ROTOMOLDING PRODUCTION START UP PROJECT IN RUSSIA MOSCOW REGION
SectionI. Brief description of the project
There is a decryption of staring up project in the very new industry with high efficiency and great potential in Russia - rotomolding production. This sector has been developing in Russia since 2007. Rotomolding production gives an opportunity to do great variable products which are in high demand on the market. In Moscow region there are three real competitors, one of which focuses on products for the construction (not our case), other has an obsolete and not efficient equipment for the time being
Our competitive advantages are: Romomolding production, modern equipment, managerial skills of partners and possibility to work on its own assets. The place (Moscow region) is also a great plus to the future of the business.
All these guarantee that the business will have a sustainable development for many years. And even with very conservative attitude, the company will have a 10 -15% the market share in 3 years.
The partners on the business are looking for a loan of 3500 00 USD for 6 years. ROI 200 %And offer collaterals in the form of building and equipment for investor to minimize investor’s risks. Before putting into operation building(supposed to build it from scratch) and equipment, Investor will control all expenses for the first 6 months. The research is already made. 150000 USD was spent. The company is ready to operate.
Pls. write: skype: julia935g
Section II. Description of the sector of the company, its products
Sector description: recently on the Russian market increased demand for products obtained by rotational molding (Russian Federation), including large-size containers of various purposes. The method of the Russian Federation can be recycled thermoplastic polymeric materials (PM), originally located in powder. With these method polyethylene goods, polypropylene, nylon, polycarbonate and polyurethane are produced. For processing of thermoplastics the most popular methods are pressure die casting, extrusion. Rotational molding is used much less frequently. According to experts, the share of plastic products received by Russian manufacturers using this method, does not exceed 5%, while mastered only 20% of the existing needs of the market products. Use of the method of the rotational molding for the production of products is prevented by the significant cost of their transportation. It can be argued that this technology is focused mainly on local markets, so in different regions naturally there is a need to organize such production.
Features of the production of products from thermoplastic materials produced by the method of rotary forming:
Application of the rotational molding method makes it possible to produce products, which are impossible to obtain in other ways: capacity for individual sewage facilities, small-size and large capacity (up to 30 m3, containers of various purpose, garden furniture, guardrails, children's playgrounds, the goods for winter recreation. It is known that hollow products from thermoplastics can also be read by extrusion blow molding. But the drawback of this method are the thickness of the products due to the heterogeneous draft degree procurement in various places; significant waste material in the form of a matrix, inevitable under this method; periodic mode of operation of the extruder. Method of rotational molding has a number of advantages compared with other types of plastics processing: the ability to manufacture products of a complex configuration; the multiple layers of products; the ability of reinforcement products metal and plastic parts; regulation of wall thickness of the product, varying quantity of the loaded in the shape of the material (the method of the RF can obtain a product with a wall thickness of 5-20 mm) and non-waste production;
Raw material market.
Raw materials is the low density polyethylene (LLDPE - linear).
The basic manufacturers of raw materials in the world are:
Main suppliers / India / PetrotechInternational /China / Aishuibao
Jushui /
Korea / LG Chem
Daelim / http:
Sam-A C&I Co. / http:
Hyosung
SK
HonamPetrochemical /
HyundaiEngineeringPlastics /
Russia / Ufaorgsintez
Kazanorgsintez / http:
Nizhnekamskneftekhim /
During the 1st and 2nd years of existence the company is planning to buy raw materials from local wholesale sellers at an average price of 2,3USD /kg Largest wholesale supplier of imported raw materials is the company «Ecoplastik» ( Traditionally wholesale suppliers begin to work on an advance payment, in the future, there may be a small installment payment. In the future, when the company's turnover will increase, possibly to buy raw materials from direct producers, both Russian and imported, depending on the market value.
