A method for quick evaluation of stepwise plant expansion scenarios in the chemical industry

The profitability of investment projects for chemical production plants is affected by the installed plant capacity in relation to the actual sales of the materials produced in the plant. Especially for markets with large predicted growth rates, it can be beneficial to gradually increase the installed production capacity rather than building a large capacity at once. Whether this is the case, however, depends on various factors such as the product sales forecast and the technology, cost structure and economy of scale of the required production equipment. We propose a method which enables a quick comparison of possible stepwise plant expansion scenarios versus building a full capacity plant.