The goal of the project: to attract investment and create a joint venture on the basis of an existing company with the aim of acquiring another vessel for transporting diesel fuel in the Black Sea and Mediterranean basins with delivery to the ports of Ukraine.
The project involves working in the wholesale segment, using the existing material and technical base and administrative resources of the company as an existing trader in Ukraine.
The buyer (customer) of the services is an operating company - an importer of light petroleum products on the Ukrainian market. The company has experience and the necessary competencies both in the field of selling petroleum products and in organizing the operation of an oil tanker (hiring personnel, organizing work, control and administration).
Subject of investment: purchase of a second oil tanker with a deadweight of 3000 - 3500 thousand tons.
The essence and relevance of the project: Since the beginning of the war between Russia and Ukraine, the fuel and lubricants market has undergone enormous changes.
Before the war, the main supplies of diesel fuel to Ukraine came from Russia:
- through the Samara-Western direction pipeline;
- railway tanks from Belarus (railway and road supply to Mozyr Oil Refinery, Gomel Oil Refinery);
- a small part was imported by sea through the ports of Odessa, Nikolaev, Kherson;
- plus the majority of the market was occupied by the domestic producer – the Kremenchug Refinery.
After February 24, 2022, everything changed dramatically. As of today, and also in the near future, there will be no supplies from Russia and Belarus. The Kremenchug oil refinery is constantly exposed to missile attacks and cannot operate at full capacity.
Today, the need for fuel and lubricants is met through the ports of Reni and Izmail, by sea and river transport, as well as by road and slightly by rail from Europe. Although these supply chains have stabilized the petroleum products market, they do not solve the problem; as soon as there is increased demand due to seasonality of consumption, not to mention the pre-war consumption of diesel fuel, which was 1.5-1.6 times higher than today.
Pricing for road transport supplies from neighboring countries is very volatile. As soon as increased demand begins to appear, traders in nearby regions raise premiums, although oil prices remain unchanged and, more often than not, may fall. Therefore, the price begins to artificially increase on the domestic market.
Taking into account the above, the only way out of the current situation to stabilize prices and cover the need for petroleum products is sea and river transport. There is a long-term prospect of launching the project.
Investment attractiveness
- Safety. The main investments go to the purchase of a tanker, which is an investment in movable, relatively liquid property.
Team of experts. Having extensive positive experience in this area of business. The company is one of the well-known oil companies with a positive reputation. There is a developed algorithm of actions. - Well-established sales. There is a base of customers who buy diesel fuel on an ongoing basis in the planned volumes.
Insurance. There is always a backup business option - leasing a tanker or exiting the project by selling it. - Experience. The company has its own material and technical base, including a smaller tanker. All stages of work have been completed and there is a complete understanding of how the market works.
- Long-term project. Investing in your own fleet for transporting petroleum products by sea is a profitable and reliable solution with rich prospects for decades.
The management company within the project performs the following functions:
- Search and acquisition of a vessel (oil tanker, acquisition process, preparation of all documents, delivery of the vessel, maintenance).
- Search and hiring of personnel (team).
- Control of all work to launch the transportation of petroleum products (uninterrupted supply of fuel, personnel management, accounting and control of work).
- Monthly progress report to shareholders.
Financial and economic indicators of the project
| Indicators | 1 year | 2 year | 3 year | 4 year | 5 year | Total |
| Amount of required investment | 3 250 000 | 0 | 0 | 0 | 0 | 3 250 000 |
| Net profit (after taxes, before return on investment) | 1 567 300 | 1 665 120 | 1 665 120 | 1 355 120 | 1 355 120 | 7 607 780 |
| Return on investment | 1 567 300 | 1 665 120 | 17 580 | 0 | 0 | 3 232 420 |
| Income | 3 678 000 | 4 413 600 | 4 413 600 | 4 413 600 | 4 413 600 | 21 332 400 |
| Expenses | 5 360 700 | 2 748 480 | 2 748 480 | 3 058 480 | 3 058 480 | 16 974 620 |
| ROI (amount) | 48% | 99% | 151% | 192% | 234% | 234% |
| Total sales volume, thousand tons | 61 300 | 73 560 | 73 560 | 73 560 | 73 560 | 355 540 |
| Break even | 3-4 months | |||||
| PP, DPP return on investment: | 24-25 months | |||||
| Discount rate: | 5% | |||||
| NPV: | $5 898 559 | |||||
| IRR | 144,24% | |||||
About company
The company (managing partner) is registered in the UK.
Work experience: 1.5 years. For six months, the company was engaged in an in-depth analysis of the market, purchasing and modernizing the vessel. They accepted the vessel for their main activity (trade of light petroleum products). In one year, we made 29 voyages and handled a total of 21 thousand tons. petroleum products. The shipping company's profit for this period amounted to $370 thousand.
Asset information:
- Liquid tanker 750 tons costing 1,200,000 € - 1,300,000 €
- Personnel: a team of 3 crew members (captain, mechanic, boatswain), superintendent, operator, logistician.
Proposal to investor
Required investment: $3,250,000. USA, of which: $3,100,000 USA for the purchase of the vessel.
1. Creation of a new company together with an investor in shares of 50%/50%. We are ready to jointly invest 600 – 700 thousand € in the purchase of a new vessel. As we receive profit, we repay 70% of our part of the profit monthly and equalize with the investor in proportion to the shares.
2. Entry of the investor into an operating company by 50%, which owns a vessel, the price of which is approximately 1,200,000 € – 1,300,000 €.
3. Joint trade in petroleum products is separately stipulated.
Additional information, incl. the business plan is available to interested parties upon request.
