KMK43503 Plant Design for Food Technology 2 Semester 1 2023/2024

UNIVERSITI MALAYSIA PERLIS (UniMAP)

Faculty of Chemical Engineering Technology

KMK43503 PLANT DESIGN FOR FOOD TECHNOLOGY 2

TASK 2

DUE DATE: 24 Nov 2023 @ 11.59pm

The content of Task 2 includes:

A) Total Production Cost

B) Profitability Analysis

A. Total Production Cost: Purchase Cost, Utility Cost, Total Capital Investment, Cost of
Manufacturing and General Expenses

1. Equipment Purchase Cost and Utilities Cost

● Estimate Purchase Cost (Cp) for ALL equipment in your plant using correlations, or
graphs or equations.
● Estimate Utilities Cost as respective to your plant and appropriate tariff in Malaysia. All
tariff in Ringgit Malaysia

2. Total Production Cost

● Estimate Total Capital Investment Cost (TCI) for the plant based on the purchase
equipment cost by using Method of Guthrie. TCI is the one-time expense for the design,
construction, and start-up of a new plant or a revamp of an existing plant.
● Calculate the annual Cost of Manufacture (COM) for the product in the process plant
including the cost of operating labor, utilities and raw materials based on Task 1B KMK33503.
Present all the components of COM by using pie diagram/chart.
● Calculate the Total Production Costs.

B. Project Cost and Profitability Analysis

1. The project cost of the plant should be break into different costs of:

● Land cost
● Fixed Capital Investment

1
KMK43503 Plant Design for Food Technology 2 Semester 1 2023/2024

● Working Capital
● Plant life = 10 years
● Start-up time = 2 years
● Design capacity and operating capacity
● Revenues from sale
● COM (without and with depreciation)
● Tax Rate = 35 %
● Depreciation Method (MACRS or straight line - linear)
● Internal rate of return = 10 % p.a. Bond rate
● Plant operation = 330 days

2. Length of time over which profitability is to be assessed = 10 years after start-up.

3. Tabulate a cumulative (non-discounted and discounted payback period) after tax cash flow
and draw the graph.

4. Evaluate the following phrase:

● Return of investment (ROI)
● Internal rate of return (IRR)
● The recommendations based on the profitability analysis

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A progress report will be submitted via email to your supervisor, cc the coordinator. Late
submission will NOT be accepted.

PLEASE WRITE THE PROJECT TITLE, YOUR NAME, GROUP NUMBER AND
SUPERVISOR NAME on the front page of the task report.

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