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Imo Pump SparesVIDEO ON THE TOPIC: New spare parts platform in Hénin-Beaumont
When analysing a project to build a new fish processing plant, expanding or renovating an old one, or changing an existing process or line, the primary and most important decision regards the various investment possibilities and, eventually, deciding whether or not to invest. Decisions on investments are based on the profit and sustainability of the technical alternative chosen and on the capital available or borrowed. Variables affecting profit and sustainability are manifold and usually fall into three general interrelated groups: market, investment and costs.
Market analysis will help to establish the probable amount of fishery products to be sold, and this information will help determine the minimum plant capacity. In turn, plant capacity is directly related to investment and this influences the cost of production. As a general principle, all feasibility studies are based on an early market survey which will provide the answers to the following questions:.
How much can be sold? With a minimum of 5 years projection from the anticipated start-up date of industrial activities. The capacity of the project can be determined from the above and studies can then be undertaken which will allow a decision to be made on whether or not to invest. The total amount of money necessary to put a project into operation is known as "Capital investment costs". This investment can be made through in-house capital, credit from national and international financing agencies, and from suppliers.
The total capital required to complete and operate the project is composed of two parts:. It is basically the total value of all the assets of the plant. Fixed assets can be tangible or intangible. Tangible assets comprise machinery including the cost of assembly , buildings, auxiliary installations, etc.
The amount of this capital varies within very wide limits, depending on the market for which the products are intended, the characteristics of the process and the conditions established by the source and availability of raw materials. Each of these components can be estimated separately, and its magnitude will vary considerably according to the nature of the project. These components of fixed investment are briefly described below. Preliminary economic studies are usually performed before deciding on or supporting construction of a project; these include investigative travel, market surveys, laboratory and pilot plant studies, etc.
However, the procedure for charging these costs varies from project to project. In the case of public utility projects, for example, the Government does not usually add these expenditures to the total costs of the project and regards them as unrecoverable promotion costs.
All the resources assigned to a project must be considered as part of its cost, including those incurred at the research stage and pre-project costs. In some cases, the pro-forma invoices of the equipment only include their intrinsic value, and in others, the value of the equipment after installation. Where it includes the value of the installed equipment, components 2 and 3 can be calculated together and include all complementary installations.
Where equipment or materials have to be imported, details will be given in terms of FOB equipment price at port of origin , CIF price including freight and insurance and at the utilization site import expenses, freight, etc. The equipment and machinery used during the assembly and which can be used in the production process must also be included. The value can be found by depreciating the goods according to use, incorporating only the resulting residual value see the concept of depreciation and residual value in Chapter 4.
If this component is dealt with separately, provision must be included for installation of imported equipment. The cost of installation will often include payment of qualified expatriate personnel. This is convenient for the experience that the personnel of the supplier company should have, and because, in many cases, equipment suppliers will only honour their guarantees if the equipment is assembled, adjusted and started-up by their own personnel or by technicians authorized by them.
In many estimating methods, this component is calculated separately from the rest of the equipment. In a detailed estimate, calculation of the cost of pipes is made with a diagram of the pipes and their siting. Piping costs can vary greatly in the fishery industry, from low to relatively high values.
Piping in the fishery industry is utilized, for instance, for the purpose of conducting water fresh and sea water , brine, refrigerants e.
This component includes all auxiliary equipment and instruments for controlling and recording the different variables at each stage of the process; it will increase with the application of HACCP and HACCP-based methods in the fishery industry. The costs involved in electrical installations consist mainly of labour and materials necessary for supplying power and lighting to the process, while the costs for illuminating the service buildings are normally included in the cost of auxiliary services.
Cost of construction includes the expenditure on labour, materials, and supplies needed for the construction of all buildings connected to the plant. They include plumbing costs, electrical installation, ventilation, air conditioning, and similar building services.
The cost of constructing a fish plant usually varies according to the country and the site of the plant. Table 3. When no other data are available building requirements can be estimated at m 2 per ton of raw material daily processed. Buildings for fish production first category, with offices, buildings for storage sinks, etc. The accepted definition for auxiliary services for a process are the structures, equipment and services not directly involved in the process.
Normally, these include equipment for the supply of steam, water, electricity, compressed air and fuel. Some of these services can be bought from other companies, in which case they are considered part of production costs and are not included in investment calculations.
Waste disposal equipment, fire extinguishers, cafeteria, etc. The value of land does not decrease with time and is therefore not included in fixed investment when annual cost of depreciation is calculated. Although land does involve capital investment, it is usually preferred to include in fixed capital only those items for which depreciation is allowed by law, thus excluding land. The part of the investment which is used for land improvement includes the cost of materials for fences, levelling of the land, roads, parking, and other similar costs.
There is a period between formal completion of construction and commencement of normal production, "starting-up", and which can last from a few weeks to several months. Obviously, a series of costs are incurred during this period. They can be divided into two main groups. Construction costs during starting-up loss on production lines and equipment, flaws in design to be solved, malfunction of equipment, need for additional equipment, etc.
