Agroindustrial project analysi

152 AGROINDUSTRIAL PROJECT ANALYSIS* Raw versus semi-processed material to reduce storage neededfor finished goods?* Storage for processing supplies and repair parts?Are the facilities adequate?* Costs and benefits of reducing inventory deterioration?* Location relative to producers and distributors?Have the requirements for working capital and the inventoryprice risks been adequately analyzed?* Peak needs for working capital?* Feasible to hedge price risks through futures markets?* Continued buying versus stockpiling?* Advance contracting?Supplies for ProcessingAlthough the dominant input for the processing operation is theagricultural raw material, 4 2 there are other supplies that also deservethe analyst's attention. The analyst should determine whetheradequate quantities and qualities of these ancillary supplies will beavailable when needed and at a reasonable cost. Source alternativesand nutritional value should also be examined. Selected referenceson industrial procurement, including a listing of UNIDO guidesto information sources on a variety of agroindustries, are providedin the fourth section of the bibliography.Alternative sourcesThe major ancillary agroindustrial supplies are packaging materials,added ingredients (for example, flavorings and preservatives),processing chemicals, as well as maintenance supplies. Localsources are preferable but frequently not feasible. The manufacturingof the aforementioned ancillary supplies is a secondary industrythat operates on derived demand. Consequently, the developmentof these various kinds of supplies is usually slower than that of the42. Although this is true of most agroindustries, some, such as textiles, havebecome increasingly dependent on synthetic rather than natural raw materials.