ID: 22577

12.12.20

Investment projects in Ukraine

Processing and export of medicinal herbs for the pharmaceutical, food, cosmetic and feed industries

Attracting additional funding is the need to accelerate the company's growth in processing and export of medicinal herbs for the pharmaceutical, food, cosmetic and feed industries

Location:

Тлумач, Ивано-Франковская область, Украина, 78001

  • Sector: Wholesale
  • Business activity: Agriculture
  • Stage: Стадия роста и расширения (Growth / Expansion)
  • Required investments: $3 000 000
  • Type of investment: Участие в капитале
  • Return on investment: 4 г.

Company started its activities in 2013 on the local market of medicinal herbs, and from the second quarter of 2016 began to develop export sales.

The company belongs to a new generation of Ukrainian enterprises that adhere to high ethical and moral principles of doing business from the very beginning.

Today one of the leading enterprises for processing and trading of vegetable raw materials in Ukraine.

The company handles herbal procurement, drying, screening, cutting, cleaning, fumigation, quality control, storage and sale.

Among the company's clients are well-known companies from the EU (Germany, France, Belgium, Spain, Poland, Czech Republic, Lithuania, etc.) and Ukraine in the food, pharmaceutical, feed, cosmetic industry. Links can be provided upon additional request.

Our production is based on HACCP and GMP principles. We work with the German laboratory Eurofins to confirm the quality of our products (including screening for pesticides, glyphosate, glufosinate analysis, plant authenticity, etc.).

The company is certified organic by the Organic Standard.

The company takes an active part in international exhibitions (MAP – Neherlands, Biofach – Germany, FI – France).

The company also has a registered TM "HerbTea" for the development of the direction of production and sale of herbal teas.

Production capacity

The operating production has the ability to process up to 600 tons of raw materials per year.

The total area of ​​warehouse and production facilities is 2,200 sq. m.

  1. Warehouse premises of 800 sq. m.
  2. Production premises of 200 sq. m., including a laboratory room, a dining room, changing rooms, an office shower room.
  • Drying chamber – 100 sq. m., which allows drying 6 tons of fresh raw materials
  • Cutting line – cutting machine (2 pcs), screening machine, conveyor
  • Cleaning line – Zig-Zag, Petkus, inspection tables, elevator, conveyor
  • Press
  • Engineering workshop with special equipment (100 sq. m.)

The premises are located on the territory of 1.5 hectares (for rent). The lease can be extended for up to 10 years with a low rent cost.

The total cost of fixed assets is EUR 130, 000, of which: production equipment – EUR 100,000, transport – EUR 25,000.

Products

The company offers dried medicinal aromatic plants and fruits. In total, more than 30 types of crops grown in Ukraine are processed.

Leading Products: Elderberry Blossom / Berry, Rosehip Fruit, Hawthorn Fruit, Arnica Blossom, Chestnut Fruit, Icelandic Moss, Horsetail Grass, etc.

The products are sold in dry form as whole raw materials and cut into fractions from 0.10 mm to 10 cm.

Team and staff

Founder of the company and Managing Director of the company has Experience in this business for almost 10 years, understanding the entire process from purchasing to selling medicinal herbs.

Graduated from the Finance Faculty of the Tax Academy (Master's degree) in 2005,  Kyiv-Mohyla Business School (Executive MBA) in 2015 and worked for 10 years in reputable companies (such as: E&Y Ukraine, Whatson`s Group Ukraine).

The main staff has experience in the market since 2015

Number of employees as of 01.09.2020:

  • Temporary – 10 people (freight handlers, sorters)
  • Permanent – 10 people, of which:

- Director
- Chief Engineer
- Purchasing manager
- Technologist
- Assistant / Logistician
- Driver
- Warehouse Manager
- Production manager
- Freight handler (2 people)
Legal services, IT, accounting, marketing are provided on outsourcing

Clients of the company

Among the clients are well-known European companies from countries such as Germany, France, Belgium, Spain, Poland, Czech Republic, Lithuania, as well as Ukrainian companies from the food, pharmaceutical, cosmetic and animal feed markets.

Sales structure by industry:

  • International traders and processors for further resale mainly to the pharmaceutical market – 50%
  • Pharmaceutical market – 20%
  • Food market – 20%
  • Animal feed market – 10%
  • Cosmetic market - (negotiations underway).

Investment project

The economic calculations and forecast are based on extensive market research and detailed knowledge of what is required to scale a business.

The main reason for attracting additional funding is the need to accelerate the company's growth.

Investment amount requested: EUR 2,600,000, of which:

  • EUR 1,000,000 – an increase in working capital to fulfill export contracts that increase the purchase of medicinal herbs in Ukraine.
  • EUR 1,600,000 – capital investment in the construction of a plant for processing herbs, roots, flowers, etc.

The scenario of the entrance of an investor with an investment of EUR 1,000,000 or more is being discussed.

Assimilation of investments within 3 years (2021 – EUR 1,400,000, 2022 – EUR 1,000,000, 2023 – EUR 200,000)

Estimated return on investment project: 5 years

The valuation of the company is calculated based on 2 annual turnover, which is EUR 1,300,000.

During the activity of the company, USD 350,000 of its own investments were spent.

Offer to Investor

Depending on the amount of investment and the role of the investor in the project, the following options for attracting financing are discussed:

1) Minority share (up to 50%) for investments up to EUR 1,000,000

2) Majority share (more than 50%) with investments of more than EUR 1,600,000

3) Mezzanine financing (the possibility of raising funds for up to 3 years (USD 1-2 million into working capital) at a rate of up to 11% per annum with obtaining control of financial flows from the lender and the possibility of converting debt into equity capital)

Additional information will be provided by the request.

Location

Contacts

Алексей Олейников

info@inventure.ua +380677136571

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