Pre Feasibility Studies

In the movies, when a baby is about to be born, the doctor, with a very concerned look on his face, comes out of the room and says, "I need hot water, lots of it!". He doesn't need lots of hot water: I was present at the birth of my son, and we didn't use any hot water, though I did help give him a warm bath later.

It very much the same when the idea of a sugar factory is being born, the project promoters say "We need engineers, lots of them". again, this is a mistake: employing lots of engineers should come near the end of the feasibilty process.

All of the sugar factory feasibilty studies I have worked on have been least sensitive to the capital cost of the plant. This means you don't need an accurate cost of the plant at this point, probably a 40% accurate price is adequate.

The selling price of sugar is usually the most sensitive parameter, together with things like agricultural yield and cane or beet quality. This is where the work in producing accurate numbers is required as these are the factors that will drive the feasibilty of the project to success or failure


So, when starting out on a feasibilty study, start at the destination, not, the departure point.

Raw Material

Next go to the other end of the process, the fields where the canes or beets are grown.

Capital Cost

Now you need an estimate of the capital cost of the factory. The are many rules of thumb that are good enough at this point

The answers to these questions, together with an estimate of factory operating costs and overheads, should be enough tell you whether to continue on your feasibility or not. If the outcome of the pre-feasibilty is continue, now you can employ the engineers, lots of them, to do the design and capital cost estimate and the feasibility study