Strategic feasibility study for a major capital investment programme

BearingPoint was asked to conduct a strategic review to assist in the preparation of an internal business case for a major capital investment. The review would ideally include options for improving the internal business case and the assumptions upon which it was based.

All market segments were reviewed and checked for viability. Several new market opportunities were identified and modelled into the P&L.

Engineering revamp project reviewed against internal base case:

• Two process stages eliminated, increasing plant capacity by around 15% and energy needs by around 10%
• Reduce waste from approximately 15% to near zero
• Reduce investment cost by over 10%
• Reduce required manning levels by over 20%

In total, a capacity increase in excess of 30%, at 20% lower operating cost compared to the internal project.

Bearing Point also refined the financial scenario analysis, ultimately developing six business cases instead of one. The client CEO was delighted that our subject matter expertise delivered such tangible value in such a short time: “Never has a consultant delivered more value to us than BearingPoint on this project.”

• The BearingPoint team’s expertise, creativity and industry experience.
• Buy-in by the client team and confidence in BearingPoint as a trusted partner.

Our team of three people confirmed the business case and assisted client management in decision-making. We used a methodology derived from industrial feasibility studies:

• Detailed investigation and viability check of all market segments, import-export flows and market trends, to paint a future-proof picture of each segment
• Full review of the engineering project by an experienced chemicals project engineer, investigating technology options, automation options and applying constraints analysis for lean process flow
• Integrating the financial data, market and revenue projections, project expense data and plant operations cost into an integrated market-technology-production- financials business model
• Remodelling the base, adding five other business cases, conducting scenario analyses and sensitivities on all six cases
• Developing ROCE, IRR, NPV and payback metrics for each business scenario