«Trade West Africa» Ltd Business Plan Commercial Trucks Distribution in Republic of Ghana JUNE 2014, ACCRA
SUMMARY ........................................................................................................ 3 Business Idea .................................................................................................... 3 Business Domain............................................................................................... 4 PROJECT HIGHLIGHTS........................................................................ ………6 MARKETING ANALYSIS................................................................................... 7 Road haulage in Ghana: current trends and challenges ................................... 8 Modern Trends of the World Trucks OEM Industry ......................................... 10 Customers Profile ............................................................................................ 12 PEST Analysis ................................................................................................. 14 COMPETITORS BENCHMARKING................................................................ 15 SWOT Analysis................................................................................................ 18 MARKETING STRATEGY............................................................................... 19 Our products .................................................................................................... 19 Promotion ........................................................................................................ 20 Resources........................................................................................................ 20 Objectives ........................................................................................................ 20 Promotion tactics ............................................................................................. 20 FINANCIAL PROJECTIONS ........................................................................... 21 OPERATIONS PLAN....................................................................................... 22 Start-Up Expences........................................................................................... 23 Flow of funds within the credit ......................................................................... 24 Assumptions .................................................................................................... 25 APPENDIX 1: FINANCIAL TABLES................................................................ 26 APPENDIX 2: CHARTS AND DIAGRAMMS................................................... 38
Business Plan Trade West Africa Page 3 SUMMARY This business plan is designed to give us а blueprint for marketing Russianmade Trucks in the Commercial Transport market of Republic of Ghana, West Africa. We have included a market analysis, target market summaries, a SWOT analysis, a detailed milestones table, and other relevant discussions. Our ambitions for this business plan include: Building an effective Commercial Tracks Distribution and Service Center using our existing business partners in Ghana as well as a strong technical support from the KAMAZ Group ; Local promotions and marketing of KAMAZ Trucks; KAMAZ Trucks Brand promotion in Ghana market that will draw sponsorships from the KAMAZ Team numerous wins of Dakar Rally and the other Trophies; Identifying our strengths, weaknesses, opportunities, and threats; Identifying the local market forces, target markets, and promotional opportunities. We hope this business plan creates a long-term growth model for our success. Business Idea The main idea is to offer Ghana market a new Trucks Brand, using the market gap in price and quality between the trucks of the "expensive brands" (such as Scania, Volvo, Daimler etc.) and cheap Chinese brands as Foton. Their positions are shown for comparison in the Price/Quality (P/Q) diagram. As can be seen at the diagram, there is a gap in the market between the sectors A and B both in quality and price. Trucks in
Business Plan Trade West Africa Page 4 the sector B are low price and low quality as well as at the sector A are high price and high quality. That is why (P/Q) Ratio is equal in both segments. But ! KAMAZ can offer the market much better (P/Q) Ratio. It is because of similar to segment B prices and much better quality of the trucks. This, as well as several other findings set out in the business plan is a background of the our plans of market expansion. Business Domain In 2014 Ghana is still ranked as one of the best-performing economies in the region – and by some measures, the world1. Our company will operate in 2 cities of Ghana: the head office will be situated in Accra and the service center will be organized in Kumasi, the second largest city in Ghana. The map above shows the main directions of the cargo transportation in Ghana. As It is seen, the major import port of Ghana is Tema, the major export port is Sekondi-Takoradi. All the goods trucking in/from Ghana’s inland pass 1 Source: Oxford Business Group, Ghana Year in Review 2013
Business Plan Trade West Africa Page 5 through the city of Kumasi. And Accra is not only the capital but also – the major consumer market of Ghana. All together they form a Ghana transport hub with major trucking activity. That is why we decided to place our business units in Accra (head office) and Kumasi (KAMAZ service center). We plan to use KAMAZ Brand as a locomotive that will help us to bring to Ghana market GAZ commercial trucks and trailers TONAR. Conclusion Company is basing at the most This enables us to predict the growth of road transportation in Ghana and growing demand for trucks.
Business Plan Trade West Africa Page 6 PROJECT HIGHLIGHTS Discounted cash flow criteria Criteria US Dollar Discount rate, % 5,00 Pay back period - PB, mths. 18 Discounted payback period - DPB, mths. 18 Net present value - NPV 15 036 955,09 Profitability index - PI 3,60 Internal rate of return - IRR, % 139,20
Business Plan Trade West Africa Page 7 MARKETING ANALYSIS To evaluate our market prospects we studied: Economic situation in Ghana Modern Trends of the World Trucks OEM Industry Trends and challenges of the Road Haulage In Ghana Economic situation in Ghana Ghana has evolved into a stable and mature democracy throughout the last two decades. The country continues to show good performance on democratic governance, arising from strong multi-party political system, growing media pluralism and strong civil society activism. Ghana’s economy has growth trajectory with an average annual growth of about 6.0% over the past six years. In 2013 growth decelerated to 4.4%, considerably lower than the growth of 7.9% achieved in 2012. Growth has, however, been broad-based, driven largely by service-oriented sectors and industry, which on average have been growing at a rate of 9.0% over the five years up to 2013. Over the medium term to 2015, the economy is expected to register robust growth of around 8%, bolstered by improved oil and gas production, increased private-sector investment, improved public infrastructure development and sustained political stability. Conclusion An economic situation and political climate in Ghana are favorable for investment. Entering the market with the country's high economic growth reduces the commercial risks.
