Industrial investment screening begins with a commercial hypothesis, not a machinery quotation. Investors often start by identifying an available product or facility. That can make the study technically detailed while leaving the more important question unanswered: who will buy the output, at what price, under which terms, and against which alternatives?
Establish the opportunity universe
Separate the candidate opportunities into local demand replacement, export driven supply and industrial inputs serving other manufacturers. Define the underlying demand in physical units rather than relying on a market value alone. For local substitution, identify actual import categories, competing domestic capacity, product specifications and the reasons buyers currently import. An imported product is not automatically a viable local manufacturing opportunity
Define who influences purchase decisions. For an industrial input, the economic buyer, plant engineer, quality team and procurement department may each apply different acceptance criteria. Include switching costs, required certifications, sample approval, minimum orders and payment cycles in the initial screen
Test raw materials and operating constraints
Create a bill of materials for each candidate and classify inputs by local availability, imported dependency and price currency. Evaluate alternatives where one imported input would determine most of the margin. Confirm utilities, water, energy intensity, waste handling, staffing, tooling, maintenance and logistics. A factory can be profitable on a static spreadsheet yet fragile under interruptions or foreign exchange movement
The Industrial Development Authority describes activity selection, market research, site analysis, feasibility, financing, execution and licensing as distinct steps in the investor journey. These should be reflected in the investment work plan, rather than treated as a single permission process
Build a comparable financial model
Define installed equipment cost, freight, duties where applicable, commissioning, validation, working capital and the cash required before commercial production. Model revenue from realistic utilization and qualified buyer conversion, not nameplate machinery capacity. Put planned construction cost in a separate schedule so it remains visible even if excluded from the initial equipment budget
Use base, downside and stress cases. Test foreign exchange, input inflation, sales price pressure, slow receivables, longer ramp up and delayed qualification. Compare projects using cash flow, payback, return on invested capital, net present value and sensitivity, with the same financing assumptions for every candidate
Confirm the regulatory route
Classify the activity and proposed site before committing. GAFI is the official investor entry point, while IDA outlines industrial licensing and establishment requirements. Depending on the activity, environmental, safety, sectoral and product approvals can change both the cost and the time to operate. Legal and technical advisers should confirm the specific route
Make the investment decision in stages
At the first investment review, reject proposals that lack buyer evidence, rely on unworkable input costs or face unresolved licensing problems. The next gate commissions supplier quotations, buyer interviews, technical engineering and location assessment only for the strongest candidates. The final gate compares financial feasibility, execution risk, funding exposure and the commercial pathway to first sales
The investment committee should receive a ranked shortlist with a clear decision for each option: proceed to full feasibility, validate a named uncertainty or stop. That output is more valuable than a large catalogue of industries without comparable economics
