Cost Data Analysis For The Food Iindustry

Journal of Food Engineering 67 (2005) 289299
www.elsevier.com/locate/jfoodeng
Cost data analysis for the food industry

A.Z. Marouli, Z.B. Maroulis
School of Chemical Engineering, National Technical University of Athens, Zografou Campus, 15780 Athens, Greece
Received 24 October 2003; accepted 23 April 2004
Abstract
A systematic analysis of published food industries cost data is used (a) to estimate the appropriate factor models for rapid cost
estimation in food plant design, and (b) to reveal the particular food industry characteristics for supporting various techno-economic studies.
2004 Elsevier Ltd. All rights reserved.
Keywords: Fixed capital cost; Equipment cost; Raw materials cost; Utilities cost; Annual operating cost; Food factories; Food plant design; Cost
estimation; Labor cost; Land cost; Product cost; Manpower; Buildings construction cost; Plant capacity
1. Introduction
Cost data are crucial in plant design. The most significant magnitudes concerning the cost estimation of an
industry are:
the xed capital cost Cfx in $, which is paid during the
installation period, and
the annual operating cost Cop in $/yr, which is paid
during the operation.
Both xed capital and annual operating cost
estimates are also important in project evaluation, product pricing, process optimization and other technoeconomic studies.
Based on process design principles, the raw materials
and utilities costs are obtained from material and energy
balances, while the purchased equipment cost can be
based on equipment sizing procedures. On the other
hand labor cost can be estimated from an intelligent
Corresponding author.
E-mail address: maroulis@chemeng.ntua.gr (Z.B. Maroulis).
URL: http://users.ntua.gr/maroulis.
0260-8774/$ - see front matter 2004 Elsevier Ltd. All rights reserved.
doi:10.1016/j.jfoodeng.2004.04.031
study of the equipment owsheet, paying attention to

the kind of equipments.
Rapid xed capital cost estimation can be based on
the purchased equipment cost by using appropriate factors (factor methods). These factors are characteristics
of the industrial sector considered, e.g., chemical, pharmaceutical, mineral, food industry.
It is the purpose of the present paper to estimate the
corresponding factors for the food industry by tting
simplied factor models to published data retrieved
from existing food factories. Furthermore, the present
paper aims to reveal the basic characteristics of the food
industry concerning the cost distribution to various
resources.
2. Cost estimating models

Fixed capital cost estimates are often based on an
estimate of the purchased equipment cost (Ceq) of the
major equipment items required for the process, the
other costs being estimated as factors of the purchased
equipment cost. The accuracy of this type of estimate
depends on the reliability of the factor values.
290
A.Z. Marouli, Z.B. Maroulis / Journal of Food Engineering 67 (2005) 289299
Nomenclature
B
c
Ccv
Ceq
Cfx
Clabor
Cme
Cmu
Cop
Cmisc
e
building area (m2)

product cost ($/kg)
civil works cost (M$)
purchased equipment cost (M$)
xed capital cost (M$)
labor cost (M$/yr)
mechanical and electrical works cost
(M$/yr)
raw materials and utilities cost (M$)
annual operating cost (M$/yr)
miscellaneous cost (M$/yr)
capital recovery factor ()
F
fcv
fL
flabor
fme
fmu
fmisc
L
M
The factorial method of xed capital cost estimation

(Cfx) is expressed by the equation:
C fx f L C eq
Table 1
Cost items denition
Ceq
where fL is called the Lang factor due to the early

work of Lang (Sinnott, 1996).
The Lang factor depends on the type of industry. For
chemical processes the following values are often used
(Sinnott, 1996):
3:10 for predominantly solids processing plants
f L 4:70 for predominantly fluids processing plants
3:60 for a mixed fluidssolids processing plants
2
For food industries the Lang factor has a lower value
because of the higher equipment cost (Maroulis & Saravacos, 2003):
f L 1:60 for food plants
annual production capacity (1 Gg = 106 kg)

(Gg/yr)
civil works cost factor ()
Lang factor ()
labor cost factor ()
mechanical and electrical works cost factor ()
raw materials and utilities cost factor ()
supplement cost factor ()
land area (m2)
number of employees (persons)
To make a more accurate estimate, the cost factors that

are compounded into the Lang factor are considered
individually. The cost items that are incurred in the
construction of a plant, in addition to the purchased
cost of equipment, can be arranged into the following
two categories:
Civil works cost (Ccv), including site improvements,
buildings and structures.
Mechanical and electrical works cost (Cme), including
equipment installation, piping, instrumentation and
controls, electrical equipment, engineering and supervision.
The above division is selected for the purpose of the
present analysis, which is appropriate for the available
data. As the denitions of these terms given by various
authors are generally dierent, Table 1 is introduced
to make clear the denitions used. More sophisticated
(A) Total capital

