Specialty Fats Project (SFP)

Savola Foods Co.

Pavlos N. Petts S.A.

Chipita S.A

Project Charter
Technical

15-04-2012
Rev. 15
Table of Contents

1. Background
1.1. Business Vision
1.2. Our Mission
1.3. Goals
1.4. Business Plan
1.5. Scope
1.6. Project Phases / Time Frame
1.7. Future Expansions
1.8. Capital Estimations
2. Project Team Structure
2.1. Project Steering Team
2.2. Project Management Team
2.3. Spin Off Teams
2.4. Consultation & Technical Support
2.5. Suppliers & Contractors
3. Project Plan
3.1. Approach
3.2. CPS
3.3. Financial Plan & Cost Tracking
3.4. Quality Plan
3.4.1. Product Quality Plan
3.4.2. Process Quality Plan
3.4.3. Project Quality Plan
4. Project Considerations
4.1. Risks / Challenges
4.2. Issues
4.3. Assumptions
4.4. Constraints
5. Appendix
5.1. Supporting Documents
1. Project Background:

1.1. Business Vision:

1.2. Our Mission:

 To establish a successful and professional International food industries company that supply
B2B bakeries and food service customers with:
 High Quality & Customized Specialty Fats.
 Technical Solution Support
 Customer Service Support (Product development & Logistic).

 To build a complete plant with full in house capabilities to supply fats to discriminating
customers who demands the highest degree of quality, services and technical solutions.

The project’s intended customers are mainly users of:

 Margarines (Block& Sheet)

 Shortening (Block& Creamy liquid)
 CBS & CBR
 1.3. Goals:

 Expandable capacity : 60K MT / Year production capability in first year expandable to 100K MT / year.
 Flexibility : High degree of batch preparing flexibility (5MT / batch)
 Sophistication : specialized recipe formulation for top quality product
 Top design : Compliance to International Industrial Standards and Food Safety Requirements.

1.4. Business Plan:

Y2012* Y2013 Y2014 Y2015 Y2016

Margarine 10,000 12,500 17,000 23,000 27,500
Shortening 10,000 12,500 17,000 23,000 27,5000

Total 20,000 25,000 34,000 46,000 55,000

* Trading

1.5. Scope

The project technical scope would cover the following items:

1.5.1. Area Preparation:

A. Boundary wall and infrastructures
B. Temporary warehouses and Security should be considered.
1.5.2. Margarine & Shortening Plant Building to accommodate all units of:
A. Storage Tanks
B. Recipe Preparations.
C. Packaging Lines
D. Cold stores
E. Offices
F. Raw Materials WH
G. Utilities and Workshops
1.5.3. Equipment Of Margarine & Shortening Plant (2 Lines):
A. Line 1 : Margarine
B. Line 2 : Shortening
1.5.4. Oils Processing Plants & Building
A. Hydrogenation Unit
B. Interesterification Unit
C. Fractionation Unit
D. Bleaching
E. Deodorization Unit
 F. others
1.5.5. Utility Supplies Facilities & Equipment
A. Hydrogen Production Unit & Buffer Tank (in house)
B. Compressed Air Supply
C. Process & Cold Water Supply
D. Steam Supply
E. Power Stations & Standby Generators
1.5.6. Oils Tanks
A. Raw Oils Tanks (port & Plant)
B. Intermediate Storage
C. Refined Oils Tanks
1.5.7. Infrastructures & Support Facilities
A. Quality Lab
B. Water Treatment Unit
C. Waste Water Treatment & Disposal
D. Drainage System
E. Pipe bridge
F. Roads
G. Firefighting

1.5.8. Licenses & Permits

A. Production License
B. Building Permit
C. Power Supply Permit
D. Etc.
 1.6. Project Phases

The project now will be executed in one phase and it will include all the facilities required for full in-
house capabilities.

