Factory CAPEX vs OPEX: Building a Realistic Industrial Budget

What is CAPEX?

Capital expenditure includes acquisition and commissioning of long-lived productive assets such as machines, site improvements, durable utilities, infrastructure and qualifying software. Actual accounting treatment follows applicable standards and professional advice.

What is OPEX?

Operating expenditure covers regular production costs such as materials, labor, electricity, gases, consumables, routine service, logistics and other period or production expenses. Some costs are mixed; classify consistently and document assumptions.

Do not confuse working capital with OPEX

Inventories, customer payment terms and supplier payment terms determine how much cash is tied up. A profitable project can still face a cash shortfall during ramp-up. Budget cash requirements by month, not only a yearly profit-and-loss estimate.

Build three connected schedules

Create (1) CAPEX schedule by project milestone, (2) OPEX forecast by production volume and utilization and (3) working-capital/cash-flow schedule. Include contingency and scenario tests. Ask suppliers which installation items, training and service are included in the quotation.

Illustrative breakdown and FAQ

Example only: EGP 5 million equipment/site investment, EGP 1 million initial inventory and receivables less payables, and EGP 350,000 monthly running costs at planned volume. These figures are not market benchmarks. Can CAPEX be paid in stages? Often contract-dependent; confirm payment milestones. Ask SAKKARY MACHINERY for verified machinery scope and site utility inputs.