Developed and developing countries (like Republic of Moldova) are increasingly in need of properly prepared feasibility studies for taking good investment decisions. In the past, too many investment projects did not produce the outputs for which they were originally designed or their actual construction costs exceeded those that had been expected. Many financial institutions are increasingly relying on well-prepared investment studies to avoid cost overruns later on.
The approach that Proera is using for conducting feasibility studies is based on the highest international standards, and has been adopted by investment promotion agencies, government ministries, universities and other institutions of higher learning, as well as by banks and consulting firms.
The marketing concept comprises the marketing strategy and the operative measures required to implement the project strategy and reach the project or corporate objectives.
Marketing research consists mainly in the analysis of demand and competition, customer behaviour and consumer needs, competitive products and marketing instruments, taking into account the interdependencies between the individual subjects, their relation to the market as a whole, and the impact of social, ecological and economic factors.
The different materials and inputs required for the operation of the project are identified and analysed in terms of requirements, availability, supply, costs and risks. The selection of raw materials and supplies depends primarily on the technical requirements of the project and the analysis of supply markets.
A project can potentially be located in a number of alternative regions, and the choice should be made based on the identification of key requirements and assessment of these requirements for different locations. The integrated feasibility study focuses not only on technical and commercial or financial factors, but also on the social and environmental impact of the project.
The scope of engineering includes the design of the functional and physical layout for the industrial plant, as well as the selection of appropriate technology, as well as planning of the acquisition and absorption of this technology and the corresponding know-how. The required machinery and equipment are determined in relation to the technology and processes to be utilized, the local conditions and the state of human capabilities.
The design of the organization usually includes the goals and objectives for the business, the necessary functions, organizational framework or structure, description of key jobs and processes and preparation of a recruiting and training programme.
Special attention is paid to the overhead costs, which may have a significant impact on the profitability of some projects. They include factory, administrative and marketing overheads.
The successful implementation and operation of a project needs different categories of human resources – management, staff and workers – with sufficient skills and experience. The feasibility study identifies and describes such requirements and assesses the availability of human resources as well as training needs.
On the basis of qualitative and quantitative HR requirements of the project, the availability of personnel and training needs, the cost of estimates for wages, salaries, other personnel-related expenses and training are prepared for the financial analysis of the project.
The project implementation phase embraces the period from the decision to invest to the start of commercial production. An essential part of the feasibility study is the implementation schedule, which presents cost of project implementation as well as the schedule for the complete cash outflows, in order to allow the determination of the corresponding inflows of funds, as required for financing the investments.
Financial analysis and final project appraisal involves the assessment, analysis and evaluation of the required project inputs, the outputs to be produced and the future net benefits, expressed in financial terms. The methods applied for this purpose are as follows: analysis of the reliability of projected data; analysis of the structure and significance of costs and income projections; determination and evaluation of the annual and accumulated financial net benefits, expressed as profitability, efficiency or yield of the investment; and consideration of the time factor with regard to prices, cost of capital, and decisions taken in conditions of uncertainty.