1.7. Future Expansions:

Initial Setup : 60K MT / Year

Future Expansion : targeting 80K – 100K MT / Year

 1.8. Capital Estimations:

Estimates Remarks
$M M SR
Land & Buildings 6.9 26
Tea Factory Land 5,200 m 2 (Adjacent to Salama) 0.5 2
Area Qualification 0.3 1
Oils Processing Building 3.2 12 Base on Ref 5 building cost
Packaging Building 2.1 8 2 levels for production + 1 Lvel utility
Raw Materials WH 0.8 3
Cold Stors 0.5 1.7
Cold Stors 0.5 1.7 Based on budgetary offer
Tanks 8.1 30.4
Raw Oils Tanks (Plant 5 x 300T & Harbour 10 x 1000T) 3.8 14.23 Based on budgetary offer
intermediate Tanks (40 x 40 T) SS 304 2.5 9.56 Based on budgetary offer
Finished Oil Tanks (10 x 40T) SS 304 0.64 2.39 Based on budgetary offer
Tanks Insulations (50 Tanks) 0.16 0.60
Agitators & Instuments 0.97 3.65
Plants & Equipmets 19.7 74
Margaine Line (40KMT) 6.7 25 Based on budgetary offer (Split 2B confirmed)
Shortening & CBS Line (20KMT) 2.4 9 Based on budgetary offer
Oils Processing Units 10.7 40 Reviwed with Pavlos
E / M works 1.7 6.5
Mechanical Works 0.80 3 Base on Ref 5 building cost
Electrical Works 0.67 2.5 Base on Ref 5 building cost
Fire Protections System & Water Tank 0.27 1
Utlities 4.8 18
Power Stations 0.67 2.5 3 x 1000kW stations
Air Compressors 0.13 0.5
Boilers 0.80 3 2 x 8T / Hr boilers
Chillers & AC 0.27 1
Stand By Power Generation 0.40 1.5 1500 kVA
Water Treatment Unit 0.27 1
Hydrogen Production unit 2.27 8.5 Based on budgetary offer
Infrastructure: 1.4 5.3 ?? To be confirmed
Roads & Drainage 0.21 0.8
Waste Water Treatment 0.53 2
offices, Restrooms & Workshops 0.13 0.5
Training Center 0.27 1
Lab Equipments 0.27 1
Others 2.8 10.5
Equipment Storage & Handling 0.07 0.25
Insurance 0.03 0.1
Design & Supervision 1.07 4
Project Mangement Fees (internal) 0.27 1.00
Trainings & Travel 0.13 0.5
Testing Materials 0.03 0.1
Custom Clearance 0.05 0.2
Equipment Rentals 0.01 0.05
Commissioning Fees 0.08 0.3
Provision 1.07 4
Total 46.0 172.4

Note: the refinery is to be equipped to refine blends and tropical oils only. Liquid oils is assumed to be supplied by Afia
(mainly Sunflower)
 Project - Technical Team Structure:
1.9. Project Steering Team:

1. Walid Salah
2. Kyriakos
3. Ehab Sami Faidi
4. Omar Bayazeid
5. Mazen Badawood
6. Zalmi Fazeel
7. Matouk Moarfi
8. Amr Gadallah
9. Kostas Pikros
10. Jamal Malik
11. Saleh Faghih

ROLES & RESPONSIBILITIES:

 ensure and encourage Commitment

 Establish and ensure Alignment to business objectives.
 Provide Directions.
 Agree and document basic Assumptions.
 Approve initial scope and future variations.
 Track and monitor cost & timing.
 Resolve major Issues.

1.10. Project Management Team:

1. Saleh Faghih Project Leader

2. Kostas Pikros Technical Leader
3. Abdulwahab Abu Kwaik Project Coordinator
4. Francis J. Alaan Mechanical, Process & Utility In charge
5. Walid Abdul Razik Packaging & Site Coordination
6. Mohamed Basheer Electrical / Control In charge
7. Amr Gad Allah Customer Requirement Integration / Tech. Support
8. Mohamed Baroum Central Buying

Note:

70% of Francis & Walid time is required for this project.

30-40% of Basheer Time is required for this project.

ROLES & RESPONSIBILITIES:

 Prepare Scope & Layouts.

