As a result of project implementation it is going to be built the manufacturing and trading plant with a specialization in:
1 Large-sized household appliances and fitting elements of kitchen segment production;
2) Bulk sale on the inside market and export of appliances under an own trade mark.
Was implemented according to the project:
- business plan;
- the range of extractor hoods was projected along with prototype equipment;
- Patents are at the process of registration;
- manufacturing process is designed and equipment has been selected;
- operational buildings have been selected (lease);
- personnel has been hired;
- client base throughout the Ukraine and 17-year experience of the initiator of the project in the sphere of product distribution.
Manufacturing start up:
Rented premises: Kyiv oblast, Kotsubynskoye urban-type village
Terms of manufacture start up: 3.5 month (equipment delivery, starting-up and adjustment and personnel training)
1st month of startup: fitting elements delivery and startup of the first assembly shop.
Rest 2.5 month: cutting, bending, bonding and coloring shops establishment.
Italian specialist, who is a technologist of Italian manufacturing and technological company “Faber”, is going to be a startup consultant.
Product:
Extractor hoods: fireplace type, classic, standard.
Models: FS COLOR, FS INOX, FS 2 M COLOR, FS 2 M INOX, TELESCOP COLOR, TELESCOP INOX, AIRLINE 1 COLOR, AIRLINE 1 INOX
Planned manufacturing capacity - to 60.000 pc: 70% - models FS models and Тelescop; 30% - Airline.
Model range has been already presented by the initiator of the project on the Ukrainian market for demand examination, and got good feedbacks.
Competitive position of the product:
- Conseptually new style for the extractor hoods on Italian level.
- Usage of the main industrial centers in Italy gives a grate quality of the product, even of those, whiche are budget-oriented.
- Enclosed motor complement – extends the service life for 50%.
- Long warranty period (1 year of warranty 1 year of free service).
- Reasonable price (on the level with the Chinese product)including great design and quality
Competitive position of the manufacturing:
- Strict control of the quality.
- Own design allows standing out from competitors and quickly react on conjuncture changes.
- Own design of machinery parts and fitting elements allow distributing them to competitors.
- Production line is full range (from door hinge to elevator box).
- Ability to add work shifts.
- Ability to start the electric convector heater production.
Market and competitive environment:
Annualy in Ukraine is sold less than 3 000 000 extractor hoods of FS type, nearly 1 500 000 of Telescop type, 1600000 fireplace type.
Monthly sales of extractor hoods:
- FS type- 35 000-200 000 thous. $.
- Telescop type - 27 000-360 000 thous. $ .
- fireplace type (average price segment) - 50 000-130000 thous. $.
The main competitors are : PYRAMIDA, Ventolux, Eleyus.
In 2013 market segment showed the 11% increase.
Distribution and marketing:
The product is oriented on the end buyer, whose income is low, average or average +. The client base throughout whole Ukraine and working system are developed by the initiator of the project himself in a 17-year period of household appliances wholesales. The main Ukrainian bulk purchasers are: internet shops, private entrepreneurs, small chains and single stores.
2nd year – export in CIS countries (with a previous agreements with supermarket chains of household appliances in Moldovia (MAXIMUM) and Kazakhstan (SULPAK).
Distribution stimulation: bonus for salesmen (from the experience for better results)
Team:
Manufacturing team: 18 people, including technologist (VW is more them 15 years), production manager (VW 20 years), other personnel – more then 7 years of VW.
Office team:
- Director, 17 years of VW (including export duties)
- 4 distribution managers, 3 years of VW, work in different regions of Ukraine
- accountant
Initiator of the project/ director.
Birthdate: 1980
Education:
Kyiv National Agrarian University, 1997-2002, bachelor degree in «Accounting and Audit»
Kyiv National University of Trade and Economics, 2003-2005, Specialist Degree in «International Business Management»
Qualification: 17 years, import, introduction of household appliances into the market
1997 – import of household appliances of CIARCO plant, Poland.
2000 - organization LLC «Arnor» - import and installation of extractor hoods.
2002-2005 – import of household appliances of CIARCO plant, Poland.
2003 – import of household appliances CATA, Spain
2005-2006 cooperation with “HANSA” plant`s technologist, learned the cycle of cooking surfaces production.
2006-2011 - import of household appliances DAVOLINE, Greece
From 2011 – development of the own model range. In the middle of 2012 on the plant in Poland was produced and presented on Ukrainian market, 6 models of extractor hoods and 3 models of gas cooking surfaces, which received a lot of good reviews. Because of the high self-cost of the manufacturing in Europe, there was made a decision about launching own manufacturing in Ukraine.
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Total project cost, $ |
675 350 $ |
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Proprietory funds, $ |
100 000 $: |
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Needed investments, $ |
575 350 $ |
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Implementation of investments |
427 770 $ - equipment purchase; |
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Raising funds requirements |
Direct investments |
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Previous proposal to the investor |
80 % of profit till the moment of payoff and 50 % after. |
Performance indicators of the investment project
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|
1st year |
2nd year |
3rd year |
4th year |
5th year |
Altogether |
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Operating income, $ |
2 844 300 |
3 288 600 |
3 288 600 |
3 288 600 |
3 288 600 |
15 998 700 |
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Self-cost, $ |
1 974 424 |
2 883 336 |
2 883 336 |
2 883 336 |
2 883 336 |
13 507 768 |
|
Expenses, $ |
602 997 |
632 686 |
632 686 |
632 686 |
632 686 |
3 133 741 |
|
Profit, $ |
266 879 |
372577 |
372 577 |
372 577 |
372 577 |
1 757 187 |
|
ROI, return on investments, % |
205,4% |
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РР, payoff period |
1,8 of the year |
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DPP, discount payoff period |
2,4 of the year |
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NPV (5 years) |
$ 450 801 |
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IRR (5 years) |
50,13% |
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PI, profit index |
1,78% |
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Main thesis of investment project:
- The initiator of the project is the professional with 17-year experience period in import and distribution sphere.
- Product is distinguished by its uniqueness due to the new design, European quality and low price.
- The project is developed in details.
- Payoff period of the projet is 2 years and average profitability for the calculation period is 41,08 % per year.
