how to make feasibility of a mega project by tariq sarwar awan food technologist & engr. saima...

How to Make Feasibility How to Make Feasibility of a Projectof a Project

ByByEngr. Saima Khoro BE & MS (Electrical/Electronics), andMr. Tariq Sarwar, Food Technologist, Nasir Flour Mills, Lahore, Chairman Research and Recommendations Wing, Pakistan Flour Mills Association.

Engr. Saima Khoro / Tariq Sarwar Engr. Saima Khoro / Tariq Sarwar Awan Food Technologist Awan Food Technologist

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TYPES OF FEASIBILITIES FOR THE PROJECTTYPES OF FEASIBILITIES FOR THE PROJECT

Preliminary FeasibilityPreliminary Feasibility

Full Scale FeasibilityFull Scale Feasibility

Bankable FeasibilityBankable Feasibility


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PRELIMINARY FEASIBILITYPRELIMINARY FEASIBILITY

Availability of the Raw MaterialAvailability of the Raw Material Water Water PowerPower FuelFuel Soil TestSoil Test Effluent DisposalEffluent Disposal Finished Product Demand Market StudyFinished Product Demand Market Study


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THE BASICSTHE BASICS

The Size of the Mill with The Size of the Mill with Recommended CapacityRecommended Capacity

The Targeted Marketing AreaThe Targeted Marketing Area

Penetration PossibilitiesPenetration Possibilities


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FULL SCALE FEASIBILITYFULL SCALE FEASIBILITY

It should not be prepared by self but it It should not be prepared by self but it should be done by any professional with should be done by any professional with deep study in the Same Field.deep study in the Same Field.

Complete market Scenario Complete market Scenario Actual Financial aspectsActual Financial aspects Financial ForecastsFinancial Forecasts Ten year Plan Ten year Plan


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BANKABLE FEASIBILITYBANKABLE FEASIBILITY

Should be prepared by Trade Specialist Should be prepared by Trade Specialist like senior Food Technologist specially like senior Food Technologist specially any Food Technology Professor in any any Food Technology Professor in any University in consultation with Financial University in consultation with Financial and costing expert who is dealing to and costing expert who is dealing to banks from ten years minimum.banks from ten years minimum.

Machine Specification Book (Precise)Machine Specification Book (Precise) Should be prepared in a manner Should be prepared in a manner

acceptable to Bank.acceptable to Bank.


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ADEQUATE SITE SELECTION CRITERIAADEQUATE SITE SELECTION CRITERIA

Criteria for selection of SiteCriteria for selection of Site Infra structure RequiredInfra structure Required Area RecommendedArea Recommended Recommended Location of SiteRecommended Location of Site Land RequirementLand Requirement Proposed Construction Plan with CostProposed Construction Plan with Cost


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ADEQUATE FINISHED PRODUCT MARKETADEQUATE FINISHED PRODUCT MARKET

Local Market of PakistanLocal Market of Pakistan Export Market ScenarioExport Market Scenario List of Importer Countries in the World with List of Importer Countries in the World with

their import quantity and rate of importtheir import quantity and rate of import Acceptable Market LogisticsAcceptable Market Logistics TransportTransport DutiesDuties Costing Factor Costing Factor


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FACTORY REQUIREMENTSFACTORY REQUIREMENTS

Raw Material TransportRaw Material Transport Process water (treatment plant, etc, Process water (treatment plant, etc,

Quality check options)Quality check options) Effluent DisposalEffluent Disposal Transport Finished ProductsTransport Finished Products Labor and Housing AvailabilityLabor and Housing Availability Expansion facilities and space.Expansion facilities and space.


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ADEQUATE CAPITAL COST ADEQUATE CAPITAL COST ESTIMATEESTIMATE

Plant Cost Plant Cost Plant Cost with AutomationPlant Cost with Automation Phases of Plant Up-gradation plan year Phases of Plant Up-gradation plan year

wisewise Infra-structure CostInfra-structure Cost Financing Cost During Construction and Financing Cost During Construction and

StartupStartup Working Capital including training Cost.Working Capital including training Cost.


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FANANCING STRUCTUREFANANCING STRUCTURE

Debt. Equity Ratio and AvailabilityDebt. Equity Ratio and Availability Net Cash flow for Debt. ServicingNet Cash flow for Debt. Servicing Sensitivity AnalysisSensitivity Analysis1- Market Price Analysis and Cyclicity1- Market Price Analysis and Cyclicity2- Raw Material Cost Fluctuations2- Raw Material Cost Fluctuations Return of InvestmentsReturn of Investments Recommended Life span of PlantRecommended Life span of Plant Saturation Probability Study of Saturation Probability Study of

international standardinternational standard


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PROCEDURE FOR FINANCIAL ANALYSISPROCEDURE FOR FINANCIAL ANALYSIS

Profit and Loss statement Profit and Loss statement Cash Flow Charts and Statement Cash Flow Charts and Statement Sensitivity AnalysisSensitivity Analysis Projected Balanced SheetProjected Balanced Sheet Expected Sale Trends with last 5 years Expected Sale Trends with last 5 years

reference and proposed for next 5 years.reference and proposed for next 5 years.


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DETAILED PLANS BOOKLETDETAILED PLANS BOOKLET

Plan for obtaining Raw Material Plan for obtaining Raw Material Construction Plan with Structural Construction Plan with Structural

DrawingsDrawings Training plan local or ForeignTraining plan local or Foreign Operations PlanOperations Plan Phases of various plans if needed in the Phases of various plans if needed in the

specific section Booklet.specific section Booklet.


