ABSTRACT
Most of the used container glass continues to end
up in landfills, or dumps in Trinidad and Tobago
(T&T) and the wider Caribbean. This glass has
the potential to be recycled into a much more
valuable product than the original. This profile
explores the opportunity that centres on the use of recycled glass for tile making in T&T. MANUFACTURING
PROFILE 13: GLASS TILES ENGINEERING INSTITUTE 2016 The Development of Project Profiles for the Manufacturing Sector of T&T
The research contained within this document was commissioned by InvesTT Limited and conducted by the UWI, St. Augustine Campus
Manufacturing Profile 13: Glass Tiles
Table of Contents
List of Tables ...... iv
List of Figures ...... v
1 Description of the Opportunity ...... 1
1.1 Summary ...... 1
1.2 Product Mix...... 3
1.3 Description of Activities ...... 4
2 Industry Overview ...... 6
2.1 Industry Description ...... 6
2.2 Incentives ...... 7
3 Stakeholder Analysis ...... 9
4 Environmental Scan ...... 12
4.1 External Analysis ...... 12
PESTLE ...... 12
PORTER’S 5 FORCES ...... 14
4.2 Internal Analysis ...... 15
5 Sub-Sector Assessment ...... 17
6 Identification of Value Added Services ...... 19
ii The research contained within this document was commissioned by InvesTT Limited and conducted by the UWI, St. Augustine Campus
Manufacturing Profile 13: Glass Tiles
6.1 Supply Chain Issues ...... 20
Contamination of raw material: ...... 20
Consistency of raw material: ...... 21
7 Financial Analysis ...... 22
7.1 Infrastructure ...... 22
7.2 Annual Utilities Usage ...... 22
7.3 Salaries ...... 23
7.4 Legal/ Statutory Fees ...... 24
7.5 Operational Costs ...... 24
7.5 Equipment ...... 25
7.6 Analysis of Cash Flows...... 27
8 Human Resources ...... 28
8.1 Organisation Chart ...... 28
8.2 Job Descriptions for Key Positions ...... 29
8.3 Labour Availability ...... 31
9 Location ...... 34
10 List of Potential Investors and Partners ...... 36
11 Concluding Remarks ...... 38
12 References ...... 39 iii The research contained within this document was commissioned by InvesTT Limited and conducted by the UWI, St. Augustine Campus
Manufacturing Profile 13: Glass Tiles
List of Tables
Table 1: Optimistic, Pessimistic and Moderate Scenarios of Glass Tiles Investment ...... 3
Table 2: Stakeholder Analysis - Glass Tiles ...... 10
Table 3: PESTLE Analysis Glass Tiles ...... 12
Table 4: Competitive Issues in Glass Tile Production ...... 14
Table 5: SWOT Analysis of Glass Tiles...... 15
Table 6: Sub-Sector Assessment Table for Glass Tiles ...... 17
Table 7: Infrastructure Summary ...... 22
Table 8: Annual Utilities Estimate (All currency USD) ...... 23
Table 9: Yearly Salaries in USD ...... 23
Table 10: Summary of Operational Costs ...... 24
Table 11: Base Start-Up Expenses ...... 26
Table 12: Job Descriptions ...... 30
Table 13: Table showing potential labour pools for proposed positions ...... 31
Table 14: A general assessment of locations in T&T ...... 35
Table 15: List of Potential Investors and Partners ...... 36
iv The research contained within this document was commissioned by InvesTT Limited and conducted by the UWI, St. Augustine Campus
Manufacturing Profile 13: Glass Tiles
List of Figures
Figure 1: Types of Glass Tiles ...... 2
Figure 2: Product Mix – 4 types of specialty glass tiles ...... 4
Figure 3: Glass Tile Making Process ...... 5
Figure 4: Stakeholder Identification for Glass Tiles ...... 10
Figure 5: Key Stakeholders in Glass Tile Manufacturing ...... 11
Figure 6: Value Stream Map – Glass Tiles ...... 20
Figure 7: Tunnel Kiln Steps ...... 26
Figure 8: Discounted Annual Net Cash Flows ...... 28
Figure 9: The organizational structure of the recycled glass tile factory ...... 29
v The research contained within this document was commissioned by InvesTT Limited and conducted by the UWI, St. Augustine Campus
Manufacturing Profile 13: Glass Tiles
1 Description of the Opportunity
1.1 Summary
This opportunity centres on the use of recycled glass for tile making. Most of the container glass used in Trinidad and Tobago (T&T) and the wider Caribbean continues to end up in landfills or dumps. This occurs despite the fact that container glass is 100% recyclable and is one of the few materials where products made from the recycled glass may be much higher in value than the original product, as there is no loss in quality or purity (GPI 2015).
The use of glass in tiles and other building elements is a growing market because of the greater aesthetic appeal of glass as opposed to the alternatives such as ceramics. Glass reflects light and therefore, is attractive when used on walls or countertops around the home, offices and other buildings such as hotels and restaurants.
The local glass container plant Carib Glass, incorporates broken glass pieces (cullet) into their batch mix for new containers. Carib Glass is furthermore, the only glass plant in the
English-speaking Caribbean and they simply import containers of cullet for use in their batch. This means that non-returnable glass containers are not generally recycled locally and glass is available for an enterprise such as this one.
