By Richard C. Dow
1. MARKET - ISSUES AND CONCERNS
A. Country, Business Climate and Demographics
Population distribution and per capita income
Political Stability and overall Business Conditions
Local and Foreign currency exchange and interest
rates
Cultural, Public health and Sanitation issues
B. Market Assessment – Sanitary Tissue Products
Per capita consumption: Household; Commercial;
Institutional
Specific types and grades of tissue products currently
available
Quality levels and predominant packaging practices
C. Local and/or Imported Tissue Production
Volumes, sources
Parent rolls: Diameters; Widths; Cores; and Type
wrap
Consumer Converted Products – Type packaging
Shipping mode: Containers, Break-bulk
D. Market Growth Prospects
Local, Regional and Export
Immediate and Longer term
Potential contributors to, and/or constraints to
growth
E. Import and Export Shipping Options
Shipping firms: Agents and Telephone/fax and e-mail
addresses
Port conditions: Efficiency, Cost, Security
Handling and Warehousing: Damage, Weather, Insurance
Labor Relations: History of Strikes and Slowdowns
F. Government Customs Operations
Import tariffs – Duties - Licenses
Clearance Procedures and Special conditions
Requirements for Certification/Inspection of shipments
(import/export)
Names and telephone/fax, e-mail addresses of Agencies
and Officials
G. Local and Regional Inland Transportation
Availability and Type Equipment
Reliability – Security - Seasonal Weather effects - Cost
2. EXISTING PULP & PAPER MILLS,
CONVERTERS AND DISTRIBUTORS
A. Pulp and Paper Mills
Type products - Production levels
Ownership - Financial strength
Market position - Sales policies
Competitive considerations - Current and future
Prospects for purchasing the mill(s) Pulp, Broke
and Wastepaper
Prospects for contract to share Energy/Environmental
facilities
Potential for Joint Venture or Partnership
B. Paper Converters (Other than Tissue)
Type products: Stationery – Packaging - Other
Market position - Sales policies - Financial strength
Prospects for purchasing Wastepaper from the Converters
Company names, Telephone/fax, e-mail addresses
C. Local and Regional Tissue Converters
Ownership - Years established
Specific products - Market share
Equipment: Type and capacity
Quality levels
Purchasing - Sources and Distribution data
Financial strength
Waste and trim Disposal methods
Competitive relationships - Cooperative or aggressive
Marketplace reputations – Quality and Sheet-count verification
Converters Pricing and Payment practices
Current and historical pricing trends
History, duration and resolve of price wars
Potential for Joint Venture or Partnership
D. Warehousing and Distribution
Importers – Converters - Distributors
Facilities and equipment
E. Retail Sales Outlets and Pricing Policies
Predominant sales outlets: Supermarkets - Small
stores
Buying Schedules - Inventory practices
Promotion – Advertising - Shelf space policies
Commercial and Institutional procurement practices
Quality – Brand - Pricing - Sheet count
Promotion - Multiple or Single roll packaging
G. Market Share Considerations
Estimate of expected share of the current market
Rationale for, and method of determining estimated
share
Effect of existing suppliers aggressively protecting
their position
Prospects for pre-construction contracts with distributors/converters
Prospects for a directly competing project
Availability of materials, utilities and labor
to support capacity
3. THE PAPER MILL PROJECT - SCOPE
A. Projected Scope of Overall Mill Operations
Potential for production of pulp from indigenous
fiber
Determination of predominant fiber to be used
Technology of proposed or planned Deinking operation
Decision re’ establishing Converting operations at the mill
Design considerations to accommodate expansion
Warehousing requirements
B. Project Management Considerations
Project Development entity
Consulting firm - Turn-key basis
Consulting firms - Specific areas (Design – Machinery -
Process etc.)