Business Plan Trade West Africa Page 8 Road haulage in Ghana: current trends and challenges One of the powerful drivers of Ghana trucking market is that it is located between Ivory Coast (with its ports infrastructure, best in the region) and Nigeria with more than $80 billion merchandise trade. Now shipping lines have shifted from Nigeria to Ivory Coast and Ghana. Advantages of Ghanaian Roads: Less risky transport routes in region (Compare to Ivory Coast) Less corruption at entry points (Compare to Nigeria) Increasingly Efficient Ports, reducing shipping costs Conclusion This enables us to predict the growth of road transportation in Ghana and growing demand for trucks.
Business Plan Trade West Africa Page 9 Disadvantages of Ghanaian Roads Not well maintained road network compared to neighbors Low Capacity, especially on the coastal main road Bottlenecks Reckless drivers Disadvantages are not limiting road haulage. Moreover – Russian Tracks, including KAMAZ were made especially for the problem road networks. Conclusion Experience of KAMAZ in developing trucks for poor conditions roads enable its trucks to better address the needs of local customers
Business Plan Trade West Africa Page 10 Modern Trends of the World Trucks OEM Industry2 Global truck manufacturers are faced with a number of challenges. They have to be aware of the growth trends in emerging markets, and at the same time stay alert to the continuous market cyclicality. A consistent worldwide business model will not be sufficient. Regional needs have to be reflected, and innovations will be needed to address technological challenges and the rising importance of total cost of ownership (TCO). Conclusion Correlating this challenges with the Ghana trucks market one can notice the place for our project. We can offer the market a business model that includes the best total cost of the ownership and at the same time – truck that are optimal for the specific tasks of local Ghana carriers. We offer the new fail-safe trucks with ½ or of the European price. 2 Source: KMPG Emerging Markets Spotlight 2014
Business Plan Trade West Africa Page 11 In times of economic slowdown on 2012-13 global truck market maintained a slight increase – from 2,6 to 2,8 million units. One of its most important drivers is an intensification of global competition. The way to improve the competitiveness of companies is to reduce logistics costs. And this is directly linked with truckings of goods, which enables to reach efficiency of logistics. Another reason for retaining growth of the truck market - the fact that the quantity and quality of the roads in the world is constantly growing. Every year the new roads are constructed and old ones are still working. The chart shows that in most developed countries the ratio MCV/HCV is in favor of heavy trucks. And in developing countries, the ratio of different - it is obvious that due to the high prices carriers are buying fewer new trucks and more used trucks. The situation in Ghana is the same. According to Ghana Statistical Service bulletin, in 2008 quantity of the trucks was 5477, MCV – 3568 (65%) and HCV - 1909 (35%). Taking into consideration Ghana’s average economic CAGR we can make assumption the number of trucks in 2014 is about 7,5 thousands.
Business Plan Trade West Africa Page 12 According to EXPORT.GOV3 Ghana has no significant domestic assembly of motor vehicles and thus relies exclusively on imports. Used vehicles (5-10 years old) constitute about 70 percent of vehicles imported into Ghana. But overall the transportation sector is growing and substantial infrastructure development is underway in Ghana, so there is a special demand for Dump trucks. Customers Profile Our end customers in Ghana market are the haulage business owners. Around 90 percent of transporters work in the informal sector and are one-man companies. The remaining 10 percent is composed of well-organized companies operating several vehicles with strong links to importers and exporters. The road haulage sector employs a lot of people which gives the sector influence and some level of ‘voice’. As road transport in Ghana, as in most African countries, is the main mode of transport for international and domestic trade, truckers here have strong leverage with high-level authorities. The nature of road transport makes it quite easy for people to enter the sector and establish a small business. Transporters operating in the informal sector will most likely be part of a transporters association. There are ten of these associations in Ghana, which are responsible for representing transporters interests. Because of this, an umbrella association –“Ghana Haulage Transport Owners Association” was 3 US Gouvernement Export Helling Website
Business Plan Trade West Africa Page 13 recently established in an attempt to provide a single focal point for transporters to engage with industry and government. This is why we can allocate 3 major target groups for our marketing efforts: So our marketing activity will be primary addressed to these groups. We fulfilled a number market analyzes to develop the right strategy of entering the market.