Different processes may be used to recycle glass into tiles and the simplest of these is a physical process whereby crushed glass is added to a ceramic or coloured cement-based mixture to create tiles that sparkle. The glass may also be heated and reformed into tiles
1 The research contained within this document was commissioned by InvesTT Limited and conducted by the UWI, St. Augustine Campus
Manufacturing Profile 13: Glass Tiles using the sintered, cast or slumped methods as described in Figure 1. This profile, going forward, is based on the production of sintered, cast and slumped tiles.
•Molten glass mixed with metal oxides form opaque sheets which are then broken into small pieces and used for mosaics. SMALTI
•Performed by first cutting flat glass into tiles and placing it in a furnace under very high temperatures. The temperatures in the kiln range between 593 degrees Celsius and 816 FUSED degrees Celsius.
•Obtained by mixing waste glass that has been ground to powder form, with colouring agents. The mixture is then pressed into tile shapes and sent through a kiln. In the kiln, the mixture is heated just below the melting point and then cooled at room temperature SINTERED which allows for solidification.
•Waste glass is melted and then allowed to solidify on its own in a tile mould. CAST
•The waste glass is first placed in a tile mould. After, the material is placed in a kiln at a very high temperature. This high temperature melts the glass material. SLUMPED
Figure 1: Types of Glass Tiles Source: Adapted from Architectural Art Tile (2012)
2 The research contained within this document was commissioned by InvesTT Limited and conducted by the UWI, St. Augustine Campus
Manufacturing Profile 13: Glass Tiles
The contribution of the country’s design capacity can make this product unique and in demand rather than just a commodity competing based on low cost. Glass tiles holds a majority of advantages over conventional ceramic tiles. Due to its composition, glass tiles possess greater aesthetic qualities and better maintainability than ceramic tiles. Glass tiles are less porous than ceramic tiles which mean they do not hold water or become stained.
This feature also prevents the formation of mould, mildew and bacteria. Glass tiles are great reflectors of light in comparison to ceramic tiles which absorb light. Three scenarios; optimistic, moderate and pessimistic markets were assessed in the profile and the result may be seen in Table 1. The investment analysis are further discussed later in the report, under the financial analysis section.
Table 1: Optimistic, Pessimistic and Moderate Scenarios of Glass Tiles Investment
SCENARIO INVESTMENT (IN PAYBACK 10 YEAR NPV (IN 10 YEAR MILLION USD) PERIOD MILLION USD) IRR OPTIMISTIC 5.83 5 yrs 16.3 39% MODERATE 5.83 7 yrs 11.3 29% PESSIMISTIC 5.25 10 yrs 0.512 13%
1.2 Product Mix
While clear glass tiles with a coloured backing sheet are among the most common types of glass tile, specialty glass tiles command higher prices. Specialty glass tiles may be used for many traditional applications in kitchen and bathrooms, however, they may also be used as showpieces in furniture, countertops, lamps, wall hangings and as the focal point among other floor, wall or ceiling tiles. They take many forms including mosaic, hand painted, 3 The research contained within this document was commissioned by InvesTT Limited and conducted by the UWI, St. Augustine Campus
Manufacturing Profile 13: Glass Tiles designer tiles and bubble tiles which incorporate bubbles at the production stage. Specialty tiles are quite unique and require the input of skilled labour and creative designers, of which
T&T have many available through programmes at the University of the West Indies (UWI) and the University of Trinidad and Tobago (UTT). The proposed product mix is shown in
Figure 2.
Bubble Tiles 10% Mosaic Tiles 30%
Designer Tiles 40% Handpainted Tiles 20%
Bubble Tiles Designer Tiles Handpainted Tiles Mosaic Tiles
Figure 2: Product Mix – 4 types of specialty glass tiles
1.3 Description of Activities
The container glass may be processed at the plant or it may be outsourced in the form of pre- crushed glass. There are advantages and disadvantages to each approach. Figure 3 shows a basic description of the major activities.
4 The research contained within this document was commissioned by InvesTT Limited and conducted by the UWI, St. Augustine Campus
Manufacturing Profile 13: Glass Tiles
Glass arrives at the factory and is offloaded on a flat belt conveyor
The glass is washed and crushed to size 0.250mm – 0.595mm
The crushed glass is poured into a ceramic tile mould and pigments are added or it is pressed into shapes.
The tile moulds or pressed cakes of glass pass through the tunnel kiln.
Glass pieces are arranged on tile backing.
Figure 3: Glass Tile Making Process
5 The research contained within this document was commissioned by InvesTT Limited and conducted by the UWI, St. Augustine Campus
Manufacturing Profile 13: Glass Tiles
2 Industry Overview
2.1 Industry Description
All glass tiles sold in T&T are imported from various countries around the world. Tile retailers were interviewed and they confirmed the growing popularity of glass tiles, revealing that the tiles sold were imported from countries such as i) Mainland China
(including Hong Kong); ii) The United States of America (USA); iii) Spain; iv) Taiwan; v)
The US Virgin Islands; vi) Czech Republic, and vii) Germany. Impressive websites retailing tiles were also found. A site which boasted 100% recycled tiles was https://www.fireclaytile.com/glass/. FireClay Tile company is based in California in the
USA and their site even offers design assistance and a customized mosaic builder to customers who may include interior designers and other business customers.
The use of glass in tiles and other building elements is still very much a growing market, locally as well as globally. This is because of the aesthetic appeal of glass as opposed to the alternatives such as ceramics. Glass has specific features that reflect light, and therefore is attractive when used on walls or countertops around the home or in offices and other buildings such as hotels and restaurants.
