The economic analysis for the production of cross-linked collagen from bovine pericardium was carried out. For this purpose, production capacities of 5, 15, and 25 X 103 BPU.mth-1 were selected. Figure 3 presents the profitability analysis for a production capacity of 5 X 103 BPU.mth-1.. Similar analyses were performed for production capacities of 15 and 25 X 103 BPU.mth-1. These data are presented in Appendix B. Figure 3A depicts the increase in process capacity (annual throughput) against NUPC. As expected, the cost of production showed the typical exponential decay of scaling up. According to the results, a NUPC of $USD 12,836.58 per kg biomesh was obtained at a process capacity of 30 kg. yr-1. In addition, a process capacity of 750 kg.yr-1 (2.5 kg.day-1) resulted in a NUPC value of $USD 784.57 per kg biomesh. Figure 3B displays the Facility Dependent Product Cost ($.kg-1) against process capacity (Annual throughput). Similarly, an exponential decay behavior was observed with values of $USD7327.36 and $USD318.58 for capacities of 30 and 750 kg.yr-1, respectively. These results confirm that an increase in capacity decreased the NUPC and facility dependent cost. Data on Revenues and NP against Annual throughput are presented in Figure 3C. Herein, a positive NP resulted when the process capacity exceeded 360 kg per year. However, the NP should be confirmed with a positive IRR value. Indeed, positive IRR values of 1.55% and 0.58% before and after taxes, respectively, were determined when process capacity was 510 kg.yr-1 (Figure 3D). The IRR value is a metric used in financial analysis to estimate the profitability of potential investments. The IRR value is a discount rate that makes the net present value (NPV) of all the cash flows equal to zero in a discounted cash flow analysis. Our data also indicated that the maximum process capacity (750 kg.yr-1 or 2.5 kg.day-1) provided IRR values of 16.66% and 13.09% before and after taxes, correspondingly. In addition, a ROI of 20.41% was obtained for a process of 750 kg.yr-1. This value confirms that the process proposed in the present investigation is profitable.
Table 5 presents data on total capital investment (TCI), operating cost (OC), revenues, NUPC, ROI, IRR, payback time, and NPV for the production of biomesh in three different scenarios. As expected, the investment costs followed the order 5 < 15 < 25 X 103 BPU.mth-1. According to these results, production of 2.5, 7.5, and 12.5 kg of biomesh per day can be potentially achieved. Thus, when production capacity increased from 5 X 103 BPU.mth-1 to 15 X 103 BPU.mth-1, TCI augmented 28.21%. However, the TCI of a production capacity of 25 X 103 BPU.mth-1 was only 16.05% higher than that of 15 X 103 BPU.mth-1. It was also found that NUPC decreased as production capacity increased, with NUPC values of 784.57, 458.94, and 388.26 $USD.kg-1 for biomesh production capacities of 5, 15, and 25 X 103 BPU.mth-1, respectively.
In the present work, an ROI value of ≈ 20% was selected. The ROI is a performance measure used to evaluate the efficiency or profitability of a given investment, and in general, an acceptable value is over 5 %. Our data indicated a payback time of about 5 years, period that can be shortened whenever a higher price is considered. In addition, a higher selling price can reduce the payback time affecting the ROI and the profitability of the process. The results in Table 5 indicate that in the three scenarios analyzed in our work, IRR values of about 13% were obtained. This means that in all the cases, profitability is possible. Finally, in all the cases, positive NPVs were obtained. In addition, it was observed that as NPV increased, process capacity improved. NPV corresponds to the present value of the cash flow at the required ROI compared to the initial investment. Thus, the initial TCI will be depreciated in ≈ 40% after ≈ 5 years in the three scenarios.