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SITE PLANSSITE PLANS

Selection of SiteSelection of Site TopographyTopography Socio-Economic StatusSocio-Economic Status Environmental aspectsEnvironmental aspects Fundamental AssumptionsFundamental Assumptions General Economic BackgroundGeneral Economic Background Political Stability.Political Stability.


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DESCRIPTION OF PROCESS & DESCRIPTION OF PROCESS & MILL ANCILLARIESMILL ANCILLARIES

Power Generation (if Required)Power Generation (if Required) RecoveryRecovery Effluent TreatmentEffluent Treatment Electrolytic PlantElectrolytic Plant Maintenance ShopMaintenance Shop Lab Development for Quality assurance Lab Development for Quality assurance

according to ISO standards according to ISO standards Bid from SuppliersBid from Suppliers


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LAYOUTS & AUTOMATION LAYOUTS & AUTOMATION PLANPLAN Complete Line Flow DiagramComplete Line Flow Diagram Technical Layout with specificationsTechnical Layout with specifications Placement plan with foundations ready for Placement plan with foundations ready for

installation at Specific spot, (be careful about installation at Specific spot, (be careful about placing, height, non-disturbed flow of placing, height, non-disturbed flow of material)material)

Automation of Feeding at startAutomation of Feeding at start Speed Check facilitiesSpeed Check facilities Sensors provisionSensors provision Linkage in line with automationLinkage in line with automation Auto weighing and auto packing unitAuto weighing and auto packing unit Conveyors till warehousesConveyors till warehouses


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PROCESS ESSENTAILSPROCESS ESSENTAILS

List of Raw material requiredList of Raw material required Cost of Raw material per tonCost of Raw material per ton Accessories availability assuranceAccessories availability assurance List of raw material to be imported and its List of raw material to be imported and its

fluctuation history and graphical fluctuation history and graphical representationrepresentation

SparesSpares Availability of Clean WaterAvailability of Clean Water


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METHODS AND PLANSMETHODS AND PLANS Operations Covering MethodOperations Covering Method Data and Production PlanData and Production Plan Tests and Sources of Information on YieldsTests and Sources of Information on Yields Raw material characteristicsRaw material characteristics Man power requirement stages and their Man power requirement stages and their

employment planemployment plan HR DevelopmentHR Development Recommended staff and their wages ratesRecommended staff and their wages rates Organization ChartOrganization Chart Schedule of EmployeesSchedule of Employees Training ProgramTraining Program Accommodation PlansAccommodation Plans


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ESTIMATION & COSTINGESTIMATION & COSTING

Manufacturing costManufacturing cost Capital cost requirementCapital cost requirement Escalation FactorEscalation Factor ContingenciesContingencies Interest During ConstructionInterest During Construction Other ExpendituresOther Expenditures


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FINANCIAL FACTORSFINANCIAL FACTORS

Plan Financial institutionsPlan Financial institutions Payout periodPayout period Is payout period enough or extension Is payout period enough or extension

requiredrequired Indicators of anticipated interest ratesIndicators of anticipated interest rates Terms and grace periodsTerms and grace periods Proposed methods of foreign and local Proposed methods of foreign and local

financing and documents requirementsfinancing and documents requirements


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ORDER OF MAGNITUDE ORDER OF MAGNITUDE with Basic Parameterswith Basic Parameters

Capital Cost EstimationCapital Cost Estimation

Operating Cost EstimationOperating Cost Estimation

Selling Price ProjectionsSelling Price Projections


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Executive Summary for BOD/ Executive Summary for BOD/ CEOCEO

Executive Summary should be precise Executive Summary should be precise covering all the Important factors, covering all the Important factors, highlighting every aspect to understand highlighting every aspect to understand every thing to foresee the viability of the every thing to foresee the viability of the Project and its suitability.Project and its suitability.


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Method to be Adopted by Method to be Adopted by CEO/ MD/ BODCEO/ MD/ BOD

Hand over responsibilities to skilled people.Hand over responsibilities to skilled people. Supervise and supportSupervise and support Get daily/ weekly Progress report with presentaionGet daily/ weekly Progress report with presentaion Monthly BOD meeting and grand presentationMonthly BOD meeting and grand presentation Give Deadlines to responsible.Give Deadlines to responsible. Remember…….Men at Work, Your Money at Work.Remember…….Men at Work, Your Money at Work. No relaxation for time frame to any one, deadline is No relaxation for time frame to any one, deadline is

a deadline.a deadline. Most important factor to remember…….YOU WILL Most important factor to remember…….YOU WILL

KEEP EXPENSING, TILL YOU START YOUR KEEP EXPENSING, TILL YOU START YOUR FACTORY, SO START FACTORY AND START FACTORY, SO START FACTORY AND START EARNING…………..EARNING…………..


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Best Wishes for Success Best Wishes for Success Transworld TeamTransworld Team

Engineer Saima Khoro BE Electrical/ Engineer Saima Khoro BE Electrical/ Electronics, MS Electrical/Electronics Electronics, MS Electrical/Electronics with Kind Support of Mr. Tariq Sarwar, with Kind Support of Mr. Tariq Sarwar, Food Technologist, CEO Nasir Flour Food Technologist, CEO Nasir Flour Mills & Chairman Research and Mills & Chairman Research and Recommendations Wing, Pakistan Flour Recommendations Wing, Pakistan Flour Mills Association, Head Office, Lahore.Mills Association, Head Office, Lahore.

how to make feasibility of a mega project by tariq sarwar awan food technologist & engr. saima...

Business

cost of raw material

raw material construction

senior food technologist

food technology professor

raw material cost fluctuations

training cost

detailed plans booklet

specifications placement