Engineering Economic Analysis of Automation Investment for a Sachet Packaging Line in Bayelsa State

This research conducts an engineering economic analysis to evaluate the financial viability of investing in automated sachet packaging equipment at a consumer goods manufacturing facility in Bayelsa State, South South Nigeria. As labour costs in Nigeria's manufacturing sector rise and consumer demand for packaged goods expands, automation investment decisions require rigorous economic justification that accounts for the specific cost structure and risk profile of the Nigerian operating environment. This study compares the existing semi-manual packaging configuration with three automation investment options of increasing capital cost and throughput capacity. Economic evaluation employs net present value, internal rate of return, payback period, and sensitivity analysis against key uncertain variables including production volume growth rate, energy cost trajectory, and equipment maintenance costs. The analysis draws on equipment supplier quotations, current labour cost data, energy tariff projections, and market demand forecasts. Results indicate that Option B, a mid-tier automated packaging system, yields the highest risk-adjusted net present value under base case assumptions and remains financially superior across eighty percent of sensitivity analysis scenarios. Break-even analysis shows full capital recovery within three years and five months at projected production volumes. Recommendations advise proceeding with Option B and securing import duty relief under the Industrial Development Income Tax Relief Act provisions. Keywords: engineering economics, automation investment, sachet packaging, Bayelsa State, net present value