In T&T, Carib Glass incorporates broken glass pieces (cullet) into their batch mix for new containers; non-returnable glass containers are not recycled locally. Carib Glass is the only glass plant in the English-speaking Caribbean, however they currently import cullet for their batch mix.
6 The research contained within this document was commissioned by InvesTT Limited and conducted by the UWI, St. Augustine Campus
Manufacturing Profile 13: Glass Tiles
2.2 Incentives
A number of incentives are available for investors; these include:
The Fiscal Incentives Act, offers a waiver of income tax on dividends or other
distributions, other than interest, out of profits derived from manufacture of approved
products.
The Customs & Excise Act offers investors duty free importation of plant,
machinery, equipment, components and raw materials, as specified in the Third
Schedule of the Customs Tariff.
The Foreign Investment Act allows a foreign investor to purchase land up to one
acre for residential purposes and five acres for commercial use. In addition, foreign
investors are allowed to purchase up to 30% of the cumulative shareholding in a
public company.
Free Trade Zones activities that qualify for approval include manufacturing for
export, international trading in products, services for export and development and
management of free zones. Benefits include exemptions from Corporation Tax,
import duties on capital goods, parts and raw materials for use in the construction
and equipping of premises and in connection with the approved activity, Value
Added Tax, withholding taxes, container examination fee, work permit fees and land
and building taxes.
7 The research contained within this document was commissioned by InvesTT Limited and conducted by the UWI, St. Augustine Campus
Manufacturing Profile 13: Glass Tiles
8 The research contained within this document was commissioned by InvesTT Limited and conducted by the UWI, St. Augustine Campus
Manufacturing Profile 13: Glass Tiles
3 Stakeholder Analysis
The various stakeholders were analysed using Mitchell, Agle and Wood’s Power Legitimacy
Urgency model. The Power, Legitimacy, Urgency model results in eight different stakeholder groups. These groups are defined by which of the three (3) attributes each individual stakeholder group possesses. Each of the stakeholders in this study was rated on a scale from 1 to 5 for degree of possession of each attribute where 1 was lowest and 5 was highest. The stakeholder was deemed to possess the attribute of power, legitimacy or urgency when given a ranking of 3 or higher. Definitive stakeholders consisted of designers and groups or organisations with the motivation and capacity to collect large volumes of glass for recycling. Designers are critical to this venture because differentiation is key to creating the most value, especially since the nature of the country means that economies of scale would be difficult to achieve if true mass production was being pursued. The results of the stakeholders’ assessment are shown in Figures 4 and 5 and Table 2.
SUPPLIERS/GLASS PRODUCTION CUSTOMERS
•Scavengers •Glass technicians •Domestic •General public •Designers •Corporate •Offices •Labourers •Contractors •Bars/restaurants •Staff •Architects •Schools •Interior designers •Recycling depots •Hardware Stores •Community groups •Tile stores •Churches •Youth groups •NGOs
9 The research contained within this document was commissioned by InvesTT Limited and conducted by the UWI, St. Augustine Campus
Manufacturing Profile 13: Glass Tiles
Figure 4: Stakeholder Identification for Glass Tiles
Table 2: Stakeholder Analysis - Glass Tiles
STAKEHOLDER POWER LEGITIMACY URGENCY TOTAL Scavengers 5 2 5 12 Recycling depots 5 4 2 11 Glass technicians 5 3 1 9 Designers 5 4 4 13 Labourers 5 5 2 12 Corporate 5 4 2 11 Contractors 5 4 2 11 Architects 5 4 2 11 Interior designers 5 3 2 10 Tile stores 5 4 2 11 General public 4 4 1 9 Bars/restaurants 4 2 1 7 Schools 4 2 2 8 Community groups 4 3 3 10 Churches 4 3 3 10 Youth groups 4 3 3 10 NGOs 4 3 3 10 Domestic customers 4 4 2 10 Hardware Stores 4 4 2 10 Offices 3 1 1 5 Staff 3 5 2 10
10 The research contained within this document was commissioned by InvesTT Limited and conducted by the UWI, St. Augustine Campus
Manufacturing Profile 13: Glass Tiles
14
12
10
8
6
4
2
0
POWER LEGITIMACY URGENCY
Figure 5: Key Stakeholders in Glass Tile Manufacturing
11 The research contained within this document was commissioned by InvesTT Limited and conducted by the UWI, St. Augustine Campus
Manufacturing Profile 13: Glass Tiles
4 Environmental Scan
4.1 External Analysis
PESTLE
The environmental scan started with an evaluation of the external environment for Glass
Tiles. This was done using the PESTLE tool where Political, Economic, Social,
Technological, Legal and Environmental (physical) benefits or concerns regarding the venture were identified and their potential impact individually assessed. See Table 3.
