Turnkey Poultry Processing Plant in the Middle East.

Challenge

The sponsor's existing 4,500 birds/hour line ran three shifts at 105% design capacity and could not absorb forecast domestic demand growth. Halal certification and cold-chain traceability requirements from two key retail accounts made a piecemeal expansion uneconomic. The board approved a greenfield 12,000 birds/hour line on an adjacent parcel of land the sponsor already owned.

Strategy

Turnkey EPC was chosen deliberately. The sponsor had no in-house poultry-line engineering, the plant needed to be single-point-warranty for retailer audits, and lender preference (an OECD ECA) favoured a wrapped scope for limited-recourse structuring. The premium versus multi-contract was estimated at 9% — accepted by the executive committee against the risk profile.

• EPC wrap for single warranty and financeability
• Two-country corridor for evisceration and cut-up equipment
• Halal and retailer audit requirements embedded in specification
• Board-endorsed CAPEX ceiling and 8% contingency held outside contract

The delivery-model rationale followed the Turnkey vs Multi-Contract guide.

Supplier selection

Four full-line integrators were invited to a two-round RFQ. All four met technical minimums; two were dropped after reference-site visits (one for warranty-response evidence, one for supply-chain concentration on a sanctioned tier-2). The final award went to the supplier with the strongest post-award support model, not the lowest headline price.

• Two-round RFQ with technical + commercial evaluation
• Warranty response times verified with three independent reference sites
• Tier-2 supply chain screened for sanctions and concentration
• Final scoring: technical 40%, price 30%, warranty & service 20%, ESG 10%

Financing

The OECD ECA guaranteed 85% of the eligible equipment and services value. The commercial bank arranging the loan required an independent lender's engineer, an ESIA covering effluent and animal welfare, and a signed offtake structure with the sponsor's two retailer accounts. Financing was documented in parallel with the last two months of technical RFQ evaluation — the ECA structuring never became the critical path.

The offtake and lender-engineer requirements mirror the Project Financing Readiness checklist. Structural background is on the Export Credit Agencies pillar.

Execution

The contract included a formal Factory Acceptance Test at the supplier's works: three consecutive test days at contract throughput on live-carcass simulations, with the sponsor's veterinary lead present. FAT identified 11 non-conformances; 9 were closed at the supplier's cost before shipment, 2 were deferred to SAT with a signed deviation waiver. Site erection ran 3 weeks behind schedule due to imported-cladding customs delays; commissioning recovered 2 weeks through parallel utility handover. First commercial slaughter began 7 days after contractual date.

• FAT: 11 NCRs, 9 closed pre-shipment at supplier cost
• Imported cladding customs delay flagged early via risk register
• Retention of 10% held to end of 24-month warranty
• First commercial slaughter 7 days late vs 24-month plan

Lessons learned

• FAT at the supplier's works paid for itself several times over — the two deferred items would have blocked SAT.
• The wrap premium (9%) was cheaper than the estimated cost of managing 6+ package interfaces without in-house engineering.
• Running financing structuring in parallel with technical RFQ shaved an estimated 10 weeks off the critical path.
• The customs cladding issue is now a standing item on the sponsor's project risk register for every subsequent build.
• Retention held to warranty triggered one call on a controls issue — the mechanism justified the negotiation effort.

Executive takeaways

• Match delivery model to owner engineering depth and lender preference — turnkey EPC is often the right premium.
• FAT is the highest-leverage moment in the whole procurement — treat it as owner-controlled, not a supplier ceremony.
• Structure ECA finance in parallel with technical evaluation, not sequentially.
• Retention held to warranty is not a formality — it is the enforcement mechanism.

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