2.1 Total Capital Investment An investment is needed as the capital cost to begin a product manufacture. Total Capital Investment (TCI) of a chemical plant includes purchase of the land, building, offsite, supporting facilities, utilities installation, market research, licensing, and contractor’s fee. Investment cost is divide into 2 categories, there are 2 F ixed Capital Cost
(Fc) and Working Capital (Wc). Fixed Capital Cost is the capital needed to supply the necessary manufacturing and plant facilities. While Working Capital Cost is the capital needed to operate of the plant until company get income. Capital Investment (TCI) is calculated with the combined method, Guthrie for Total Permanent Investment (TPI) calculations and general translation for other expenses. Guthrie method is chosen because it can calculate other cost besides equipment cost based on bare modul factor. This factor already include cost for additional fee such as delivery fee and installation fee. Guthrie method is done by calculating the Total Bare Module Cost. Total Bare Module Cost is the total cost of equipment with the additional delivery fee, customs fee, and other required fee. The purpose of this TCI calculation is to know whether the factory development will give preferable profits or not. The equation to calculate Total Capital Investment :
= () ) + () where:
= 1,18 () = + + + ℎ 2.1.1 Fixed Capital
Fixed Capital is all cost that is needed to build the plant, office, and its supporting equipment. Fixed capital consists of direct cost and indirect cost.
A. Direct Cost
Direct cost is expenses that directly connected to the production proces including equipment cost, land cost, building cost, offsite facilities,supporting facilities investment cost, utilities installation cost, market research cost, and licensing cost.
1. Equipment Cost
In this section we will discuss all costs that are used to buy main equipments for our plant process production. Equipment cost here is calculated with Guthrie method by adding some cost that known as “Bare Module Cost.”
The sequence step to obtain Total Bare Module Cost are : 1. List all of our equipment needed, include the quantity 2. Classify it in a category that is most suitable in data to obtain bare -module factor 3. Look for Marshall and Swift Chemical Equipment Cost Index to determine cost of equipment in year that we expect to buy
4. Use the formula to obtain Total Bare Module Cost. The formula is :
= From the previous assignment, we already list all of our equipment needed and also the quantity. Now we will divide each equipment into certain category to obtain bare module factor. The bare module factors included FOB (Free on Board) purchase, equipment instruments and installations (piping, concrete, steel, controllers, electrical, insulation, and paint), direct labor for installation (material erection and equipment setting), and also indirect module expenses (insurance, taxes, construction overhead, and contractor engineering expenses). Then, this factor will be multiplied by the cost of each equipment. As for the equipments that have no bare mo dule factor in the table, we would use the average value of the all bare module factor. In the table below, we can see the bare module factor for each equipments used from literature.
Figure 2.1 Bare Modul Cost (Source : Chemical Engineering Handbook 8th Edition (Perry, 2006))
The price for equipments that we had is for year 2016, meanwhile the equipments should be bought on 2017, so we need to use chemical equipment cost index to obtain price for year 2017.
Table 2.1 Marshall and Swift Chemical Equipment Cost Index
Year 2010 2011 2012 2013 2014 2015 2016 2017
Cost Index 1,457.40 1,565.64 1,618.88 1,672.12 1,725.36 1,778.60 1,831.84 1,885,08
(Source : Chemical Engineering Handbook 8th Edition (Perry, 2006))
And here is the formula to determine the price for year 2017 :
(2017)] (2017) = (2016)[ (2016) (2017) = (2016)[1885,08 1831,84]
Here is the table of Total Bare Module Cost : ( Table ini di Landscape yaa ?!!)
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ga bisa
Table 2.2 Bare Module Cost
Equipment
FOB in 2016 (Rp)
FOB in 2017 (Rp)
Quantity (Unit)
BMF
Total Bare Modul Cost (Rp)
Mixer FMC-100
133,000,000
136,865,468.6
2
4.16
1,138,720,699
Mixer FMC-150
199,500,000
205,298,202.9
1
4.16
854,040,524.1
Hockmeyer Mixer GMK LDH-200L
399,000,000
410,596,405.8
1
4.16
1,708,081,048
Drug to Patch Loader Machine
266,000,000
273,730,937.2
1
1
273,730,937.2
Packaging Machine
79,800,000
82,119,281.16
1
1
82,119,281.16
Slurry Pump
6,650,000
6,843,273.43
3
3.3
67,748,406.96 4,124,440,896
Total Equipment Cost
(Source: Author’s Personal Data)
b. Land Cost Our plant will be built in the area of approximately 500 m 2. From the assumption listed in this chapter above, we decide to build our plant from grass root. Assumed that there are no additional cost for land treatement such as chop down tree to obtain land because it will make the calculation more complicated. The land price per square meter in Bekasi is about Rp 2,540,300/meter 2, so total cost will be spent on land is equal to Rp 1,270,150,000.
Table 2.3 Land Cost Price per m2 (Rp)
Area (m2)
Land Cost (Rp)
2,540,300
500
1,270,250,000
C. Building Cost
Building Cost is cost to build plant and office as well. But the office is located inside the plant, so if we construct the plant, the office will be built too. The data of building cost is taken by contractor in Bekasi, West Java.
