Professional Documents
Culture Documents
Project Cost Estimation Sheet
Project Cost Estimation Sheet
A Capital Investment is required for any industrial process and determination of the
necessary investment is an important part of a plant design project. The total investment for any
process consists of Fixed Capital Investment for physical equipment and facilities in the plant plus
working capital which must be available to pay salaries, keep raw materials and products on
hand and handle other special items requiring a direct cash outlay. Thus in an analysis
including income taxes must be taken into consideration.
1) Purchased Equipment
S. No. Equip. Name Nos. Price in Rs. S. No. Equip. Name Nos. Price in Rs.
1 RE 1 654,300 24 SS304 Receiver 100lts 3 29,836
2 RFE 1 570,000 25 SS304 Receiver 75lts 1 7,852
3 WFE 1 458,010 26 SS304 Stand 1 9,160
4 36" Centrifuge 1 274,806 27 MS ST 6.0KL 2 70,664
5 24" Centrifuge 1 196,290 28 MS ST 500lts 2 25,518
6 24" Centrifuge GMP 1 412,209 29 SS304 VTD 24 Trays 1 257,139
7 SS316 Reactor 5.0KL 1 536,735 30 SS304 GMP VTD-24T 1 310,793
8 SS304 Reactor 1.2KL 2 348,088 31 SS304 Multi Mill GMP 1 39,258
9 SS304 Reactor 630lts 2 238,165 32 SS304 MM GMP R&D 1 22,900
10 SS304 Reactor 300lts 3 404,357 33 SS304 Candle Filters 2 26,172
11 SS304 Reactor 150lts 1 117,774 34 SS304 Receiver 250lts 1 19,629
12 SS304 ST 4.0KL 1 78,516
13 SS304 HE 6m2 9 288,546
14 SS304 ST 7.0KL 2 236,857
15 SS304 ST 1.0KL 1 35,332
16 SS304 ST 500lts 2 67,262
17 SS304 Steam pan 150lts 1 20,934
18 SS304 HE 10m2 1 52,344
19 SS304 H Receiver 300lts 1 18,059
20 SS304 P Tank 200lts 1 12,432
21 SS304 Receiver 200lts 10 124,317
22 SS304 HE 2m2 8 136,095
23 SS304 ST 500lts 3 96,182
S. No. Description Nos. Price in Rs. S. No. Description Nos. Price in Rs.
1 Pressure Gauge 0-7kg/cm2 44 11,918
2 Pressure Gauge 0-10kg/cm2 7 2,184
3 Temp. Gauge 4-50 deg C 6 8,206
4 Vacuum Gauge 0-760mm Hg 21 5,897
5 Water Flow Switch 1 1,352
6 U syphon & Cock 55 4,576
7 Safety Valves 8 2,080
8 Temp. Controller 3 8,486
9 Temp. Indicator 8 38,896
10 PID Controller 1 18,252
11 FLP Temp. Scanner 2 26,343
12 2/2 Pheumatic P.O valve 4 62,400
4) Piping
a) Process Piping
Total Cost of Pipe Hangers, Fittings, Valves, Beams, Channels etc. 2,047,938
c) Insulation - Piping, Equipment
Total Cost for Electrical Equipment and Materials including a and b = 3,435,677
a) Process Buildings
Total Price incurred in constructing Process Buildings = 4,000,000
b) Auxiliary Buildings
Total Price incurred in Auxiliary buildings = 0
c) Maintenance Shops
Total Price incurred in Maintenance Shops = 0
d) Building Services
S.No. Description Nos. Price in Rs.
