step further by shifting to complete knockdown (CKD), where all the parts will be imported in pieces to be welded, painted and assembled in Ethiopia, it says.
So far it has been assembling vehicles from semi knockdown (SKD) kits, where parts are welded, painted and assembled. In its earlier relationship with Lifan Motors and now with Anhui Jianghuai Plc (JAC) Holland Car receives SKD kits. In a CKD, the parts, including the internal combustion engine and the transmission, will be supplied in parts for assembly by the receiving company.
This decision followed the problematic split the company had with its former supplier, the Chinese Lifan motors, which brought viability under such relationships into questions, Tadesse Tessema (Eng.), general manager and part-owner of the company, told Fortune.
"If we have to survive we have to do it all ourselves," Tadesse said.
Holland Car Plc undertook a feasibility study for six months and set up its research and development department two weeks ago, according to Tadesse.
The department comprises three people, including Jeffery D. Jenks, an American automotive engineer, and two Ethiopians specialising in biogas and marketing. The department will be responsible for transforming the operations of the company from semi-knockdown (SKD) to complete knockdown (CKD).
In a CKD, the company will need to set up body coating line, welding line, engine assembly line and mechanical testing line, Tadesse said, which could require the company a capital of 35 million Br.
"Some of it will come from us. We will have to borrow the rest from banks," he said.
The company currently has 250 employees, but Tadesse says that that may double when the company shifts from SKD to CKD even though the company already has all the professionals it needs for the new process. Four people have already returned from training in China on logistics, assembly, coating and maintenance, he said.
The company also announced, last week, that it had started assembling vehicles that could run on biogas and petroleum, stored in different tanks, to supply to the market cars that cut the cost of fuel consumption. It established Sheger Biogas Manufacturing Company to produce biogas for the new vehicles it is assembling to run on this fuel.
A tanker and some industrial machinery for the new plant were delivered early in January from China and the Netherlands, respectively, the company disclosed at an event organised for journalists on January 14, 2010.
The new plant will be constructed on a 50,000sqm site in Burayu, 15km from Addis Abeba, in the Oromia Special Zone, Tadesse Tessema (Eng.) general manager of the company told Fortune.
The total cost of machinery and equipment to be procured cost three million dollars, according to him.
The new delivery included one large tank to hold the human and animal excreta and other organic wastes from agro-industries and other sources, which is imported from China, and industrial machinery from the Netherlands, which will convert these wastes to biogas.
The company also demonstrated the first model of Abay Executive sedan which runs on biogas. The biogas holder fitted for this car has a capacity for 60 litres. Awash Executive will also be made to run on biogas.
All models will also run on conventional fuel, and the drivers can switch between the two sources, Tadesse said.
The biogas plant will be operational in seven months, according to Tadesse, when it could have a capacity to produce 500,000 litres in its first year.
After seven months, when the company commences full operation it will have the capacity of generating 500,000 litres of biogas the first year.
There is no fear of shortage of waste, according to the manager, as over one million cubic litres of waste is collected from Addis Abeba.The biogas could be available to car owners at five to six Birr a litre, which could cut the cost of fuel by half, he said. The gas will also be available for household use. http://allafrica.com/stories/201001190652.htmlNew step
Buzzing on his success and the competition he managed to initiate in the market, Holland Car CEO Tadesse is even embarking on a new project where he will be working towards producing the first fully Ethiopian cars. A huge factory to cater for this is being built and is expected to be completed in two months time.