  Prepare CAPEX, OPEX & CPS.
 Prepare, together with consultant, Tender Documents.
 Technical Tender Analysis, with consultant.
 Commercial Tender Analysis, with Buying Center.
 Suppliers & Contractors Selections, with Buying Center.
 Prepare Detailed CPS, with suppliers & contractors.
 Agree Performance Guarantees with suppliers & contractors.
 Monitor & Report Progress of Works.
 Track & Control Cost & Time.
 Track & Resolve Issues.
 Prepare Safety Plans for site and staff.
 Prepare project & operation Quality Plans.
 Prepare and follow up Change Management Plan.
 Responsible for Site Coordination Plan between suppliers & contractors.
 Prepare Equipment / Material Control Plan (handling, storage, issuing, etc.).
 Coordinate and follow up all Permits Requirements.
 Follow up Power & Utilities Requirement Plan.
 Prepare for plant Startup & Commissioning.
 Coordinate Insurance Coverage Plan (for all stages of project).

1.11. Spin Off Teams:

Different spin off teams will be formed as required at different stages of the project to
handle one of the following requirements:

a. Logistics & Site activities

b. Licenses & Legal Requirements.
c. Utilities Supplies
d. HR & Security Services
e. Material & Equipment receiving and storage management.
f. Insurance Requirements.
g. Product Development, Material Planning & Commissioning.

ROLES & RESPONSIBILITIES:

 Execute & follow up specific tasks or initiative as required.

 Provide support as required.
2. Project Plan
2.1. Approach

A. Prepare Project Charter, Communicate and Align.

B. Project Kick off
C. Identify Technical Requirements:
i. Define Technical Scope
D. Prepare Complete Scope & Layout Document for Approval.
E. Prepare initial CPS.
F. Consultants Selections and Agreements.
G. Start Tendering Process:
i. Prepare RFT for Machineries & Equipment
 Analysis
 Agreements.
ii. Prepare RFT for Civil Works
 Analysis
 Agreements.
H. Prepare Final Capital & CPS
I. Start Procurements Process.
J. Sign Contracts & Open LC’s.
K. Project Kick off with Suppliers / Contractors (Site Works) .
L. Monitor Project Execution and Report Progress
M. Monitor Cost and reconcile with Finance.
N. Train and qualify operation staff (production, quality control & maintenance)
O. Prepare for startup and commissioning
P. Prepare for hand over
Q. Project closing and starting of depreciation.
R. Post Review & Warranty period management.
 2.2. CPS

Milestones Y 2012 Y 2013 Y 2014

A M J J A S O N D J F M A M J J A S O N D J F M
Registration & Industrial Permit
Land Transfer
Design Works
Building Permit
Equipment Tender & Procurment
Construction Tendering
Construction Works
Equipment Delivery
Equipment Installation
Startup & Commissioing
Production Startup & Varification
Project Closing

Final time frame would only be confirmed after:

 Development of scope and agreement of layouts

 Delivery times and project time agreements with Suppliers & Contractors.

2.3. Financial Plan & Cost Tracking

Full plan and cost tracking sheet will be prepared after the CAPEX approval

2.4. Quality Plan

2.4.1. Product Quality Plan

To be prepared by PAVLOS Quality Assurance
2.4.2. Process Quality Plan
To be prepared by PAVLOS Quality Assurance
2.4.3. Project Quality Plan
To be prepared by Francis
3. Project Considerations
3.1. Risks / Challenges

To be done together with Project team

 Plant Safety (Hydrogen Production & Handling)

 Product Hygiene
 Formulation Stability & Product Quality
 Customer Services Capabilities & Flexibilities.
 Shared resources

3.2. Issues

To be done together with Project team

 Power Supply
 Waste Water Disposal
 Water Supply

3.3. Constraints

To be done together with Project team

3.4. Assumptions

3.4.1. Budget (The Budget was estimated based on)

A. € 1 = $ 1.4
B. Machines Budgetary offers of Dec 2010
C. Steel prices of March 2011
D. Team Estimates for Buildings and Refinery Equipment (70% accuracy)
3.4.2. Area
a. Jeddah 2 – total area of 40,000 m2.
b. Specific area allocation to JV (30,000 m2)
3.4.3. Water Cost
A. Demineralized Water SR. 19 / CM
B. Desalinated Water SR. 11 / CM
Assumed Layouts:
At Jeddah 2
Proposed New Land:

Jeddah 2 is about 35 km south of Jeddah 1

Note:

 Power Station feeding the Industrial City is already built, however, the main power cabling
and connection is still not done. This might take few months
 Waste water drainage system is not yet started; according to MODON officials, the contract
is already awarded and the drainage system might not be ready before 2 years.
 Water supply is not available. We assume supply by tankers as currently done in AIC (SAR 10 -12 / CM)
 Source Energy, an independent energy supplier recommended by MODON is promising to start
operation by April 2013. They promise to supply Electrical Power, Steam, cold and Chilled Water.
 Provision need to be made from our side to arrange for electrical supply (through our own generators
or renting from outside) and also for waste water disposal.

