The risks factors those can make an industry sick. How each factor accelerates the sickness? Or, Factor behind/responsible industrial sickness

Answer One-- The two categories factors are listed behind that accelerate the industry sickness are discussed below:

 

Internal risk factors: 1. Lack of Experience 2. Poor Management 3. Wrong feasibility / Uneconomic Plant size 4. Lack of working Capital 5. Obsolete technology 6. Faulty employee appointment 7. Non-cooperation among owners and employees 8. Marketing Problem 9. Dependence on single financial source

10. Irregular wage payment  11. Poor product quality

 

External risk factors: 1. Lack of working Capital 2. Political Unrest  3. Smuggling 4. Trade liberalization 5. Poor infrastructure 6. Global price fluctuate

7. Problems in loan disbursement (already sanctioned) 8. Bank control over

machinery purchase 9. Natural calamities 10. Duty on raw materials /customs problems 11. Non-availability of raw materials 12. Lack of modern technology

13. Long project implementation period 14. Lack of demand for the product 15. High loan interest

 

Answer Two---

A. Internal risks factors

1. Lack of Finance: The weak equity, inefficient working capital, absence of costing & pricing and budgeting, and so on will accelerate the industry sick. 2. Inefficient Production Policies: This includes wrong selection of site is related to production, lack of quality control and standard, research & development, etc. 3. Marketing factors: Inefficient planning and product mix, weak market research and sales promotions are force to industry sickness. 4. Improper Staffing: It includes bad wages and salary administration, bad labor relation, conflicts among the employees and workers. 5. Ineffective Corporate Management: It includes improper corporate planning, lack of coordination, control and integrity in top management, etc.

B. External risks factors

1. Personnel Constraint: Unskilled labor, wages disparity, general labor invested in the area will accelerate behind make a sickness. 2. Marketing Issues: The sickness arrives due to liberal licensing policies, changes in global marketing, excessive tax policies by govt. and market recession. 3. Production problem: This arises due to shortage of raw material and its high prices, shortage of power, import-export restrictions. 4. Financial Issues: The sickness arises due to credit restrains policy, delay in loan disbursement, unfavorable investments, etc.

A project loan is treated as a term loan. Discuss why. Discuss the risks you anticipate in such financing.

Project finance transactions typically involve the direct financing of infrastructure and industrial projects. The financing is usually secured by the project assets such that the financial institution providing the funds will assume control of the project if the sponsor has difficulties complying with the terms of the transaction. Project finance is generally used for large, complex and sizable operations, such as roads, oil and gas explorations, dams, and power plants. Due to their complexity, size, and location, these projects often have challenging environmental and social issues, which may include involuntary resettlement, loss of biodiversity, impacts on indigenous and/or local communities, and worker safety, pollution, contamination, and others. Because these projects generally face high scrutiny from regulators, civil society, and financiers, the project‘s sponsoring companies allocate more resources to managing environmental and social risks. If not managed properly, the environmental and social risks can result in disrupting or halting project operations and lead to legal complications and reputational impacts that threaten the overall success of the project. Because anticipated project cash flows typically generate the necessary resources to repay the loan, any disruption to the project itself, regardless of the financial standing of the sponsoring companies involved, poses a direct financial risk to the financial institution.