The target of the project is to create a production of packaging materials (woven polypropylene bags) in the Republic of Belarus.
To achieve this target, an investment of 750,000 USD is needed to purchase necessary equipment and launch the project.
-there has been developed a business plan;
-there has been developed a technical plan;
-there have been defined the equipment needed and its suppliers;
-there has been made up the team of top specialists (managing director, sales director, financial director and chief engineer);
-there have been conducted the negotiations and achieved the preliminary agreements with the potential buyers;
-there has been chosen a manufacturing site.
The area of usage of bags is as following: agricultural enterprises, producers of flour, sugar, cereals, fodder and biological additives for livestock, as well as fertilizers, chemicals and dry building mixtures.
The market of Belarus is estimated at about 40 million pcs/year
and tends to increase
Domestic production is 28 million pcs/year
Quantity of local manufacturers is 4 enterprises
Quantity of import is approximately 12 million pcs/year
Total market of bags of other types 100 million pcs/year
Currently there is a pronounced and steady tendency of growth of demand for packaging in the agricultural sector and the sector of production of building materials. The growth rate is 1-4% per year.
Problem or Opportunity
Various bulk cargoes (grain, cereals, sugar, animal feed, fertilizers, dry construction materials and much more) require reliable, convenient and inexpensive containers.
Solution (product or service)
polymer woven bags of various sizes and designs
«Sohim» has been a major producer of petrochemicals since Soviet times. Advantages - large production capacity, stable position; shortcomings - the rigidity of the structure, the lack of responsiveness to customer requests
«Eurotarex» is a Belcoopsoyuz enterprise, the vast majority of its products are supplied by a members of Belcoopsoyuz.
«Nurbis» is a small regional producer.
«Prompak» is in a state of reorganization, changing its specialization to “big bags”.
Advantages or differentiators
The advantages over existing enterprises are as below:
quick reaction to customer needs and requests;
high quality of products
flexible pricing policy;
convenient settlement system;
efficient logistics system.
Monthly financial plan
After the full capacity is reached, the monthly financial plan is as follows:
Income 151 200 USD
Raw materials 67 200 USD
Salary 26 000 USD
Rent 2 500 USD
Electricity and communal services 8 000 USD
Amortization of equipment 6 000 USD
Costs associated with realization 5 000 USD
Other expenses 10 500 USD
TOTAL 125 200 USD
Taxes (approximately) 11 000 USD
Profit 15 000 USD
Further financial information is available upon request.
The risk of incomplete production load.
To reduce the risk, a thorough and in-depth analysis of the state of the market and its changes over the past five years has been carried out. An additional measure to reduce risk is preliminary negotiations with potential buyers, carried out before the start of the project. Also, the project is given additional stability by the fact that the break-even point is at the level of 60% of the planned equipment productivity.
Risk of price fluctuations.
Prices for this type of product are quite stable and their changes are associated with fluctuations in raw material prices. To minimize risks, it is planned to sign long-term contracts, as well as maintaining optimal reserves of raw materials and finished products.
The risk of non-payment for delivered products is minimized by the conclusion of contracts with strict sanctions for non-payment, as well as the use of a flexible system of mutual settlements, providing various payment methods.