Based on data received from PNP on 30 Nov. 2011

 3.4.4. Tank Farm at Harbor (to be reviewed)

Tanks Allocation & operation control:

The flowing tanks will be dedicated to JV:

 7 x 1,000 m3 (new)
 3 x 500 m3 (from existing tanks)

Basic Agreement:

 Sunflower oils (refined) to be supplied by Afia at 10,000 MT / Year.

 All operations of shipment scheduling, shipment unloading, operations, inventory control,
and oils lifting to be managed by Afia.
 Oils buying still to be discussed and agreed upon.

Note:

 Share existing pipe lines (2 lines) to unload from ships to tanks with of 150 – 220 Ton / Hr. The following should be
considered:
 These lines should be equipped with heating tracing lines to avoid solidification of hard oils.
 Special cares to avoid oils mixing.
 Future demands might require increasing unloading speed by increasing branching pipe lines to existing tanks. New
tanks piping should consider higher pipe sizes from the beginning.
 4. Attachments
4.1. Laboratory Requirements (prepared by Zaheer)

S. # INSTRUMENTS QUANTITY COST IN SR REMARKS

1. NMR One 450000
2. HPLC One 200000 OPTIONAL
3. Atomic Absorption One 150000 OPTIONAL
4. GC One 85000
5. SPECTROPHOTOMETER One 55000
6. COD REACTOR One 4000
7. DOSIMAT Five 60000
8. LOVIBOND TINTOMETER One 40000
9. HEATER WITH MAGNETIC STIRRER Two 4500
10. MELTING POINT APPARATUS One 8500
11. OVEN One 6750
12. MIXER Two 6000
13. CENTRIFUGE One 7500
14. REFRACTOMETER One 40000
15. REFRACTOMETER WATER BATH One 9500
16. CONDUCTIVITY METER One 7000
17. pH Meter One 3000
18. KARL FISCHER One 40000
19. VACUUM PUMP One 7000
20. HOT PLATE One 2000
21. MUFFLE FURNACE One 7500
22. MILLIPORE FILTERATION UNIT One 7500
23. DIGITAL METLER BALANCES Two 15000
24. HAAKE THERMOSTAT BATHS Seven 140000
25. MERCURY THERMOMETERS FOR Seven 900
THERMOSTAT BATHS
26. DIGITAL THERMOMETER One 4000
27. DISSOLVED OXYGEN METER One 2500 OPTIONAL
28. DIGITAL MICROMETER One 900 OPTIONAL
29. DIGITAL CALIPER One 750 OPTIONAL
30. MEASURING TAPE One 200
31. GAS BURNER One 750
32. BLENDER ( WARING BLENDER ) One 500
33. WATER BATH ( 14L VOLUME WITH One 7500
HYDROSTATIC THERMOSTAT )
34. AUTOCLAVE ( MODEL KT-40.82L VOLUME ) One 20000
35. DIFFERENT CULTURE MEDIA One 1000
36. HERAUS STERLIZING OVEN (MAX. One 7500
TEMPERATURE 250˚C)
37. VINDON INCUBATOR One 8500
38. MICROBIAL PLATE COUNT TESTER One 3000
(SALMONELLA, COLIFORM, YEAST &
MOLD)
39. WIRE LOOPS Three 100
40. MEDIUM REFRIGERATOR One 1200
41. SLIDE MICROSCOPE Ten 200
42. DIGITAL COLONY COUNTER One 1500
43. PLASTIC TRAYS One 150
44. ALCOHOL BURNER One 250
45. SCISSORS Two 75
46. HEODOPH MECHANICAL TEST TUBE MIXER One 900
47. FORCEPS Two 50
