Sustainability Best Practice Business Cases

In an effort to continually improve the sustainability performance of the clay brick sector in South Africa, business cases have been developed to assist clay brick makers to evaluate the feasibility of implementing various sustainability measures or actions in their existing operation/s. Typically, these would be measures which can result in more cost and resource efficient clay brick production processes, leading to a reduced environmental impact whilst improving operational performance.  

Three excel-based business case models have been developed to evaluate the feasibility of investments made into three specific sustainable production measures. The measures investigated include:

1. Switching to a more efficient firing technology (e.g. from a clamp kiln to a zig-zag kiln)
2. Producing perforated brick products
3. Waste symbiosis - using/adding waste products as raw materials in the clay brick production process

Financial measures?

For all three measures, the feasibility of the investment is evaluated in terms of the potential monetary (ZAR) savings in operational costs over a 5-year period, as a result of the capital investment made into the sustainability measure. These savings are then compared to the capital investment made and are evaluated in terms of four financial measures:

• Net present value (NPV) – the difference of the initial investment and the value of the cash inflows over time considering a rate of return and the time value of money. A positive value is a sign the investment made will return financial benefits to the organisation   
• Profitability Index - the ratio of the present value of cash inflows to the initial investment.  A ratio of greater than 1 is a sign that the investment will return financial benefits to the organization
• Pay-back period - the length of time required to recover the initial cash outlay (investment) to implement the sustainability measure. It represents the amount of time required to earn back the cost incurred to make the investment through the successive cash inflows