Table 2.4 Building Cost
Description
Price (Rp)
Area (m2)
Total Price (Rp)
Plant Building Area (m2)
2,400,000
500
1,200,000,000
Road
150,000
150
22,500,000 1,222,500,000
Total
(Source : Author’s Personal Data and gather from many Sources )
d. Supporting Facilities Investment Cost
A plant and its operation office must provide a decent facilities for its worker so that they can work optimally and accelerate production process. The amount of these supporting equipments is determined from the number of employees and their needs. This includes all sorts of facilities that essential to an office, enhance the comfort of their work hours and also the facilities that maintain their health, plus any other types of facilities that we feel necessary to be in our plant and site. Here is the detail of supporting facilities investment cost:
Table 2.5 Supporting Facilities Investment Cost Supporting Equipments
Quantity
Price (Rp)
Total Price (Rp)
4
2,000,000
8,000,000.00
Computer (Asus)
15
4,200,000
63,000,000.00
Receptionist Desk
1
2,500,000
2,500,000.00
Air Conditioner
5
5,000,000
25,000,000.00
Dispenser
3
300,000
900,000.00
Printer & Fotocopy Machine
2
10,000,000
20,000,000.00
Office Desk
20
1,000,000
20,000,000.00
Office Chairs
20
250,000
5,000,000.00
Genset
2
200,000,000
400,000,000.00
Locker
3
400,000
1,200,000.00
Meeting Desk and Chair Set
3
6,000,000
18,000,000.00
Cupboards
10
1,200,000
12,000,000.00
Whiteboard
5
300,000
1,500,000.00
Sofa
Pickup Truck
5
130,000,000
650,000,000.00
telephone
5
500,000
2,500,000.00
Recyle Bin
30
50,000
1,500,000.00
Toilet Set
10
4,000,000
40,000,000.00
5
200,000
1,000,000.00
Carpet for Praying Room
15
350,000
5,250,000.00
CCTV
15
2,500,000
37,500,000.00
Absence Machine
1
200,000
200,000.00
Long Neon Lamp
20
75,000
1,500,000.00
Internet Router
1
300,000
300,000.00
Projector Set
1
1,300,000
1,300,000.00
Fax Machine
2
1,500,000
3,000,000.00
First Aid Medicine
1,321,150,000.00
Total
(Source : Author’s Data and gather from m any sources)
e. Utilities Installation Cost
Utilities Installation Cost is cost to provide utilities for plant and office. Utilities needed for plant is water and electricity while utilities for office include water, electricity, telephone, internet, and hydrants. Here is the detailed abo ut utilities installation cost. Table 2.6 Utilities Installation Cost
Installation
Cost (Rp)
Telephone Installation
10,000,000
Electricity Installation
50,000,000
Internet Installation
8,000,000
Water Installation
20,000,000
Hydrants Installation
12,000,000
TOTAL
100,000,000
(Source : Author’s Data and gather from many sources )
f. Market Research Cost Market Research is needed to know market situation when we are going to sell our product. In the application, market research could be done by conducting a survey, questionnaire distribution, or hire a consultant service to analyze the market. This analysis and evaluations from the consumer can help us to improve our product convenience. The table below shows the detailed cost o f market research.
Table 2.7 Market Research Cost
Market Research Activities
Price (Rp)
Surveying
10,000,000
Consultant Service
25,000,000
Total
35,000,000
(Source : Author’s Personal Data and gather from many Sources )
G. Patent and Brand Cost
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B. Indirect Cost
Indirect Cost is the cost that is not directly involved with the production process. Things that were categorized as indirect costs are based o n the total building cost, which are : Engineering and supervision cost (4%) , construction expenses (4%), contractor’s fees
(2%), and contingency (5%). The Calculation is done as shown in Equation below :
Table 2.8 Indirect Costs Component
Percentage
Total Building Cost
Total Cost
(Rp) Engineering and
4%
48,900,000.00
Supervision Cost Construction
4%
1,222,500,000
48,900,000.00
Expenses Contractor’s fees
2%
24,450,000.00
Contigency
5%
61,125,000.00
Total
183,375,000.00
(Source : Author’s Personal Data and gather from many sources )
If we calculate all of the Fixed Capital, we will have :
Table 2.9 Fixed Capital Cost Cost Direct Cost
Indirect Cost
Price (Rp)
Total Equipment Cost
4,124,440,896
Land Cost
1,270,250,000
Building Cost
1,222,500,000
Supporting Facilities Investment Cost
1,321,150,000
Utilities Installation Cost
100,000,000
Market Research Cost
35,000,000
Patent and Brand Cost Engineering and Supervision Cost Construction Expenses
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48,900,000.00
Contractor’s fees
24,450,000.00
Contigency
61,125,000.00
Total Price (Rp)
8,073,340,896
48,900,000.00
Total Permanent Investment Cost (CTPI) Fixed Capital Cost (1,18 x CTPI) (Source : Author’s Data and gather from many Sources )
183,375,000.00
8,256,715,896 9,742,924,757
2.1.2 Working Capital
Working capital is the fee paid in the first months of the production process before the company earns revenue from product sales. The working capital for a chemical plant consists of the total amount of money invested in raw materials and supplies c arried in stock, accounts receivable, cash kept on hand for monthly payment of operating expenses, such as salaries, and taxes payable. Cost of working capital (FW) can be estimated by the formula as in the following equation.
= 5% = 5% 9,742,924,757 = 487,146,237
After that, we can calculate the value of Total Capital Investment (TCI ) The Result is Shown in Table Below :
Table 2.10 Total Capital Investment
Cost Segmentation
Price (Rp)
Fixed Capital
9,742,924,757
Working Capital
487,146,237
Total Capital Investment
10,230,070,995
(Source : Author’s Personal Data and gather from many Sources )
Then we will have Total Capital Investment value is equal to Rp 10,230,070,955.