48. PLASTIC STERLIZER CUP 100ML Two 25
49. ALUMINIUM FOIL Six Roles 100
50. SURGICAL GLOVES Three packs 150
51. COTTON Two Bundles 25
52. BINOCULAR MICROSCOPE WITH BUILT IN One 1250
ILLUMINATOR 30W, 220-240V, 50/60 Hz
53. PETRI DISHES SIZE 100X20MM Twelve 150
54. MAGNETIC STIRRERS Six 100
55. MAGNETIC RODS Three 100
56. WATER DISTILLATION UNIT One 7500
57. GRADUATED TEST TUBES 10ML Twelve 24
58. STAINLESS STEEL TEST TUBES STAND Two 150
59. HEATER STANDS Three 150
TOTAL SR 1,427,899
S. # GLASSWARE QUANTITY COST IN SR REMARKS
1 BEAKERS 50ML, 100ML, 250ML & 500ML Twelve each 1200
2 BEAKERS 1000ML & 2000ML Three each 750
3 CONNICAL FLASKS 100ML & 250ML Twelve each 600
4 CONNICAL FLASKS 500ML Three 250
5 SOXHLET Three 1200
6 STANDARD FLASKS WITH STOPPER 25ML, 50ML, Twelve each 1200
100ML
7 STANDARD FLASKS WITH STOPPER 250ML, 500ML, Three each 1500
1000ML
8 ALUMINIUM MOISTURE DISCS Six 250
9 MEDIUM SIZE GLASS RODS Three 40
10 PLASTIC FUNNELS SMALL, MEDIUM & BIG Four each 600
11 CRUCIBLES WITH LID MEDIUM Six 150
12 WHATMAN FILTER PAPER MEDIUM & BIG Six each 500
13 ROUND BOTTOM FLSAKS 250ML & 500ML Three each 750
14 SCHOT GLASS BOTTLES WITH CAPS 100ML Twelve 600
15 OPEN ENDS CAPILLARY TUBES Twelve packs 300
16 RUBBER BANDS SMALL One pack 15
17 WASH WATER BOTTLES 50ML, 100ML, 500ML & Three each 300
1000ML
18 COLORED STANDARD REAGENT BOTTLES 100ML, Three each 900
250ML, 500ML & 1000ML
19 DESICATORS MEDIUM Two 500
20 NMR TUBES Sixty tubes 250
21 NMR TUBES BLOCKS Six 300
22 MOISTURE DISHES Six 150
23 GOOCH CRUCIBLES MEDIUM Three 300 OPTIONAL
24 GRADUATED CENTRIFUGE TUBES 10ML Two packs (24) 250
25 GRADUATED PIPETTES 0.5ML, 1.0ML, 2.0ML, 5.0ML, Six each 500
10.0ML & 25.0ML
26 FIXED VOLUME PIPETTES 1.0ML, 2.0ML, 5.0ML, Six each 450
10.0ML
27 THIMBLES One pack 250
28 DISPOSABLE GRADUATED PLASTIC PIPETTES 1.0ML Two packs each 300
& 5.0ML
29 GLASS RODS (MEDIUM SIZE) Three 50
30 SEPARATING FUNNELS, 500ML Three 900
Total SR 15,305
S. # CHEMICALS QUANTITY COST IN REMARKS
SR
1 ANALAR GRADE DIETHYL ETHER 100L 6000
2 ANALAR GRADE ETHANOL 200L 1500
3 PHENOLPHTHALEIN 500GR 400
4 TECHNICAL GRADE GLACIAL ACETIC 75L 900
ACID
5 ANALAR GRADE GLACIAL ACETIC 10L 600
ACID
6 ANALAR GRADE STARCH 500GR 300
7 ANALAR GRADE CHLOROFORM 50L 3000
8 EDTA 500GR 348
9 ANALAR GRADE ACETONE 75L 3000
10 ANALAR GRADE N-HEXANE 10L 1300
11 ANALAR GRADE PETROLEUM EHTHER 5L 160
12 ANALAR GRADE SODIUM 1KG 220
CARBONATE
13 ANALAR GRADE SODIUM 500GR 500
MOLYBDATE
14 BROMO PHENOL INDICATOR 50GR 600
15 METHYL RED INDICATOR 50GR 500
16 METHYL ORANGE INDICATOR 50GR 500
17 BROMO CRESSOL GREEN INDICATOR 50GR 750
18 ANALAR GRADE ZINC OXIDE 500GR 250
19 POTASSIUM DICHROMATE 250GR 150
