Xây dựng nhà máy sản xuất gỗ dăm tại tỉnh quảng nam e

I.1.1.

Chapter 1: PROJECT OVERVIEW

1.1 Introduction
- Project name: Investment to built wood chips factory.
- Location: Que Cuong, Que Son District, Quang Nam Province.
- Type of investment: Investment in new building
1.2 Imperativeness
Currently, the domestic materials for paper production mainly depend on imports,
accounting for nearly two thirds of the domestic material needs of paper production, the rest,
by offshoring. Due to import raw materials, domestic production faced many difficulties. This
is one of the reasons to push paper prices increase in the future.
On the other hand, the demand for paper in the market is very large, so businesses in
paper industry have increasingly developed. Most businesses have confirmed, if materials
prices continuously face to difficulty, it might lead to the increase in paper even businesses
always uphold the spirit of saving production costs and accepting in reducing profits.
Facing the tension of the current paper market, we would like to set up and
implementation of the project: "Construction woodchips factory in Quang Nam".
1.2.1 The natural conditions of the project area
Quang Nam province is located in central Vietnam (from 14057'10'' to 16003'50'' north
latitude, from 107012'50 to 108044'20'' east longitude), it takes 860 km to the south from
Hanoi, 865 km to the north from Ho Chi Minh City. The administrative center of the province
is Tam Ky City. Quang Nam is famous for two world cultural heritages are Hoi An and My
Son.
Factory is located in the industrial park - East Que Son in Que Cuong, Que Son
district, Quang Nam province. Project location is located next to Highway 1A, it takes about
40 Km to the west from Chu Lai airport and Ky Hay port.
Advantages of the project location:
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- Located close to the material area.
- Located near the building materials.
- Advantages in developing infrastructure.
a) Topography
Project superficies is about 2 hectares, the factory is located in the industrial park East Que Son, it’s terrain is quite flat, that located next to Highway. It is convenient to
transport product from the central to the South – North and input materials from other
provinces.
b) Climate - weather
Quang Nam is located in tropical climate, there are two seasons: rainy and dry seasons,
Quang Nam is influenced by cold winter in the north. The average temperature of 25.4 ° C,
winter temperatures may plains below 20oC. The average humidity in the air is at 84%. The
average rainfall is 2000-2500mm, but it distributed unevenly in time and space, mountain
areas rain more than in plains, rainfall that is largest in the months of 9-12 accounting for
80% of the annual rainfall, the rainy season coincides the hurricane season, so the hurricane
central often cause landslides, flash floods in the mountainous districts and caused flooding in
the riverine areas.
c) Forest Resources
Quang Nam Province has 425 921 hectares of forest, the coverage rate reached 40.9%;
the provincial timber volume is about 30 million m3. The natural forests area is 388 803 ha,
planted forests is 37 118 ha. Rich forest in Quang Nam has about 10 thousand hectares,
distributed in the high mountains, the remaining are mostly poor forests, average forest and
forest regeneration, with timber volume of about 69 m3/ha. The nature reserve is located in
the province of Nam Giang Thanh River.
d) Land use status
The project area is 2 ha, lies in the Industrial Park - East Que Son. Investors lease land
for a period of 50 years. The land is located next to other companies in this industry park
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where the focus so many workers. The location of this area exudes value and untapped
potential for economic efficiency when operating.
1.2.2 Economic, social and cultural conditions of the projects
Quang Nam province has much potential, location is next to Da Nang City where is
one of the economic centers of the country. Quang Nam has abundant labor force with more
than 887.000 people (accounting 62% of the provincial population).
Quang Nam economic grow quickly, during the period 1997-2011, Gross domestic
product (GDP) has average growth of nearly 10.6%, especially in 2011 GDP rise to 12.2%,
higher more than 4 times in 1997. The economic structure has shifted towards increasing the
share of industry and services (from 52% in 1997 to 79% in 2011); reducing agriculture's
share (from 48% in 1997 to under 21% in 2011). Labor structure shifted towards positive, the
employment rate that is primarily agricultural goes down from over 78% to below the 55%,
non-agricultural workers account for more than 45 % of total employment. Income increased
over 10 times from 2.1 million in 1997 to nearly 22.5 million in 2011.
Quang Nam province did not have any industrial parks, however recently Quang Nam
has nine industrial parks with a total planned area of 4,390 hectares; 52 industrial clusters
with an area of 1,400 hectares; the province has restored and developed 19 villages
traditional, rural industries. Up to now, over 5,300 domestic enterprises have registered and
operated, the project attracted 81 foreign direct investment totaling more than $ 4.7 billion,
promote economic restructuring and create strong growth step, solid, industrial production
value increased by 23.6%/year.
Cultural - social in recent years also recognizes outstanding efforts and strong
development in the field of culture and society - a factor to ensure sustainable development.
1.2.3 Project evaluation:
Regarding to basis analysis of the economic conditions, social, over natural conditions of
region as well as the basis of legal documents related. The invesment of construction project
of pulp factory product can be feasibled.
The construction project factory is located in Que Son, Quang Nam Province. The project
area has been havest in accordance with the functions of a modern industrial, to ensure
Page 3 of 27