(I) Fixed capital
Purchased equipment
Installation
Piping
Instrumentation and control
Electrical
Buildings
Yard improvement
Land
Engineering
Contingency
Cme
Ccv
*
*
*
*
*
*
*
*
(II) Working capital

Cmu
(B) Total production cost
(I) Operating cost (direct)
Materials
Utilities
Labor
Miscellaneous
Clabor
Cmisc
*
*
*
*
(II) Overheads (indirect)

Administrative
Sales
General expenses
divisions of the capital xed cost are considered in the

literature (Clark, 1997; Peters & Timmerhaus, 1991).
Based on the above cost division, the detailed factorial method can be expressed by the following equations:
C fx C eq C cv C me
C cv f cv C eq
C me f me C eq
where
Ceq
Ccv
Cme
fcv
fme
291
The eect of production capacity (F) is examined in

the following:
purchased equipment cost

civil works cost
mechanical and electrical works cost
civil works cost factor
mechanical and electrical works cost factor
Purchased equipment cost (Ceq)

Annual operating cost (Cop)
Product cost (c)
Product cost is dened as follows:
c eC fx C op =F
The above model is equivalent to the following:

C fx 1 f cv f me C eq
In a similar way, the annual operating cost can be estimated based on the raw materials and utilities cost
(Cmu), using appropriate factors. The raw materials
and utilities cost can be calculated accurately by material and energy balances. In food plants, the cost of
packaging materials is important (Clark, 1997) and it
should be included in the raw materials.
The one-factor method for the annual operating cost
(Cop) is expressed by the equation:
C op f op C mu
where fop is the operating cost factor.

The detailed factorial method for the annual operating cost (Cop) is summarized by the following equations:
C op C mu C labor C misc
where
F
the annual production capacity
e
the capital recovery factor
(b) Requirements in employees, building and land versus production capacity (F)
Employees (M)
Buildings (B)
Land (L)
(c) Interrelation between the various xed capital cost
items
The eect of the purchased equipment cost (Ceq) is
examined in the following:
C labor f labor C mu
10
Fixed capital cost (Cfx)

Civil works cost (Ccv)
Mechanical and electrical works cost (Cme)
C misc f misc C mu
11
(d) Other interesting cost-related relationships
where
Cop
Cmu
Clabor
Cmisc
flabor
fmisc
annual operating cost

raw materials and utilities cost
labor cost
miscellaneous cost (maintenance, repairs, royalties and patents)
labor cost factor
miscellaneous cost factor
The above model is equivalent to the following:

C op 1 f labor f misc C mu
12
13
Annual operating cost (Cop) versus annual materials and utilities cost (Cmu)
Annual materials and utilities cost to purchased
equipment cost (Cmu/Ceq) ratio
Average labor rate (Clabor/M)
Average building construction cost (Ccv/B)
The results of the above analysis are very useful in
various techno-economic studies such as plant design,
project evaluation, process optimization, product pricing.
4. Data and methods

3. The food industry cost radiography
The term food industry cost radiography means
the particular characteristics of the cost distribution to
its components and the relationships which express that
allocation. These characteristics could be grouped into
the following categories:
(a) Eect of the production capacity on the various
cost items
The appropriate data for the present analysis have

been retrieved from the work of Bartholomai (1987).
Forty one existing factories (Table 2) are described in
a uniform format concerning the process, the equipment
and the cost data. Most of the food plants refer to economic conditions in the United States and Western
Europe in the year 1986. Cost data refer to both xed
capital (Table 3) and annual operating (Table 4) costs
in US dollars ($).
292
Table 2
Food factories data: product capacity, annual operating time (Bartholomai, 1987)
No.
Plant
Product
Capacity (Mg/yr)
Operating time (h/yr)
1
2
3
4
5
6
7
8
9
Fruits and vegetables

Apple Processing Plant
Community Cannery for Education
Fruit Puree Plant
Multi-purpose Fruit Processing Line
Orange Juice Concentrated Plant
Baby Food Line
Tomato Paste Plant
Frozen Vegetable Plant
Mushroom Farm
Apple products
Fruit jams
Fruit puree
Fruit jams
Concentrated juice
Baby food
Tomato paste
Frozen vegetables
Mushrooms
4000
4800
6000
4800
3200
10,000
5000
4400
80
1000
2000
2000
2000
2000
2000
2000
2000
2000
10
11
12
13
14
15
16
17
Dairy and egg products

