Project selling, process

If utilities are supplied to the new project from some other source, the cost and amount must be determined. If purchased from a second party, the cost will be determined by contract and can be estimated by discussions with the vendor. If utilities are transferred from an affiliated source, the cost must include a profit to the supplying entity. Some estimators use a lower return on utility plants than on a new hydrocarbon processing unit, since the utility can be used for some alternate plant if the new one shuts down for any reason. However, the preferred analysis allows a high enough utility transfer price to provide the same return on the utilities as the new unit being studied. This can require a trial and error approach, especially if the utilities are a significant part of the selling price of the product. 

Finally, we are in the business to produce products and profits. Broadly, if a product is made in 3-4 reaction steps in the batch-manufacturing environment, the market value should be 10 times the materials. If market value is only twice the raw material cost, the project should be redefined or stopped. In a 10-step process, it is not uncommon that materials are 1/20 of the selling price. A comparison of a two reaction step product using discounted cash flow methods (11) showed that a process with a market value 4 times the materials was greatly preferred over one at 3 times materials. 

Successful implementation of waste minimization methodologies depends on several factors, most notably obtaining the necessary funding. Waste reduction is generally accompanied by process efficiency improvements and cost reductions. Nevertheless, the company s capital resources may be tied up elsewhere. It is essential to know the level within an organization that has approval authority for capital projects, and to have a team that can present the financial, technical and environmental benefits in such a manner as to sell the project to management. 

Without reference to a particular HTGR, an input parameter of USD 30/MWt-h was used for the cost of nuclear heat was. Electricity cost was set based on a 2008 price of USD 75/MWe-h. The H2A modelling tool, as published, is based on an assumption that all costs and the selling price have the same rate of inflation. However, for the Shaw assessments, energy costs are projected to rise more rapidly than general inflation, and so a modification to the H2A model was been made to add this analysis capability. For the analysis, real escalation, over and above any inflation, is included at 1%/yr over the plant life for the electric power bought or sold. The assumed reactor outlet temperature for evaluating component costs and process efficiencies was 950°C. 

Having developed some intellectual property to the level where it is open to exploitation a decision must be made about how this should be done. R D and marketing personnel will be involved in an evaluation of the product or process to see if it is suitable for development within the company. If, for a variety of reasons, the answer is no, exploitation by other means will be considered. One way could be in a joint venture with an appropriate partner. Alternatively, it is possible to license or sell the intellectual property to another company, if this fits in with the company strategy. The final option is to abandon the project at this stage and to leave the data in the company secret files, for reconsideration at some future date. These options are shown in Figure C9. 

The development of a process to make a new chemical entity is not a simple procedure and a project leader will need to be appointed, if one has not been there during the speculative research phase. Process development usually costs several times more than the expenditure on the initial product research and is not entered into lightly. The procedure adopted for process development needs thoughtful planning, if time and money are not to be wasted. The procedure, which is described here, is normally applied to novel chemical entities, but many of the aspects apply equally to the addition of a known material to a company s selling range. 

For example, let us consider a project that involves the introduction of a new speciality product. This is classically divided into the invent-make-sell phases. The process is much more complicated than this, and this has already been described in Section D, 2.2. Invent-make-sell is more accurately split into four phases, namely research-process develop-manufacture-launch. The initial project team should have represen-... 

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