production standards as well as environmental issues for companies here to invest in
production. Project location is advantaged of all the aspect such as nearby resources, good
traffic, ensures the production and operation of the factory.
Implementation strategies for urban development, creating specific patterns consistent
with policy planning and public policy, contribute to the economic development of the
region, particularly the province of the paper industry.
To planning and management of construction, economy development in sync with the overall
development process of Quang Nam province. At the same time the project will contribute to
society, to the economy of the province an industry consumes a large amount of mangrove
trees to plant adjoining districts of the province but also help farmers no longer worry the
output auriculiformis plantations.
According to a survey of contrition recent years, the country's forestry is difficult. Many
farmers are deforestation by planting mangrove trees to encourage advocate of the province.
But recently the devaluation Melaleuca trees caused many hardships farmers, accompanied by
incessant storms made them anxious lest the tree will fall ... So building factories for investors
this is an urgent task should be done right and not just the interests of investors in mining
projects but also help farmers improve their lives, step out of poverty.
Considering that in Quang Nam area but had some manufacturing pulp and paper, what
worries or concerns about the product output acacia trees and eucalyptus trees have not been
satisfactorily resolved, the prices the output is so low that farmers depressed, many families
have broken many hectares of Acacia and Eucalyptus for planting cassava. However, wood
chips market in recent years many positive changes. Our country is in the process of
improving pulp production capacity to gradually eliminate imports and exports began in
2015. Currently, Vietnam is still trying to meet the domestic demand and thus still more
opportunities is opening up in front of the producers as well as business in the future. The
favorable conditions for investment is in Vietnam, including the advantages of geography,
political system and social stability, forest resources, water and abundant labor. However, the
risks and challenges coexist as slow administrative reform, corruption exists, poor

infrastructure and strict regulations on environmental barriers to business in South Vietnam.
Besides Vietnam wood chip company is in the process of restructuring in order to develop
sustainably.
Page 4 of 27


Perhaps that is why the need to build a pulp factory in central is needed.
1.3. Objectives and results of the project
1.3.1 Goals
• The overall goal
Develop manufacturing plants for the wood grain paper manufacturing industry.
Specific objectives
- Bring economic benefits to investors: after the project is completed and put into
operation to provide an income for the owner and staff of factory workers.
- Each year, the project needed a large mangrove tree leaves as inputs. This contributes
ideas and improves life for farmer’s plant neighboring districts.
- Create employment conditions for workers in Quang Nam province.
- To contribute to the socio-economic development of Quang Nam province especially the
paper industry.
1.3.2 Expected results of the project
Operations wood chip production plant with a capacity of 3,504 tons/year. Annual plants
brought in some investors large profits in addition to creating jobs provide stable source of
income for near 80 labors in the region.
1.4. The size and capacity of the project