Business Plan Trade West Africa Page 14 PEST Analysis Environmental factors influencing Ghana haulage market Currently, the limits of the axle weight is the regulation, causing resistance Ghana Haulage Transport Owners Association. We will offer them models of trucks that would help decrease the problem for transporters. But actually Ghana is moving to implement ECOWAS legislation on axle-loading and pushing for harmonization of axle loading legislation in ECOWAS countries. Deregulating the Ghana trucking market could lead to large cost reductions in transport Prices. In Rwanda the prices decreased by over 30 percent after deregulation of the sector. Competition based on cost and service would lead to a more professional and efficient trucking service which would in turn have knock-on effects for the wider economy. As a result of changes in legislation, we can expect a shift of the market towards more efficient new vehicles. At the same time western trucks TOC is still too high for Western Africa. This means a great market opportunity for us.
Business Plan Trade West Africa Page 15 COMPETITORS BENCHMARKING In order to understand current competition situation and work out the efficient strategy a competitors benchmarking was carried out. 3 groups of rivals were chosen for that purpose: 1. New European Trucks 2. Used European Trucks 3. New Chinese Trucks Following competition factors were benchmarked: Competitor Factors Weighting Price 40% Reliability 15% Availability of Spare Parts (ASP) 10% Total Cost of Ownership (TCO) 15% Service 20% 100% Weights were assigned to all factors to take into account their relevance to consumers. First the competition factors were rated by our auto retail experts. Scores are figured in the table below: Competitors Price Reliability ASP TCO Service Total Score KAMAZ 9 8 9 10 10 46 New European Trucks 3 10 9 6 8 36 Used European Trucks 7 8 6 7 2 30 New Chinese Trucks 9 3 5 5 4 26 Than we calculate the weighted scores: The following table contains the ratings considering weights of the competitor factors
Business Plan Trade West Africa Page 16 Competitors Price Reliability ASP TCO Service Total Score KAMAZ 3,6 1,2 0,9 1,5 2 9,2 New European Trucks 1,2 1,5 0,9 0,9 1,6 6,1 Used European Trucks 2,8 1,2 0,6 1,05 0,4 6,05 New Chinese Trucks 3,6 0,45 0,5 0,75 0,8 6,1 We mapped the assessment on two graphs - taking into account weights and without weights. Analysis of these graphs suggests that in both cases the competitiveness of our trucks is very high. This allows us count on success on the market if we use proper marketing strategy.
Business Plan Trade West Africa Page 17 By summarizing adjusted scores a Total Adjusted Competitor Score (TACS) was calculated. TACS shows competitor’s power in a moment. Conclusion As can be seen at the TACS diagram, KAMAZ competitor’s power is very strong. It is ready to enter the market.
Business Plan Trade West Africa Page 18 SWOT Analysis SWOT Strategies SW S1, S3 → W1 The best price/quality ratio end and well-known brand will help us to become well known in the market S2,S4 → W2, W3 Modern service center and moderate prices create more customer’s value than competitors SO S3,S4 → O1 O2 KAMAZ brand and good service will enable us to an image reliable partner OW O1 → W1 Cooperation with GHTOA will help us to promote our trucks in the market O3 → W2 Strong support of KAMAZ technicians will help to maintain reputation of reliable trucks OT O2 → T2 Presence of KAMAZ technical team in our service center will help to ensure victory in the field of quality ST S5 → T1 Right location of business will help us to stand an economic slowdown
Business Plan Trade West Africa Page 19 MARKETING STRATEGY Our products Our main products are the different models of KAMAZ trucks. We shall offer the market wide range of vehicles adopted to Ghana’s climate and road network. There will be dump trucks, tractors, vehicles with 6 - and 8 - drive axles and many other types of trucks. The additional vehicle line light commercial GAZ trucks. These trucks use Cummins diesel engines: Notice that in East Europe KAMAZ and GAZ hold more than 46% of the market, leaving far behind such brands as Volvo and MAN.
Business Plan Trade West Africa Page 20 Promotion Resources We have the following resources: strong brand name, credibility among the consumers; reliable trucks; moderate price; the best P/Q ratio; Long living KAMAZ success at all international rallies. Objectives Our main objectives: 1) sales growth: 1 year - 345 KAMAZ trucks 2-nd year – 360 ; 2) forming the image of Ideal for Africa truck; 3) building a good quality distribution network. Promotion tactics
Business Plan Trade West Africa Page 21 FINANCIAL PROJECTIONS Discounted cash flow criteria Criteria US Dollar Discount rate, % 5,00 PayBack period - PB, mths. 18 Net present value - NPV 15 036 955,09 Profitability index - PI 3,60 Internal rate of return - IRR, % 139,20 Cash flow criteria calculation period - 36 mths. Retained earnings statement projection (USD) Item 7-12.2014 2015 year 2016 year 1-6.2017 PROFIT AFTER TAX 421 330 6 952 852 7 515 514 3 757 757 P & L Reserve b/f 421 330 7 374 181 14 889 695 P & L RESERVES c/f 421 330 7 374 181 14 889 695 18 647 452 Break-Even Analysis The breakeven will be achieved at 3-rd month from the start of the project (see chart at Appendix 2) Sensitivity analysis The graph shows the sensitivity of the project can withstand 15 -% drop in sales prices, the growth of direct costs by 20%, while remaining profitable (see chart at Appendix 2)
Business Plan Trade West Africa Page 22 OPERATIONS PLAN Standard truck delivery deal lasts within two months. The deal structure is represented in the diagram below: The forecasted sales volume is: KAMAZ Trucks: 30 GAZ Trucks: 30 TONAR trailers: 24 We expect to achieve this level of sales in six months .