Mozzarella Cheese Plant
Blue Cheese Plant
Dairy Plant
Modular Dairy Plant
Milk Powder Plant
Dried Whole Egg Plant
Yoghourt Plant
Ice cream Plant
Mozzarella cheese
Blue cheese
Milk products
Milk products
Skim milk powder
Egg powder
Yogurt
Ice cream
1875
5440
43,500
5000
12,000
500
25,000
4000
3000
2560
2400
2000
7200
2000
3125
2000
18
19
Cereals and grains

Parboiled Pice Plant
Corn Starch Plant
Parboiled rice
Corn starch
36,000
42,000
7200
7920
20
21
22
Pasta and Tofu

Pasta Plant Plant
Precooked Lasagna Plant
Tofu Line
Pasta
Lasagna
Tofu
3575
3420
2600
5500
5700
2000
23
24
Fermentation
Bakers Yeast Plant
Vinegar Plant
Dry yeast
Vinegar
8200
2500
7200
7200
25
26
27
Extruded products and snacks

Quenelles Plant
Tortilla Chip Plant
Corn Snacks Plant
Quenelles (dumpling)
Tortilla chips
Corn snacks
1200
1750
500
2000
3500
2000
28
29
30
31
32
33
Seafoods and meats

Catsh Processing Plant
Shrimp Processing Plant
Surimi Plant
Cattle Slaughterhouse
Coextruded Sausage Plant
Protein Recovery Plant
Frozen sh
Frozen shrimp
Seafood
Slaughter products
Sausages
Protein
3350
375
20,100
28,800
1600
23,750
2000
1500
3528
1800
1600
4000
34
35
Fats and oils

Soybean Oil Extraction Plant
Vegetable Oil Renery
Soybean oil
Cooking oil
300,000
10,800
7200
6000
36
37
38
Baked products
Pan Bread Bakery
Arabic Bread Bakery
Half-backed Frozen Baguette Bakery
White bread
Arabic bread
Frozen bread
11,000
10,608
2160
5000
6240
4000
39
40
41
Beverages
Sea Water Desilination Plant
Fruit Juice Plant
Soymilk Line
Water
Fruit juice
Soymilk
3,000,000
4000
2000
7200
2000
2000
293
Table 3
Food factories data: xed capital cost (Bartholomai, 1987)
No.
Plant
Fixed capital cost ($)

Equipment
Mech. & Electr.
Civil
Total
1
2
3
4
5
6
7
8
9

Fruit Puree Plant
Baby Food Line
Tomato Paste Plant
Mushroom Farm
1,963,000
103,817
767,000
401,600
1,016,500
200,000
1,042,085
803,820
41,000
313,500
52,183
183,000
646,760
48,000
150,000
391,000
650,000
324,915
96,180
355,00
470,000
450,000
40,000
2,923,260
204,000
1,100,000
401,600
2,057,500
200,000
1,837,000
1,350,000
116,500
10
11
12
13
14
15
16
17

Blue Cheese Plant
Dairy Plant
Modular Dairy Plant
Milk Powder Plant
Yoghourt Plant
Ice cream Plant
340,750
2,860,000
6,600,000
760,200
2,700,000
1,302,500
3,236,600
1,330,000
65,850
843,000
4,620,000
427,700
715,000
314,700
878,000
650,000
435,000
390,000
2,310,000
22,000
585,000
670,000
713,000
535,000
841,600
4,093,000
13,530,000
1,209,900
4,000,000
2,287,200
4,827,600
2,515,000
18
19
Cereals and grains

Corn Starch Plant
888,000
13,680,000
326,500
6,842,000
165,000
9,776,000
1,379,500
30,298,000
20
21
22
Pasta and Tofu

Pasta Plant Plant
Tofu Line
1,714,000
2,211,800
350,000
374,000
590,400
265,000
458,800
2,353,000
3,261,000
350,000
23
24
Fermentation
Bakers Yeast Plant
Vinegar Plant
9,776,000
498,700
7,286,000
136,300
9,488,000
115,000
26,550,000
750,000
25
26
27

Quenelles Plant
Tortilla Chip Plant
Corn Snacks Plant
476,000
1,250,000
122,425
409,000
153,000
37,575
100,000
285,000
150,000
985,000
1,688,000
310,000
28
29
30
31
32
33
Seafoods and meats

Surimi Plant
1,011,803
191,700
5 899 600
930,000
1,000,000
1,900,000
588,197
59,300
1,300,400
355,000
410,000
311,000
800,000
180,000
2,800,000
2,375,000
590,000
460,000
2,400,000
431,000
10,000,000
3,660,000
2,000,000
2,671,000
34
35
Fats and oils