Page 5 of 27


Investment in construction of pulp mills in Eastern Industrial Zone Que paint

To meet the increasing demands of the domestic paper market, and to address inputs
of untapped investment properly, as we know the neighborhood and the industrial
park adjacent Que Son district, such as Nong Son, Duy Xuyen, Bac Tra My, Thang
Binh, Dai Loc…have planted many trees and Acacia auriculiformis. To catch all the
other advantages of the hotel location as well as the utility and brings valuable
business and brand our company decided to invest in the construction of the plant
above locations to fully exploit’s potential and inherent advantages.
1.4.1 The model of portfolio construction
Total construction area: 2ha
With a total area above along with the ability to calculate and financial investors to invest
in the following categories:
THE CONSTRUCTION VOLUME OF THE PROJECT
No.

Content

Unit

Amount

Volume

Total

I

The works

1

Office construction

m²

200

200

200

2

Wall construction 2,4 meters height

m²

220.00

220

220

3

Workshop construction

m²

1,000.00

1,000

1,000

m²

500.00

500

500

m²

700.00

700

700

m²

200.00

200

200

4
5

6

Construction

of

wastewater

treatment ponds
Build the void for wooden materials
Build the ponds for chemical
disposal

7

Parking

m²

200.00

200

200

8

The volume leveling

m³

1,600.00

1,600

1,600

9

3-phase power system

HT

1.00

1

1
Page 6 of 27


10

Truck

1.00

1

1

11

System grinder, chopped

HT

1.00

1

1

12

Supply system, drainage

HT

1.00

1

1

13

Fire protection system

HT

1.00

1

1

1.4.2 The factory capacity
The operating principle of the factory:
The input material from Acacia trees and Melaleuca trees are first bought from local
people. Therefore, the average capacity of the factory per day is estimated about 36 tons fresh
Acacia per 1ha of factory. However, this capacity will be increased gradually in following years.
With 36 tons fresh acacia, the company collects about 12 tons of material powder which produces
12 tons of finished-product paper. The process is below:

Manufacturing Process
from Acacia tree.

Pulp

Cutting
machine

Agitator

Wood chips

Paper
Machines

Digester

Paper
excision

The remaining material will be put into storage for preservation for the production of the
next day.

Page 7 of 27


The amount of water used to wash cleaning materials is put into the line to be monitored by
the flow meter.
With such operating principles, we have driven operating capacity of the factory 12 tons /
day which is equivalent to 3,504 tons / year.
1.5. Product consumption market of the project
In Quang Nam province today; even though, there were some manufacturing pulp and
paper, the worries and concerns about the output for the products of acacia and eucalyptus trees
have not been resolved because the prices of output products is so low that farmers are depressed,
many households have destroyed many acres of Acacia and Eucalyptus to plant cassava. The
factory construction project is located in Dong Que Son industrial zone, Quang Nam Province.
Project location is convenient in many divisions such as nearby area materials, smooth traffic,
which ensures the production process and operation of the factory.
Products of the factory in operation will meet the demand of paper in the province in
particular and in the country in general .
1.6 Progress of project implementation time
Factory construction area has a large area, items and group of items have relatively large
distances and the large construction area projects and construction plans for the project.
The building and installtion items are carried out at the same time, which will ensure
to shorten construction time, reduce administrative costs, construction supervision, and

other expenses and soon put construction to use and bring economic benefits.
General construction solutions includes:
- Assemble construction : used for items as pretentious steel .
- Construction of monolithic : for items foundations , water tanks , equipment foundations , pile
foundations , underground works .
- Construction Manual : for items gates , fences , yards , roads ...
- Commissioning shall be carried out with all the equipment and machinery
Page 8 of 27