Business Plan Trade West Africa Page 23 Our investment plan will last for 3 months. During this period, we plan to construct a building of the service center, office equip and purchase cars for the office. ! All the equipment of the service center will be provided by KAMAZ at its own expense. Technical personnel of the service center will also provided by KAMAZ. Start-Up Expences To finance the project we will need a bank loan. Lending terms are presented in Table below: Loans Name Date Amount (USD) Period Interest % Credit 01.07.2014 5 903 562,63 18 mths. 10,00 Sources and using of Funds Sources of Funds Credit 5 903 564 Total 5 903 564 Using of Funds Office equipment 39 350 Executive Car 25 000 Website 4 000 Track showroom 638 959 Building 350 000 Working Capital 4 846 253 Total 5 903 564
Flow of funds within the credit
Assumptions Taxes Tax Tax base Period Rate VAT, NHAL, VFRS VAT Month 18 % Corporate tax Profit Quarter 25 % List of project stages $ US Office equipment 39 350,00 Execuitive Car 25 000,00 Website 4 000,00 Track showroom 638 959,00 Building 350 000,00 ИТОГО 1 057 309,00 Personnel plan Position Quant. Cost (USD) Payments Administration Manager 1 2 000,00 Once per month, Project period, Deputi manager 1 1 500,00 Once per month, Project period, Accountant 1 500,00 Once per month, Project period, Secretary 1 300,00 Once per month, Project period, Total personnel: 4 - 4 300 USD General expenses Item Amount (USD) Payments Administration Office 5 416,00 Once per month, Project period, Office expenses 500,00 Once per month, Project period, Electricity 3 000,00 Once per month, Project period,
APPENDIX 1: FINANCIAL TABLES Price (USD) Item 7.2014 8.2014 9.2014 10.2014 11.2014 12.2014 1qrt. 2015y. 2qrt. 2015y. 3qrt. 2015y. 4qrt. 2015y. 1qrt. 2016y. KAMAZ 96 022 96 022 96 022 96 022 96 022 96 022 96 022 96 022 96 022 96 022 96 022 GAZ 27 570 27 570 27 570 27 570 27 570 27 570 27 570 27 570 27 570 27 570 27 570 TONAR 56 980 56 980 56 980 56 980 56 980 56 980 56 980 56 980 56 980 56 980 56 980 Price (USD) Item 2qrt. 2016y. 3qrt. 2016y. 4qrt. 2016y. 1qrt. 2017y. 2qrt. 2017y. KAMAZ 96 022 96 022 96 022 96 022 96 022 GAZ 27 570 27 570 27 570 27 570 27 570 TONAR 56 980 56 980 56 980 56 980 56 980 Sales schedule (pcs.) Item 7.2014 8.2014 9.2014 10.2014 11.2014 12.2014 1qrt. 2015y. 2qrt. 2015y. 3qrt. 2015y. 4qrt. 2015y. 1qrt. 2016y. KAMAZ 5 10 15 75 90 90 90 90 GAZ 5 10 15 75 90 90 90 90 TONAR 4 8 12 60 72 72 72 72 Sales schedule (pcs.) Item 2qrt. 2016y. 3qrt. 2016y. 4qrt. 2016y. 1qrt. 2017y. 2qrt. 2017y. KAMAZ 90 90 90 90 90 GAZ 90 90 90 90 90 TONAR 72 72 72 72 72
Business Plan Trade West Africa Page 27 Sales revenues (USD) Item 7.2014 8.2014 9.2014 10.2014 11.2014 12.2014 1qrt. 2015y. 2qrt. 2015y. 3qrt. 2015y. 4qrt. 2015y. 1qrt. 2016y. KAMAZ 144 033 288 066 600 138 1 080 248 1 560 358 7 129 634 8 641 980 8 641 980 8 641 980 8 641 980 GAZ 41 355 82 710 172 313 310 163 448 013 2 047 073 2 481 300 2 481 300 2 481 300 2 481 300 TONAR 68 376 136 752 284 900 512 820 740 740 3 384 612 4 102 560 4 102 560 4 102 560 4 102 560 TOTAL 253 764 507 528 1 057 350 1 903 230 2 749 110 12 561 318 15 225 840 15 225 840 15 225 840 15 225 840 Sales revenues (USD) Item 2qrt. 2016y. 3qrt. 2016y. 4qrt. 2016y. 1qrt. 2017y. 2qrt. 2017y. KAMAZ 8 641 980 8 641 980 8 641 980 8 641 980 6 913 584 GAZ 2 481 300 2 481 300 2 481 300 2 481 300 1 985 040 TONAR 4 102 560 4 102 560 4 102 560 4 102 560 3 282 048 TOTAL 15 225 840 15 225 840 15 225 