Section III. Market analysis and marketing plan
Business competitorsName / Regions of activities / Production / Functional activities / Ad, PR, marketing activities / The estimated market share Moscow region 2013 in % / The estimated market share in the Central Federal district of the Russian Federation (50% of the Russian Federation) 2013. in %
Anion, Ltd + Kation, Ltd / Moscow(The branch and warehouse on the leased premises.), Moscow region(In Klin is manufacturing, warehouse and head office in the area of the property), Saint-Petersburg(Warehouse on the leased premises), Ekaterinburg (Warehouse on the leased premises), Krasnodar (Warehouse on the leased premises), Nizhny Novgorod, Dzerzhinsk (Manufacturing, warehouse and branch in the area of the property) / Septic tanks (up to 14500 liters, caissons, wells+products of polyamide / Engaged in rotomolding and casting polyamide (PA 6). Lately seen activity in development of agriculture in the Orenburg region. Work on Rotomolding since 2006 (the equipment of the joint Assembly with the English Nylacast). According to unconfirmed information, the founders of 2009 are in conflict on the grounds of the so-called "Case of Chemists" (Illegal shipment of ethyl ether). Mainmarket: stateorderanddistributors. / As such - are not engaged. All media activity given the chance Directors objects. / 10% / 5%
Triton plastik, Ltd + Elit Story Invest, Ltd / Moscow (The Head office, Manufacturing, Warehouse), the Moscow region: Mytishchi (A Warehouse of raw materials and manufacturing), Turaevo (Warehouse, manufacturing) / Septic tanks, caissons, and wells. / Actively promoted in the Central regions of Russia. Business in shares (75% husband and 25% by the wife). / There is no specialist .The founder is engaged in advertising activity personally. A superficial analysis allows to do assumptions this is not effective. / 15% / 8%
Rotoprom, Ltd / CityVladimirRussia / Rotomolding forms production, septic tanks, caissons, and wells. / Rotomolding production was organized as a subsidiary of the production at processing of metal rolling. Thebasicprofileofthecompanyismetal-roll. / Minimum, because consider it is not necessary. Media work - no. Production Manage is engaged in Media activity / 5% / 3%
Ekopol, Ltd / City Vladimir (Warehouse and Office), Moscow (Warehouse) / Septic tanks(up to 6000 liters), caissons, and wells. / Rotomolding production was organized in 2002. Currently experiencing difficulties with sales. / The lack of activity since 2012. / 5% / 3%
GroupofcompaniesMefodiy / Moscow region, Ramensky district, Ostrovci / Boats, Canoeing, pontoons, cast forms for rotomolding. / Was established as a subsidiary enterprise engaged in the manufacture and installation of plastic and aluminium profiles. / Activity is observed in the promotion of boats by web. / 5% / 3%
ElgadPolimer, JSC / Moscow / Septic tanks, caissons, and wells. / Formed as a subsidiary company of building holding "Elgad". / Carry out the activities in the framework of the overall communication strategy of the parent company. / 10% / 5%
GroupofcompaniesEcoProm / Moscow region ,Mytischi and another 10 objects in the Central Federal district / Rotomolding equipment. Septic tanks, caissons, and wells. / High activity in the framework of media activities of the main Holding. / Activities in the framework of the functioning of the group of companies. / 30% / 15%
Rotoplast / Moscowregion ,Mytischi / Septic tanks(up to 6000 liters), caissons, and wells. / Created to support the needs of a building complex of Moscow / According to the analysis of sites for job seekers, the has positions in marketing. Noadvertisingneither PR. / 10% / 5%
Others / 10% / 55%
Basic groups of products to be manufactured by the company, received by rotomolding:
1. Tanks of different shapes and sizes, designed for different variants of their use, with the volume from 100 to 10000 litres, i.e. the possibility to receive by rotoformation products without seams and consequently without the danger of weak sections allows containers guaranteed to withstand a pressure of liquid filled. All of the tanks on customer request can be equipped with fittings. Material containers usually polyethylene, this material has a very high resistance to most aggressive chemicals and allows the use of polyethylene tanks for storage of the most aggressive chemicals. The polyethylene absolutely non-toxic, and allowed for contact with food products, that allows to use it in the food industry.
2. Products for private household plots. This group includes a wide range of products from tanks, mobile showers and mobile peat toilets to small children's pools and garden furniture.
3. Sanitary-technical products. Mainly in the CIS are widely used septic tanks for wastewater treatment, it is much easier and economically more advantageous than the use of traditional wells of concrete rings. However, in addition to septic tanks rotomolding produce a large range of funded systems of purification of underground systems, all kinds of oil catchers, integrated sewage system for the device of canalization in the scale is not only one house, but of the whole village.
4. As a separate group of products, toilets must be selected. Rotomolding get all the details of portable toilets from the tank to the walls and the roof. In the toilets in this arrangement there is no metal frame and other metal elements that, when installing a cabin under the open sky, are the most vulnerable components and limit the service life of the product. The lack of such elements makes the toilets produced by rotomolding, most appropriate to use in the any weather conditions.
5. For agriculture - products for cattle-breeding complexes and poultry farms (bins, drinkers, houses for calves and so on).
6. Products for river and sea complex - pontoons, buoys. While having a simple design, low cost and high buoyancy pontoons can be collected in the design of any shape and size for a variety of needs.
7. Special containers for installation on agricultural equipment, under any order can be developed and released the necessary capacity of any size and shape.
Classification of clients of our company:
Retail clients - terms of payment - prepaid.
Corporate, wholesale clients - terms of payment: prepaid, special promotions and discounts
Large retail chains, hypermarkets DYF - terms of payment - factoring
Dealers -variety of instruments- prepayments, factoring (the banking Commission by the dealer) (no risk on no payments)
Conditions of work with clients: work with minimal risks for the prepayment for dealers and large networks, it is planned to use factoring. In the result the company will have more liquidity, high turnover, the minimum difference, there is virtually no client receivables.
