Oapdd brief investment plan rev2-construction company

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Oapdd brief investment plan rev2-construction company

  1. 1. Ontario Auto Parts Distribution Development Ltd. Ontario Auto Parts Distribution Development Ltd. Investment Plan (Construction Company) th Date: January 4 , 2013OAPDD Investment Plan- Construction Company Rev2 Page 1 of 11
  2. 2. Ontario Auto Parts Distribution Development Ltd.1 Executive SummaryOAPDD intends to develop, construct and manage auto parts distribution c entre and OAPDD willset up the parts distribution center in the Waterloo Region to help the local parts suppliers andauto service shops in the aftermarket industry. Through our innovative distribution platform, theauto parts manufactured by ON 300 plus local parts manufactures will be demonstrated anddelivered to the end consumers or auto service shops timely, efficiently and effectively, which willresult in more business and add competition/sales powers to the parts manufactures.2 OAPDD Structure and InvestmentsThe materials provided in the following sections are in an intention to set out the basicinvestment structure required to establish and fund the OAPDD Project. The preliminaryproposed structure and investments currently contemplate the following: (a) Four (4) interested Chinese investors will invest $8 million into a Canadian constructioncompany (the "Construction Company") which funding will be used to purchase and developthe site for the OAPDD facility in Waterloo Region.Funding into the Construction Company is expected to be invested from the Chinese Investmentthrough Canadian companies (in which Chinese investors will be shareholders) to theConstruction Companies , as applicable.As the OAPDD business plan is executed upon, it is expected that OAPDD will own approximately15% of the Construction Company, and the investors will own the balance of the shares. Themanagement of the Construction Company shall be provided by OAPDD and its managementteam and advisors shall consist of software development experts, engineers, accountants, lawyers,and other professionals. The team has extensive Canadian commercial real estate experience,software development experience, auto parts distribution experience and also propertymanagement experience, with a strong and well established history in the strategic planning,management of Property Management and private placement financing.As consideration for the organization and development of the Corporation and the Projects,OAPDD, shall be entitled to a Development Fee which is the greater of $150,000 Cdn, or 4 % ofthe total project development cost (complete turnkey cost from initial development to finalOAPDD Investment Plan- Construction Company Rev2 Page 2 of 11
  3. 3. Ontario Auto Parts Distribution Development Ltd.delivery) with the minimum amount of $ 150,000 Cdn payable upon Commencement of theproject. The balance if any, shall be payable after completion of the construction cost Audit.Furthermore, the parties agree that OAPDD shall be entitled to retain all one-time commissions,fees, grants, or other form of incentives of any kind, granted at the construction stage of eachproject. This fee does not include any fees due to third parties, such as commissions, etc. that aretraditionally paid in transactions of this nature, which are not paid by the Developer. For furtherclarification, the Development Fee is to reimburse the Developer for all out of pocket costsincurred in the organization/development of the Project including but not limited to; architectural,mechanical and structural designs and plans, city and construction permits, professional fees, etc.Mann Engineering Ltd. (www.mannengineering.com) will be the consulting/constructioncompany