5,920,000
1,320,000
1,480,000
524,000
17,500,000
515,000
24,900,000
2,359,000
36
37
38
Baked products
Pan Bread Bakery
Arabic Bread Bakery
1,719,600
659,150
1,188,850
448,400
228,100
390,150
635,000
384,500
374,000
2,803,000
1,271,750
1,953,000
39
40
41
Beverages
Fruit Juice Plant
SoymilkLine
8,043,000
497,000
910,000
8,009,000
95,000
2,381,000
217,000
18,433,000
809,000
910,000
294
Table 4
Food factories data: annual operating cost (Bartholomai, 1987)
No.
Plant
Annual operating ($/yr)

Materials
1
2
3
4
5
6
7
8
9

Fruit Puree Plant
Baby Food Line
Tomato Paste Plant
Mushroom Farm
10
11
12
13
14
15
16
17

Blue Cheese Plant
Dairy Plant
Modular Dairy Plant
Milk Powder Plant
Yoghourt Plant
Ice cream Plant
18
19
Cereals and grains

Corn Starch Plant
20
21
22
Pasta and Tofu

Pasta Plant Plant
Tofu Line
23
24
Utilities
Labor
Suppl.
Total
5,855,640
904,000
618,000
505,000
852,000
7,100,000
1,850,000
78,000
59,200
762,000
362,000
26,600
790,000
307,920
8000
216,000
24,000
166,000
30,000
1,280,000
340,000
54,000
57,000
24,000
100,000
65,000
75,000
25,000
16,500
7,882,640
0
1,184,200
810,000
5,873,000
121,600
9,245,000
2,522,920
156,500
1,700,000
1,520,000
7,000,000
760,000
13,210,000
3,589,520
11,750,000
1,074,860
51,600
157,560
893,400
48,325
1,088,000
587,250
465,375
143,500
86,000
304,000
1,058,000
118,000
98,000
178,000
246,000
271,000
10,000
30,000
300,000
23,800
160,000
83,000
111,700
31,000
1,847,600
2,011,560
9,251,400
950,125
14,556,000
4,437,770
12,573,075
1,520,360
7,191,220
146,200
3,817,440
138,400
664,000
5000
469,140
289,600
12,141,800
1,364,000
1,330,100
147,000
384,180
170,000
198,000
14,500
92,751
1,695,500
2,005,031
Fermentation
Bakers Yeast Plant
Vinegar Plant
961,400
257,275
1,123,950
18,585
262,000
90,000
106,000
8630
2,453,350
374,490
25
26
27

Quenelles Plant
Tortilla Chip Plant
Corn Snacks Plant
720,000
955,500
123,800
35,600
239,750
10,000
102,000
178,000
82,000
25,000
62,000
200
882,600
1,435,250
216,000
28
29
30
31
32
33
Seafoods and meats

Surimi Plant
11,237,680
581,250
8,262,640
28,260,000
167,500
0
141,000
97,500
949,810
468,000
70,500
1,440,000
286,000
110,000
1,626,690
1,292,000
78,000
132,000
374,000
38,000
1,332,490
122,000
25,000
383,000
12,038,680
826,750
12,171,630
30,142,000
341,000
1,955,000
34
35
Fats and oils

72,000,000
7,305,000
3,698,000
252,000
1,080,000
322,000
1,018,000
62,250
77,796,000
7,941,250
36
37
38
Baked products
Pan Bread Bakery
Arabic Bread Bakery
3,302,000
2,733,627
826,944
332,100
76,196
188,800
213,600
169,000
148,000
55,000
30,000
13,000
3,902,700
3,008,823
1,176,744
39
40
41
Beverages
Fruit Juice Plant
Soymilk Line
8,589,440
1,669,600
0
1,465,000
8,403,840
96,800
100,000
86,000
85,600
21,800
5,245,000
295
Table 5
Food factories data: requirements in buildings, yard and employees (Bartholomai, 1987)
No.
Plant
Buildings (m2)
Yard (m2)
Employees (persons)
UO
1
2
3
4
5
6
7
8
9

Fruit Puree Plant
Baby Food Line
Tomato Paste Plant
Mushroom Farm
10
11
12
13
14
15
16
17

Blue Cheese Plant
Dairy Plant
Modular Dairy Plant
Milk Powder Plant
Yoghourt Plant
Ice cream Plant
18
19
Cereals and grains

Corn Starch Plant
20
21
22
Pasta and Tofu

Pasta Plant Plant
Tofu Line
23
24
Fermentation
Bakers Yeast Plant
Vinegar Plant
25
26
27

Quenelles Plant
Tortilla Chip Plant
Corn Snacks Plant
28
29
30
31
32
33
Seafoods and meats