20 SOLCHROME BLACK T 50GR 200
21 AMMONIA SOLUTION 25% TO 30% 5L 200
22 SODIUM 250GR 300
23 DIMETHYL CARBONATE 2L 400
24 COPPER STANDARD SOLUTION 100ML 175
25 NICKLE STANDARD SOLUTION 100ML 175
26 LEAD STANDARD SOLUTION 100ML 175
27 IRON STANDARD SOLUTION 100ML 175
28 MERCURY STANDARD SOLUTION 100ML 175
29 ARSENIC STANDARD SOLUTION 100ML 150
30 ANALAR GRADE SODIUM HYDROXIDE 2KG 200
31 ANALAR GRADE POTASSIUM 2KG 350
HYDROXIDE
32 ANALAR GRADE HYDROCHOLORIC 5L 150
ACID
33 ANALAR GRADE SULFURIC ACID 5L 250
34 SPECTRA DRADE HYDROCHLORIC 3L 300
ACID
35 SPECTRA GRADE NITRIC ACID 3L 300
36 ANALAR GRADE SODIUM 500GR 120
THIOSULPHATE
37 PHOSPHORIC ACID 1L 200
38 ANALAR GRADE CITRIC ACID 1KG 100
39 ANALAR GRADE IODINE 200GR 150
MONOBROMIDE
40 ANALAR GRADE POTASSIUM IODIDE 5KG 3500
41 ANALAR GRADE HYDRAZINE 500GR 150
SULFATE
42 POTASSIUM DIHYDROGEN 500GR 235
PHOSPFATE
43 ANALAR GRADE PARA-ANASIDINE 200GR 300
44 ANALAR GRADE ISO-OCTANE 5L 500 OPTIONAL
45 KEROSENE 3L 2
46 ANALAR GRADE OXALIC ACID 500GR 100
47 ANALAR GRADE METHYL ALCOHOL 5L 150
48 ANALAR GRADE BORON 500ML 550 OPTIONAL
TRIFLOURIDE
49 ANALAR GRADE DIMETHYL 3L 900
CARBONATE
50 ANALAR GRADE POTASSIUM 500GR 75
CHLORIDE
51 ANALAR GRADE AMONIUM 1KG 750
MOLYBDATE
52 HYDROQUINONE 500GR 350
53 ANALAR GRADE POTASSIUM 500GR 350
CARBONATE
54 ANALAR GRADE POTASSIUM IODATE 200GR 300
55 FERRION INDICATOR 50GR 250
56 AMMONIUM FERROUS SULFATE 500GR 250
57 POTASSIUM HYDROGEN PHTHALATE 250GR 150
58 DISINFECTANT (DETTOL OR LYSOL) 5L 375
59 STANDARD pH Tablets 4.0 pH 25TAB 150
60 STANDARD pH Tablets 9.0 pH 25TAB 15O
61 ANALAR GRADE SILVER NITRATE 250ML 750
62 KARLFISHER REAGENT 3L 800
Total SR 36,160

Totally four rooms are required for Laboratory, Chemical stores and Office. The proposed dimensions are as
follows:

Analytical Laboratory 6 x 12 Meters with laboratory furniture, stools & Fume hood facility.

Microbiology Laboratory 3 x 4 Meters with laboratory furniture & stool

Chemical Stores 2 x 6 Meters with racking facility

Lab Office 3 x 6 Meters with table, file cabinet and chairs.

Manpower: Three Shift Chemists, One Microbiologist and One Laboratory Assistant.

Note:

 The three Shift chemists will be supervising production in addition to analysis.

 If our current central laboratory facility is used, then a small process laboratory of 3.5x4 Meters will do the
analytical jobs. The requirement of instruments & glassware will be very nominal with addition of NMR.
 4.2. Operational Staff Head Count

Manpower Requirement
[Link] Designation Number
JV Production Head Count
1 Plant Manager 1
2 Production Manager 1
3 Quality Manager 1
4 Shift Supervisor 3
5 Skilled Operator 15
6 Utility 6
7 QC 3
Total 30