acting as a general contractor to manage the design of the auto parts centre andgenerally to manage the construction process of the project until final delivery to OAPDD. Atender process will be used by Mann Engineering for sub-contractors (including the architecturalfirm), as is customary in the industry.3 Our Objectives;1. Set up the largest auto parts distributing center in Canada and the largest research and designcenter for auto parts manufacturers.2. Demonstrate and sell auto parts from many manufacturers in one location to provideconsumers with maximum service in a minimum area by using advanced technologies as follows,  3D display sales terminals developed and maintained by DDD.  cloud computing  Radio-frequency identification (RFID) smart warehouse management developed and maintained by DDD.  cell phone scan for order tracking and genuine part verification4 Return on the Construction Company, and expansion planEstimated to start from less than 5% for the first year and reach 8% after the first year.There are other phases to be expanded upon the successful development and operation on thesefirst two companies.5 Market Analysis SummaryOAPDD will be participating in an exciting, growing market. Auto aftermarket service has seenexplosive growth in the Canada in the last decade.OAPDD Investment Plan- Construction Company Rev2 Page 3 of 11
  4. 4. Ontario Auto Parts Distribution Development Ltd.Highlights are as follows:  The aftermarket is now estimated to be worth $19.4 billion and employs 420,000 Canadians representing 50% of all employment in the automotive industry.  54% of all vehicles registered in Canada are now over the age of 8 years with the average age of a vehicle on Canadian roads now standing at 8.54 years.  There were 22.2 million vehicles registered in 2011 with total annual vehicle kilometers driven measured at 469.8 billion kilometers or an average of 21,995 kilometers per vehicle.  Used vehicle sales represented 65.6% of all vehicles sold in Canada in 2011.  The average mileage recorded on a retired vehicle is now estimated at 320,000 kilometers.Ontario is home to five of the worlds top automakers, as well as 300+ innovative partsmanufacturers. Our industry employs 88,000 highly skilled workers who produced 2.1+ millionvehicles in 2011 – more than any other North American sub-national jurisdiction.Canada has been losing market share globally due to having virtually no export markets beyondthe US. According to a report from Scotia Economics, in recent years, Canadian auto part makershave failed to diversify their business which has caused them to fall out of the list of the top 10global exporters in the sector. Since there is less demand for auto parts for local and NorthAmerican market, the price for the auto parts also goes down. Being able to demonstrate or sellthe ON made auto parts locally and also to other territories are essential to sustain the ON autoparts manufacturing business.6 Distribution Patterns/ System Overview  Smart warehousing technology-high efficiency, accurate  3D sale terminal  By 8 AM Delivery and worldwide  With our shipping alliance-Ebox, a by 8 AM system will deliver huge customer benefits of Unattended Nighttime Delivery.  Inventory visibility  Smart phone trace7 ConclusionWe are confident that the arrangement mentioned above will establish the Auto PartsOAPDD Investment Plan- Construction Company Rev2 Page 4 of 11
  5. 5. Ontario Auto Parts Distribution Development Ltd.Distribution Centre in a timely no-risk manner. This will enable us to swiftly move through thevarious stages in tandem and should demonstrate the desired results in an effective and efficientmanner to help the ON auto parts manufacturers, auto service shops in the aftermarket industryand the end users as well.Steve Xing, VP of Business DevelopmentOntario Auto Parts Distribution Development Ltd.Address: 23 Chase Crescent CambridgeON, Canada, N3C 0C5Tel: 01-519-496-3078Fax: 01-519-658-2179OAPDD Investment Plan- Construction Company Rev2 Page 5 of 11