840 15 225 840 12 180 672 Cash paid to suppliers (USD) Item 7.2014 8.2014 9.2014 10.2014 11.2014 12.2014 1qrt. 2015y. 2qrt. 2015y. 3qrt. 2015y. 4qrt. 2015y. KAMAZ 384 090 768 180 1 152 270 1 536 360 1 920 450 6 913 620 6 913 620 6 913 620 6 913 620 GAZ 110 500 221 000 331 500 442 000 552 500 1 989 000 1 989 000 1 989 000 1 989 000 TONAR 182 400 364 800 547 200 729 600 912 000 3 283 200 3 283 200 3 283 200 3 283 200 TOTAL 676 990 1 353 980 2 030 970 2 707 960 3 384 950 12 185 820 12 185 820 12 185 820 12 185 820 Cash paid to suppliers (USD) Item 1qrt. 2016y. 2qrt. 2016y. 3qrt. 2016y. 4qrt. 2016y. 1qrt. 2017y. 2qrt. 2017y. KAMAZ 6 913 620 6 913 620 6 913 620 6 913 620 6 913 620 2 304 540 GAZ 1 989 000 1 989 000 1 989 000 1 989 000 1 989 000 663 000 TONAR 3 283 200 3 283 200 3 283 200 3 283 200 3 283 200 1 094 400 TOTAL 12 185 820 12 185 820 12 185 820 12 185 820 12 185 820 4 061 940
Business Plan Trade West Africa Page 28 General expenses (USD) Item 7.2014 8.2014 9.2014 10.2014 11.2014 12.2014 1qrt. 2015y. 2qrt. 2015y. 3qrt. 2015y. 4qrt. 2015y. Office 5 416 5 416 5 416 5 416 5 416 5 416 16 248 16 248 16 248 16 248 Office expenses 500 500 500 500 500 500 1 500 1 500 1 500 1 500 Electricity 3 000 3 000 3 000 3 000 3 000 3 000 9 000 9 000 9 000 9 000 TOTAL 8 916 8 916 8 916 8 916 8 916 8 916 26 748 26 748 26 748 26 748 General expenses (USD) Item 1qrt. 2016y. 2qrt. 2016y. 3qrt. 2016y. 4qrt. 2016y. 1qrt. 2017y. 2qrt. 2017y. Office 16 248 16 248 16 248 16 248 16 248 16 248 Office expenses 1 500 1 500 1 500 1 500 1 500 1 500 Electricity 9 000 9 000 9 000 9 000 9 000 9 000 TOTAL 26 748 26 748 26 748 26 748 26 748 26 748 Cost of personnel (USD) Item 7.2014 8.2014 9.2014 10.2014 11.2014 12.2014 1qrt. 2015y. 2qrt. 2015y. 3qrt. 2015y. 4qrt. 2015y. Manager 2 000 2 000 2 000 2 000 2 000 2 000 6 000 6 000 6 000 6 000 Deputi manager 1 500 1 500 1 500 1 500 1 500 1 500 4 500 4 500 4 500 4 500 Accountant 500 500 500 500 500 500 1 500 1 500 1 500 1 500 Secretary 300 300 300 300 300 300 900 900 900 900 TOTAL 4 300 4 300 4 300 4 300 4 300 4 300 12 900 12 900 12 900 12 900 Cost of personnel (USD) Item 1qrt. 2016y. 2qrt. 2016y. 3qrt. 2016y. 4qrt. 2016y. 1qrt. 2017y. 2qrt. 2017y. Manager 6 000 6 000 6 000 6 000 6 000 6 000 Deputi manager 4 500 4 500 4 500 4 500 4 500 4 500 Accountant 1 500 1 500 1 500 1 500 1 500 1 500 Secretary 900 900 900 900 900 900 TOTAL 12 900 12 900 12 900 12 900 12 900 12 900
Business Plan Trade West Africa Page 29 Taxes paid (USD) Item 7.2014 8.2014 9.2014 10.2014 11.2014 12.2014 1qrt. 2015y. 2qrt. 2015y. 3qrt. 2015y. 4qrt. 2015y. VAT, NHAL, VFRS 7 426 82 424 363 139 414 490 459 652 459 652 Corporate tax 140 443 483 310 600 055 611 627 TOTAL 7 426 82 424 503 582 897 800 1 059 707 1 071 279 Taxes paid (USD) Item 1qrt. 2016y. 2qrt. 2016y. 3qrt. 2016y. 4qrt. 2016y. 1qrt. 2017y. 2qrt. 2017y. VAT, NHAL, VFRS 459 652 459 652 459 652 459 652 459 652 306 434 Corporate tax 622 625 626 293 626 293 626 293 626 293 626 293 TOTAL 1 082 277 1 085 944 1 085 944 1 085 944 1 085 944 932 727 Start-up and capital expenses (USD) Item 7.2014 8.2014 9.2014 Office equipment 39 350 Execuitive Car 25 000 Website 2 067 1 933 Track showroom 330 129 308 830 Building 119 318 119 318 111 364 TOTAL 515 864 430 082 111 364