Surimi Plant
34
35
5
2
24
3
SO
QCT
FM
PM
Total
2
1
2
1
1
1
2
2
3
3
1
1
1
2
1
1
1
1
14
5
31
4
16
2
29
50
10
2
6
20
4
17
1
4
13
2
1
1
3
6
1
2
5
1
1
1
1
3
1
2
9
1
1
1
3
1
1
1
1
1
1
1
1
1
8
31
115
14
10
24
36
28
2000
150
500
100
2000
300
5000
800
2000
0
5000
0
3000
6000
10,000
30,000
1500
11,300
7000
0
1500
1200
8500
1700
10,000
30,000
20,000
1500
0
3000
20,000
5000
600
2400
2000
20,000
2
18
8
3
2
21
2
6
1
4
1
1
16
53
2000
1150
10,000
4000
9
12
4
2
1
2
2
1
1
3
1
1
2
3
1
1
1
1
19
19
10
8000
375
40,000
2000
34
2
25
1
4
2
5
1
3
1
1
1
72
8
350
950
500
2000
4000
2000
5
3
1
13
2
1
3
1
1
1
1
1
3
1
1
1
1
9
24
7
1200
600
11,500
5200
1000
1000
10,000
2000
20,000
30,000
5000
3000
8
84
54
2
27
2
30
115
1
4
1
1
10
5
1
4
1
1
4
2
1
1
1
8
3
1
2
1
1
1
1
1
1
31
14
137
180
7
11
Fats and oils

2500
1000
40,000
10,000
28
16
6
9
13
8
3
1
9
2
2
1
61
37
36
37
38
Baked products
Pan Bread Bakery
Arabic Bread Bakery
2800
1000
1056
10,000
4000
6000
18
4
8
3
2
2
19
2
2
2
2
1
1
1
25
28
15
39
40
41
Beverages
Fruit Juice Plant
Soymilk Line
110
724
3000
5000
4
1
20
2
1
1
1
1
1
1
1
1
1
1
21
10
6
1
20
43
6
2
87
7
24
10
1
2
1
2
2
22
1
1
UO: unskilled operators, SO: skilled operators, M: mechanics, QCT: quality control technicians, FM: foreman, PM: plant manager.
The original data were doubled to take into account

the ination. Based on the Marshall and Swift Equipment Cost Index and the Consumer Price Index, this
assumption seems to be logical for the 20 years period
from 1985 to 2005.
Furthermore, the requirements in employees, buildings and yards are presented (Table 5). Among the 41
plants summarized in Tables 25 four are concerning
process lines (Nos. 4, 6, 22, and 41), one farm cultivation
(No. 9) and one education plant (No. 2). These data are
not taken into account. Thus, 35 existing factories are
considered in the present analysis.
Simple power models of the following form are used
to describe the relationship between any two magnitudes
(X,Y) throughout this paper.
Y fX n
100
milk products
seafood
yogurt
Purchased equipment cost Ceq(M$)
296
10
blue cheese
lasagna
skim milk powder
slaughter products
apple products
white bread
protein
ice cream
cooking oil
pasta
frozen fish
sausages
tomato
paste
frozen bread
tortilla chips
milk products
arabic bread
quenelles (dumplings)frozen vegetables fruit puree
concentrated juice
mozzarella cheese
fruit juice
vinegar
frozen shrimp
corn snacks
14
Eq. (14) was tted to the appropriate data for all the
cases described in Sections 2 and 3 above. When the estimated value of parameter n was near to unity a linear
model was retted. All the regressions were presented
graphically in appropriate gures. In addition to the
best tting curve two more curves are presented: the
double of the best tting curve (maximum) and the half
of the best tting curve (minimum). The data lying signicantly outside of this region were considered as outliers and were excluded from the regression.
It should be noted that, in most cases, the estimated
model parameters were very sensitive to the points considered in the regression analysis. Thus, no strictly statistical criteria but rather visual observations were used. In
addition, rounded values of the parameter estimates
were used.
Ceq = 1.80 F 1/2
0.1
0.1
10
100
Plant capacity F(Gg/yr)
Fig. 1. Purchased equipment cost versus plant capacity for various

food industries. Points represent actual data; lines depict (a) the double
of the best tting curve, (b) the best tting curve, and (c) the half of the
best tting curve, respectively from the top.
100
slaughter products
skim milk powder

frozen fish
seafood yogurt
corn starch
tomato paste
cooking oil
concentrated juice
milk products
apple products
5. Results and discussion

