High Pressure Gas Valves Final

Acknowledgment We would like to thank our almighty ALLAH who helps us during the difficult times when we were doing our task We would also like to thank our respectable resource person Mr.Manqosh-urrehman who encourage us that we use our ability and skills for complete this task successfully. He also discuss the things in the regular classes that what happened to mini project so basically teacher motivated us to complete project tremendously. We would also like to thank our family especially our parents for being so patient and encouraging and they help us in every moment when we want something.

Executive Summary

We have done the project in high pressure gas valves. ALCO is the one who only produce high pressure gas valves in Pakistan. They produce CNG valves, LPG valves, CO2 valves, Nitrous valves and Oxygen valves. They are established in 1991 and are located in Gujranwala, their products approved from U.K and are tested in ITS, this is certified company. They can produce 5000 to 7000 piece but now a days they only 1000 piece because of demand. They take raw material by ship breaking and also import the raw material (brass, zinc, copper) from Italy and Germany. They use CNC (computerize numeric character) machine which is import from Taiwan and America to produce their product. They also produce valves manually which we describe in the production process. Most of the high pressure valves are import from different countries but ALCO export their product to Malaysia, U.A.E and Bangladesh. Some problems are facing by the industry in which most of the important is copyright issue, OGRA takes 500,000 for approval of CNG valves, labor skills and marketing problem. Their price of the product for LPG valves is 150, CNG valves is 500 and oxygen vales is 400.They only pay just sales tax no Government policy and no incentives given by the Government. The company is aiming to produce low pressure gas regulators as well in the future. The company is also aiming to market its product in the local market and also aiming to operate globally by physically existing there. In this project we tried our best to study the complete structure of ALCO with reference to Mr.Rafique(M.D of ALCO) and Mohammad Yasin but .we have analyzed the company as a whole through its raw material, location, production capacity, production process, problems and future prospects.

Table of Contents Background of the Industry.................................................................................................4 Quality Policy..................................................................................................................5 Product Specifications.........................................................................................................6 Co2 cylinder Valves.........................................................................................................6 Oxygen cylinder Valves...................................................................................................7 CNG Valves.....................................................................................................................8 LPG Valves......................................................................................................................8 Nitrous Valves..................................................................................................................9 Production Capacity.............................................................................................................9 Major Players.....................................................................................................................10 Location.............................................................................................................................10 Production and Capacity Utilization..................................................................................11 Export for last five years....................................................................................................11 Export area/countries.........................................................................................................12 Raw material (Local, Imported).........................................................................................12 Sources of Raw material....................................................................................................12 Production Process.............................................................................................................13 Technological Level...........................................................................................................14 Problem Faces by Industry.................................................................................................14 Pricing................................................................................................................................15 Government Policies and Incentives..................................................................................15 Future Prospects.................................................................................................................15 References..........................................................................................................................17

Background of the Industry High pressure gas valves fall under the category of gas equipments. These gas equipments have vast utilization in oil and gas companies. High pressure gas valves are utilized for the input and output of gas. These valves help to maintain the high pressure of gases passing through. These valves further consist of LPG, CNG, Nitrogen, Oxygen and Carbon Dioxide valves. These valves have extensive use in medical and industrial gas cylinders and for refinery or gas industries. In Pakistan these valves are mostly imported from the foreign markets. The manufacturing of high pressure gas valves is very less in Pakistan, so companies are importing them. ALCO (Abdul Latif Company) Valves, as the name suggests, is highly involved in the production and manufacturing of gas valves. ALCO Valves is the only company that is producing wide range of high pressure gas valves in Pakistan. The company was established in 1991 by Latif and brothers with the trade name of ALCO. The company is certified for ISO 9001 by DNV Netherlands and the products are approved, after attestation, by Intertek Testing Service (ITS) U.K. The company manufactures brass valves and accessories in various size and shapes. The products include high pressure gas valves like CNG, LPG, Oxygen valves etc. the company use CNC machines in its production process and all other related designing processes are computerized. ALCO is much into the exporting business than supplying its products to the local markets. ALCO is strongly committed to high quality products manufacturing and customer’s satisfaction.

