Agaroud - Agarwood oil from Thailand
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Agaroud - Agarwood oil from Thailand Agaroud - Agarwood oil from Thailand Presentation Transcript

  • A Pure Touch Of Nature and IntellectAgarwood Oil (Oud) Production in Thailand Business Approach and Projections Confidential V 1.0
  • What is Agarwood?Agarwood are also known as Agarwood fromAquilaria genus.Agarwood is a kind of resin which forms a naturalconsequence of the reaction to the attacks agarwoodtree fungus / bacteria (disease). Plants attacked byspreading a smell of oil to protect the injured bodypart (either the root, stem, branch, etc.) where the oilwill eventually become hard (resin). Resin materialthat is produced consists of a sari or the diffusion ofaromatic resin known as agarwood.2 Confidential V 1.0
  • Why Agarwood? Agarwood is the most expensive resinous wood in the world; Agarwood consumption has increased 25 times over the last 40 years; Global demand for agarwood exceeds supply; We have access to trees in Thailand and to the most advanced technology for production of 100% natural agarwood oil / oud with extraordinary high efficiency.3 Confidential V 1.0
  • Use of AgarwoodAgarwood is used in various ways, including traditionalmedicine, art and artifacts, artifacts essential oil. Agarwoodburned to produce a fragrant odor since time immemorialby the Chinese, Arab, India, Japan and Korea which arewidely used in festivals, customs and religion. Starch isextracted from agarwood oil was used as a perfumeingredient. For example, oil "Attar", which is water-basedperfume containing agarwood oil extract. Perfumes arewidely used by Muslims and other religion.Based on quality agarwood divided on grades of between$1,000 to $60,000 per kg. Starch extracted oil is also sold onthe quality according to certain grades of between $100 -$400 per tola (12 ml). Pieces of wood based on the qualityagarwood sold according to grade from $1.5 - $10 per kg.4 Confidential V 1.0
  • Agarwood Oil Production Production Cycle1. Buy 7-8 years old trees2. Inoculate using proprietary fungal formula3. Wait 9-10 months4. Harvest trees – 1 week5. Separate inoculated pieces6. Produce powder / dust7. Soaking8. Distillation of oil The whole cycle is 1 year5 Confidential V 1.0
  • Agarwood Oil Production Our Concept1. Produce oil of medium quality  Less than $10k per kg  Easier to sell  Wider market2. Produce 40 kg oil per month3. Sub-contract powder preparation for 1st year  To start production immediately  May be consider continue 2nd year, at least partly4. Target all markets:  Far East  Arab world  Western world6 Confidential V 1.0
  • Capital Investment Equipment Price/unit Units Cost Distillation system $55,000 1 $55,000 Grider $2,667 0 $0 Owen $6,667 0 $0 Steenless tanks $100 300 $30,000 General equipment $13,333 1 $13,333 Pick-up car $28,333 1 $28,333 Motocycles $2,000 2 $4,000 Misc $25,000 1 $25,000 Total capital investment $155,6677 Confidential V 1.0
  • COGS Ingredients Price/unit Units Total cost Time Trees $67 160 $10,667 Inoculate $17 160 $2,667 2 weeks Harvest and deliver $333 1 $333 40 weeks Total $417 $13,667 52 weeks COGS per kg oil $341.67 Produce podwer, kg 4,000 COGS per 1 kg powder $3.42 During 1st year of operation we will purchase ready powder. For Business Plan considered cost of powder as THB 400 / USD13.38 Confidential V 1.0