WORK ALLOCATION STRUCTURE TABLE
Unit: 1.000 VND
Subjects that
No

WBS

Work name

Time

carry out

Objectives

Establish management
1.1
board

1

T12/2013

Meeting all related
1.2

Investors

division

2

2.1 Receive ground

+

2.2 Clearance

Management
board

2.3

Surveying the
construction

design

and
T12/2013

Finding a plant model
best suits

Evaluation of design
2.4
approval
Estimating for the
3
entire project
4

T12/2013

Management Selecting the most suitable
board
contractor with the lowest
cost

4.1 Preparing bidding
documents
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4.2 Bidding
Selection of successful
5
bidder
6.1 Material gathering
6

Preparing plans

T12/2013

6.2
against fire and explosion
7.1 Reinforcing foundations
7.2 Leveling earthworks

7

Preparing the main
7.3
bearing structure

T12

Building protective barrier
8

8.1

Complete schedule of items
ensuring technical standards
for construction.

at the site and
the temporary house

8.2
9

9.1 Office Building

T1/2014
T3/2014

9.2 Building workshops

–
Bidder

10.1 Making garden
10

10.2

Construction fencing and entrance
T 3/2014
gates

10.3 Parking

Construction of drainage system
11

Construction
of
treatment ponds

Construction
treatment

12

lake

wastewater
T2/2014T3/2014
chemical

12.1 Purchase of equipment
12.2 Installation of equipment

T4/2014

Ensure timely and properly
installed according to design
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13

Comparing actual work with the
project plan
T4/2014
Evaluating results and adjusting the
13.2
necessary work
13.1

14.1
14

Checking and comparing with
Management the plans to limit the
encountered
risk
board

Completing testing and completion
of the project

14.2 Preparing project handover

T4/2014

Investors

Completing projects

14.3 Reporting and payment settlement
14.4 Liquidation of contract

- Organizational construction chart
Detailed Organizational construction chart will be made during the construction and installation
bidding by the construction contractors.
- Type of project management
Since the project size is small with simple techniques, and investors have qualified
professional skills and experience in project management, so companies choose the form of

managing construction investment project directly. This model has the advantages of cost savings,
investors can capture the progress and implementation process more closely. But it also has
disadvantages if the investor does not have in-depth knowledge of project management and just
rely on his experience to manage, he sometimes will encounter difficulties.

Page 11 of 27


1.7. Operation project resources.
1.7.1 Labour
LABOUR DEMAND AND SALARY SUMMARY TABLE
Unit: 1000 VND

No

Social
Total
insurance and
Salary cost/
Total annual
Quantity
monthly
medical
month
salary
salary
insurance
(year)

Title

1

Director

1

6500

6,500

84,500

19,435

2

Vice Director

1

5000

5,000

65,000

14,950

3

Accountant

2

4000

8,000

104,000

23,920

4

Head of departments

10

4500

45,000

585,000

134,550

5

Fired boiler workers

6

3000

18,000

234,000

53,820

6

Pressure cooker workers

12

3000

36,000

468,000

107,640

7

Skim workers

6

3000

18,000

234,000

53,820

8

Bleaching workers

12

3000

36,000

468,000

107,640

9

Hash machine workers

4

3000

12,000

156,000

35,880

10

Mill workers

8

3000

24,000

312,000

71,760

11

Treadmill workers

6

3000

18,000

234,000

53,820

12

Porters

4

3000

12,000

156,000

35,880

13

Car pairs
workers

technical
4

3000

12,000

156,000

35,880

14

Wastewater
workers

treatment
3

3000

9,000

117,000

26,910

Total salary

and

79

259,50 3,373,500

775,905

Page 12 of 27


0

Based on the results of the project labour table, it is showed that the number of labor of workers
needed for the project is 79 employees. The investor has launched recruitment orientation, the
number of employees above will be given priority in hiring locally first and then recruit in
neighboring provinces in order to solve the employment problem in the province.
1.7.2 Capital investment of projects
a, Total capital investment:
THE COSTS OF THE PROJECT
(Unit: 1.000 dong)
No.