The prospects for our company: for the successful implementation of instruments of PR, advertising and marketing possibly permanent increase of sales. Increase instrumentation settlement and reduction of delivery terms of the distributor or end user gives competitive advantages. Progressively growing demand for capacity over 10,000 liters for agriculture and industrial production.Prospects of opening of branches and warehouses in the Central Federal district. When solving the transport issue - shipment railroad transport, open storage in more remote towns with population over one million, where this type of business is almost not represented. The prospects for the CIS in the area of the single customs Union: the Opening of the Belarus production to work on a foreign market, the resource base is present, Kazakhstan opened a warehouse - virtually no competition, also in Kazakhstan, there is no resource base.
Section IV. Start up of production
Start up of production: analyzing the market on the available proposals on the market for land, leasing of manufacturing spaces, the company's Partners have come to the conclusion about its own industrial spaces. Companies in Moscow are actively developing industrial sites in the Moscow region. The selected plot of land is near the central gas and electricity.Own assets of the company will ensure the stable, sustainable development of the company for many years. Furthermore, by building a production premises at cost, the market value will increase by 2-3 times after putting into operation. That is, when necessary area of 2000 sq. m. the cost of construction will be 1201 030 USD+ cost of land 300000 USD for 0.5 hectares. Total cost of the production complex without equipment will be equal to about 3, 5 million USD.
According to the schedule the following are needed: approval of the project, construction, connection of communications, equipment installation and launch of production. It is planned to start the project in October 2013, One (1) month for the development and coordination of the project. Construction will take three (3) months, and the connection of communications take another three (3) months, at the end of this period, installation of equipment. Total project on putting into operation of the production complex is 1+3+3= 7 seven (7) months. The company is interested in entering the market next year.
Production: the Company will produce mainly mid-size products.
Section V. the Characteristic of the equipment and production plan
For the cost-effective rotational formation of intermediate products is advisable to use a rotary-moulding machine with independent conveyors PRM 3500-2C (VAT $400000). Basic equipment includes: the burner connected with furnace, cooling chamber, the central column, 6 PLC controls, moving conveyors, conveyors holder levers, electrical control equipment.
PRM 3500-2С
PRM 3500-2С
Also, it is advisable to consider the full cycle of processing of raw material (granules and re-granules). For the preparation of the fine fraction HDPE need mill. To maintain the volume of production and provision of high maintainability you must use common HDPE mill MF-600 (27 000 $ with VAT).
MF-600
For processing of defective products, overflow and low-quality raw materials necessary complex of equipment for processing of solid waste, consisting of: Schroeder, combined with the crusher (YMSC-4080 cost of $ 50,000 with VAT) and granulation line (TR-VS cost of $70,000 with VAT).
YMSC-4080TR-VS
This equipment allows processing 3 % of spoilage and, beyond that, to give 100 kg of granules per hour, which covers the needs of equipment for rotomoulding.
Thus, the full cycle will be as follows. HDPE granules goes to the bunker mill, next goes the small fraction that is loaded in a prepared form for casting. Form is sealed and sent to the burner. After rotation of the form in the oven it moves in the cooling chamber, where goes the process of crystallization. Then the form is opened, the product is removed and is handling by flexible cutter. After that we have the overflow and finished product. When the accumulation of sufficient amount of waste they are sent to the shredder and mill where fraction is prepared for recycling into granules.
The very conservative assumption is made that during 1st year - 1 shift and 25% of loading of capacities, 2nd year – 1 shift and 25% of loading of capacities 52 % of loading capacities. From the 3-d year there is increase in sales and production by 35 % each year.
Seasonal business: June-August – maximum loading capacity, September-October – 80 %, November – March – 50 %, April-May – 80 %. Thisfactorisincludedincalculation. All this assumption are made on the analysis of competitor’s activity, but our figures are extremely conservative.
During the offseason, the company makes a small stock of finished products ( up to 10 days) , as well as working on the state orders, molding produces, develops a product, looks for ways to corporate orders, enters the markets of the CIS countries with a milder climate, engaged in preparation for an extensive advertising campaign in the next year.
Section VI. A technical modification of the product.
List of the additional equipment:
Cutters on flexible shaft;
Disc saw;
Angle grinder;
Pressing cutter;
Measuring instruments.
Additional processing
During production, when the withdrawal of the finished product from the form, there is a removal of formed overflow. It is carried out with the use of cutters on flexible shaft. If necessary to countersink the edges of the holes, toothed disc saws carbideand good free cut are used, or cutters installed in the auxiliary tools. Cost of the equipment for technical modification is about USD 3000 in 2013. Calibration of finished products is not required, since the chiller is used.
For some types of products, it has to mount the flexible fittings (septic tanks) and/or pour working fluids (septic tanks, toilet cabins). Also, after implementation of the technology of production of electric septic tanks, the wiring and filling of the chemical reagents are needed.
Under these tasks it is planned to use the work shift, consisting of 3 people. As this work does not require special permits and carried out by people who do not require degree of a specialist, these works can be made during the day or the night shift. A maximum efficiency of the technological equipment, when on the production of 1(One) form was spent 20 minutes, in parallel shifts in the daytime and in the case of seasonal congestion production, night shift will be created.
Section VII. Management team