Prefeasibility study What is a Pre Feasibility Study

Pre-feasibility study

What is a Pre- Feasibility Study? It is a preliminary survey, its intended goal is to make sure there are no fundamental problems impeding by the implementation of the proposed investment project. The initial feasibility study or pre-feasibility study does not require a detailed and careful examination, as in detailed feasibility studies which lead to intolerance of the large expense

The initial feasibility study is to clarify or some of the following information: 1. The necessity needs for the products or services of the project, and this requires a description of the market as an estimate of current consumption trends and the prevailing prices, and consumer tastes, etc 2. Availability of basic factors of production, and this requires a study of the materials that will be required by the project in terms of availability and quality. As well as employment that the project will depend on in terms of their efficiency and wage levels, etc. .

3. Estimate the size of the investment required and the operating cost. 4. Estimating net profit expected from the project. 5. Summary of the problems that could face the project, and the types of hazards that can arise from the residence. 6. Estimated cost for a detailed feasibility study of the project Finally, the Pre-feasibility Study is only an exploratory study of investment ideas are relying on the findings in the report a detailed feasibility study or to stop at this point of the study for some investment opportunities

Project Sources and Ideas The sources of project ideas (investment ideas) are multidirectional and vary from one country to another and from one activity to another even in the same country, and from these sources: 1. Studying the imported data compared with domestic production, taking into account the indication of the demand gap on the item locally. 2. Studying the supply side, that is how to provide resources locally with an affordable indicator of investment opportunities to exploit these resources that can also be a commodity for export.

The study of a phenomena such as the presence of congestion in places where to sell some products. 2. Studying the interrelationships between inputs and outputs (bonding) to a particular industry. E. g. Textiles crude model ginning yarn fabric clothes can be as an investment opportunity in any stage of the industry. 4. Visit exhibitions and identify products and new ideas 5. Some governmental jurisdictions or private studies may provide initial or promote some investment opportunities (it is called investment promoter) 1.

Data Study Sources Information from previous research Sales reports representatives and distributors Data and official statistics Primary sources (or field) data

Information from previous research information and studies published by the role of newspapers, advertising agencies and research equipment in the television and radio stations information and studies published by industry associations and chambers of commerce. � data, information and studies published by the commercial banks and industrial, agricultural and the central bank. information and studies published by universities and scientific institutes

Sales reports representatives and distributors Reports prepared by the sales representatives, distributors and brokers which is a great benefit example: Customer satisfaction which may include opinions and suggestions. Notes of offered items Sold items satisfaction, especially in terms of sale and the style and handling system and their opinion and suggestions. Pricing Ways policies and future projects to competitors of publicizing goods for this project Repeated customer complaints

Data and Official statistics This is exemplified by the source in what is published by bodies and institutions of economic, industrial, commercial, agricultural and statistics bodies and departments or other government agencies, such as the census and classification and distribution by geographic location and by age, occupation, gender, nationality, educational level, income and expenditure (household budget). . . and other data.

Primary sources (or field) data Field research's are mainly based on primary sources of data, natural or actual data and information, and through the use of statistical methods for sample design, inspection and design of a questionnaire that is addressed to members of the selected sample and then analyze those data.

Technical Feasibility Study

Technical Feasibility: Details how you will deliver a product or service (i. e. , materials, labor, transportation, where your business will be located, technology needed, etc. ).

3: 1 study the productive capacity and choose the appropriate size of the project engineering study for the project Study and analysis of the project site study of the production process and determine the required spaces required Identify the needs of the project : machinery and equipment Identify the needs of the project of raw materials and supplies.

3: 1 study the productive capacity and choose the appropriate size of the project Estimate the energy needs of the project Assess the needs of the project from the furniture to transportation Assess the needs of the project of direct labor , supervisory, administrative requirements and the structure of the organization Estimate the capital cost of the project

3: 1 study the productive capacity and choose the appropriate size of the project Study of the costs of the project based in the preparation of financial statements that enable financial needs assessment. The study of the project costs : • estimate the investment costs of the project. • estimate operating costs for a record year

Technical information required Product: Product functionality , use or consumption A description of each product and its components artistically with attachments of its diagrams Is the product will be ready for use upon leaving the factory or it requires other works by the manufacturer such as assembly at the factory site?