Eleven gures summarize the results of the present
analysis. In each gure the literature data are presented
along with the resulting tting equation.
Fig. 1 presents the purchased equipment cost versus
the production capacity for various food industries.
These data are described very well by the equation
Ceq = 1.80F1/2. It must be noted that the 27 from the
35 factories examined are lying in the range between
the minimum and maximum characteristic curves
Ceq = 0.90F1/2 and Ceq = 3.60F1/2 respectively. Thus,
these equations can be used for preliminary purchased
equipment cost estimation for a new food industry.
Similar results can be concluded from Fig. 2, which
presents the annual operating cost versus the production
capacity for various food industries. In this case, the
number of industries inside the min/max range is less
20 from the total 35, which means that the annual operating cost estimation is of less accuracy than the case of
purchased equipment cost.
Annual operating cost Cop(M$/yr)
10
white bread
fr ozen veget ables
lasagna
mozzarella cheese
tortilla chips
pasta
arabic bread
dry yeast
blue cheese
protein
fruit juice
ice cream
fruit puree
frozen bread
frozen shrimp
quenelles (dumplings)
milk products
sausages
vinegar
corn snacks
Cop = 2. 00 F
3/4
0. 1
0. 1
10
100
Fig. 2. Annual operating cost versus plant capacity for various food
industries. Points represent actual data; lines depict (a) the double of
the best tting curve, (b) the best tting curve, and (c) the half of the
best tting curve, respectively from the top.
Fig. 3 is a very good picture of the various food products cost. Data are very scarce due to the variability of
297
1000 00
10
frozen fish
frozen shrimp
concentrated juice
tomato paste
apple products
skim milk powder
sea food
mozzarella cheese
blue cheese
slaughter products
tortilla chips
yogurt
10000
dry yeast
lasagna
cooking oil
milk products
frozen vegetables
pasta
Buildings B(m2)
Product cost c($/kg)
sea food
frozen bread
corn snacks
yogurt
blue cheese
ice cream
sausages
1
fruit juice
corn starch
white bread
slaughter products
frozen vegetables
white bread
arabic bread
corn starch
milk products
apple products
frozen fish
egg powder
milk products
vinegar
cooking oil
lasagna
frozen bread
sausages
1000
skim milk powder
ice cream
mozzarella cheese
fruit puree
soybean oi l
pasta
concentrated juice
protein
arabic bread
tortilla chips
frozen shrimp
fruit juice
fruit puree
corn snacks
vinegar
protein
c =4.00 F -1/ 2
1/2
B = 800 F
100
0. 1
0. 1
10
0. 1
100
10
100
Fig. 3. Product cost versus plant capacity for various food industries.
Points represent actual data; lines depict (a) the double of the best
tting curve, (b) the best tting curve, and (c) the half of the best tting
curve, respectively from the top.
Fig. 5. Eect of plant capacity on the required buildings. Points

represent actual data; lines depict (a) the double of the best tting
curve, (b) the best tting curve, and (c) the half of the best tting curve,
respectively from the top.
1000
100000
L = 5000 F
1/3
blue cheese
dry yeast
slaughter products
soybean oil
slaughter products
sea food
sea food
yogurt
corn starch
100
milk products
dry yeast
Employees M (persons)
milk products
Land L(m )
frozen vegetables
white bread
frozen fish
mozzarella cheese
10000
pasta
cooking oil
concentrated juice
frozen bread
apple products
soybean oil
frozen vegetables
blue cheese
frozen fish
cooking oil
ice cream tomato paste

lasagna
pasta
concentrated juice
apple products
frozen shrimp
fruit juice
yogurt
fruit puree
tortilla chips
egg powder
corn starch
arabic bread
white bread
parboiled rice
frozen bread
sausages
ice cream
tortilla chips
mozzar ella cheese
10
arabic bread
skim milk powder
protein
fruit juice
lasagna
egg powder
sausages
protein
vinegar
corn snacks
frozen shrimp
vinegar
corn snacks
fruit puree
parboiled rice
M = 10 F
1/2
skim milk powder

milk products
1
1
0 .1
0.1
10
10
100
100

Fig. 4. Eect of plant capacity on the required land. Points represent

actual data; lines depict (a) the double of the best tting curve, (b) the
best tting curve, and (c) the half of the best tting curve, respectively
from the top.
the raw materials cost. The eect of production capacity on the product cost is characterized by a negative
Fig. 6. Eect of plant capacity on the required number of employees.

