The China Aluminum Industry Network highlights that setting up an aluminum extrusion production line involves significant investment. This includes the cost of importing extrusion presses, aluminum rod heating systems, and other processing equipment. The total project cost, covering land, factory construction, facilities, equipment, and installation, amounts to 36 million yuan.
The estimated payback period is five years, with 6,000 operational hours per year, totaling 30,000 hours over the period. This means the capital expenditure needs to be recovered at a rate of 1,200 yuan per hour.
Once the aluminum extrusion line is operational, additional costs come into play. These include energy (industrial power and fuel), mold manufacturing, labor, consumables, and maintenance of production equipment. These are calculated at 1,000 yuan per hour. Meanwhile, the operation of an aluminum extrusion press alone costs 2,200 yuan per hour, excluding other company-related expenses.
All these costs must be covered through the sale of aluminum products. Revenue must not only cover management costs but also post-extrusion processes like spraying, anodizing, and further processing. Therefore, every kilogram produced contributes to covering the plant’s overall input costs. A production shutdown would result in greater losses than the cost of the extrusion process itself.
To compensate for other company costs, an additional 50% is added per hour, raising the total operating cost of the extrusion press to 2,860 yuan per hour. This cost is recovered by selling qualified aluminum profiles. Increasing the output from 800 kg/hour to 1,000 kg/hour reduces the cost per kilogram significantly:
- 2,860 yuan ÷ 800 kg = 3.58 yuan/kg
- 2,860 yuan ÷ 1,000 kg = 2.86 yuan/kg
Scrap aluminum before extrusion incurs costs related to remelting, homogenization, and storage, but it hasn’t yet consumed extrusion time or caused product loss. This is an important factor when evaluating aluminum defects.
In the West, the aluminum extrusion industry has shifted toward reducing the number of extruders while increasing investment in more advanced extrusion lines. This approach uses high-cost porous molds to boost productivity and yield—newer lines can achieve 82% to 86% efficiency in aluminum rod usage, leading to higher shipments.
Key considerations include:
1. High initial costs of an extrusion line must be offset by selling high-value aluminum profiles.
2. Since aluminum profiles are the main revenue source, all extrusion-related operating costs are tied to them. Thus, maximizing output is crucial for profitability.
3. Additional company costs and profits depend on the sale of aluminum profiles, which can be even higher than the extrusion process itself.
Because all costs rely on selling quality products, every business decision should focus on improving the shipping rate of aluminum profiles.
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