Quality Policy

"SYMBOL OF TOTAL QUALITY" • • • •

Technology Total Quality by understanding who our customer is, what the requirements are and meeting those requirements. To enjoy our work and always brighten our working atmosphere. Effective use of resources.

Certified by

Product Specifications ALCO manufacturing a qualitative range of valves which are extensively used for various industrial and medical applications. These are designed and developed as the customer specifications and requirements in order to meet with all demands of the customers. We are offerings include Co2, CNG, LPG, NITRUS Valves etc. Prime functions of Gas Cylinder Valves are • • • •

filling of gas into cylinder proper storage of gas inside the cylinder release the gas as and when required act as a safety for cylinder against pressure variation (when valves are fitted with safety devices)

Co2 cylinder Valves Our design valves are for lower backpressure when carbon dioxide is release and are available in both front and side outlet configurations.

Standard Specification ITEM CODE

WORKING PRESSURE

SAFETY BURST PRESSURE

CONNECTIONS INLET

OUTLET

(BAR)

(BAR)

NGT 14TPI

CO-01

80 - 100

190

5/8"

7/8 " 14TPI

CO-02

80 - 100

190

7/8"

7/8 " 14TPI

CO-03

80 - 100

190

1"

7/8 " 14TPI

CO-04

80 - 100

190

1-1/8"

7/8 " 14TPI

CO-05

80 - 100

190

1-1/4"

7/8 " 14TPI

CO-06

80 - 100

190

1-3/8"

7/8 " 14TPI

CO-07

80 - 100

190

1-1/2"

7/8 " 14TPI

RH

Oxygen cylinder Valves . We designed and develop our oxygen cylinder valve to the customer demand by providing quality with safety devices. Its accuracy makes the valve durable which is helpful for strong working condition.

Usage:  Industrial

 Medical

 All other Important Gas Applications

Standard Specification

ITEM CODE

WORKING PRESSURE

CONNECTIONS INLET

OUTLET

(BAR)

NGT 14TPI

RH

OX-26

200

7/8"

5/8 " 14BSP

OX-27

200

1"

5/8 " 14BSP

OX-28

200

1-1/8"

5/8 " 14BSP

OX-29

200

1-1/4"

5/8 " 14BSP

OX-30

200

1-3/8"

5/8 " 14BSP

OX-31

200

1-1/2"

5/8 " 14BSP

CNG Valves These valve is highly safe product with its unique design and Its function is to allow the gas filling into the vehicle.

Standard Specification ITEM CODE

CN-01

WORKING PRESSURE

SAFETY BURST PRESSURE

CONNECTIONS INLET

(BAR)

(BAR)

NGT 14TPI

250

355

1"

OUTLET LH

5/8 " 14BSP

LPG Valves

Standard Specification ITEM CODE LP-07

CONNECTIONS

WORKING PRESSURE

SAFETY RELEASE PRESSURE

(PSI)

(PSI)

NPT

LH

160

375

1"

5/8" 14BSP

INLET

OUTLET

Nitrous Valves These valves are available for cylinders of different size and Capacity, it is designed under the legal standards and safety guidlines which is followed all over the world.

Standard Specification ITEM CODE

WORKING PRESSURE

CONNECTIONS INLET

OUTLET

(BAR)

NGT 14TPI

RH

NI-01

136

7/8"

11/16 " 20TPI

NI-02

136

1"

11/16 " 20TPI

NI-03

136

1-1/8"

11/16 " 20TPI

NI-04

136

1-1/4"

11/16 " 20TPI

NI-05

136

1-3/8"

11/16 " 20TPI

NI-06

136

1-1/2"

11/16 " 20TPI

Production Capacity ALCO has the capacity to produce 5000 to 7000 high pressure gas valves per day. Though the company has the capacity to produce more, but it does not produce more than 500 to 1000 valves, because the daily demand is not more than this. In order to produce high pressure gas valves, the company use two ways. It either uses machinery to produce these valves or the production is done manually.