Table 3: PESTLE Analysis Glass Tiles
CATEGORY SITUATION POTENTIAL IMPACT Political The Clean Manufacturing sector Special concessions for this industry may not is not a specific area of focus for materialise, however, the opportunity would the government. be evaluated on its own merit and based on concessions available to all qualifying manufacturing enterprises. Economic Glass tiles are gaining in Entering a growing industry could bode well popularity globally so the value for sales in the short to medium term. It may of the industry is increasing. be easier to globalise in this scenario. Social Individuals are getting more This increases opportunities for sales in glass sensitive to using green tiles. products. Technological This industry is new to the The technology is simple – moulding crushed region. glass and melting in a furnace. However, glass technology training may be necessary. Legal The Beverage Container Bill Recovery of raw material may be a lot easier
12 The research contained within this document was commissioned by InvesTT Limited and conducted by the UWI, St. Augustine Campus
Manufacturing Profile 13: Glass Tiles
was proclaimed in parliament. than first anticipated. Environmental Corporate Social Responsibility This would make the feedstock for the glass in the area of protecting the tile enterprise easier to recover from these environment is gaining in entities which can be offered monetary as well popularity among T&T’s public as non-monetary rewards for their efforts. and private sector
13 The research contained within this document was commissioned by InvesTT Limited and conducted by the UWI, St. Augustine Campus
Manufacturing Profile 13: Glass Tiles
PORTER’S 5 FORCES
The second part of the external analysis examined the competitive environment. For this analysis Porter’s 5 Forces (P5F) was used. P5F looks at the rivalry among existing competitors, the threat of new entrants, the threat of substitute products, the bargaining power of suppliers and the bargaining power of customers. Using the P5F tool is superior to simply identifying competitors in the marketplace and assessing their potential threat.
Because it allows for the analysis of potential threats from other products or ventures that may not be identical or even operate in the same industry but which are threats nonetheless.
This analysis can be seen in Table 4.
Table 4: Competitive Issues in Glass Tile Production
FORCE SITUATION THREAT Existing Rivalry Glass tile imports are expensive and are not customised MODERATE to reflect the taste of the specific customers There are no glass tile producers in the region. A variety of glass tiles are, however, imported. Other materials i.e. – ceramic, plastic, clay, do not hold the appeal and elegance associated with glass. Threat of new Market is open but start-up costs may deter entrants MODERATE entrants Lack of knowledge in glass manufacturing may also be a deterrent as there are only a limited number of people in the region who have worked with glass. Moderate legal barriers to foreign entrants Threat of Customers are accustomed to alternatives such as HIGH substitutes ceramic tiles
14 The research contained within this document was commissioned by InvesTT Limited and conducted by the UWI, St. Augustine Campus
Manufacturing Profile 13: Glass Tiles
Non-tile alternatives such as paint are also widely used Substitutes are much cheaper than glass tiles While trends and tastes point toward increased use of glass tiles right now, this is subject to change Customers, however, have a taste for glass tiles Bargaining Diverse customer base. Not leaning to only a single LOW - power of market. MODERATE customers Bargaining Raw material in abundance LOW power of Not dependent on one supplier suppliers Many foreign suppliers of agents required for production such as colouring agents
4.2 Internal Analysis
The SWOT tool was used to conduct an Internal Analysis for the venture. The first phase of the SWOT tool identified the Strengths and Weaknesses inherent to the proposed project; and major Opportunities in and Threats to the industry (see Table 5). The second phase recommends how strengths and opportunities can be exploited and threats can be mitigated and weaknesses addressed respectively; this is addressed elsewhere in the report.
Table 5: SWOT Analysis of Glass Tiles
STRENGTHS WEAKNESSES Availability of skilled labour in glass High start-up cost making processes Limited capacity initially Flexibility in production Uncertain consistency in the raw
15 The research contained within this document was commissioned by InvesTT Limited and conducted by the UWI, St. Augustine Campus
Manufacturing Profile 13: Glass Tiles
Customer focused material Capturing a niche market Close management of feedstock Utilization of technology to make required products available to international Possibility of contamination of raw markets material Low energy costs in T&T Availability of up and coming skilled individuals in product design Ability to partner in various green initiatives OPPORTUNITIES THREATS Growing market for glass products Substitute products Upcoming beverage container bill to be New entrants into the market passed in parliament Potential competition for raw Abundance of cheap raw material material by new and existing Changing trend in culture toward the use manufacturers of recycled glass Threats from heavily capitalized People now more willing to recycle industries to overtake the market Range of products to diversify into e.g.: other building materials, speciality wares, decorative pieces/items, customised promotional items targeted at corporations.
16 The research contained within this document was commissioned by InvesTT Limited and conducted by the UWI, St. Augustine Campus
Manufacturing Profile 13: Glass Tiles
5 Sub-Sector Assessment
The Glass Tile Plant, was assessed on various criteria including market demand, raw
material cost and availability, energy use, investment value, finished product value and
availability of labour. This was based on a factor rating method developed by subject-matter
experts. On each of the criterion, the venture was given a rating from 1 to 10. These were
weighted according to the relative importance of the criteria and a final score calculated. The
final score for the Glass Tile Plant was 5.999 out of a possible 10, which was average among
the potential investment opportunities. See Table 6.