Machinery Selection – Components - Turn-key basis
C. Machinery & Equipment
Designed production capacity and Paper Machine
trim
Specific type of paper machine
Stock preparation equipment and capacity - batch
or continuous
Deinking equipment and capacity
Level of process automation and control instrumentation
Steam and electrical generation and distribution
equipment
Maintenance capability and required equipment
Material handling equipment
Water treatment and sludge/effluent machinery and
equipment
D. Site Selection- Geographic description, topography, site
dimensions
Climatic conditions, seasonal variations, floods,
earthquakes,
Water, source distance from site, quantity, chemical
analysis
Access to electric power and availability of fuel
Environmental concerns and zoning constraints
Effluent and sludge disposal facilities
Access to highways
Convenient to labor pool
Acquisition cost
5. WATER
A. Source, Availability, Quantity and Quality
River, wells or lake
Ownership - government, municipal, private
Applicable access rights
Quantity - seasonal variations
Quality - raw, potable, chemical analysis, clarity
Level of treatment required
Cost of the above issues
6. ENVIRONMENTAL CONSIDERATIONS
A. Regulations Applicable to the Mill Site
Permitting and licensing process
Effluent disposal - method, clarification and treatment
Sludge disposal - availability of facility
Compliance monitoring, violation penalties
Cost of the above issues
7. ENERGY
A. Electric Requirements and National, Regional
and/or Local utility data
Project’s electric requirements (kwh)
Proximity to existing power grid sub-station
Transmission and distribution voltages
History, types, and reasons for service interruptions
Electric rates, demand charges and pricing history
Cost of any required distribution line construction
Ownership and maintenance costs of transformers
and sub-stations
Potential for cogeneration and sale of excess electricity
to utility
B. Thermal Energy Requirements
Steam usage, volume and pressure - pulpers and
dryers
Air system thermal usage - hoods and through-dryers
Fuel availability - oil, natural gas, propane,
other
Supply reliability and price
Maintenance considerations, boilers, steam and
gas turbines
8. FIBER SUPPLY
A. Virgin Pulp
Types - wood, other non-wood fiber
Sources, local, imported
Inventory and warehousing requirements
Prices, duties and taxes
Contract and payment terms
B. Secondary Fiber
Types - wastepaper and recycled pulp
Sources, local and imported
Quantities and qualities available
Wastepaper collection system
Sorting and grading methods
Inventory and warehousing requirements
Prices duties and taxes
Contract and payment term
9. MILL STAFFING AND TRAINING
A. Work-force Availability
Review of labor pool with factory experience
Educational and skill levels
Area trade, technical schools
Review of management and workers compensation levels
Mandatory social obligations: bonuses, vacations,
uniforms, meals
Cost of government’s employee insurance programs
Employee transportation issues
Traditional shutdowns for extended holidays
Employer latitude regarding worker termination
Union concerns and issues
B. Evaluation of Existing Operations (Converters)
Summary of type and age of equipment
Level of maintenance and housekeeping
Employee productivity and quality awareness
Absenteeism, discipline and employee turnover
C. Training
Government financial aid programs
Cultural and social impact of 24 hour operations
Aptitude testing, experience resumes
Foreign training plan for key skilled positions
Estimate of number and skills of expatriates required
D. Expatriate Staff Requirements
Language and management/technical skills required
Expatriate contracts, salaries, visas, work permits
Housing, medical services, schools, security
Assurance of availability of a qualified expatriate
staff
Estimate of time before 100% indigenous staffing
10. CONSTRUCTION - LOCAL CONSIDERATIONS
A. Skilled Trades, Equipment and Services
Locally available trades and skill levels
Union/non-union, workmanship, labor rates
Mobile equipment, availability and rates
Construction electrical considerations
Housing and local cafeteria customs
Emergency medical services
Construction period security
Construction scheduling - weather effects
B. Construction Materials Availability, Cost and Storage
Cement, stone, sand, fill, bricks, blocks
Steel, cable, pipe, conduit, wire, cladding, lumber
Construction material storage facilities
Container unloading - demurrage
Proper storage for mill equipment
Fire protection
11. POST CONSTRUCTION - AVAILABILITY OF MATERIALS AND SERVICES
A. Services - Local and/or Regional
Machine shop services
Electric motor repair and rewinding
Boiler maintenance services
B. Raw Materials, Repair Materials and Mill Supplies
Bearings, pumps, valves, motors, wiring
Paper making process chemicals
Boiler and water treatment chemicals
Mill supplies such as cores, adhesives, wrappers
12. PROJECT FINANCING
A. Cost Estimate
Project Development studies
Design Engineering
Land, site preparation and civil works
Machinery and equipment - acquisition and installation
Training, start-up materials and labor, working
capital
Construction period interest
B. Sources of Financing
Equity from project development entities/individuals
Government grants
Government insured loans
Commercial banks
Suppliers
Philanthropic institutions
13. PROJECT SCHEDULE
A. Based on Conservative and Studied Estimates
Completion of feasibility studie
Receipt of engineering, equipment and construction
costs
Receipt of applicable permits and licenses
Completion of project financing arrangements
Placement of orders for machinery and equipment
Mill construction period
Mill staffing and training scheduling
Ordering start-up raw materials and supplies
Mill pre-start-up machinery and process checkout
Start-up
Commissioning
14. THE EXECUTIVE SUMMARY
A. Brief on project and development concept
Ownership structure and data on entity and/or individuals
Product and market description
Project scope and anticipated production and sales
Activities or special conditions enhancing development
B. Review of Factors Contributing to Project’s
Viability
Lack of competition or product availability
Advantages of the specific location
Labor pool, skills and compensation rates
Energy costs
Access to raw material
C. Conclusions
Summary of positive aspects of the project
Factors that could negatively impact the project
D. Civil Works, Design and Construction
Descriptive review of the site and general area
Compatibility with other area activities
General description of mill layout and building(s)
Project management
E. Machinery and Equipment
Brief review of specific technology
Summary of the mill’s major components
Resume of manufacturer of the paper machine
F. Organization, Management and Staffing
Management team - experience summary
Local labor pool
Outline of training program
Expatriate staffing requirement
G. Mill Production Operations Spreadsheet (Costs per Ton)
Raw materials, labor, energy and administration
Impact of cost increases of above items
Impact of varied production and sales levels
Working capital requirements
Break-even analysis
Debt service
Cash flow
Internal rate of return
H. Project Financing
Sources - list institutions and/or individuals
Letters of interest from potential sources
Requirements - long term and short term
Richard C. Dow, Cape Elizabeth, Maine, USA, is a consultant
specializing in feasibility studies for the development of tissue
mills and evaluating manufacturing and converting process
efficiency. E-mail: rcdow@maine.rr.com