Table 5
Investment summary for the manufacture of biomesh from BPU considering different scenarios.
|
5000 BPU.mth-1
|
15,000 BPU.mth-1
|
25,000 BPU.mth-1
|
Units
|
Total capital investment
|
1,258,000
|
1,613,000
|
1,872,000
|
$USD
|
Operating cost
|
612,560
|
1,074,320
|
1,515,280
|
$USD/yr
|
Revenues
|
783,000
|
1,305,000
|
1,740,000
|
$USD/yr
|
Cost basis annual rate
|
750.00
|
2,250
|
3,750
|
kg MP/yr
|
Net unit production cost
|
784.57
|
458.94
|
388.26
|
$USD/kg MP
|
Unit production revenue
|
1,043.75
|
579.86
|
463.89
|
$USD/kg MP
|
Unit production revenue
|
0.16 ± 0.078
|
0.086 ± 0.043
|
0.069 ± 0.035
|
$USD/cm2 MP
|
Gross margin
|
24.79
|
20.85
|
16.30
|
%
|
Return on investment
|
20.38
|
21.31
|
19.90
|
%
|
Payback time
|
4.91
|
4.69
|
5.03
|
years
|
IRR (After taxes)
|
13.06
|
14.34
|
13.25
|
%
|
NPV (at 7.0% interest)
|
523,000
|
817,000
|
787,000
|
$
|
MP: Main Product. The density considered for biomesh was 3 g/cm3, the dimensions were considered 1 cm X 1 cm X 0.5 ± 0.25 mm.
In order to obtain the minimum selling price per kg of biomesh, a sensitivity analysis was performed. Figure 4 present the NPV and biomesh selling price in different scenarios. Figure 4A show the results for a production capacity of 5 X 103 BPU.mth-1 with selling prices varying between 350-500 $/kg. Positive unit product revenues of 1,043.75, 579.86 and 463.89 $USD.kg-1 corresponded to selling prices of 400, 450, and 500 $USD.kg-1 , respectively. On the other hand, a selling price of 350 $USD.kg-1 resulted in a negative NPV. Thus, profitability is possible with prices above 400 $USD.kg-1. Process capacities of 15 and 25 X 103 BPU.yr-1 yield minimum selling prices of 250 and 200 $/kg, correspondingly. Below these values the processes will be considered unprofitable.
In Figure 5, costs distributions are presented. Data showed that cost of raw materials increased as production size increased. In addition, the fraction corresponding to cost of labor decreased as process capacity augmented. In this particular case, the size of the plant and the intended production do not require additional workers. We proved that facility-related costs are higher at relatively small production capacities. This is associated with the fact that the use of facilities is similar in the three proposed scenarios, however, for the use of facilities for the smallest process, it implies the same effort as for the other two scales assayed. The costs related to quality assurance (QA) and quality control (QC) are relatively elevated at small scales as observed in the scenario with the lowest production capacity. The QA/QC costs were calculated as a 1.4, 1.97 and 3.45 percentage of the total labor cost (TLC) of the 5, 15, and 25 X 103 BPU.mth-1 capacities, respectively. In addition, utilities expenses represent a small percentage of the operating costs. This item is mainly associated with the costs for heating, cooling, and centrifugation, which do not represent a high energy consumption during the biomesh manufacturing process
Comparison with actual commercial products
Currently, different companies also offer collagen-based products from bovine or porcine origin for the treatment of burn injuries. Those from bovine origin cost between 4 - 8 USD per cm2, while porcine-based products are sell at prices between 3 -14 USD per cm2. [2]. These biomeshes display an area of 1 cm2 and thickness of 0.5 mm ± 0.25 mm [2, 18]. In addition, 1-cm2 units present density, weight, and volume of 3 g/cm3, 0.15 ± 0.075 g, and 0.05 ± 0.025 cm3. These data were used to compare the prices of 1 g of product in the market with that obtained in this research. Our results indicated that a production capacity of 5000 BPU.mth-1 yield a unit product revenue of 1,043.75 USD/kg (0.16 ± 0.078 USD/cm2). In addition, production capacities of 15 and 25 X103 BPU.mth-1 represent revenues of 0.086 ± 0.043 USD/cm2 and 0.069 ± 0.035 USD/cm2, respectively. The minimum selling price reported by Kowa Co was 4 USD/cm2 [2]. Herein, we demonstrated that the continuous production of collagen from BP proposed by our research group drastically reduced the TPC and selling price of collagen-based biomesh. In consequence, low-income consumers will eventually have more access to these types of products.