ALCO use CNC machines (Computerized Numerical Control) to produce high pressure gas valves. The machinery is imported from three major countries, America, Taiwan and China. Among these countries, the machinery imported from Taiwan is the most expensive one. The CNC machines make the production easier. The production process through machines requires only the input of raw material. The instructions are given to the machine for the pressure required, design, logo and other requirements for the production of high pressure gas valves. The machine gives the output in the form of finished good without much involvement of the employees.

Major Players The market for high pressure gas valves is not saturated. Pakistan has not much players regarding this category. Almost all the companies that are utilizing these high pressure gas valves are importing these products from the foreign markets. Those companies that are producing high pressure gas valves are more into exporting business than supplying these valves to the local market. ALCO has no direct competitor that is producing high pressure gas valves. International Engineering Company located in Gujranwala is producing gas valves but of low pressure. Other companies that are into the business of producing gas equipments are producing only high pressure pipelines, cylinders or tanks. ALCO is also not much into supplying high pressure gas valves to the local markets. It is exporting its products to the foreign market and aiming to supply them to the local market in future.

Location The industries where the high pressure gas valve is manufactured are the ALCO industry. It is located in Gujaranwala, because most of the industries of Pakistan are in Gujaranwala and Sialkot. There is no problem of employees because in that area there are much workers who works in factories or industries. The transport is easily available there and this is near the main market like the companies are near by the industry so that the products when they are manufactured the companies deal in that product if it is authorized. Address:

Plot No. 145-146-C, Small Industrial Estate No. 2, Gujranwala, Pakistan. Tel : +92-55-4283805, 4283898 Fax : +92-55-4283806 Email : [email protected] Web : www.alcovalves.com.pk

Production and Capacity Utilization ALCO Valves is producing high pressure gas valves like Oxygen valves, Carbon dioxide valves, and LPG and CNG valves. The daily demand of these high pressure gas valves is 500 to 1000 pieces. The daily production and utilization is low. ALCO Valves is exporting most of its products and its production for the local markets is less. The reason for its low production is that previously the demand for these high pressure gas valves was more. ALCO Valves is not producing more for the local markets, so the demand and its profit margin from the local markets is less as compared to the international markets. So the company also had to cut down the number of employees working to 80, which were previously 150 employees, because of the low demand for the high pressure gas valves and as most of the work is done through CNC machinery which requires less involvement of employees. The company is supplying its LPG Valves to Shell gas, HSV and NIGP. The oxygen valves produced by the company are only exported in the international markets like Germany, Italy, Dubai, Indonesia and Arabic Countries etc. The company is producing its CNG valves for the local markets. These high pressure gas valves are utilized for the outlet and injection of gas depending upon the nature of the gas.

Export for last five years Export for 5 years Year 2003 2004 2005 2006 2007

Revenue 13,864,000 15,870,800 18,089,000 19,005,350 17,045,000

Export for last 5 year

Rupees

20,000,000 15,000,000 10,000,000

Revenue

5,000,000 0 2003 2004 2005 2006 2007 Ye ars

Export area/countries • • • • • •

Indonesia Germany France Bangladesh Italy Middle east

Raw material (Local, Imported) Alco valves uses local as well as imported raw material For their raw material they used a expire ship for scarp yard which are come from Karachi and most of the time when they require more then they import from Italy and France. Their raw material comes in the containers. The raw materials which they used are copper, zink, brass and led.