sign which veries that massive production results in

products of lower cost. These data can be used for
298

100
10 0
corn starch
dry yeast
water
water
milk products
dry yeast
corn starch
sea food
10
Mechanical and elect r ical wor ks cost Cme(M $ )
10
yogurt
skim milk powder
blue cheese
lasagna
apple products
protein
Fixed capital cost Cfx (M$)
white bread
ice cream
frozen fish
pasta
concentrated juice
egg powder
sausages
frozen bread
tomato paste
tortilla chips
parboiled rice
frozen vegetables
arabic bread
milk products
fruit puree
mozzarella cheese
vinegar
fruit juice
1
frozen shrimp
milk products
soybean oil
sea food
blue cheese
ice cream
yogurt
skim milk powder

frozen fish
lasagna
cooking oil
milk products sausages
white bread
frozen bread
pasta
slaughter products
egg powder
protein
parboiled rice
tomato paste apple products
arabic bread
vinegar
fruit puree
tortilla chips
frozen vegetables
fruit juice
mozzarella cheese
corn snacks
frozen shrimp
0. 1
corn snacks
C fx = 1.80 C eq
C me = 0.35 C eq
0. 01
0.1
0.1
10
0 .1
100
100
10
Equipment cost Ceq(M$)
Equipment cost Ceq(M$)
Fig. 7. Relationship between xed capital cost and equipment cost.

Fig. 9. Relationship between mechanical and electrical works cost and

equipment cost. Points represent actual data; lines depict (a) the
double of the best tting curve, (b) the best tting curve, and (c) the
half of the best tting curve, respectively from the top.
10 00
100
soybean oil
dry yeast
corn starch
soybean oil
100
10
sea food
slaughter products
Annual operating cost Cop (M $ / yr )
water
slaughter products
Civil works cost Ccv(M$)
milk products
frozen fish
concentrated juice
frozen veget ables
1
mozzarella cheese
ar abi c bread
egg powder
apple products yogurt
whit e br ead
sausages
skim milk powder
ice cream
cooking oil
lasagna
tomato patse
protein
blue cheese
frozen bread
tortilla chips
pasta
fruit juice
frozen shrimp
corn snacks
parboiled rice
fruit puree
vinegar
yogurt
skim milk powder

frozen fish
corn starch
tomato paste
water
cooking oil
concentrated juice
seaf ood
milk product s
apple pr oduct s
10
egg powder
white bread
arabic bread
frozen vegetables
dry yeast
mozzarella cheese
lasagna
protein
blue cheese
ice cream
fruit juice
pasta
tortilla chips
fruit puree
frozen bread
milk products
frozen shrimp
0. 1
sausages
vinegar
parboiled rice
corn snacks
C op = 1.10 C mu
C cv = 0.45 C eq
0. 1
0. 01
0 .1
10
100
Equipment cost Ceq (M$)
0 .1
10
10 0
100 0
Raw materials and utilities cost Cmu (M$ / yr )
Fig. 8. Relationship between civil works cost and equipment cost.

Fig. 10. Relationship between annual operating cost and raw materials and utilities cost. Points represent actual data; lines depict (a) the
double of the best tting curve, (b) the best tting curve, and (c) the
preliminary product pricing, applying the cost-plus-fairprot approach (Holland & Wilkinson, 1997).
Figs. 46 reveal the needs in land, buildings and

employees versus plant capacity for various food indus-
1.10 suggests that the largest component of the annual

operating cost is the raw materials and utilities cost,
which can be accurately estimated through materials
and energy balances.
Fig. 11 reveals a linear relationship between the annual operating cost and the purchased equipment cost.
The slope is estimated equal to 2.50, which means that
the annual operating cost for a typical food industry is
about 2.5 times the purchased equipment cost.
The average labor rate cost for the examined factories
is estimated as the slope of the annual labor cost versus
the number of employees. The corresponding graph is
not presented here due to space limitation. The resulting
average labor rate cost is estimated about 20,000 $/year.
Similarly, the average building construction cost for
the examined factories is estimated as the slope of the civil works cost versus the buildings area. The resulting
average building construction cost is estimated about
600 $/m2.
10 0
skim milk powder

yogurt
sea food
corn starch
tomato paste
milk products
apple products
cooking oil
concentrated juice
Annual operating cost Cop(M$/yr)
10
egg powder
white bread
arabic bread
frozen vegetables
lasagna
mozzarella cheese
fruit juice
fruit puree
frozen shrimp
protein
pasta
ice cream
tortilla chips
frozen bread
299
blue cheese
milk products
1
vinegar
corn snacks
C op = 2.50 C eq
0. 1
0. 1
10
100
Equipment cost Ceq (M$ )
Fig. 11. Relationship between raw materials and utilities cost and
purchased equipment cost. Points represent actual data; lines depict (a)
the double of the best tting curve, (b) the best tting curve, and (c) the
tries. The trend in employees and in buildings is visible