  6. 6. Ontario Auto Parts Distribution Centre Inc. Appendix A Software Development Major MilestoneAuto Parts Distrition Centre Development Major Milestone Projected Cost$ Secure a industrial zoned land with a size of0-3 Month 15 to 20 acres- Look into details on the real estate website Meet with multiple real estate agents and $2,436,000- engage a buyer agent- Lock up a land for development Assist in land purchasing, review the zoning0-12 Month with the city Site Plan Application and Building Permit- Application Detailed site plan, architechtural and $831,450- engineering designing- Apply for site plan- Apply for building permit- Obtain approval on obth SPA and BP13- 19 Month Construction Works- Prepare RFQ for various trades Award construction works to the winner- contractors $4,250,000- Start Construction Works- Finish up the building construction Complete the interior works and purchase- furnitures and required equipement Relocate from the rental office to the new20 to 24 Month built head office- Set up the software and servers Set up warehouse demonstration and $106,800- storage area to start the distribution-- Total Capital $ $7,624,250OAPDD Investment Plan- Construction Company Rev2 Page 6 of 11
  7. 7. Ontario Auto Parts Distribution Centre Inc. Appendix B Auto Parts Centre Development 1-12 Months CostAuto Parts Centre Development 1st 24 Monthsn Cost Description Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 Salaries $20,000 $20,000 $20,000 $38,000 $38,000 $38,000 $46,000 $46,000 $46,000 $46,000 $46,000 $58,000 Office Rent+Utilities $4,500 $4,500 $4,500 $4,500 $4,500 $4,500 $4,500 $4,500 $4,500 $4,500 $4,500 $4,500 Professional Fees $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 Telephone $150 $150 $150 $200 $200 $200 $350 $350 $350 $400 $400 $400 Equipement (Fixed Asset) $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 Supplies $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 Travel $5,000 $5,000 $5,000 $5,000 $5,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 Meals & Entertainment $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 Postage & Delivery $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 Dues & Subscriptions $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 Printing/Documentation $400 $400 $400 $400 $400 $400 $400 $400 $400 $400 $400 $400 Allocated Expense Sum $36,450 $36,450 $36,450 $54,500 $54,500 $59,500 $67,650 $67,650 $67,650 $67,700 $67,700 $79,700HeadcountEmployees Project Manager 1 1 1 1 1 1 2 2 2 2 2 2Employees Project Engineer 1 1 1 2 2 2 2 2 2 2 2 2Employees Project Coordinator 1 1 1 2 2 2 2 2 2 2 2 2Employees Office assistant 0 0 0 1 1 1 1 1 1 1 1 1Employees Field project manager 0 0 0 0 0 0 0 0 0 0 0 1Employees Field safety officer 0 0 0 0 0 0 0 0 0 0 0 1Employees Field security guard 0 0 0 0 0 0 0 0 0 0 0 0 3 3 3 6 6 6 7 7 7 7 7 9Headcount by DepartmentProject management 3 3 3 5 5 5 6 6 6 6 6 6Operations 0 0 0 1 1 1 1 1 1 1 1 1Field staff 0 0 0 0 0 0 0 0 0 0 0 2 3 3 3 6 6 6 7 7 7 7 7 9EmployeesManager Sal=$ 8000 per month 8000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $16,000 $16,000 $16,000 $16,000 $16,000 $16,000Engineers Sal=$ 6000 per month 6000 $12,000 $12,000 $12,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000Operations Sal=$ 6000 per month 6000 $0 $0 $0 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000Field staff Sal=$ 3000 per month 6000 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $12,000Secutiry guard Sal=$ 6000 per month 3000 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $20,000 $20,000 $20,000 $38,000 $38,000 $38,000 $46,000 $46,000 $46,000 $46,000 $46,000 $58,000OAPDD Investment Plan- Construction Company Rev2 Page 7 of 11