Sources of Raw material • • • •

Karachi (Ship breaking Material) Germany Italy France

Production Process The ALCO produce on the demand when any company place any order and requirements. Before the start of production they make the sample valve and send it to Intertek UK in testing lab. Testing the Valve’s raw material and accessories is a necessary requirement in providing quality assurance to clients and safety to the consumers. In Intertek they provide the information about the Government and industry regulations or standards. They also inform them where danger can be occurring in processing chain. This is very costly procedure. Cost of the valve checking is Rs 20 to 25 lakhs. But it is very important because it assures that the valve standards are good and there is no weakness in this. So after satisfaction they issue the certification and after that they can start production. First they buy Raw material which is Copper, Zinc, Brass etc. and they also buy some kind of iron which is ship break material. Some of the raw material they purchase from local markets and mostly they import from Germany, Italy, and China etc. The iron frames which are used in Ships is crushed and then sent to the laboratory which they actually own. In this lab they check the quantity of Zinc, copper, brass etc. These quantities vary in different products. In case of low quantity they include it externally. After finalizing the raw material according to standards they make the Rods from it. Up till now the process is same but after that there are two methods for the production of valves. First is to operate different machines which are done manually. And 2nd is the technological method. (1) After making the Rods they start cutting according to different valves sizes than they send it to Furnace in which they provide 650 degree heat and dyeing process is also done in the Furnace. Here we have a shaped product then they emboss an ALCO logo and secret code on it with the machine. This code gives information that which kind of material they have used and when the valve is produced. Then they start the finishing process. After finishing, they send all the valves in testing department. In testing department they test the valve in different machines. They check the leakage of valve and they check the valve by giving the testing pressure. This job is very dangerous because in case of blast heavy loss is possible. The testing pressure is different for different valves. (2) The second method which they use for high pressure gas valves production is through machines. They are using very high and advance technology. They have 3 CNC (computerized Numeric Control) machines (American, Chinese, and Taiwan) these machines are very costly. In which the machine they import from Taiwan (YCM) is very

efficient and give good quality product. They just enter the raw material (Rods) and give the instructions to machine then machine works accordingly. The cutting, dyeing, heating, coding and finishing, all processes are done by these machines. So at the end they get the finished good which they send in to the testing laboratory.

Technological Level They are using world best technology for producing the valves. They are using three CNC machines which they are imported from China, America and Taiwan. Further detail we discuss in the production Process and production capacity.

Problem Faces by Industry Copyright issue: Copyright is the main problem of this industry. When they made a design for new valves then most of the competitors copy the design of their product. Approval from U.K: When the industry made a new product then this product goes to the U.K for approval and it takes 4 to 6 month, it is a risk factor because the product can be accept or reject after tested in U.K, and without approval the industry cannot sell the product. Dangerous material: There is some dangerous material which is used in the production. Safety rules and regulation is very necessary for working employees. Low demand: At the current situation in Pakistan, demand of the product is decreases, not so much but a little bit. Marketing problem: The marketing of the product is not so strong because the industry is not selling the product to wholesalers and retailers. They sell their products to specific companies

and export their product to U.A.E, Bangladesh and Malaysia. Also industry faced the problem in distribution channel. OGRA OGRA takes 500,000 rupees for approve to CNG valves and it is only 1 year agreement. Labor skills: The most of the labor is not well-educated that’s why communication gap occur in the industry

Pricing Valves LPG CNG valve oxygen valve

Size Range

0.75 inch 1 inch 1-1.5 inch

Pressure Range 100-160 2000-2900 2000-3000

Price 150 500 400

Government Policies and Incentives Such as they have no government policy because ALCO is one company who are manufacturing High Pressure Gas Valves. They are just paying sale tax and not receiving any kind of incentives and rebates from the government.

Future Prospects •

ALCO Valves is producing high pressure gas valves currently. The company is aiming to produce low pressure gas regulators as well in the future. Because the demand for low pressure gas regulators is also high in the market.

•

ALCO Valves is exporting its products in the international markets only. The production of the company for the local markets is quite less. The company is also

aiming to market its products in the local markets as well, as the supply is less there so the demand for the ALCO products is also less in the local markets. •

The company has done weak marketing for its products. Only few of the buyers in Pakistan are known of the ALCO high pressure gas valves, as the company is more in the exporting business than producing for its own local market. The company is also planning for strong marketing and promoting its products in the local markets as well.

•

The company has currently its base in Pakistan only, though it is exporting its products more to the international markets. But the company has not its base in the international markets. So ALCO Valves is also aiming to operate globally by physically existing there.

References •

Mr Yaseen Butt

•

Mr Muhammad Rafique (Managing Director ALCO)

•

www.alcovalves.com.pk