The Investment Benefit In Valve Project Of Jilin Equipment Manufacturing Co.

Jilin Equipment Manutacturing Company plans to invest valv project withtotle investment of RMB300milion, construction period of19months, theproduction of valves is more than500000sets a year,the revenue in the yearreaching the designed capacity will be RMB564milion yuan.This paper utilized many aspect of theory, such as engineeringeconomics, management and technical economy、Strategic management、market analysis, human resources management, financial Analysis, andproject evaluation combining with a variety of analysismethods to achievescientific research process and accurate result, so as to achieve the purposeof investment analysis and realize the scientific of the project implementationand management.The main contents are as followed:First,the prospects of space in valve industry market is wildly. With thestrengthening of the global economy warming Gradually expand the marketdemand for valve products Valve market will have good market prospects.Equipment manufacturing group in order to meet domestic demand while, Isalso a need to build a10billion yuan production base to seek new projects andnew economic growth point, Proposed investment in valve production projects。Second, Valve market is demanded for mainly petroleum、chemical、powerplants、 long-distance pipelines、shipbuilding、 nuclear industry、a variety ofcryogenic engineering、 aerospace and marine oil and other economic sectorsof the lack of fluid control equipment. The largest users are petroleumindustry、 petrochemical industry、power sector、metallurgy sector and urbanconstruction departments. Including oil, petrochemical industry, productionlines, covering a wide range of petroleum, petrochemical companies, oil field,oil plants, oil refineries, chemical plants, oil depots, gas stations, oil (gas)pipeline throughout the various regions of the country.With economicdevelopment rapid ly,The increase in energy demand and national energy security will promote the rapid development of the energy industry, therefore,the demand for valves was bound to continued growth.After completion the project,the annual production of valve will reach500,000sets.The project combining independent research and development andintroduction of foreign enterprise technology, Through cooperation, to explorethe core technology of the valve manufacturing master oil and gas fields,Introduction of key equipment, Completion of the domestic first-class petroleumand petrochemical valve manufacturer.Third, the project is located in Changchun Green Park West IndustrialConcentration Area, and three horizontal, six vertical "network basic framework ofthe formation of the park, water, electricity, gas, heat and other facilities is basicallysound, According to the needs of the production process, To make a scientific design,rational distribution,Implementation of environmental protection projects with the main projectdesigned, constructed and put into operation the principle of running, Resolutelyimplement the provisions of the national energy saving, design, specification,and take appropriate energy saving measures.Fourthly, according to the relevant provisions of the state, Civil works toimplement the project tendering and implementation of project supervision,Project calculation period of five years (excluding construction period), Theconstruction period is19months, After the project is put into the first annualproduction design capacity,70%of, The second year90%of design capacity,The third year of production. Preparatory work for the project since January2012,Be completed by the end of December2013.The project total investment of30,000million, Investment in fixed assetsof224.87million yuan, Liquidity to75.13million yuan. All required fundsraised by the project unit to apply for financial support (Group Corporation).Put into operation to achieve an annual output of valves500,000sets. Annualsales income of564million yuan, Production and after-tax net profit of 50.9741million yuan, Taxes19.9353million yuan. Project internal rate ofreturn after tax of18.65%, investment profit rate22.66%, The static paybackperiod of4.14years, dynamic payback period of4.51years.(Discount rate10%, does not include the construction period).Sensitivity analysis of the results of product sales at lower prices is themost sensitive factor, Followed by increased operating costs. From the lower marginof the internal rate of return, the project has a certain ability to resist risks.The breakeven analysis shows that the company’s production capacity will reach42.05%when capital preservation, That the ability of projects to adapt to the marketand ability to resist risksProject NPV>0, Within the project yield is higher than the industry benchmarkrate, Entire investment in4.51years to recover, Project after-tax internal rate ofreturn of18.65%, Is put into the annual taxes of19.9353million yuan,Showed that the level of profitability of the project better.In summary, The project is feasible in theory,and should be done as soon aspossible to encourage market early and obtain economic benefits.The project is in line with the national strategic policy, improve theemployment, increase tax revenues, driven regional economic development,and social benefits are particularly significant. The main risks of the project aretechnology, market s, material prices and management.This paper givesmeasures and reduce risks.This paper is based on the estimated investment of the project, Productionscale, product price, product cost estimates, determine the tax rate oninvestment financial net present value, internal rate of return, payback period,the calculation of financial indicators and sensitivity analysis, breakevenanalysis, demonstrationinvestment in the rationality and feasibility of theproject. The project is the level of product technology is advanced, Wide range ofproduct market space, considerable benefits, and economically viable. Suchas the production on schedule, is bound to be a successful investment.