Spinning Mill Feasibility Report

How to read this sheet

The report models year one at full rated output and holds every price constant, which is the convention project reports are written in and also their principal weakness: a spinning mill earns a spread between two independently volatile commodities, and a report that fixes both is answering a narrower question than the investor is asking. Run the cotton price and the yarn price apart from each other before believing any payback here. Capacity is derived from the ring frame alone on the assumption that preparatory and winding are balanced to it; a mill short of combing or autoconer capacity will not reach this production however many spindles are installed, and the machinery schedule is where that imbalance shows up as a suspiciously cheap department. Realisation is the single most sensitive input in the whole model - a point of realisation is worth more than a point of machine efficiency, because it applies to the largest cost line rather than to the smallest - and it should come from a trial or from a comparable mill on comparable cotton, never from a supplier brochure. Break-even utilisation depends on how much of the conversion cost genuinely falls with volume; the default treats 45 percent as fixed, which is a reasonable figure for a three-shift mill with permanent labour, and a mill running contract labour on a single shift should lower it. Depreciation is straight line on machinery and civil works together, which understates the early-year charge against a written-down-value schedule and therefore overstates early profit while leaving cash accrual almost unchanged. Two outputs report zero to mean "never" rather than "immediately", which is the opposite of how a zero usually reads and is worth knowing before the report is circulated: all three payback lines are zero together when the project generates no cash to repay anything - they are deliberately gated as one, so that a project cannot show a respectable EBITDA payback beside an honest payback that never arrives - and break-even utilisation is zero when contribution after variable cost has gone negative and no volume breaks even at all. In both cases the neighbouring lines say so plainly - cash accrual and contribution after variable cost are printed beside them - and the break-even yarn price, which is defined whatever happens, is the line to read when the utilisation figure collapses. Working capital appears only as the promoter margin, not as the full cycle: a mill carrying ninety days of cotton and sixty days of receivables needs a great deal more than that in sanctioned limits, and the interest on those limits is inside the administration line rather than in term interest.