Construction of an Elevator Complex for Grain Storage and Supplies

Intesco Research Group Company, specializing in development of high-quality business plans, renders services on projects of any difficulty and financing volumes. Highly estimating the quality of our work and successfully implementing projects developed on the basis of materials we prepared, many our customers become our regular clients.

Among companies, which repeatedly entrusted us with development of business plans, we can distinguish one project initiator. The given Company is a part of the group of companies working in the field of production, processing, implementation and delivery of oil and cereal crops and animal products. One of the projects, the business plan of which was prepared by analysts of Intesco Research Group, is a project of construction of an elevator complex for grain storage and supplies.

Implementation of the project required attracting investments to the volume of 96 502 000 rubles, which amounted to 53% of total investment. The other part of financing to the amount of 47% was supposed to be the Company’s own funds.

Investment Structure

It was planned to direct the investments in the following way:

The credit financing security, with the annual discount rate of 16%, was the security of constructed facilities. With the elevator running at full capacity, the volume of supplied grain was to amount to 70 thousand tons per year.

Estimated Effectiveness Rates

While working on development of the business plan, Intesco Research Group analysts paid a lot of attention to calculations and drawing conclusions about cost-effectiveness of project implementation.

According to effectiveness rates:

• net cash flow and net present value – 101 577 000 and 48 181 000 rubles, respectively;
• simple and discounted pay-back periods – 2.09 and 2.94 years;
• profitability index – 1.92 units;
• internal rate of return – 52.3%.

The guarantee of repaying the loan and, correspondingly, feasibility and investment justification, was, first of all, positive estimates of project implementation profitability. In addition, the project demonstrated a high profitability index. The analysis of all the effectiveness rates showed not only the ability of the project to be implemented, but its significant profitability as well.

One should note that the basis for calculating project implementation effectiveness was the owners’ intention to create a modern elevator complex with a corresponding equipping level and integration of innovative technologies. According to the project, the complex was to be a fully automated operational system, including stages of receiving, storing and shipping agricultural products.

Elevator Complex Key Features

The key features of the complex were to be the following:

• construction and equipping 4 storage silos, with the capacity of 1 400 tons each;
• creation of a modern laboratory with the ability of assuring the quality of supplied and delivered products;
• development of modern infrastructure, which enables receiving products at the level of 175 tons/hour, with reaching the full storage capacity of the elevator during 32 hours, as well as loading the supplied products on water transport at the level of 250 tons/hour with reaching the full storage capacity of a 2.8 thousand ton ship during 8 hours;
• automation of the complex management system, which enables minimizing labour costs and labour remuneration costs;
• modern high-tech equipment, which enables reducing power consumption significantly.

Transport Availability and Project Logistics

It is planned to build the elevator complex at a distance of about one kilometer from the village of Orlovskoye, Markovsky district, Saratov region, on the bank of the Volga River. Transport availability is ensured with the close regional-significance car road Р226, which connects Samara and Volgograd and passes through Engels and Volzhsky. Water transportation is ensured with the ability of the riverside wharf to accept river ships and ships of the river-sea class.

Project Effectiveness Justification

While analyzing project effectiveness justification, the following factors were taken into account: a convenient location of the complex, availability of road and transport infrastructure, the middle-term rent (10 years) of a land plot required to build the complex and a plot with the cargo wharf equipped for shipments of products.

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