CASH FLYING with ASH Business Opportunities in Ash Handling [Feb 2012]

February 10, 2012 6:37 am

Earlier coal seemed to produce ash to contaminate air, now it is generating cash in the form of ash
It’s true that nothing comes free of cost. A candle has to be burnt for avoiding darkness of night. In a vicinity to lit up its roads and shelters, tons of coal has to be burnt in the furnace of a thermal power plant, which throws out thousand tons of ash to pollute the earth. That is a great cost and problem. But it is also true that the bigger problem finds bigger opportunity.
In a coal based thermal power plant, huge amount of ash is generated which has to be disposed off continuously. Generally a 500 MW coal based plant generates 400 tons ash per hour. This is produced in two forms viz. fly ash and bottom ash.
In the past, ash produced from coal combustion used to be dispersed into the atmosphere directly which was harmful for nature and life. Then the health and environmental concerns came into action and endorsed laws which have reduced ash emissions significantly.
The managing and recycling of fly ash has become a great interest for social entrepreneurs and scientists in recent years. Though the ash management has never been a primary objective of a power plant but its utility options have attracted many business opportunities in  manufacturing PPC, sintered aggregate, blocks, fly ash bricks etc.,  filling of low lands and open cast mines etc. by managing ash through ‘ash handling plant’, so it has become indispensable part of power industry.  This consists of hundred types of equipment and spares. Firms which provide total solution for ash handling systems to the power plants procure materials, services and components from their vendors/OEMs on a large scale.  Thus the ‘ash handling’ itself has become an industry. The industry has created a great opportunity for small and medium entrepreneurs to become OEMs for ash handling system providers. The major business opportunity in this field is metal casting.
Major parts of ash handling components are moulded in metal casting shop. Clinker grinder rolls, segments, anvil plates, wear plates, bearing housings, valves etc. are the cast materials required widely in AHP. The style of metal casting business depends upon the material, process and production capacity. Process and chemical composition in this business play a vital role in competitive market. There are many types of processes to cast metals but for ash handling components sand moulding is applied. AHP regularly requires cast material items as its spares. The highly required casted spares in AHP are gates made of cast iron IS:210, housing wear plates (  Cast Iron IS:210), wear plates for clinker grinders (manganese steel IS:276), grinding rolls (manganese steel ASTM A128), grinding segments (Ni-hard), inlet section for jet pumps (alloy cast iron IS:4771) and different type of valves etc.
Electricity cost is the major cost elements for casting biz apart from materials, so it also gives competitive advantages to those who are being availed of subsidised electricity. Nowadays many energy efficient casting machineries are available in the market, through which new entrants can gain cost effectiveness.  Generally AHP requires CI, manganese and hi-chrome casted materials. One firm exercises on one type of casting material and process so economy of scale is easily achievable. The business is risky as materials are hardly rectified once they casted, but the profit margins are also proportionally and positively related with risk and complications of materials. Production capacity matters into the business but if a small firm having as small as 1 ton capacity furnace can be a rate contractor and fully utilised throughout the year if it can manage to supply quality products at low price.
Fabricated equipment and structures viz. chutes, hoppers, feeders, conveyors, gratings in AHP are generally made by MS materials, so metal fabrication business can also be a great option for business seekers. This biz is relatively easy to stat and to manage as firms manufacture fabricated items as per drawing and details provided by clients. An entrepreneur can start the venture with a team of labours with a mechanical engineer with a set of few machineries and a shed. The major cost element in this biz is raw materials which occupy 60-70 per cent of total cost while 15-20 per cent of that goes to labour, so a firm can achieve competitive advantages through procurement of materials. Production capacity in this business matters greatly, as it helps to win trust and contracts from client. Moreover, the economy of scope is also achieved by large production capacity firm by producing multi products with same resources. A firm with large capacity can win the competition by low price strategy in two different ways, one through producing on large volume with low margins and other through producing small equipment and components by materials left scraped after producing big size structural items. A firm with small capacity can go for producing small components such as gratings, small hoppers, gate housing, clinker grinder body, clinker outlet chutes, overflow tanks, sprocket etc.
AHP or any other plant necessitates operation, repair and maintenance jobs for smooth running of the plant. A breakdown for couple of minutes may make huge loss for a plant, as a result power plants call for specialised contractors to run and maintain its plant. This creates a good opportunity for a businessman to take up the responsibility and start business as a contractor. In this business a team of labours, supervisors and engineers are employed at the site, so it does not require huge funds for machineries and land unlike other businesses. Though the entry into this business is tough for new and fresh entrepreneur but being a sub contractor or partnering with main contractor can open up the avenues to get in. Typically in 500MW plant a team of 20-30 people are required for operation and maintenance of AHP. Other contractual jobs are also required in AHP for ash cleaning, ash dumping etc.
Trading and supply also may be the good choice as business for AHP. There are lot of brought-out items such as bearings, chains, bush, nozzles, and electrical components viz. cables, control systems, MCBs regularly required. Competition in this business is very intense, so one has to be ready to accept low margin and credit strategy.
Transporting of clinkers or ash from ash handling plant to ash ponds or other sites such as cement plant is a good biz option. Today’s many ash handling plant directly discharge its ash from hopper to trucks, so there are permanent requirement of trucks in AHPs. Now a days owning trucks and other commercial vehicle is not a tough job as financial institution have become more aggressive and liberal in financing this business. Running trucks in AHP is much better than running them on the public roads. A truck has to run within few kilometers to load and unload ash. This keeps the trucks maintenance free and the business less risky.
According to NTPC, over the years, the ash utilisation level has reached from meagre 0.3 million tonne in 1991 – 1992 to 26.03 million tonne in 2010-11. Therefore ash utilisation is the major necessity for environment and great interest for entrepreneurs.
Ash is currently being utilised in production of cement, asbestos, land development, road embankment construction,  building products such as bricks, blocks, tiles and in soil formation for  agriculture etc. Therefore it’s as well a good business opportunity to deal in ash and clinkers for trading with cement plants or farmers or manufacturing bricks and blocks.
Now NTPC’s ash is being utilised in road embankment, construction and filling works such as in Allahabad by-pass road executed by NHAI and Noida – Greater Noida Expressway etc. In building construction works for example the Greater Noida Industrial Development Authority (GNIDA) has been constructed with fly ash bricks. In mine filling, the South Balanda Mine is being filled with ash. Use of fly ash in agriculture, as a soil modifier and source of micro and macro nutrients, has been exercised by NTPC.