Content

Amount of money
(before tax)

VAT

1

Cost of construction

3,389,000.00

338,900.00

2

Cost of equipment

6,559,000.00

0.00

3

Cost of investment advisory

644,724.73

64,472.47

4

Cost of project management

152,900.76

15,290.08

5

Other costs

182,178.77

18,217.88

6

Provision for expenses

1,186,780.43

43,688.04

TOTAL

12,114,584.68

480,568.47

Total investment

12,114,584.68

480,568.47

The following table sets cost we determine the total investment 12,114,585 thousand dong.
b) Funding methods:

THE CAPITAL FOR PROJECT OPERATION
Page 13 of 27


(Unit: 1.000 dong)

No.

Content

12/2013

Quarter I/2004

Total

1

Owner’s capital (40%)

1,928,573.94

2,917,259.93

4,845,834

2,892,860.91

4,375,889.89

7,268,751

4,821,434.86

7,293,149.82

12,114,585

2

Borrowings
(12.5%/year)
Total

Method loans: the principal will be extended in constructing period, just to pay interest
based on the term loans and the loan period. Starting pay from the project in operation.
Repayment of principal and interest are calculated annually by the beginning balance.
c) The progress of Capital use:
The Progress of Capital Use
(Unit: 1.000 dong)
No

Content

12/2013

Quarter
I/2014

Total

1

Cost of construction

1,355,600.00 2,033,400.00

3,389,000

2

Cost of equipment

2,623,600.00 3,935,400.00

6,559,000

3

Cost of
advisory

4

Cost
of
management

5

Other costs

6

Provision for expenses

7

Total

investment
project

257,889.89

386,834.84

644,725

45,870.23

107,030.53

152,901

63,762.57

118,416.20

182,179

474,712.17

712,068.26

1,186,780

4,821,434.86 7,293,149.82

12,114,584.68

Progress drawdown and repayment is presented in the following table:
(Unit: 1.000 dong)
Page 14 of 27


Year

2013

2014

December

Quarter I

Beginning Debt
Borrowings during the
period
Repayment
+ Interest incurred

2,892,860.9
2,892,860.91

4,375,889.89

33,750

254,406

33,750

254,406

2,892,860.9

7,268,750.8

+ Principal
Ending Debt

Funds: 40 % equity, 60 % debt . The investors will increase the charter capital of the
company and make arrangements with the commercial banks for medium term loans.
Currently, the average lending rate of commercial banks is about 14 % / year.
With added borrowed funds made up 60 % of capital investment projects, so investors
need to be oriented for funds arrangement in order to not affect the project schedule .
This loan amount expected to be disbursed beginning of the month 12/2013 in the
amount of one and the beginning of the month 2,892,860,910 1/2014 with the same amount of
4,375,889,890. During construction of the end of each quarter will pay all unpaid interest but
not the principal source of revenue for the general interest of time the building is 288 156
000. Interest during construction is equal to the amount paid premium reserves or borrowing
from banks .
When the project went into operation business, with revenues going to start paying
principal . Time quarterly repayment plan in 5 years at an interest rate of 14% / year , payable
quarterly amount includes interest and principal with equal amounts.

Through planned revenue and expenses and the interest on that debt repayment plan
effective projects, capable of very high debt service, bringing huge profits for investors and
partners effects such as banks.