Table 6: Sub-Sector Assessment Table for Glass Tiles
CRITERIA ASSESSMENT WEIGHT RATING SCORE 1-10 Demand Glass tiles are a growth industry worldwide but 19.6% 6 1.176 T&T has not participated in it so some groundwork is necessary. Finished product Finished product value is high, in comparison to 17.4% 7 1.218 value inputs for well-designed and executed glass tiles. Raw material Recycling is not well developed in T&T, even 13.0% 6 0.78 (availability) though awareness is growing. While glass is available in large quantities, the collection would have to be well managed. Fluctuating raw material supplies; some intervention needed. Raw material Low with respect to finished product value. 13.0% 7 0.91 (cost) Legislation/ Favourable legislation exists for recycling 10.9% 6 0.654
17 The research contained within this document was commissioned by InvesTT Limited and conducted by the UWI, St. Augustine Campus
Manufacturing Profile 13: Glass Tiles regulation/ beverage containers, our main raw material government focus source, even though its implementation is slow. Energy High energy utilisation per unit output 8.7% 3 0.261 Labour market Glass forming is not a popular industry in the 8.7% 5 0.435 Caribbean. Employees not readily available; training and/or motivation required Investment value Investment on the high end of 1-5m USD would 6.5% 7 0.455 be required. Technology Relatively unfamiliar but somewhat basic 2.2% 5 0.11 technology as compared to local existing capability Job creation Low end of 20-50 permanent jobs. Skilled and 0.0% 5 0 unskilled required. More jobs, businesses may be created in the collection and pre-processing of glass. 100% 57 5.999
18 The research contained within this document was commissioned by InvesTT Limited and conducted by the UWI, St. Augustine Campus
Manufacturing Profile 13: Glass Tiles
6 Identification of Value Added Services
Value Stream Map (VSM) has its genesis in the Toyota Production System of Lean
Manufacturing. It essentially shows, on a single page, how value is created along the extended value chain from suppliers to customers for a single product type. When the value stream is mapped and assessed, opportunities for improvement may only then be identified.
The value stream indicates other services that will be necessary for the successful realization of the venture. This can be seen in Figure 6.
19 The research contained within this document was commissioned by InvesTT Limited and conducted by the UWI, St. Augustine Campus
Manufacturing Profile 13: Glass Tiles
Local and Recycling Production Control Regional Centres Hardwares
NGOs/Schools International etc Clients
Private and Bars/ Public Sector Restaurants etc Recycling Projects/ Feasibility Study Logistics Architects etc Intervention Design of initial product lines Process streamlining Glass Technology intervention Training
Design
Pre-processing Moulding Forming Finishing/ Packaging Inspection
30days 7days 1day 7days 3days 48days
7days 1day 1day 7days 1day 17days
Figure 6: Value Stream Map – Glass Tiles
6.1 Supply Chain Issues
Contamination of raw material:
One issue, particularly in Trinidad and Tobago is the sorting of garbage. This particular industry requires that glass refuse be sorted out specifically and sent to the factory for
20 The research contained within this document was commissioned by InvesTT Limited and conducted by the UWI, St. Augustine Campus
Manufacturing Profile 13: Glass Tiles processing. Contamination of the raw material would result in extra processing to purify it, as well as possibly resulting in flaws in the finished product. One method of avoiding this is to use the same model as Carib Breweries, by which an incentive is given for persons to sell their bottles to the company.
Consistency of raw material:
Waste glass may not always be of the same consistency depending on the method used to make it. This could cause problems later on in the value stream as poorly made glass may result in flawed tiles and subpar final product.
21 The research contained within this document was commissioned by InvesTT Limited and conducted by the UWI, St. Augustine Campus
Manufacturing Profile 13: Glass Tiles
7 Financial Analysis
7.1 Infrastructure
This facility will utilise approximately 20,000 sq ft for its operations. Table 7 shows a summary of Infrastructure Summary. Two (2) alternatives are proposed. These include either the purchase of land and building of a warehouse type structure at approximately
$1.5m US to house the factory. Alternatively, if available, a similar structure may be leased in an industrial estate. In either case further preparation of the facility would cost around
$400,000 US. An initial cost of 1.9m USD would be used to represent this in the estimate of expenses.
Table 7: Infrastructure Summary
DESCRIPTION COST (USD) Renting/Leasing of a 1021 m2 warehouse/factory 1,500,000.00 Installation of fire and security systems, air conditioning, plumbing, electrical 400,000.00 works etc. to make the building ready of occupation TOTAL 1,900,000.00
7.2 Annual Utilities Usage
The main utilities necessary would be water for the glass processing plant and natural gas and electricity for the tunnel kilns and, press and other equipment as well as for the building in general. A generous allocation was made for utilities however the incorporation of energy saving strategies are recommended for the venture from inception. See Table 8.
22 The research contained within this document was commissioned by InvesTT Limited and conducted by the UWI, St. Augustine Campus
Manufacturing Profile 13: Glass Tiles
Table 8: Annual Utilities Estimate (All currency USD)
DESCRIPTION COST (USD) Electricity 150,000.00 Water 65,000.00 TOTAL 215,000.00
7.3 Salaries
The Marketing and Sales efforts are important for this opportunity to realise its potential.
The talent and skill of the designers and operators are also critical. As such, considerable provision has been made for payment by commissions, and bonuses, respectively once performance targets have been met. Though the basic yearly payroll is US $428K, a final estimate of US $905K has been made for the payroll expenses which would only be fully utilised when performance targets have been achieved. Any overachievement will easily be paid from revenue. See Table 9.
Table 9: Yearly Salaries in USD
JOB TITLE NUMBER UNIT ANNUAL TOTAL ANNUAL SALARY (USD) SALARY/USD Accountant 1 32,239 32,239 Clerks 4 11,642 46,567 Administrator 1 21,493 21,493 General Manager 1 44,776 44,776 Marketing and Sales Reps (Plus 6 5,373 32,239 Commission)
23 The research contained within this document was commissioned by InvesTT Limited and conducted by the UWI, St. Augustine Campus
Manufacturing Profile 13: Glass Tiles
Marketing and Sales Manager 1 32,239 32,239 Operators 10 11,642 116,418 Designers/Artists 4 21,493 85,970 Driver/Messenger 1 11,642 11,642 Production Manager 1 32,239 32,239 Technician 1 21,493 21,493 Bonuses/Commission/Statutory 428,418 Expenses etc TOTAL 905,731
7.4 Legal/ Statutory Fees
Legal and statutory fees are estimated at $50K USD/yr.
