I wanted to share my experience on how large ($100M+) process plants get the green light to proceed and ultimately become real projects. Steps 1 to 6 are already well underway in the cannabis market by the truly big players like Bayer, ADM, Cargill, Pepsi, Nestle, Phillip Morris, etc.
Step 1) Market research, supply chains and draft business plans are developed. This is overseen at Exec VP level at places like Shell, Chevron, Cargill, Pepsi, etc. At smaller places ownership and top leadership direct.
Step 2) Scientist and labs are utilized to develop the chemistry and SOP. Sometimes patents are purchased, or complete SOP packages purchased for big bucks. This could be done in house or not.
Step 3) Big firms like ADM, Shell and Cargill will contract with a firm like Process Engineering Associates to develop a detailed process plan, scale the SOP and simulate. They will also determine real costs, not just the BS ones used in the business plan. This is where plans go to die.
Step 4) Now that all the science, costs, markets and other real numbers have been gathered the business plan will be fleshed out in detail.
Step 5) The specific plan will be vetted against other plans. The best plans will be selected to get further vetting and approvals. Boards and ownership will determine if the investment is sound an inline with the broader strategy. Deals will be made to lock up supply chains.
Step 6) Large firms like Haliburton, Fluor Daniel and so on are then contracted as vendors to make the build plans (mechanical, electrical, etc.). Sometimes companies can buy complete construction plans for huge sums of money. Supply chains will also be locked up.
Step 7) Projects may get turned over to large construction firms or the same firms that did the plans to work as the Prime Contractors. They then sub out the work to smaller contractors.
Step 8) Mostly subcontractors will run these plants. Very few will be actual employees of the company funding the project. If you are an actual employee of ADM for example, you are likely in an oversight position representing your companies interest and holding vendors accountable.
Also note that a lot of times these operations are ran as subsidiaries to mitigate risk and exposure.
All of this is also highly iterative. As assumptions are actualized and plans change figures will constantly be checked and rechecked, including market assumptions.
The only way to compete against these behemoths in my view is to find ways to make their size irrelevant. Specialization, having a better product, finding ways to do it cheaper, innovating, etc. are how you compete.