Page 15 of 27


Chapter 2: EVALUATION THE PROJECT’S EFFECTIVENESS
2.1 Evaluation the financial effectiveness
2.1.1 Payback time
Repayment plan proposed in this project is the plan to pay interest and principal
annually from the start of project activities. Repayment plan is shown in detail in the
following table:
(Unit: dong)
The loan amount

7,268,750.81
thousand dong

Borrowed time

5 years

Interest rate

14.0%/year

Repayment schedule: Attachment
Through calculating table shows quarterly investors have to pay the original funds for
the borrowings is 363. 438. 000 and the payment of this amount will be paid in 20 next

quarter and the investors will pay the interest with the original interest which was based on
the balance of each quarter. It is expected that the first quarter of 2019 the investors will repay
for the bank in time. So payback period of the project is 6 years from the first quarter of 2013
to first quarter of 2019.
2.1.2 Profit of the project:
For the project’s operation, some expenses are needed such as:
- Advertising expenses
- Costs of electricity, water
- Maintenance costs
- Cost of insurance
- Welfare costs, unemployment insurance, benefits, bonus ...
- Cost of inputs
Page 16 of 27


- The cost of land rent
- Shipping costs
- Chemical materials costs
- The cost of stationery, phone.
- Other expenses
Investor intends operation time of the project is 292 days / year. Based on that we can collect
the operational costs of the project are as follows:

OPERATION COSTS OF THE PROJECT
Unit: 1000 VND

No.

Content

Year
2014

1

Marketing cost (0,31,5%revenue)

2

Cost of utilities
Utilities cost per day

3

Maintenance
costs:
0.5% of assets value
(excluding land cost)

4

Insurance cost

5

Benefits
fund,
unemployment
insurance, bonus ...

6

Raw material cost

2015

2016

2017

2018

83,76
8

142,93
4

155,06
7

17
6,884

19
2,432

328,50
0

511,00
0

552,36
7

59
7,870

64
7,997

1,5
00

1,7
50

1,8
92

2,048

2,219

45,43
0

60,57
3

63,60
2

6
6,782

7
0,121

9,08
6

12,11
5

12,72
0

1
3,356

1
4,024

581,92
9

775,90
5

814,70
0

85
5,435

89
8,207

5,190,30

8,073,80

8,727,39

9,44

10,23

Page 17 of 27


Raw material cost per
day
7

Lease expenses

8

Transportation cost

0

3

6,346

8,347

23,7
00

27,6
50

29,8
88

3
2,351

3
5,063

4
0,000

4

0,000

1,971,00
0

3,066,00
0

3,314,20
0

3,58
7,220

3,88
7,980

21
9

29
2

29
2

292

292

9,0
00

10,5
00

11,3
50

1
2,285

1
3,315

raw

4,730,40
0

7,358,40
0

7,954,08
0

8,60
9,328

9,33

1,152

Chemical
raw
material cost per day

21,6
00

25,2
00

27,2
40

2
9,484

3
1,956

Operation days
Cost per day
9

0

Chemical
material costs

10

Stationery

225,00
0

300,00
0

306,00
0

31
2,120

31
8,362

11

Other cost

1,184,88
7

1,624,05
8

1,752,01

0

1,89
6,427

2,05
1,090

14,350,29
9

21,924,78
5

23,652,13
9

25,60
1,768

27,68
9,712

Total

• Revenue:
With modern technological processes, advanced technology along with the utilization
of raw materials available capital from the market operators and stable output. Revenue
includes the following items:
1. Revenue from trampling:

Page 18 of 27


- In 2014, investors are expected to produce paper, this year is the first year the project
operate, so every day produces about 9 tons of paper sold at 8,500,000VNĐ/ton. Therefore
revenue this year is about 16.7535 million thousand dollars
- In the next years, the factory manufacture more plants and gold paper, so to produce
paper about 6 tons/day and sold 8,500,000 VND/ton in 2013, 2014 and 2015, in 2016 price is
8.925 million VND/ton. Paper output will increase 5 % in the next year. Thus revenue in 2015
is 14.892 million, and the revenue next years will increase with the same volume and prices.
2. Revenue from the cutted paper:
In 2015, factory began to produce cutted paper with capacity is 2.5 tons/date, unit price
per ton of paper is approximately 10,200,000 VND. Thus the revenue is about 7.446 billion in
2015. Revenue is calculated as follows:
Revenue = Price x yield x number of operation days/ year
Paper output hike 10% and unit price increased 5% in the next year in the cycle life is
calculated.
3. Revenue from gold paper
In 2015, factory began to produce cutted paper with capacity is 2 tons/date, unit price
per ton of paper is approximately 10,200,000 VND. Thus the revenue is about 6.248.800.000
VND in 2015. Revenue is calculated as follows:
Revenue = Price x yield x number of operation days/ year
Paper output hike 10% and unit price increased 5% in the next year in the cycle life is
calculated.
REVENUE OF THE PROJECT
Unit: 1000 VNĐ
No
1