7.5 Operational Costs
Raw materials and salaries and wages represent the biggest expenses regarding base operational costs. Legal and statutory fees are estimated at $50K USD/yr. This is included in administrative expenses. A summary of the base operational costs is shown in Table 10.
Table 10: Summary of Operational Costs
DESCRIPTION COST (USD) Administrative Expenses (including Legal/ Statutory Fees) 300,000 Building Insurance 10,000 Maintenance and Repairs 441,600 Raw Materials 1,766,400 Salaries and Wages 905,731 Sales and Marketing 450,000 Utilities 215,000 TOTAL 4,088,731 24 The research contained within this document was commissioned by InvesTT Limited and conducted by the UWI, St. Augustine Campus
Manufacturing Profile 13: Glass Tiles
7.5 Equipment
Major equipment include the cullet processing plant, the press and the kiln. The kiln selected for this profile is the tunnel kiln as this is the most suitable for the designer tiles that this venture would be producing. The tunnel kiln consists of 3 zones, namely the preheating zone, the firing zone and the cooling zone. The issue of incompatibility is resolved by using the glass in finely crushed form, however, proper firing is necessary to get the glass to fuse properly into tiles of a consistent nature. Container glass or sand-soda ash-limestone glass, requires high temperatures to fuse properly and the selected tunnel kiln is able to achieve temperatures of up to 1350 degrees Celcius in the firing zone. See Figure 7.
25 The research contained within this document was commissioned by InvesTT Limited and conducted by the UWI, St. Augustine Campus
Manufacturing Profile 13: Glass Tiles
•The tiles first enter the Preheating Zone. Here, they are heated by combustion gases coming from the Firing Zone. The conveyors runs continuously or at STEP 1: fixed time intervals, as required. PREHEATING ZONE
•The tiles now enter the second zone which is called the Firing Zone. Here, the fuel is fed. This is the hottest part of the kiln. The firing is provided by STEP 2: the burners located on the walls and the roof of the kiln. FIRING ZONE
•The tiles finally enter the Cooling Zone. The cooling is provided by the preheated ambient air flowing into the kiln. This zone consists of cold air injections and hot air extraction. This is to ensure a controlled cooling STEP 3: process. The hot air is extracted by the dryers. The load is cooled to room COOLING temperature. ZONE
Figure 7: Tunnel Kiln Steps
The major expense for this venture consists of the four (4) tunnel kiln sets. In order to get the best quality of tile, stacking is not recommended; so tiles must be fired and annealed in single layers. The tunnel kiln was selected for this purpose. The cullet processing plant, consumables such as tile backing and inks and moulds are all important to have at the inception of production. Details of base start-up expenses are shown in Table 11.
Table 11: Base Start-Up Expenses
DESCRIPTION QUANTITY UNIT PRICE TOTAL PRICE (US$) (US$)
26 The research contained within this document was commissioned by InvesTT Limited and conducted by the UWI, St. Augustine Campus
Manufacturing Profile 13: Glass Tiles
Ceramic Moulds (set) 1 100,000 100,000 Consumables 1 250,000 250,000 Conveyor 1 50,000 50,000 Cullet Processing Plant 1 300,000 300,000 Presses 3 100,000 300,000 Tunnel Kiln Sets 4 500,000 2,000,000 Vehicles(s) 4 45,000 180,000 Working Capital 1 750,000 750,000 TOTAL 3,930,000
7.6 Analysis of Cash Flows
An analysis of estimated cash flows using a 12% discount rate showed that optimistic, moderate and pessimistic scenarios have the potential to be successful over 10years. In the optimistic scenario, an investment of US$5,830,000U in Year 0, would Payback in Year 5 with an NPV of US$824,954 and an Internal Rate of Return of 16%. Over 10 Years, the return would be 39% and the Net Present Value $16,302,785. Key in achieving this, would be the strength of the sales initiative which would depend increasingly on global sales. Raw materials would also have to be imported to supplement the local supply but this is already being done by Carib Glassworks locally and provisions have been made in the budget for this.
The Pessimistic scenario pays back in Year 10. It requires a lower investment of
US$5,247,000 but the operational costs are considerably less due to the fact that sales are less in this scenario. Over 10 years the Internal Rate of Return is 13% and the NPV is
US$512,127. The Moderate and most likely estimate pays back in 7 Years with an NPV of 27 The research contained within this document was commissioned by InvesTT Limited and conducted by the UWI, St. Augustine Campus
Manufacturing Profile 13: Glass Tiles
US$2,506,919 and an IRR of 18%. Over 10 Years, the NPV is US$11,299,766 and the IRR is 29%. Both sales and production must be on target from Year 1 in order to achieve these targets, and leeway is made in the budget for rapidly increasing production should there be a sudden increase in market demand. Logistics are key in this scenario and it is crucial that the best people for the job are retained and the production closely matches what is required by the markets being served (see Figure 8).