1 Plumbing work (labor charges) Lumpsum 15,000
2 Air Handling Units (HVAC) 2 337,500
3 Paint Material Lumpsum 10,912
4 Labor charges for painting Lumpsum 20,000
8) Service Facilitites
a & b) Utilities and Facilities
The cost of Land is taken as 4% of the Total Purchased Equipment cost = 247861.24
Total Direct Costs (D)
Total Engineering and Supervision cost is taken as 8% of the Total Direct Cost = 1791728.239
2) Construction Expenses
Total Construction Expenses cost is taken as 7% of the Total Direct Cost = 1567762.209
3) Contractor's Fee
4) Contingency
Total Contingency cost is taken as 8% of the Total Direct and Indirect cost = 2337036.834
Determination of the necessary Capital Investment is only one part of a complete cost estimate. Another
equally important part is the estimation of costs for operating the plant and selling the products. These costs
can be grouped under the general heading of Total Product Cost
The Total Product Cost is calculated for the known production process, which can be produced in the above
installed plant. This production process is basically related to the product of Active Pharmaceutical Ingredient
(API) produced from the naturally occuring plants. The basic Raw Material for the process is Duboisia Leaves.
Basis
1) The Total Product Cost is calculated based on the Annual Cost Basis
2) Number of days working per year is taken as 300 days
3) Plant is running in 3-shifts I.e. 24hrs per day
4) Capacity of the plant per year of the API, in Kg = 2,400
Manufacturing Costs
S. No. Description Quantity per annum, Kg Cost per unit in Rs. Total Annual cost in Rs.
1 Duboisia Leaves 90,000 125 11250000
0
0
0
0
0
0
0
b) Operating Labor
S. No. Description No, Required Monthly Salary in Rs. Total Annual Salary in Rs.
1 Skilled Labor 30 3000 1080000
2 Unskilled Labor 10 1500 180000
3 Watch men 6 2000 144000
0
0
0
0
0
S. No. Description No, Required Monthly Salary in Rs. Total Annual Salary in Rs.
1 In-charge 3 12000 432000
2 Supervisor - Plant 6 7500 540000
3 Supervisor - Stores 1 6500 78000
4 Supervisor - Maint. 1 9500 114000
0
0
0
0
0
0
0
0
0
0
S. No. Description No. of Units/year Cost / unit (in Rs.) Total Annual Cost in Rs.
1 Steam 2,15,205Kg 6.97 1500000
2 Electricity 3,60,000KWH 4 1440000
3 Water 4,320m3 50 216000
f) Operating Supplies
S. No. Description Quantity per Annum Cost per Unit Total Annual Cost in Rs.
1 Methanol, Lts 466,000 8 3728000
2 D.M.Water, Lts 120,000 1 120000
3 Hydrochloric Acid, Lts 1,500 4.5 6750
4 Chloroform, Lts 78,000 15 1170000
5 Ammonia, Lts 4,000 7 28000
6 n-Butylbromide, Lts 7,500 25 187500
7 Acetonitrile, Lts 7,500 18 135000
8 Activated Charcoal, Kgs 300 60 18000
9 Hyflow, Kgs 6,500 12 78000
0
0
0
0
0
0
0
0
b) Taxes
c) Insurance
d) Rent
1) Administrative Expenses
4) Financing (interest)
Method 1 : Based on Fixed Known Selling Price of the Finished Product API at 75% Capacity
Method 2 : Based on Selling Price of the Finished Product API calculated at 100%, 75% & 50% Capacity.
Method - 1
At present the market value of the Finished Product API manufactured under this
facility per Kg = 50,000
Rate of Return
The Total Product Cost estimated in the facility is, Rs. = 32460783.034 per year
This amount should be compensated by the annual sales of the Product
The Unit Cost per Kg of the Finished Product API = 13525.33 per Kg
Pay Back Period = Depreciable Fixed Capital Investment / ((Average profit/yr) + (Average Depreciation/yr))
Depreciable Fixed Capital Investment = Sum of Sl.Nos. 1,3,4,5 & 6 of Spread Sheet No.1
= 17,817,407
= 4674073.667
= 2921296.042
To estimate Selling Price (Rs/Kg) of the Finished Product API, average net profit is to be determined.
A calculation table is prepared to perform this at 100%, 75% & 50% capacity.