What are the specifications of local or global product will be and what are the details? Note that these specifications include the usage of raw materials and the final product as they define in testing methods and quality control. Packaging - packaging materials , cardboard boxes , boxes and pallets tanker. Is it a completely available locally? new product or is it similar to other products

3: 2 - Choosing and describing productive methods ( Production process manufacturing methods) Description of each stage of the manufacturing from raw materials to production-includes the identification of the function of each piece of equipment (eg piston forming curved metal pieces, steam boiler for heating, saw to cut the wood). A detailed drawing shows the itinerary of each article of raw materials through various manufacturing stages Outline a scale sketch shows the site of machinery and equipment inside the building and shows as well as storage areas for raw materials and under manufacturing and finished products and the maintenance workshop and lab. . Etc

shows the outline above the specified number of workers per machine during work shift and must conform to the distribution. Description of equipment for the treatment of industrial unwanted waste (incinerators to burn waste and effluent treatment units and air purifiers) Statement methods control of the environment inside the plant and the necessary manufacturing processes (eg need textile and paper to good temperature control and humidity) and must include the costs of such equipment and procedures either in the cost of buildings or equipment costs of the project A factory statement waste treatment methods, whether gaseous, liquid or solid to make them conform to the specifications used by government agencies such as the Environmental Protection Authority.

3 - The productive capacity of the project: Should clarify the annual production capacity of the vehicle and contracted with a supplier machines with an explanation of how to calculate this energy and foundations that have been calculated (eg calculated on the basis of production 1, 000 small units and 100 large unit of product (a) annually) this must clarify installed power for the project Note the number of work shifts and hours of work attributed to the annual quantities above and the gradual increase of production capacity each year from direct production processes.

4 - Machinery and Equipment: Must provide full and detailed list of machinery and equipment. Separates each item in terms of manufacturer and type and model and weight with a statement whether he had obtained through an intermediary either directly from manufacturers or through attach detailed brochures. Shows price of each item , originally to the nearest port (CIF) through purchase invoice in the case of actual purchase or under preliminary invoice and must be attached to detect local transport costs and expenses of installation, this does not accept projects that offer them offers a lump sum (turnkey) unless There was a complete breakdown of all items and costs.

If you do not select a specific item once and must provide information about the various alternatives. Show anti-fire equipment, air conditioning and water treatment and safety devices and backup power generators and laboratory equipment. . Etc. within the above item, unless estimates are included under the buildings. Must insert the correct amount of necessary spare parts and costs during the first year of operation, at least.

5 - Buildings: Location of the factory, whether in or outside the industrial city A blueprint for the factory site so that shows the limits of the site and roads near enough sites for buildings which will be held at the project site in addition to a statement of buildings and support facilities proposed A blueprint for the factory site so that shows the main places of benefits connections (sewer extensions, water and electricity) Drawings of buildings so as to indicate the space and vertical sectors, INCIDENTAL, which describes the methods and building materials for building components, floors and foundations. Concise specification main features of the buildings.

A plan that shows the equipment and safety equipment and all the necessary measures to ensure the safety of the plant and its workers from the risk of fire or any other risks that may be involved in the manufacturing processes. Should get priced offers a comprehensive civil works and buildings but no fewer than three bids for detailed specifications or table quantities, nor accept offers that include a lump sum In the case of non-inclusion offers above the work site preparation must provide special offers for these acts, such as • evacuation and clean up the site. • excavations. • rubble • other work related to the processing site

6 - Transportation: The list of transportation is necessary it must include: Transport Cars trucks and staff and car pickups and Jacks Fork automated and Manual to be a statement industry and Why the need for transportation with the observation that project needs for transportation must be compatible with the quantities expected marketed products of the project in the early years and The areas that will be marketing the product, knowing that the Fund has some exceptions / reservations on the eligibility of some transportation funding

7 - Furniture and fixtures: The list of the required furniture, office equipment to and equipment, computers, phone system and printers and copiers. . Etc. .

8 - Employment: In addition to the outline that shows locations of factory workers (Section II - item "d"), you must provide a comprehensive statement of all people who will be using them to include this disclosure: Job Title and basic monthly salary and all additional expenses such as social security and travel tickets, accommodation and bonuses The source of factory employment (recruitment of local employment abroad. . ) Provides a description of the procedures for staff training.

9 - Raw materials A list of all raw materials and packaging with an indication of the source or sources of alternative to buy so This list also includes the current price of the unit and expected prices during the first year of production with attachments offers three prices for raw materials. The list should include the above materials ready and half manufactured procurement used in manufacturing (motor and keys and hinges, locks, etc. ). Shows a detailed account of the cost of raw materials , packaging per unit and packaging materials that go into manufacturing in to a single unit of the production.