Content
Revenue

from

Year
2013

2014

2015

2016

2017

16,753

14,892,

15,636,

17,239,

18,101,
Page 19 of 27


trampling
Output

(ton)

Price (VND/ton)

600

352

319

9

6

6.3

6.6

6.9

219

292

292

292

292

8,500

8,
500

8,
500

8,
925

8,
925

8,190,
600

9,460,
143

10,406,
157

Revenue
from
cutted paper

-

7,446,

000

Output
(ton)

-

2.5

2.8

3.0

3.3

219

292

292

292

292

1
0,200

10,
200

10,
200

10,
710

10,
710

7,186,
120

8,677,
240

9,978,
826

quality

Operation days
Price (VND/ton)
3

000

quality

Operation days

2

,500

Revenue
from
gold paper

-

6,248,
800

Output
(ton)

-

2.0

2.3

2.6

3.0

219

292

292

292

292

Price (VND/ton)

1
0,700

10,
700

10,
700

11,
235

11,
235

Total

16,753
,500

28,586,

800

31,013,
320

35,376,
734

38,486,
302

quality

Operation days

Based on revenue and operating costs of the project annual income can be estimated as
follows:
INCOME STATEMENT OF THE PROJECT

Year

2013

2014

2015

2016

2017

Page 20 of 27


Revenue
Cost
Wage cost

16,753,500
14,350,299

28,586,800
21,924,785

3,112,054

31,013,320

35,376,734

38,486,302

23,652,139

25,601,76
8

27,689,712

4,149,405

4,149,40
5

4,149,405
965,322

4,149,405

Depreciation

723,992

965,322

965,322

965,32
2

Interest expense

725,058

788,659

585,134

381,609

178,084

1,661,319

4,278,63
0

5,503,779

415,330

1,069,65
7

1,375,945

1,245,990

3,208,97
2

4,127,834

Profit before tax

(2,157,902)

Tax (25%)
Profit after tax

758,629
189,657

(2,157,902)

568,972

The factory operates in the second quarter in 2014, so capacity and costs have not been
fully utilized. In addition investors estimate inputs prise is higher than the market prise. So in
the first year the investor loss of 2.157902 billion. However, this figure is estimated to
prevent changes, operational risks in business. But by 2015, profits from the operation of the
plant is 758 629 000. Profit of the plant increases in the next year to see the project activities
effectively.
2.1.3 Net present value and internal rate return of the project
Based on the results of cash flows in and out, we calculate the financial indicators, and the
results showed:
Net present value of project is: NPV = 17.286.968.000 dong >0
Internal rate of return of project is: IRR = 38%

STATEMENT OF CASHFLOW
Unit: 1000 dong
Page 21 of 27


Year

2013

2014

2015

2016

2017

0

1

2

3

4

CASHFLOW IN
16,75
3,500

Revenue
Bank loan

2,8
92,861

28,5
86,800

31,01

3,320

35,37
6,734

4,37
5,890

Liquidation value

0
28,586
,800

31,013
,320

35,376
,734

Operating cost,

14,35
0,299

21,9
24,785

23,65
2,139

25,60
1,768

Salary expenses

3,11
2,054

4,1
49,405

4,14
9,405

4,14
9,405

Debt

33,750

2,06
9,777

2,2
42,410

2,03
8,885

1,83
5,360

4,85
5,185

26,825
,279

28,316
,599

29,840
,429

31,586
,533

(1,9
62,324)