Business Plan Trade West Africa Page 30 Proceeds from debt (USD) Item 7.2014 8.2014 9.2014 10.2014 11.2014 12.2014 1qrt. 2015y. 2qrt. 2015y. 3qrt. 2015y. Credit 579 080 871 349 983 119 1 007 116 854 044 767 269 841 587 TOTAL 579 080 871 349 983 119 1 007 116 854 044 767 269 841 587 Repayment of debt (USD) Item 7.2014 8.2014 9.2014 10.2014 11.2014 12.2014 1qrt. 2015y. 2qrt. 2015y. 3qrt. 2015y. 4qrt. 2015y. Credit 533 867 1 981 337 1 866 903 1 521 455 TOTAL 533 867 1 981 337 1 866 903 1 521 455 Interest (USD) Item 7.2014 8.2014 9.2014 10.2014 11.2014 12.2014 1qrt. 2015y. 2qrt. 2015y. 3qrt. 2015y. 4qrt. 2015y. Credit 4 826 12 087 20 280 28 672 35 789 139 987 121 462 74 220 27 348 TOTAL 4 826 12 087 20 280 28 672 35 789 139 987 121 462 74 220 27 348
Business Plan Trade West Africa Page 31 Income statement projection (USD) Item 7.2014 8.2014 9.2014 10.2014 11.2014 12.2014 1qrt. 2015y. 2qrt. 2015y. Sales revenues 716 847 1 433 695 2 150 542 10 752 712 12 903 254 Net sales 716 847 1 433 695 2 150 542 10 752 712 12 903 254 Raw materials and components 573 720 1 147 441 1 721 161 8 605 805 10 326 966 Cost of goods sold 573 720 1 147 441 1 721 161 8 605 805 10 326 966 Gross profit 143 127 286 254 429 381 2 146 907 2 576 288 Administrative expenses 7 556 7 556 7 556 7 556 7 556 7 556 22 668 22 668 Salary of administrative personnel 4 300 4 300 4 300 4 300 4 300 4 300 12 900 12 900 Total operating expenses 11 856 11 856 11 856 11 856 11 856 11 856 35 568 35 568 Depreciation 353 9 378 11 850 11 850 11 850 35 549 35 549 Interest expenses 4 826 12 087 20 280 28 672 35 789 42 183 142 552 104 951 Total non-operating expenses 4 826 12 440 29 658 40 522 47 639 54 033 178 101 140 500 Other expenses 35 099 1 638 Losses from prior periods 51 780 77 715 119 228 28 479 Profit before tax -51 780 -25 934 -41 513 90 749 226 759 363 493 1 933 238 2 400 221 Effect of operating with foreign currency 0 0 0 0 -0 0 Taxable profit 198 280 363 493 1 933 238 2 400 221 Tax on profit 49 570 90 873 483 310 600 055 Net profit -51 780 -25 934 -41 513 90 749 177 189 272 619 1 449 929 1 800 165
Business Plan Trade West Africa Page 32 Income statement projection (USD) Item 3qrt. 2015y. 4qrt. 2015y. 1qrt. 2016y. 2qrt. 2016y. 3qrt. 2016y. 4qrt. 2016y. 1qrt. 2017y. Sales revenues 12 903 254 12 903 254 12 903 254 12 903 254 12 903 254 12 903 254 12 903 254 Net sales 12 903 254 12 903 254 12 903 254 12 903 254 12 903 254 12 903 254 12 903 254 Raw materials and components 10 326 966 10 326 966 10 326 966 10 326 966 10 326 966 10 326 966 10 326 966 Cost of goods sold 10 326 966 10 326 966 10 326 966 10 326 966 10 326 966 10 326 966 10 326 966 Gross profit 2 576 288 2 576 288 2 576 288 2 576 288 2 576 288 2 576 288 2 576 288 Administrative expenses 22 668 22 668 22 668 22 668 22 668 22 668 22 668 Salary of administrative personnel 12 900 12 900 12 900 12 900 12 900 12 900 12 900 Total operating expenses 35 568 35 568 35 568 35 568 35 568 35 568 35 568 Depreciation 35 549 35 549 35 549 35 549 35 549 35 549 35 549 Interest expenses 58 663 14 670 Total non-operating expenses 94 212 50 219 35 549 35 549 35 549 35 549 35 549 Other expenses Losses from prior periods Profit before tax 2 446 508 2 490 502 2 505 171 2 505 171 2 505 171 2 505 171 2 505 171 Effect of operating with foreign currency 0 0 Taxable profit 2 446 508 2 490 502 2 505 171 2 505 171 2 505 171 2 505 171 2 505 171 Tax on profit 611 627 622 625 626 293 626 293 626 293 626 293 626 293 Net profit 1 834 881 1 867 876 1 878 878 1 878 878 1 878 878 1 878 878 1 878 878
