Industrial Plant Appraisal

Industrial plant appraisal

content structure

What is an industrial plant?

A industrial plant is a physical facility where the production of goods or the provision of services on a large scale takes place, these facilities can vary significantly in size and complexity, from small specialized factories to large industrial complexes spanning multiple buildings and complex manufacturing processes.


Industrial plants can be engaged in a wide range of activities, including manufacturing of manufactured goods, food processing, energy production, oil refining, chemical manufacturing, machine building, among many other activities. industrial.


These facilities usually have a variety of specialized equipment and machinery to carry out the specific production processes of each industry, in addition, they may have complementary infrastructure such as warehouses, loading and unloading areas, administrative office areas and service areas.


An industrial plant is a place dedicated to the large-scale production of goods or services, which can cover a wide variety of industrial activities and require specific infrastructure and equipment to carry out its operations.


Types of industrial plants

The Industrial plants They can be classified into several types according to the type of activity they carry out, the products they manufacture or the processes they use. Some of the most common types of industrial plants include:


Manufacture: These plants are dedicated to the manufacturing of physical products, such as automobiles, appliances, furniture, electronic products, among others.


Food processing: Plants dedicated to food processing, such as canning plants, meat processing, dairy production, beverage plants, among others.


Chemistry: Plants that produce chemical products, such as oil refining plants, petrochemical plants, fertilizer manufacturing plants, among others.


Pharmaceutical: Plants dedicated to the manufacturing of pharmaceutical products and medicines.


Automotive: Plants that manufacture vehicles and automotive components.


Textile and Clothing: Plants that produce fabrics, clothing and other textile products.


Energy: Power generation plants, including thermoelectric, hydroelectric, nuclear, solar and wind plants.


Metallurgical: Plants that produce metals and metal products, such as steel, aluminum, copper, among others.


Construction and Construction Materials: Plants that manufacture construction materials, such as cement, bricks, ceramics, glass, among others.


Electronics: Plants that manufacture electronic products, such as computers, mobile phones, consumer electronic devices, among others.


These are just some of the general categories of industrial plants, and within each category there may be numerous subcategories depending on the specialization and specific processes they employ.

Industrial plant appraisal

An industrial plant appraisal is a valuation process that is carried out to determine the value of an industrial facility, which can include factories, warehouses, production plants, processing facilities, among others, this type of appraisal has the main objective of determining the market value of the industrial plant Depending on your physical condition, location, infrastructure, machinery, equipment, and other associated assets.

What factors are considered for an industrial plant valuation?

In an industrial plant appraisal, various factors are considered, such as the size and quality of the facilities, production capacity, technology used, service infrastructure (such as electricity, water, access to roads, etc.), the market demand for products or services produced at the plant, among others such as:


  1. Location: The location of the industrial plant can have a significant impact on its value, considering accessibility to raw materials, sales markets, transportation infrastructure and other services.


  1. Facility status: The physical condition of the facilities, including buildings, machinery, equipment and systems, is a key factor in the valuation, evaluating the age, maintenance, obsolescence and efficiency of the assets.


  1. Production capacity: The production capacity of the plant, that is, its ability to generate products or services, is an important factor in the valuation, considering operational efficiency and flexibility to adapt to changes in demand.


  1. Technology and processes: The technology used in the plant and production processes are important considerations, obsolete technologies can decrease the value of the plant, while the adoption of modern technologies can increase it.


  1. Financial history: The plant's past and present financial performance, including revenues, operating costs, profit margins and future projections, may influence its valuation.


  1. Regulations and compliance: Regulatory compliance and environmental and safety regulations can affect the value of the plant, especially if there are risks associated with non-compliance.


  1. Competition and market: Competition in the industry and market conditions can influence the value of the plant, considering the demand for products or services, competition from other facilities and market trends.

8. Legal and contractual aspects: Lease contracts, labor agreements, licenses, permits and other legal aspects that may affect the operation and value of the plant are evaluated.

Purposes of an industrial appraisal

This type of appraisal is crucial for various purposes, such as purchase and sale transactions, investment decisions, financing, insurance, accounting, among others, it is carried out by expert valuation professionals, who use specific methods and techniques to determine the value. fair and precise of the industrial plant in question.


Some of the most common purposes include:


Buy and sell: Determine the market value of an industrial plant to facilitate its purchase or sale.


Financing: Obtain financing or loans using the industrial plant as collateral, where it is necessary to know its value.


insurance: Establish the insurable value of the industrial plant to determine the appropriate insurance premium and ensure sufficient coverage in the event of loss or damage.


Accounting and Financial Reports: Comply with accounting and financial requirements, such as valuing fixed assets for financial reporting and audits.


Merger and Acquisition: Evaluate the value of an industrial plant as part of a merger, acquisition or business restructuring.


Litigation and Arbitration: Resolve legal disputes related to property, such as divorces, partitions, expropriations or other litigation.


Tax Determination: Establish the taxable value of the industrial plant for purposes of appraisal and payment of property taxes.


Strategic planning: Assist in strategic planning and business decision making, such as facility expansion, relocation, or closure.


Lease Valuation: Determine the value of a lease contract for the industrial plant, both for the lessor and the lessee.

Approaches used in an industrial plant appraisal

In an industrial plant appraisal, various approaches and methodologies are used to determine its value. 

Some of the common approaches include:Cost Approach: This approach is based on calculating the value of the industrial plant considering the replacement cost of its assets and accumulated depreciation; the cost of construction or replacement of facilities and equipment is evaluated, adjusted for depreciation and obsolescence.

  • Market Focus: This approach uses recent sales data of similar industrial plants on the market to determine the value of the plant being valued, comparing the characteristics of the plant in question with those of other industrial plants recently sold to estimate its value.
  • Income Focus: This approach focuses on the income generated by the industrial plant to determine its present value, projecting expected future income flows, taking into account factors such as lease agreements, occupancy, operating expenses and capitalization rates.
  • Residual Approach: In this approach, the residual value of the industrial plant is determined after deducting the costs of production, promotion and sale of the products or services it produces, the value of the land and the remaining assets are considered once the costs associated with production have been deducted. and marketing.
  • These approaches can be used individually or in combination, depending on the specific characteristics of the industrial plant and the objectives of the appraisal, and it is common that the appraisers use multiple approaches to obtain a more accurate and complete assessment of the industrial plant in question.

Links that may interest you

Scroll to Top