(5,69
5,889)

27
0,201

1,17
2,891

3,79
0,202

18
9,657

41
5,330

98
3,234

3,37
4,872

TOTAL INFLOWS

2,89
2,861

21,129
,390

4,8
21,435

7,29
3,150

CASHFLOW OUT
Capital cost

Total outflows
Net cashflow before
tax
Corporate Income Tax
(CIT)
Net cashflow after tax

(1,9
62,324)

(5,69
5,889)

27
0,201

Discount rate
Page 22 of 27


1.00

0.87

0.76

0.66

0.57

Present net cashflow

(1,9
62,324)

(4,95
2,947)

20
4,311

64
6,492

1,92
9,594

Present accrued value

(1,9
62,324)

(6,91
5,271)

(6,7
10,961)

(6,06
4,468)

(4,13
4,874)

NPV

17,28
6,968

IRR

38%

Review: Through the planning, analyzing and calculating process, the
results of the project are as follows:
No

Target

Outcomes

The total investment excluding VAT 10% (1.000
1 dong)

12,114,585

2 Present net value NPV (1.000 dong)

17,286,968

3 Internal Return Rate IRR (%)
4 Return time (year)

38%
6

Total Table shows that project brings high returns for investors over the initial capital
investment spending.

2.2 Evaluation of socioeconomic efficiency of the project.
2.2.1. Economic efficiency
Project of wood chip factory construction has many positive impacts to the socioeconomic development of the province. Contributing to the development and growth of the
Quang Nam’s economy in general and Que Son district in particular. State and local have
budget revenues from VAT, corporate income tax. Creating jobs for workers and income for
the investors;
2.2.2. Social efficiency

Page 23 of 27


Not only potential in terms of economic sector, but also great value to the social sector.
When the project is put into operation, consuming a large amount of acacia, acacia trees, and
create secure to the plant output of mountain farmers. In recent years, agricultural economic
has faced difficulties due to weather, natural disasters, floods making life of farmers
miserable. Nothing from crops to harvest, many farmers are not eligible to live. Since the
policy of the state of the acacia trees come, the people life here help less miserable. However,
the efforts of the farmers have not been satisfactory for the price paid to buy fresh acacia.

Thus launch of project is a solution to this problem. In addition, the project will contribute
greatly to the State budget and solve a large highly qualified and skilled as well as unqualified
workforce for Quang Nam Province.
2.3 Evaluation of project impact on environment.
The project goes into operation generating a large volume of solid and gas, liquid
wastes, dust and noise that impact on the environment inevitably. The solution given by
investors is:
 Reduction of waste
Accurately estimate the volume of materials for construction, reducing excess unsold after
construction.
Selecting appropriate gathering place for materials at the end of the wind direction and on
high ground to avoid damage and loss when not in use.
Proposed measures to minimize dust and waste water generated during the construction
process.
Regularly check, periodic maintenance of work items to promptly prevent and remedy the
problems that may occur.
 Collection and treatment of waste:
In this project, the collection and treatment of waste should be done from the establishment to
operation and dismantling process to avoid affecting the operation of the station and
surrounding environment area.

Page 24 of 27


CONCLUSION

Through analysis, evaluation and calculation of technical and economic indicators that show
the project brings more efficiency. Project after 4 months in operation contributed resolving
jobs for 80 employees in the region, bringing a steady profit for investors. Especially project
solves the concerns of worried farmers, helping them improve their lives. In addition, the

project contributes greatly to the State budget.
The market is huge demand for chip wood, reducing imports and pushing exports and is a
trend and strategy of our country in this sector. Hence the birth of the project is consistent
with the general situation of the society, especially in the matter of Quang Nam to promote
industrialization and modernization of the province. Moreover, the project goes into operation
solving employment, generating income for many people.
Suggest authorities to help facilitate investors to project be early built and operated!

Page 25 of 27