contrary to the trend in land requirements, which is confusing. In any case, these data could be used for preliminary estimation. For example, the requirements of a
new food plant of production capacity 1 Gg/yr are estimated: land 5000 m2, buildings 800 m2, and number of
employees 10.
Fig. 7 is a plot of the xed capital cost versus purchased equipment cost. The strong linear relationship
is obvious. The slope is the Lang factor, according to
Eq. (1). The estimated value 1.80 is a little higher than
the value proposed by Maroulis and Saravacos (2003),
but it is still lower than the values used in the chemical
industries. In modern food processing plants the Lang
factor may be higher, e.g. fL = 2, due to the cost of process control and automation.
Figs. 8 and 9 are plots of the civil works cost and
mechanical and electrical works cost versus purchased
equipment cost. Linear dependences are also obtained.
The slopes estimate the corresponded factors, dened
by Eqs. (5) and (6).
Fig. 10 is a plot of the annual operating cost versus
raw materials and utilities cost. The strong linear relationship is obvious. The slope is the annual operating
cost factor according to Eq. (8). The estimated value
6. Conclusion
A systematic analysis of the existing food factories
cost data can lead to useful results concerning the particular characteristics of the food industry and to reveal
simple equations for rapid preliminary cost estimations
needed in various techno-economic studies.
Acknowledgment
The authors are grateful to professor GD Saravacos
for his valuable suggestions.
References
Bartholomai, A. (1987). Food factories: processes, equipment, costs.
New York: VCH Publishers.
Clark, J. P. (1997). Cost and protability estimation. In K. J. Valentas
E. Rotstein & R. P. Singh (Eds.), Handbook of food engineering
practice. New York: CRC.
Holland, F. A., & Wilkinson, J. K. (1997). In R. J. Perry & J. H. Green
(Eds.), Perrys chemical engineers handbook (7th ed.). New York:
McGraw-Hill.
Maroulis, Z. B., & Saravacos, G. D. (2003). Food process design. New
York: Marcel Dekker.
Peters, M. S., & Timmerhaus, K. D. (1991). Plant design and economics
for chemical engineers (4th ed.). New York: McGraw-Hill.
Sinnott, R. K. (1996). Chemical process design. In J. M. Coulson & J.
F. Richarson (Eds.). Chemical engineering (vol. 6). London:
ButterworthHeinemann.

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Journal of Food Engineering 67 (2005) 289299

Cost data analysis for the food industry

study of the equipment owsheet, paying attention to

2. Cost estimating models

A.Z. Marouli, Z.B. Maroulis / Journal of Food Engineering 67 (2005) 289299

building area (m2)

The factorial method of xed capital cost estimation

where fL is called the Lang factor due to the early

annual production capacity (1 Gg = 106 kg)

To make a more accurate estimate, the cost factors that

(A) Total capital

(II) Working capital

(II) Overheads (indirect)

divisions of the capital xed cost are considered in the

A.Z. Marouli, Z.B. Maroulis / Journal of Food Engineering 67 (2005) 289299

The eect of production capacity (F) is examined in

purchased equipment cost

Purchased equipment cost (Ceq)

The above model is equivalent to the following:

where fop is the operating cost factor.

Fixed capital cost (Cfx)

(d) Other interesting cost-related relationships

annual operating cost

The above model is equivalent to the following:

4. Data and methods

The appropriate data for the present analysis have

A.Z. Marouli, Z.B. Maroulis / Journal of Food Engineering 67 (2005) 289299

Operating time (h/yr)

Fruits and vegetables

Dairy and egg products

Cereals and grains

Pasta and Tofu

Extruded products and snacks

Seafoods and meats

Fats and oils

A.Z. Marouli, Z.B. Maroulis / Journal of Food Engineering 67 (2005) 289299

Fixed capital cost ($)

Mech. & Electr.

Fruits and vegetables

Dairy and egg products

Cereals and grains

Pasta and Tofu

Extruded products and snacks

Seafoods and meats

Fats and oils

A.Z. Marouli, Z.B. Maroulis / Journal of Food Engineering 67 (2005) 289299

Annual operating ($/yr)

Fruits and vegetables

Dairy and egg products

Cereals and grains

Pasta and Tofu

Extruded products and snacks

Seafoods and meats

Fats and oils

A.Z. Marouli, Z.B. Maroulis / Journal of Food Engineering 67 (2005) 289299

Fruits and vegetables

Dairy and egg products

Cereals and grains

Pasta and Tofu

Extruded products and snacks

Seafoods and meats

Fats and oils

A.Z. Marouli, Z.B. Maroulis / Journal of Food Engineering 67 (2005) 289299