  8. 8. Ontario Auto Parts Distribution Centre Inc. Appendix C Auto Parts Centre Development 13-24 Month CostAuto Parts Centre Development 1st 24Months Cost Description Month 13 Month 14 Month 15 Month 16 Month 17 Month 18 Month 19 Month 20 Month 21 Month 22 Month 23 Month 24 Salaries $67,000 $67,000 $67,000 $67,000 $67,000 $70,000 $70,000 $70,000 $70,000 $70,000 $70,000 $70,000 Office Rent+Utilities $4,500 $4,500 $4,500 $4,500 $4,500 $4,500 $4,500 $4,500 $4,500 $4,500 $4,500 $4,500 Professional Fees $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 Telephone $800 $800 $800 $800 $800 $800 $800 $800 $800 $800 $800 $800 Equipement (Fixed Asset) $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 Supplies $1,001 $1,002 $1,003 $1,004 $1,005 $1,006 $1,007 $1,008 $1,009 $1,010 $1,011 $1,012 Travel $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 Meals & Entertainment $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 Postage & Delivery $400 $400 $400 $400 $400 $400 $400 $400 $400 $400 $400 $400 Dues & Subscriptions $400 $400 $400 $400 $400 $400 $400 $400 $400 $400 $400 $400 Printing/Documentation $800 $800 $800 $800 $800 $800 $800 $800 $800 $800 $800 $800 Allocated Expense Sum $90,901 $90,902 $90,903 $90,904 $90,905 $93,906 $93,907 $93,908 $93,909 $93,910 $93,911 $93,912HeadcountEmployees Project Manager 2 2 2 2 2 2 2 2 2 2 2 2Employees Project Engineer 2 2 2 2 2 2 2 2 2 2 2 2Employees Project Coordinator 2 2 2 2 2 2 2 2 2 2 2 2Employees Office assistant 1 1 1 1 1 1 1 1 1 1 1 1Employees Field project manager 1 1 1 1 1 1 1 1 1 1 1 1Employees Field safety officer 1 1 1 1 1 1 1 1 1 1 1 1Employees Field security guard 3 3 3 3 3 4 4 4 4 4 4 4 12 12 12 12 12 13 13 13 13 13 13 13Headcount by DepartmentProject management 6 6 6 6 6 6 6 6 6 6 6 6Operations 1 1 1 1 1 1 1 1 1 1 1 1Field staff 5 5 5 5 5 6 6 6 6 6 6 6 12 12 12 12 12 13 13 13 13 13 13 13EmployeesManager Sal=$ 8000 per month $16,000 $16,000 $16,000 $16,000 $16,000 $16,000 $16,000 $16,000 $16,000 $16,000 $16,000 $16,000Engineers Sal=$ 6000 per month $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000Operations Sal=$ 6000 per month $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000Field staff Sal=$ 3000 per month $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000Secutiry guard Sal=$ 6000 per month $9,000 $9,000 $9,000 $9,000 $9,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $67,000 $67,000 $67,000 $67,000 $67,000 $70,000 $70,000 $70,000 $70,000 $70,000 $70,000 $70,000OAPDD Investment Plan- Construction Company Rev2 Page 8 of 11
  9. 9. Ontario Auto Parts Distribution Centre Inc. Appendix D Auto Parts Distribution 12 Months Operation CostAuto Parts Distribution 12 Months Operation Cost 6 month Description Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 1 year subtotal subtotal Salaries $52,000 $52,000 $52,000 $52,000 $52,000 $52,000 $52,000 $52,000 $52,000 $52,000 $52,000 $52,000 $312,000 $624,000 Office Utilities $4,500 $4,500 $4,500 $4,500 $4,500 $4,500 $4,500 $4,500 $4,500 $4,500 $4,500 $4,500 $27,000 $54,000 Recruiting $12,000 $0 $0 $0 $0 $12,000 $0 $0 $0 $0 $0 $0 $24,000 $24,000 Professional Fees $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $6,000 $12,000 Telephone $150 $150 $150 $200 $200 $200 $350 $350 $350 $400 $400 $400 $1,050 $3,300 Equipement (Fixed Asset) $25,600 $3,600 $3,600 $3,600 $3,600 $3,600 $3,600 $3,600 $3,600 $3,600 $3,600 $3,600 Supplies $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $6,000 $12,000 Travel $5,000 $5,000 $5,000 $5,000 $5,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $35,000 $95,000 Leasehold improvement $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $90,000 $180,000 Insurance $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $72,000 $144,000 Meals & Entertainment $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $3,000 $6,000 Postage & Delivery $0 $0 Dues & Subscriptions $0 $0 Printing $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $3,000 $6,000 Documentation $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $3,000 $6,000 Allocated Expense/equipment $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $12,000 $24,000 maintenance and others Sum $131,750 $97,750 $97,750 $97,800 $97,800 $114,800 $102,950 $102,950 $102,950 $103,000 $103,000 $103,000 $637,650 $1,255,500HeadcountEmployees Manager 2 2 2 2 2 2 2 2 2 2 2 2Employees Sales/Marketing 3 3 3 3 3 3 3 3 3 3 3 3 Assistant/officeEmployees 2 2 2 2 2 2 2 2 2 2 2 2 staff/book keepingEmployees Accountant 1 1 1 1 1 1 1 1 1 1 1 1Employees Logistics 2 2 2 2 2 2 2 2 2 2 2 2Employees Facility Manager 1 1 1 1 1 1 1 1 1 1 1 1 Assistant facility manager 1 1 1 1 1 1 1 1 1 1 1 1 12 12 12 12 12 12 12 12 12 12 12 12Headcount by DepartmentSales/Marketing 3 3 3 3 3 3 3 3 3 3 3 3Operations 7 7 7 7 7 7 7 7 7 7 7 7Facility 2 2 2 2 2 2 2 2 2 2 2 2management 12 12 12 12 12 12 12 12 12 12 12 12OAPDD Investment Plan- Construction Company Rev2 Page 9 of 11
  10. 10. Ontario Auto Parts Distribution Centre Inc. Appendix E Auto Centre Development Estimated CostAuto Centre Development Estimated CostEstimated Total GFA forAuto Centre 150,000 sft The zoning will be industrial zone and building permit is normally 4 to 6 weeks but Site Plan Applicationtakes about 6 months. Development Building Engineering ContigenciesCity Total $ Fees $ Permit Fees Package $ $Cambridge $273,000.0 $0.0 $450,000.0 $108,450.3 $831,450.3Estimated Land Cost $2,400,000Land Transfer Taxes 1.50%Land Transfer $ $36,000Total $3,267,450.27 Appendix F Project Development Phases and Estimated CostProject Development Phases and Estimated CostThe auto center will be develped into a 150,000sq.ft building in phase.Total Phases 6Items Phase 1 Phase 2 Phase 3 Phase 4 Phase 5 Phase 6GFA sq.ft 25,000 25,000 25,000 25,000 25,000 25,000Construction Cost $4,250,000 $4,250,000 $4,250,000 $4,250,000 $4,250,000 $4,250,000and other expenses $Time line 13 to 20 month To be determined based on the economy on phase 1.OAPDD Investment Plan- Construction Company Rev2 Page 10 of 11
  11. 11. Ontario Auto Parts Distribution Development Ltd. Appendix G Pro-Forma Income Statement Pro-Forma Income Statement Auto Distribution Centre For 2014 through 2018Inflation rate 3%Estimated leasees a year 25Management fee and sales 5%revenue annual increase rateAnnual management $20,000fee/leaseeAverage parts sales a year $250,000per leaseeGross margin from selling 25%parts taken by DCSpace annual lease fee $/sft $25 After 20 months DevelopmentREVENUE 1st Year 2nd Year 3rd Year 4th Year 5th YearRental income $625,000 $643,750 $663,063 $682,954 $703,443Management/Membership fee $250,000 $500,000 $525,000 $551,250 $578,813Parts sales revenue $1,562,500 $1,640,625 $1,722,656 $1,808,789 $1,899,229Gross Revenue $2,437,500 $2,784,375 $2,910,719 $3,042,993 $3,181,484OPERATING EXPENSES Others as listed in Auto Parts Distribution 12 Months Operation Cost $1,255,500 $1,293,165 $1,331,960 $1,371,919 $1,413,076 Software cost and maintenace paid to Software Development Company $583,333 $600,833 $618,858 $637,424 $656,547Total Operating Expenses $1,838,833 $1,893,998 $1,950,818 $2,009,343 $2,069,623EBITA $598,667 $890,377 $959,900 $1,033,651 $1,111,861Investment $7,624,250ROI 7.85% 11.68% 12.59% 13.56% 14.58%OAPDD Investment Plan- Construction Company Rev2 Page 11 of 11

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