Starting-up operational costs salaries, raw materials, semi-finished or finished products falling outside specifications, etc. While the first are always included as fixed capital and as such, depreciate during the plant's useful life, there is no single criterion for the second.
Depending on the accounting philosophy of the business, they can also be capitalized, or considered abnormal operational costs and charged to the losses component. Although in this last instance they are not considered in the economic evaluation of the project. However, the general tendency is to reduce starting-up costs as much as possible, by prevention at design stage. Generally, two situations can be established: a when the capital required for the development of the project is one's own, or b when some of the funds come from external sources bank credit.
In the latter instance, the interest is compounded from the moment the credit is received until the completion of construction. This interest will be added to the loan, and the total will make up the investment component. These expenses include not only payment for the technical and administrative services required to guide and administer the project during construction, but also all the engineering work and blue prints necessary to prepare final construction plans and specifications in order to bid for or contract various jobs or equipment.
These expenses are necessary for the smooth running of plant construction. They normally include field engineering inspection, location of equipment, etc.
These vary according to the situation and can be nil when the same firm is in charge of construction and setting-up of the project. This component covers unforeseen incidents. The amount varies and depends on the precision of the estimate. Estimating the cost of a project can vary from a quick estimate to a carefully prepared detailed calculation using a complete flow chart, with specifications, depending on how much is known about the product and how much time and effort are available for the estimate.
There is a large amount of literature on the cost of equipment and construction of plants. This literature is valuable for the process engineer, but must be used wisely as in the majority of cases the data on costs are published without any explanation of from where they were derived.
Two factors must be taken into consideration:. A problem usually to be faced by whoever does the estimate is that the available information on the cost of similar equipment or plants, is usually out-of-date, and has to be adjusted following changes in economic conditions over time.
This updating can be done through the use of the cost indexes. A cost index is a number showing the ratio between the price of goods at time 't' and the price of the same at time 't base'. If a specific date can be given for a past price, present cost can be determined according to the following formula:. Cost indexes can be used to make a general estimate, but none takes account of all the factors, such as specific technological advances or local conditions.
The most common indices allow for a more precise estimate if the period involved is less than 10 years. Many types of indexes are published regularly. Some can be used for the estimation of costs, others are applied specifically to manpower and specific areas such as construction, materials, etc. For instance, in Argentina, the most accessible indexes are those published by:. A complete description of these indexes can be found in Stevens Other indexes are the Engineering-News Record Indexes for construction, the Nelson Index for refinery construction, etc.
Similar indexes may be found in most countries. However, one of the current difficulties in developing countries is the scarcity or complete lack of reliable indexes. Reliable cost indexes give an indication of the degree of development of a country. In most developed countries some indexes are up-dated precisely even daily or at least weekly.
However, in others up-dating is done monthly, yearly or not done at all. In extreme situations, usually compounded by lack of statistics e. If indexes are not available, it is advisable to take values and indexes from the country where most of the equipment will be imported. In general, costs do not rise in strict proportion to size. Nevertheless, the costs of a plant or equipment can be estimated when data are available for a similar project, but of different capacity to the one desired, utilizing the following relationship:.
The exponent x in the equation 3. Its average value tends to be 0. However, 0. Tables giving values of this factor, for chemical plants and equipment, can be found in the literature Happel, ; Bauman, If the total cost is plotted against capacity on a log-log graph, a straight line will be obtained with a slope equal to cost-capacity factor.
However, this does not always happen, and curves might be obtained which show the presence of two or more cost-capacity factors, each covering a certain range and providing better results than an overall average factor. Regarding the fishery industries some values of coefficient x are listed in Table 3. Figure 3.
Inside a seafood processing facility in Norway: Machines, not humans, evaluate the quality of salmon, weigh and grade the fish, and distribute it to the production units. Soon, machines will also calculate the quantity of ice required for transportation of the fish to its respective destination. A thousand miles away, at another manufacturing plant in Germany: Machines produce millions of Programmable Logic Controls PLCs that automate machinery — from ships, automobiles, and farm equipment to entire production centers around the world. The output of customized products manufactured at the plant is
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It was hosted by the Government of Saint Lucia, and attended by 15 participants from seven countries, four regional institutions and the FAO Fisheries Department. The syntheses of the national experiences and status of aquaculture development in the Lesser Antilles reflected a significant level of diversity in the scale of activities among the island nations; they also revealed many similarities in the results and present status of aquaculture development in the subregion. The case studies elicited very positive comments and enquiries from the country representatives. In the plenary deliberations, to identify the constraints to and opportunities for developing aquaculture sustainably in the subregion, participants recognized the need to rank the aquaculture development activities based on individual country-priorities and stage of development. The workshop agreed that participants would consult with the decision-makers in their respective countries and communicate a priority-list of needs for possible technical assistance to the technical secretary of the workshop.
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