Shows the annual consumption of raw materials necessary for the licensed production capacity. Calculate the cost of raw materials and packaging account wastage during manufacturing operations Must provide a plan and a description of the purchase methods of raw materials, including purchase sufficient quantities of raw materials to avoid delays in shipping or price fluctuations with a statement of inventory estimates.

10 - Benefits: The estimated amount of water required and the source, type and cost. A statement of the electric power required for machinery and equipment, lighting, air conditioning, etc. kilo watts during working hours and a statement, originating with the installed capacity for the transfer station at the factory. A statement of the amount of fuel required for the manufacturing processes and operation (such as boilers and steam generators, cars, etc. )

11 - Licensing and franchising agreements: Must provide a copy of any agreement or technical license agreement (franchise) with respect to the project, if any. Should clarify the amount of fees submitted annual fees calculated as a percentage of sales, production capacity, net profits, or any other criteria. Should determine the responsibility of the licensed Convention and the extent of their participation in technical management and technical services for the installation, operation and maintenance, human design, graphics, and technical knowledge with an explanation of the proposed changes at hand.

12 - Foundation expenses (pre-operating): Describes the amounts paid to architects and engineering consulting firms, design engineers and legal expenses and other professional services for project planning, as well as the costs of the feasibility study. Estimates should include all other expenses leading up to the operation of the plant (pre-production), such as salaries and expenses of workers and the costs of traveling abroad for the purchase of equipment and the cost of raw materials used in the trial operation period. . Etc.

3/3 Study and selection of the project site: Factors affecting site selection decision 1 -Technical characteristics and different natural areas for the project or investment proposal under consideration. May be some investment opportunities associated with the production of certain crops require agricultural soil with natural characteristics and installation of certain technical, as well as geographic areas with specific climate characteristics. 2 - The cost of access to land 3 - Other factors: 3 -1 3 -2 the availability of fuel and the driving force and the water proximity of production requirements and workforce and proximity to markets drainage products.

3/4 Transferring technical and engineering aspects to financial aspects is to estimate the total investment cost of the project, and is the investment costs in all what is spent on the project proposed in the study and construction stages, experiences, and even the end of the operation's first regular session. And know this kind of initial investment costs Initial Investment

Types of investment costs: 3/4/1 fixed investment Fixed Investment Fixed investment items: 3/4/1/1 tangible fixed investment: And include the following costs: 1. Access to land processing costs 2. Costs of buildings, construction and facilities 3. Costs of obtaining machinery, equipment and utilities. 4. (Includes transportation costs and customs duties on the number and machinery and transport 5. And any expenses incurred in order to get it installed and processed to work) 6. The costs of obtaining and transportation, and communications. 7. Establishment costs and preparation offices and processing costs and then get on furniture 8. And furnishings for office equipment to work. 9. Contingency reserve and higher prices.

3/4/1/2 intangible fixed investment: Include the following items: 1. Pre-feasibility study costs 2. Costs detailed feasibility study of various components marketing, engineering, financial. . . 3. Advertising costs 4. Travel and transportation costs and similar expenses during the study period and before the initial operation 5. Employment training costs during the construction period and processing 6. Study offers the supply costs of assets and production requirements and costs of contracts with 7. Suppliers. 8. Costs of right, knowledge, Royalty and the costs of obtaining the Brand 9. The benefits of long-term loans to be paid during the period of processing and construction.

3/4/2 Working Capital: Includes a set of short-term assets which are priced in order to meet the requirements of the first operating cycle of the life of the project. Working capital items for the project: 1. Value of inventory of raw materials, intermediate products and spare parts which meet the needs of the first operating cycle. 2. Group cash assets that are customized to meet any cash burdens to be met during the first period of operation, such as industrial and administrative expenses, sales and operational including the costs of labor and materials and energy The first operating period vary from one project to another according to the different project activity. . In tourism projects such as hotels may be the first operating cycle period for a week and one month at the latest, while the first cycle in the industrial and agricultural projects are increasing as could be between three and six months.

3/4/3 estimate investment cost items: And appreciation through the following steps: 3/4/3/1 split costs of the principal and then to the sub-items highlighting the type of currency (domestic / foreign) 3/4/3/2 determine the relative importance of each of the main items and sub by the equation the cost of the item (local currency + foreign currency) Total investment costs (local currency + foreign currency)