6,000,000
4,000,000
2,000,000
- 0 1 2 3 4 5 6 7 8 9 10
(USD) (2,000,000)
(4,000,000)
(6,000,000)
DISCOUNTED DISCOUNTED ANNUAL NET CASH FLOWS (8,000,000) YEAR
Optimistic Moderate Pessimistic
Figure 8: Discounted Annual Net Cash Flows
8 Human Resources
8.1 Organisation Chart
The organisation would permanently employ thirty-one (31) employees with eight (8) in the
Marketing Department, sixteen (16) in the Production Department, three (3) in Accounts and
28 The research contained within this document was commissioned by InvesTT Limited and conducted by the UWI, St. Augustine Campus
Manufacturing Profile 13: Glass Tiles three (3) in Administration. In charge would be a General Manager who would ideally be an
Industrial Engineer, as would the Production Manager. They should both be familiar with
Lean Production and Total Productive Maintenance. See Figure 9.
General Manager
Production Marketing and Administrator Accountant Manager Sales Manager
Clerical Accounts Clerk Operators Online/Phone Assistant (2) (10) Sales Rep
Creative Driver/ International Designers Messenger Sales Rep (2) (4)
Maintenance Regional Sales Technician Rep
Local Sales Rep (2)
Warehouse Clerk
Figure 9: The organizational structure of the recycled glass tile factory
8.2 Job Descriptions for Key Positions
This company would do the critical design and production functions in-house. Operations such as raw material preparation could be sub-contracted especially when the demand for
29 The research contained within this document was commissioned by InvesTT Limited and conducted by the UWI, St. Augustine Campus
Manufacturing Profile 13: Glass Tiles the tiles increase. Brief descriptions for the key permanent positions in the Glass Tile Plant are in Table 12.
Table 12: Job Descriptions
POSITION DESCRIPTION General Manager The General Manager is responsible for the overall performance of the company. All the Managers and the Accountant report to the GM. Administrator The Administrator manages the office and is responsible for internal communication. This individual leads the HR function within the company and is responsible for ensuring that the physical facility is kept well maintained and also for employee welfare. Clerical Assistant The clerical assistant supports the administrator and deals with day-to-day HR issues. Driver/ Messenger The driver/messenger is responsible for courier services for the company. All work is prioritized by the administrator. When on the compound, this individual will assist in the warehouse. Accountant The Accountant is responsible for managing the financial affairs of the company and preparing financial and management accounting reports on-time, as required. Accounts Clerk (2) The Accounts Clerks support the Accountant in Payroll, Accounts Payable, Accounts Receivable and preparation of management accounting reports. Production The Production Manager is responsible for achieving production targets, on Manager time and at the quality required. The Production Manager is also responsible for building and equipment maintenance, occupational safety, and for contributing to the R&D function. A database of contractors will be maintained and utilized as necessary. Maintenance The maintenance technician shall perform routine preventive maintenance and Technician predictive maintenance on all the major pieces of equipment and on the facility. This individual will work along with contractors where necessary. Operators (10) The operators shall be responsible for production. They will work along with the creative designers to ensure that the products are properly executed. 30 The research contained within this document was commissioned by InvesTT Limited and conducted by the UWI, St. Augustine Campus
Manufacturing Profile 13: Glass Tiles
Operators will also be responsible for maintaining the facility and equipment and working with the warehouse to receive and issue materials, spares and finished goods. Creative Designers The Creative Designers work with marketing to determine what the market (4) wants, but they spend the majority of their time in production, to execute their designs along with the operators. Marketing and The Marketing and Sales Manager will be responsible for promoting the Sales Manager company’s products, coordinating the R&D Team and ensuring that the monthly sales targets are always met or surpassed. Online/Phone Sales The Online/Phone Sales Rep will be responsible for maintaining the website Rep and other media to support the sales effort and for making 5-10% of the monthly sales target. International Sales The international sales representatives will be responsible for 20-30% of the Rep (2) monthly sales target initially, increasing by 10% each year to year 5. Regional Sales Rep The regional sales representatives will be responsible for making 20-30% of the monthly sales target through sales to/through hardware stores, mall stores, tile stores, project managers, architects, interior designers, contractors, public and private sector projects and individuals. Local Sales Rep The local sales representatives will be responsible for making 40-50% of the (2) monthly sales target through sales to/through hardware outlets, mall stores, tile stores, project managers, architects, interior designers, contractors, public and private sector projects and individuals. Warehouse Clerk The warehouse clerk is responsible for maintaining documentation related to any receipt or issuing of raw material, spares and consumables and finished goods.
8.3 Labour Availability
Table 13: Table showing potential labour pools for proposed positions
31 The research contained within this document was commissioned by InvesTT Limited and conducted by the UWI, St. Augustine Campus
Manufacturing Profile 13: Glass Tiles
CATEGORY UNEMPLOYED EMPLOYED POTENTIAL EMPLOYMENT POOL
Professionals 900 36700 Graduates from any of the sixteen (16) Universities of Accountant the West Indies Open Campus locations in the Caribbean, and/or any of UTT campuses in Trinidad.
Legislators, senior officials, 400 61300 Sourced from the existing managers pool of unemployed and employed persons through General Manager interviews and the subsequent Administrator process of filtering. Production Manager Marketing and Sales Manager
Clerks 5100 67100 Can be sourced from several training centres in Trinidad Clerical Assistant registered under the Accountant Clerk Accreditation Council of Creative Designers Trinidad and Tobago (ACTT) Sales Representatives (Online, Local, E.g. Crane Safe Technical Regional and Institute, Advanced Solutions International) Technical Institute and Warehouse Clerk Technical Institute for Learning, just to list a few. Technicians 1500 69300
Maintenance
32 The research contained within this document was commissioned by InvesTT Limited and conducted by the UWI, St. Augustine Campus
Manufacturing Profile 13: Glass Tiles
Technician
Floor Operators 600 57700
33 The research contained within this document was commissioned by InvesTT Limited and conducted by the UWI, St. Augustine Campus
Manufacturing Profile 13: Glass Tiles
9 Location
The ideal location for this facility would be in East Port-of-Spain, Claxton Bay or Arima.