Business Plan Trade West Africa Page 33 Cash flow Projections (USD) Item 7.2014 8.2014 9.2014 10.2014 11.2014 12.2014 1qrt. 2015y. Cash receipts from customers 253 764 507 528 1 057 350 1 903 230 2 749 110 12 561 318 Cash paid to suppliers 676 990 1 353 980 2 030 970 2 707 960 3 384 950 12 185 820 Total direct costs 676 990 1 353 980 2 030 970 2 707 960 3 384 950 12 185 820 General expenses paid 8 916 8 916 8 916 8 916 8 916 8 916 26 748 Salary paid 4 300 4 300 4 300 4 300 4 300 4 300 12 900 Total operating expenses 13 216 13 216 13 216 13 216 13 216 13 216 39 648 Taxes paid 7 426 82 424 503 582 Net cash from operating activities -13 216 -436 442 -859 668 -986 836 -825 372 -731 480 -167 732 Purchase of property, plant and equipment 474 447 428 148 111 364 Other start-up expenses paid 41 417 1 933 Net cash from investment activities -515 864 -430 082 -111 364 Proceeds from debt 579 080 871 349 983 119 1 007 116 854 044 767 269 841 587 Repayment of debt 533 867 Interest paid 4 826 12 087 20 280 28 672 35 789 139 987 Net cash from financing activities 579 080 866 524 971 032 986 836 825 372 731 480 167 732 Cash at beginning of period 50 000 50 000 50 000 50 000 50 000 50 000 Cash at end of period 50 000 50 000 50 000 50 000 50 000 50 000 50 000
Business Plan Trade West Africa Page 34 Cash flow Projections (USD) Item 2qrt. 2015y. 3qrt. 2015y. 4qrt. 2015y. 1qrt. 2016y. 2qrt. 2016y. 3qrt. 2016y. 4qrt. 2016y. Cash receipts from customers 15 225 840 15 225 840 15 225 840 15 225 840 15 225 840 15 225 840 15 225 840 Cash paid to suppliers 12 185 820 12 185 820 12 185 820 12 185 820 12 185 820 12 185 820 12 185 820 Total direct costs 12 185 820 12 185 820 12 185 820 12 185 820 12 185 820 12 185 820 12 185 820 General expenses paid 26 748 26 748 26 748 26 748 26 748 26 748 26 748 Salary paid 12 900 12 900 12 900 12 900 12 900 12 900 12 900 Total operating expenses 39 648 39 648 39 648 39 648 39 648 39 648 39 648 Taxes paid 897 800 1 059 707 1 071 279 1 082 277 1 085 944 1 085 944 1 085 944 Net cash from operating activities 2 102 572 1 940 665 1 929 093 1 918 095 1 914 428 1 914 428 1 914 428 Purchase of property, plant and equipment Other start-up expenses paid Net cash from investment activities Proceeds from debt Repayment of debt 1 981 337 1 866 903 1 521 455 Interest paid 121 462 74 220 27 348 Net cash from financing activities -2 102 799 -1 941 124 -1 548 804 Cash at beginning of period 50 000 49 773 49 315 429 605 2 347 699 4 262 127 6 176 554 Cash at end of period 49 773 49 315 429 605 2 347 699 4 262 127 6 176 554 8 090 982
Business Plan Trade West Africa Page 35 Cash flow Projections (USD) Item 1qrt. 2017y. 2qrt. 2017y. Cash receipts from customers 15 225 840 12 180 672 Cash paid to suppliers 12 185 820 4 061 940 Total direct costs 12 185 820 4 061 940 General expenses paid 26 748 26 748 Salary paid 12 900 12 900 Total operating expenses 39 648 39 648 Taxes paid 1 085 944 932 727 Net cash from operating activities 1 914 428 7 146 357 Purchase of property, plant and equipment Other start-up expenses paid Net cash from investment activities Proceeds from debt Repayment of debt Interest paid Net cash from financing activities Cash at beginning of period 8 090 982 10 005 410 Cash at end of period 10 005 410 17 151 766
