Project Financing for a Glass Manufacturing Plant
The glass manufacturing industry plays a key role in integrating value chains and makes an important contribution to the global economy. By statistics, glass plant manufacturing industries rose by almost a third between 2005 and 2015, exceeding $200 trillion on the eve of the pandemic. According to experts and real estate owners, the demand for the glass in the coming decades will grow by 4–5% per year. The global glass industry continues to grow amid favorable long-term forecasts. Project financing for glass plant will contribute to the development of the industrial sector by providing expected quality glass.
Our flexible financing solutions support the development of the industry nationally and internationally by providing access to large loans and complex project finance instruments. We have accumulated enough knowledge, experience and technology to promote the development of the glass industry in all areas.
Havelet Finance Limited offers its clients:
• Large loans for the construction and modernization of chemical plants.
• Refinancing of debts of chemical industry enterprises.
• Services in the field of financial engineering and financial modeling.
• Legal, technical and financial consulting. Contact us to learn more about our technological excellence and broad financial opportunities.
Cost of Investment for Glass Plants
The purpose of this section is to provide an overview of the main approaches to assessing the investment costs associated with the construction and start-up of project financing for a glass plant. We cannot talk about specific figures, since the differences in the cost of technologies and equipment for glass manufacturing business are too large. In addition, there are so-called economies of scale and huge differences in land and labor costs, transport costs and other factors depending on the host country.
The cost of building glass manufacturing plant can be in the tens of millions of US dollars, but facilities of this scale are being built less frequently and are mostly limited to regional projects. The current trend is to gradually expand factories and move to large and expensive projects in order to economize on scale and further improve competitiveness. An example of such a mega-project is the EIB funding for a glass plant manufacturing Complex in Lebanon, which was jointly created by several large companies. The estimated construction cost of the plant reaches US $ 20 billion, making it one of the largest Glass plant.
Investment Analysis Project Financing for Glass Plant
At the final stage of the engineering design, the finance team can make an estimate of the investment costs. This requires detailed technical characteristics of the main production equipment (reactors, pumps, pipelines, evaporators, coolers, separators, boilers) and the way they are used in technological chains. It is important to get quotes from several manufacturers in order to compare alternatives.
Evaluating and comparing the cost of several alternative technological chains will help project managers make the most rational decision, allowing investors to get the maximum economic benefit in specific conditions.
The total cost of building a glass manufacturing plant is made up of numerous components such as engineering design, obtaining permits, purchasing land, purchasing and installing equipment, constructing buildings, testing, and so on. Obviously, it is extremely important for most companies to obtain adequate external financing for glass manufacturing plant with a large initial investment.
The initial investment can be divided into two categories. On the one hand, these are investments intended for the acquisition of fixed assets and the supply of raw materials needed to start the production of glass products. On the other hand, these are financial resources for maintaining liquidity and carrying out business activity from the start of the project until stable cash flows are achieved.
Sources of financing for the glass Manufacturing plant project
The preferences of glass manufacturing companies in the context of financing new projects are now rapidly transforming along with the rethinking of the financial structure of the business and the growing competition for financial resources at the global level. The right choice of funding sources is a key condition for ensuring the efficiency and competitiveness of any glass production. In most cases, the combination of equity and debt capital is used to quickly attract the required resources.
When choosing sources of financing for the construction of glass plants, it is important to take into account the construction schedule, which should coincide with the cash flow schedule. In addition, it is important to align the cash flow generation schedule for the future plant with the debt service schedule. Likewise, the project company should leave room for debt restructuring and negotiating with capital providers about the terms and conditions for repayment.
Havelet Finance Limited offers a full range of professional services in organizing a long term financing for the construction of glass manufacturing plant anywhere in the world. We are ready to offer a long-term loan from 50 million euros with a maturity of up to 20 years.
Internal sources of financing
One of the sources of financing for projects of Glass manufacturing Plant is internal financing, which consists of the company’s net profit, depreciation, as well as various instruments for transforming assets into financial reserves. Internal financing can increase liquidity, which strengthens the company’s competitive position in the financial market.
This has a positive effect on current activities and contributes to faster development and expansion of the business
External sources of financing
The use of external sources of financing for projects of Glass Plant helps the business to use unique development opportunities and at the same time solve the problems associated with financial liquidity. Within the framework of external financing, there are many instruments such as equipment leasing and bank loans.
This is an attractive form of financing due to the repayment of obligations with a delay in relation to the future financial flows that the investment project should generate. Given the high investment costs in the industry, the development and expansion of chemical companies depends on access to external sources of finance.
Loans for investment projects
An investment loan is a type of medium and long-term targeted financing that companies receive through banks and other financial institutions. A bank loan is one of the most widely used methods of financing chemical companies. Funding for the chemical industry comes from many financial institutions, including the International Finance Corporation and the World Bank.
Currently, commercial banks provide most of the financial services to chemical companies. Since the company applies for significant financial resources (loan amounts are often hundreds of millions of dollars), the choice of a specific proposal deserves close attention and analysis.
Get in touch with Havelet Finance Limited. We will help you grow and expand your business from begging to the end.
We are also currently structuring a convertible debt and loan financing and other project financing and international loans at of 2% interest repayable annually with no early prepayment penalties.