Financial Feasibility Studies
Techno-economic and Financial Feasibility Studies in Saudi Arabia
A techno-economic study for a new state-of-the-art production facility includes an appraisal of the following:
- Technology
- Process and capacity
- Machinery and equipment
- Buildings and civil works
- Operating costs
- Location and site selection
- Organisation and manning
- Implementation
Technology Appraisal
The selected technology and its suitability for the intended application. We will review issues such as the risk of a general shift in the industry towards alternative materials or technologies.
Process and Capacity
The process flow is documented covering the physical processes in the production process. Plant capacity is defined based on standard operating parameters.
Machinery and Equipment
Estimates for items of machinery and equipment are compiled. This includes machinery and equipment for production lines, electrical, water and gas service utilities, ancillary equipment, spare parts and tooling. Also, a review of equipment supplier estimates is undertaken while general plant layouts are prepared that reflect the possible future expansion of plant capacity.
Buildings and Civil Works
The building structures necessary to accommodate the production facility and civil works, with cost estimates for site preparation and development, construction of buildings and offsite works.
Operating Costs
Local and imported raw materials, electric, gas and water utilities, plant overheads, general and administrative expenses, management and labour, sales and marketing fees, professional fees, transportation and pre-operating costs.
Location and Site Selection
Infrastructural adequacies as well as the economic aspects of the possible locations for the facilities are examined, within the context of market requirements and the activities required for the supply of materials and delivery of outputs.
Organisation and Manning
An organisation structure and plant personnel requirement, including a breakdown of manning costs for plant operatives and management (Including salaries and benefits, according to industry guidelines). An organisation chart is prepared, indicating the reporting responsibilities of department heads, the manpower number and the skills required.
Implementation
Schedules for the establishment of project management, arrangements for the transfer of technology, detailed engineering of equipment, tendering, bid evaluation and contracts awarded. Also considered are timescales for financing, erection and commissioning, recruitment and training of personnel, pre-operation marketing and approvals and licensing from the relevant public authorities.
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A financial feasibility study from ASA Consulting Advisory Services covers:
- Capital investment (Fixed assets, pre-operating expenses and working capital)
- Financial cost and financing scheme
- Production costs and overheads
- Projected financial statements (Income and profit/loss)
- Balance sheet
- Cash flow statement
- Project performance
- Internal rate of return
- Payback period
- Net present value
- Project break-even analysis
Also undertaken is a sensitivity analysis, covering appropriate variations in project parameters such as a reduction in sales volume, increase in capital investment cost and increase in operating costs for particular bought-in components.
Markets and services
Essentials
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ASA Consulting Advisory Services
PO Box 5630
Warminster
Wiltshire
BA12 2DU
United Kingdom