Assumptions
Contd……
Profitability Analysis Contd….
1 2 3 4 5 6 7 8 9 10 Sum
A. Capacity of the Plant % 50 75 100 100 100 100 100 100 100 100
B. Product Rate, tons/year 1.2 1.8 2.4 2.4 2.4 2.4 2.4 2.4 2.4 2.4 22.2
C. All Variable Costs, (10)6 Rs/year 16.23 24.35 32.461 32.461 32.461 32.461 32.461 32.461 32.461 32.461 300.262
E. Depreciation, (10)6 Rs/year 2.921 2.921 2.9213 2.9213 2.9213 2.9213 2.9213 2.9213 2.9213 2.9213 29.213
F. Total Product Cost (C+D+E) 24.16 32.27 40.39 40.39 40.39 40.39 40.39 40.39 40.39 40.39 379.55
(10)6 Rs/year
(*) indicates, consider sum of costs from Sl.No. 11 to 18 of spreadsheet No.2
All Variable Costs = Product Rate x Unit Cost of Finished Product API per Kg
d = (V - Vs) / N
1 2 3 4 5 6 7 8 9 10 Sum
A. Capacity of the Plant % 75 75 75 75 75 75 75 75 75 75
B. Product Rate, tons/year 1.8 1.8 1.8 1.8 1.8 1.8 1.8 1.8 1.8 1.8 18
C. All Variable Costs, (10)6 Rs/year 24.35 24.35 24.346 24.346 24.346 24.346 24.346 24.346 24.346 24.346 243.456
E. Depreciation, (10)6 Rs/year 2.921 2.921 2.9213 2.9213 2.9213 2.9213 2.9213 2.9213 2.9213 2.9213 29.213
F. Total Product Cost (C+D+E) 32.27 32.27 32.274 32.274 32.274 32.274 32.274 32.274 32.274 32.274 322.744
(10)6 Rs/year
(*) indicates, consider sum of costs from Sl.No. 11 to 18 of spreadsheet No.2
All Variable Costs = Product Rate x Unit Cost of Finished Product API per Kg
d = (V - Vs) / N
1 2 3 4 5 6 7 8 9 10 Sum
A. Capacity of the Plant % 50 50 50 50 50 50 50 50 50 50
B. Product Rate, tons/year 1.2 1.2 1.2 1.2 1.2 1.2 1.2 1.2 1.2 1.2 12
C. All Variable Costs, (10)6 Rs/year 16.23 16.23 16.23 16.23 16.23 16.23 16.23 16.23 16.23 16.23 162.304
E. Depreciation, (10)6 Rs/year 2.921 2.921 2.9213 2.9213 2.9213 2.9213 2.9213 2.9213 2.9213 2.9213 29.213
F. Total Product Cost (C+D+E) 24.16 24.16 24.159 24.159 24.159 24.159 24.159 24.159 24.159 24.159 241.592
(10)6 Rs/year
(*) indicates, consider sum of costs from Sl.No. 11 to 18 of spreadsheet No.2
All Variable Costs = Product Rate x Unit Cost of Finished Product API per Kg
d = (V - Vs) / N
Pay Back Period = Fixed Capital Investment / (Average Net Profit + Average Depreciation)
The Unit Selling Price of the Finished Product API at 100% capactiy is = 22463.91
Pay Back Period = Fixed Capital Investment / (Average Net Profit + Average Depreciation)
The Unit Selling Price of the Finished Product API at 100% capactiy is = 24549.57
Pay Back Period = Fixed Capital Investment / (Average Net Profit + Average Depreciation)
The Unit Selling Price of the Finished Product API at 100% capactiy is = 30061.7
100 22463.91
75 24549.57
50 30061.7
References :
1) Plant Design and Economics for Chemical Engineers, 5/e by Max S. Peters, University of
Colorado, Klaus Timmerhaus, University of Colorado, Boulder, Ronald E. West, University
of Colorado, Boulder.
Note :