Dhofar Fertilizers Company Ammonia Plant Feasiability Report

Question: Describe about the Report for Dhofar Fertilizers Company Ammonia Plant Feasiability Report. Answer: Introduction The demand for ammonia is on increase in Al Batinah North Governorate, since is a crucial input contributing to approximately 55% of productivity of crop, with expanding agricultural production, improvement in technology and growing awareness among farmers Fertilizer is a key ingredient in ensuring the food security of the country as it increase the production and productivity of soil Description Of The Dhofar Fertilizer Company Dhofar Fertilizer Company is located in the east side of Sohar capital city of Al Batinah North Governorate, is investing on on anew ammonia plant that will be installed in the area next to it, in order to manufacture Nitrogenous fertilizers Market Consideration The domestic food grain production is set at 120 million tonnes from 2016 2018, which can be achieved since the farming practices has been improved, expansion of irrigation, availability of better seed and extensive and balance use of fertilizers in the whole country of Al Batinah North Governorate Management Team The company comprises of the shareholders, with the government holding a great share, the C.E.O is Dr. Ahmed, production manager Mr Mohammed Al Farsi, technical staff and casual workers Technical Specification And Production Plan The fertilizer ammonia plant area is projected to cover will 3 hectares of the piece of land adjacent to the Dhofar company The production unit is estimated to be about 50,000 units since the raw materials are more available The Dhofar company executive has already acquired registration permit and the CCP has also been carried out, and environmental conservation authority has issued a licence Marketing Plan Ammonia plant cost data Description of cost area Item at 2000 tonnes/day million Scale experiment n Cost factor 1.5n Item at 684.9 tonnes/day a) Equipment item Furniture heaters 6.64 0.8 1.328 8.80 Package plant 1.06 0.65 1.355 2.45 Heat exchanger 5.90 0.55 1.302 6.69 Compressor and fans 3.12 0.85 1.355 4.24 Pumps 1.09 0.8 1.383 1.48 Turbines 2.34 0.6 1.328 2.12 Tanks 0.15 0.75 1.302 1.18 Vessels and column 5.20 0.65 1.302 6.77 Miscellaneous item 0.36 0.6 1.275 0.44 Total cost of equipment 25.86 0.69 1.322 34.19 b) Bulk items Electrics 2.39 0.8 1.328 3.03 Instrumentation 5.15 0.7 1.275 6.44 Piping 6.35 0.6 1.328 8.50 Structural steel 1.68 0.55 1.302 2.32 Insulation and painting 0.38 0.65 1.302 0.56 Catalyst and chemicals 0.95 1.0 1.500 1.28 Total cost bulk item 16.79 0.68 1.323 22.13 Total equipment 25.86 0.69 1.322 34.19 Total bulk item 16.79 0.69 1.323 23.13 Civil work 2.21 0.65 1.302 2.88 Construction 11.59 0.65 1.302 15.09 Engineering and procurement 6.90 0.5 1.225 8.45 Total cost 63.35 0.66 1.307 83.74 Examination Of Critical Risks And Problems Ammonia is a corrosive substance and the main toxic effects restricted to the direct contact with ammonia which include eyes, skin, respiratory tract, digestive tract Proper measures of wearing proper clothes covering every part of your body, goggles to protect eyes, nose, ears and mouth muffs to protect respiratory tract, digestive tracts and ears. Financial And Economic Plan Fixed capital investment Total equipment from the table = 34.19 million Total bulk item from the table = 23.13 million Civil works = 2.88 million Construction = 15.09 million Engineering and procurement = 8.45 million Fixed capital investment = 34.19 million + 23.13 million + 2.88 million + 15.09 million + 8.45 million = 83.7 million Working capital investment = current assets - current liability Balance sheet for plant Assets Liabilities Cash 30 million Account profitable 15 million Marketable securities 3 million Accrued experts 10 million Account receivable 15 million Notes payable 2 million inventory 20 million Current term debt 5 million 68 million 32 million Working capital = 68 million - 32 million = 36 million Total capital investment = total liabilities total equity current liabilities = excess Fixed capital = 84 million Current liabilities = 32 million Current assets = 68 million Working capital = 36 million Total capital = 84 million + 32 million+ 68 million + 36 million = 120 million Direct labour = construction + civil works = 2.88 + 15.09 = 17.97 million Direct material = total equipment+ total bulk item = 34.19 + 23.13 = 57.32 million Overhead = engineering and procurement = 8.45 million Product cost per unit tonne = total direct material + total direct labour + total manufacturing overhead cost = [17.97 + 57.32 + 8.45]/250000 tonnes per year = 83.74 million/250000 = 334.96 million per unit tonnes [current original values]/original value * 100 = [83.74 - 63.35]/63.35 * 100 = 32.19% Evaluation And Conclusion The plant is targeting to help to a great advance meet the demand of nitrogenous fertilizers and will increase the productivity of crops and finally the food shortage is expected to reduce to a higher level on every family in Al Batinah North governorate