This is because of the proximity to the raw material source. Most of our glass bottles end up in the three major landfills located in Port-of-Spain, Claxton Bay and Arima, so it would be wise to set-up a cullet machine in each for pre-processing of the raw material in conjunction with the Solid Waste Management Company of T&T (SWMCOL). As explained previously, space may be sought within industrial estates or land many be purchased and prepared for production.
Another alternative would be to set up this facility in the Cove Eco-Industrial Park in
Tobago, however, raw material would have to be regularly brought to Tobago via the Inter-
Island Ferry service. Tobago is a beautiful location to inspire the creativity needed for such a venture and the infrastructure and space are readily available. Table 14 depicts a general assessment of locations in T&T. It is followed by a list of the best general locations which may be used as a guide to find alternative locations to the recommended, if necessary.
34 The research contained within this document was commissioned by InvesTT Limited and conducted by the UWI, St. Augustine Campus
Manufacturing Profile 13: Glass Tiles
Table 14: A general assessment of locations in T&T
Best Locations based on rankings
1) Central Trinidad: 1035 2) Trincity: 1030 3) Aranguez: 1015 4) Arima: 1000 5) South: 975 6) Diego Martin: 955 7) Tobago: 845
35 The research contained within this document was commissioned by InvesTT Limited and conducted by the UWI, St. Augustine Campus
Manufacturing Profile 13: Glass Tiles
10 List of Potential Investors and Partners
Table 15 gives a list of potential investors and partners, together with a description justifying their inclusion on the list. The list is not exhaustive.
Table 15: List of Potential Investors and Partners
POTENTIAL INVESTOR/ CONTACT INFORMATION PARTNERS Glass Packaging Institute 1220 North Fillmore Street, Suite 400, Arlington, VA 22201, USA Phone: (703) 684 6359 E-mail: [email protected] Ferro Global Headquarters 6060 Parkland Blvd. Suite 250 Mayfield Heights, OH 44124, USA Phone: (216) 875-5600 ANSA McAL Limited 9th – 11th Floors, TATIL Building 11 Maraval Road Port of Spain, Trinidad and Tobago, West Indies Phone: (868) 625-3670 to 5 SWMCOL Head Office 34 Independence Square Port-of Spain Phone 868 625 6678 Piranha International Limited 10-11 Bahadoor Street, California, Couva. Trinidad and Tobago. West Indies. Phone: (868) 223 7444 E-mail: [email protected] Website: www.piranhatt.com 36 The research contained within this document was commissioned by InvesTT Limited and conducted by the UWI, St. Augustine Campus
Manufacturing Profile 13: Glass Tiles
37 The research contained within this document was commissioned by InvesTT Limited and conducted by the UWI, St. Augustine Campus
Manufacturing Profile 13: Glass Tiles
11 Concluding Remarks
This opportunity involves manufacturing tiles out of 100% recycled container glass. The local, regional and global industry for glass tiles continues to grow and recycling is becoming an area of focus in the island states of the Caribbean. While recycling is not well developed in T&T, there should be relatively easy access to used glass containers. The collection and processing of the glass may be outsourced however, so that the enterprise does not lose focus on the core business of creating high valued added designer products.
Glass working has not been a common industry in T&T with the existence of just one glass plant which is a glass container plant and no cottage industry in the area. Notwithstanding this, there are experts in glass-forming locally. For this profile the main areas of concern would be in the organisation of the raw materials, the design and execution of the products, and the effectiveness of the marketing efforts. The design of the tiles must coincide with the taste of the target markets. As such, the role of the designer is critical in this opportunity.
38 The research contained within this document was commissioned by InvesTT Limited and conducted by the UWI, St. Augustine Campus
Manufacturing Profile 13: Glass Tiles
12 References
Architectural Art Tile. 2012. “Creating a Glass Tile Pattern.” Accessed January 20, 2016. http://www.architecturalarttile.com/creating-a-glass-tile-backsplash-pattern/
Chanan S. Syan. 2008. "Development of an Integrated Framework for Assessing and Improving the Performance of Manufacturing Industries in Developing Countries", Journal of Konbin
Environmental Center University of Colorado. 2016. “Recycling Facts.” Accessed December 06, 2016. http://www.colorado.edu/ecenter/recycling/resources/curricular- resources/recycling-facts
FireClay Tile. 2016. “100% Locally Recycled Glass Tile.” Accessed December 06, 2016. https://www.fireclaytile.com/glass/
GPI (Glass Packaging Institute). 2016. “Glass Recycling Facts.” Accessed March 01, 2016. http://www.gpi.org/recycling/glass-recycling-facts
Ministry of Trade, Industry, Investment and Communications. 2015. “Compendium of Investment Incentives in Trinidad and Tobago for the Non-Energy Sector.” Accessed December 15, 2015. http://tradeind.gov.tt/wp-content/uploads/2016/02/2015- Compendium-of-Incentives.pdf
39 The research contained within this document was commissioned by InvesTT Limited and conducted by the UWI, St. Augustine Campus