  • Income Projections Profit & Loss Years ---> 1 2 3 4 5 6 7 8 9 10 1. SalesA. Agarwood oil grade A kg 360 480 480 480 480 480 480 480 480 480 Sales $7,000 $2,520,000 $3,360,000 $3,360,000 $3,360,000 $3,360,000 $3,360,000 $3,360,000 $3,360,000 $3,360,000 $3,360,000B. Treated Powder kg 36,000 48,000 48,000 48,000 48,000 48,000 48,000 48,000 48,000 48,000 Sales $10 $360,000 $480,000 $480,000 $480,000 $480,000 $480,000 $480,000 $480,000 $480,000 $480,000Total sales $2,880,000 $3,840,000 $3,840,000 $3,840,000 $3,840,000 $3,840,000 $3,840,000 $3,840,000 $3,840,000 $3,840,000COGS 400 ($53,333) ($53,333) ($53,333) ($53,333) ($53,333) ($53,333) ($53,333) ($53,333) ($53,333) ($53,333)Gross Sales $2,826,667 $3,786,667 $3,786,667 $3,786,667 $3,786,667 $3,786,667 $3,786,667 $3,786,667 $3,786,667 $3,786,667% Gross Profit 98% 99% 99% 99% 99% 99% 99% 99% 99% 99% 2. Operation expensesProduction $70,000 $74,000 $74,000 $74,000 $74,000 $74,000 $74,000 $74,000 $74,000 $74,000Operation and Admin $88,000 $118,000 $118,000 $118,000 $118,000 $118,000 $118,000 $118,000 $118,000 $118,000M&S $38,000 $38,000 $38,000 $38,000 $38,000 $38,000 $38,000 $38,000 $38,000 $38,000Total Expenses $196,000 $230,000 $230,000 $230,000 $230,000 $230,000 $230,000 $230,000 $230,000 $230,000 3 Operation Profit Before TaxOperation profit beforetax $2,630,667 $3,556,667 $3,556,667 $3,556,667 $3,556,667 $3,556,667 $3,556,667 $3,556,667 $3,556,667 $3,556,667% Operation Profit 91% 93% 93% 93% 93% 93% 93% 93% 93% 93% 9 Confidential V 1.0
  • Cash-Flow ProjectionCash-Flow Statements Years ---> 1 2 3 4 5 6 7 8 9 10 A. Investment OultayFixed capital investment (155,667)Net working capital (53,333) (53,333) (53,333) (53,333) (53,333) (53,333) (53,333) (53,333) (53,333) (53,333)Total investment (155,667) (53,333) (53,333) (53,333) (53,333) (53,333) (53,333) (53,333) (53,333) (53,333) (53,333) B. Annual After-Tax operating cash-flowGross Sales 2,880,000 3,840,000 3,840,000 3,840,000 3,840,000 3,840,000 3,840,000 3,840,000 3,840,000 3,840,000Cash operating expenses (196,000) (230,000) (230,000) (230,000) (230,000) (230,000) (230,000) (230,000) (230,000) (230,000)Depreciation 10% (15,567) (15,567) (15,567) (15,567) (15,567) (15,567) (15,567) (15,567) (15,567) (15,567)Operating Income before taxes 2,615,100 3,541,100 3,541,100 3,541,100 3,541,100 3,541,100 3,541,100 3,541,100 3,541,100 3,541,100Taxes on operating income 23% 601,473 814,453 814,453 814,453 814,453 814,453 814,453 814,453 814,453 814,453Operating income after tax 2,013,627 2,726,647 2,726,647 2,726,647 2,726,647 2,726,647 2,726,647 2,726,647 2,726,647 2,726,647Add-back - depreciation 15,567 15,567 15,567 15,567 15,567 15,567 15,567 15,567 15,567 15,567After tax operating cash-flow 2,029,194 2,742,214 2,742,214 2,742,214 2,742,214 2,742,214 2,742,214 2,742,214 2,742,214 2,742,214 C. Loan & DividendsLoan 250,000Loan Repayment (83,333) (83,333) (83,333)Dividends 100% (1,521,895) (2,742,214) (2,742,214) (2,742,214) (2,742,214) (2,742,214) (2,742,214) (2,742,214) (2,742,214) (2,742,214)Total 250,000 (1,605,229) (2,825,547) (2,825,547) (2,742,214) (2,742,214) (2,742,214) (2,742,214) (2,742,214) (2,742,214) (2,742,214) D. TOTAL AFTER-TAX CASH-FLOWTOTAL AFTER-TAX CASH-FLOW 94,333 423,965 (83,333) (83,333)Cumulative 94,333 518,298 434,965 351,632 351,632 351,632 351,632 351,632 351,632 351,632 351,632 10 Confidential V 1.0
  • Investment Analysis Investment Analysis Years ---> 1 2 3 4 5 6 7 8 9 10RRR 10%Lenders shareholding 15%Loan $250,000Lenders Loan repayment 83,333 83,333 83,333Lenders Dividend $228,284 $411,332 $411,332 $411,332 $411,332 $411,332 $411,332 $411,332 $411,332 $411,332Lenders Cash-Flow ($250,000) $311,618 $494,665 $494,665 $411,332 $411,332 $411,332 $411,332 $411,332 $411,332 $411,332NPV annual ($250,000) $283,289 $408,814 $371,649 $280,945 $255,405 $232,186 $211,078 $191,889 $174,445 $158,586 1 year 2 years 3 years 4 years 5 years 10 years Net Present Value $33K $442K $813K $1,094K $1,350K $2,318K Based on: 1. Loan repayment (3 years) + shareholding (15%) 2. Required Return Rate – 10%11 Confidential V 1.0
  • Contactwww.agaroud.comtn@agaroud.com +66 8 9204-1953 Confidential V 1.0