Business Plan Trade West Africa Page 36 Balance sheet projection (USD) Item 7.2014 8.2014 9.2014 10.2014 11.2014 12.2014 1qrt. 2015y. 2qrt. 2015y. Cash 50 000 50 000 50 000 50 000 50 000 50 000 50 000 49 773 Account receivable 296 058 592 116 888 174 1 776 348 1 776 348 Prepaid expenses (Short term) 11 491 748 895 2 080 205 3 384 950 4 738 930 6 092 910 8 123 880 8 123 880 Total current assets 61 491 798 895 2 130 205 3 731 008 5 381 046 7 031 084 9 950 228 9 950 001 Fixed assets 21 186 562 677 859 287 859 287 859 287 859 287 859 287 859 287 Accumulated depreciation 353 9 731 21 581 33 430 45 280 80 829 116 378 Net fixed assets: 21 186 562 324 849 556 837 707 825 857 814 007 778 458 742 909 Buildings 296 610 294 138 291 667 289 195 281 780 274 364 Plant and equipment 21 186 562 324 552 946 543 568 534 190 524 812 496 678 468 544 Investments in progress 449 447 238 636 TOTAL ASSETS 532 125 1 599 855 2 979 762 4 568 715 6 206 903 7 845 091 10 728 686 10 692 910 Accrued taxes 7 426 131 994 248 630 591 365 753 272 Short term loans 579 080 1 450 429 2 433 548 3 440 663 4 294 707 5 061 976 5 369 696 3 388 359 Accounts payable 4 826 12 087 20 280 73 834 126 112 177 667 315 716 299 205 Advances from customers 215 054 645 163 1 075 271 1 505 380 1 935 488 2 580 651 2 580 651 Total current liabilities 583 905 1 677 570 3 098 990 4 597 194 6 058 193 7 423 761 8 857 428 7 021 487 Retained earnings -51 780 -77 715 -119 228 -28 479 148 710 421 330 1 871 258 3 671 424 Total shareholders equity -51 780 -77 715 -119 228 -28 479 148 710 421 330 1 871 258 3 671 424 TOTAL LIABILITIES 532 125 1 599 855 2 979 762 4 568 715 6 206 903 7 845 091 10 728 686 10 692 910
Business Plan Trade West Africa Page 37 Balance sheet projection (USD) Item 3qrt. 2015y. 4qrt. 2015y. 1qrt. 2016y. 2qrt. 2016y. 3qrt. 2016y. 4qrt. 2016y. 1qrt. 2017y. 2qrt. 2017y. Cash 49 315 429 605 2 347 699 4 262 127 6 176 554 8 090 982 10 005 410 17 151 766 Account receivable 1 776 348 1 776 348 1 776 348 1 776 348 1 776 348 1 776 348 1 776 348 1 776 348 Prepaid expenses (Short term) 8 123 880 8 123 880 8 123 880 8 123 880 8 123 880 8 123 880 8 123 880 Total current assets 9 949 543 10 329 833 12 247 927 14 162 355 16 076 782 17 991 210 19 905 638 18 928 114 Fixed assets 859 287 859 287 859 287 859 287 859 287 859 287 859 287 859 287 Accumulated depreciation 151 928 187 477 223 026 258 575 294 124 329 673 365 222 400 771 Net fixed assets: 707 360 671 811 636 262 600 712 565 163 529 614 494 065 458 516 Buildings 266 949 259 534 252 119 244 703 237 288 229 873 222 458 215 042 Plant and equipment 440 411 412 277 384 143 356 009 327 875 299 741 271 608 243 474 Investments in progress TOTAL ASSETS 10 656 903 11 001 643 12 884 189 14 763 067 16 641 946 18 520 824 20 399 703 19 386 630 Accrued taxes 764 844 775 843 779 510 779 510 779 510 779 510 779 510 468 210 Short term loans 1 521 455 Accounts payable 283 647 270 968 270 968 270 968 270 968 270 968 270 968 270 968 Advances from customers 2 580 651 2 580 651 2 580 651 2 580 651 2 580 651 2 580 651 2 580 651 Total current liabilities 5 150 598 3 627 462 3 631 129 3 631 129 3 631 129 3 631 129 3 631 129 739 178 Retained earnings 5 506 305 7 374 181 9 253 060 11 131 938 13 010 817 14 889 695 16 768 573 18 647 452 Total shareholders equity 5 506 305 7 374 181 9 253 060 11 131 938 13 010 817 14 889 695 16 768 573 18 647 452 TOTAL LIABILITIES 10 656 903 11 001 643 12 884 189 14 763 067 16 641 946 18 520 824 20 399 703 19 386 630
Business Plan Trade West Africa Page 38 APPENDIX 2: CHARTS AND DIAGRAMMS Picture 1 Payback Chart
Business Plan Trade West Africa Page 39 Picture 2 DSCR
Business Plan Trade West Africa Page 40 Picture 3 Quarterly Profit
Business Plan Trade West Africa Page 41 Picture 4 Break-even
For Notes
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