Funding zircon project to investor

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FINANCING FOR
ZIRCON PROJECT
BUSINESS PLAN
PT. KALIMANTAN MINERALS PERSADA
PREPARED BY
SETIONO WINARDI, SH.MBA
PT. W2P MANAJEMEN BISNIS
CONNECT TO VENTURE CAPITAL INVESTMENT

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TABLE CONTENT
1. Vision/Mission Statement
2. Company Summary
3. Products/Services
4. Market Assessment
5. Strategic Implementation
6. Expected Outcomes

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1. Vision/Mission Statement and Goals
A. Vision Statement
The vision/mission statements are clear summaries of where the business is headed. It
describes what the business produces, who products are produced for, and unique
business characteristics. It will reflect the values of the management team and the type
of business culture you are trying to create.
Zircon is mainly used as a fundamental raw material in various industrial sectors,
mostly used as an opacifier and used in refractories and foundries. Recently, we see
zircon demand is emerging in digital ceramic tile printing, and zirconia dental block
also used in dental implants as well.
Not only traditional zircon market of opacifier, refractories and foundries, but also
nowadays demand of zircon is increasing and expands into new markets for new
opportunities.
Current zircon market is 1.1 mil ton per annual worldwide, it will increase 1,700,000
(one million seven hundred thousand) ton by 2024. But some zircon mines are expected
to close due to mine closure and declining grades.
In Indonesia, still we do not have any major zircon producers at the moment even
though we have plenty of mineral sands in Kalimantan. We assume that many changes
in mining laws and local issues might influence it. But we have experienced in
Indonesia over 10 (ten) years, and with our expertise, we can manage and control
production, and we sure that we will be a major zircon producer in Indonesia.
Last year of 2017, export volume of zircon sand from Indonesia to China was 25,700
(twenty fife thousand and seven hundred) ton/year only. We prospect many
opportunities in mineral sands industry.
B. Goals and Objectives
1. What do you want your business to achieve? Be specific in terms of financial
performance, resource commitments (time and money) and risk.
Our goal is to produce 1,000 (one thousand) ton/month of zircon sand at first stage,
and step by step, we will increase production capacity up to 3,000 (three thousand)
– 5 (fife thousand) ton per month.
For producing zircon 1,000 (one thousand) ton,
We need US$. 6,000,000 (six millions United State Dollar) as working capital for
installing spirals and separators etc in mining site and upgrading current facilities
in the plant.

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2. When will various milestones be achieved?
<1st
stage>
- Jan 2019 : working capital is invested.
- June 2019 : start production of zircon 500 (fife hundred) ton/month.
- Jan 2020 : start production of zircon 1,000 (one thousand) ton/month.
<2nd
stage> optional
- Jan 2021 : Increase capacity of total 2,000 (two thousand) ton/month.
- Jan 2022 : increase capacity of total 3,000 (three thousand) ton/month.
KMP zircon reserve is 1,000,000 (one million) ton of final product, our calculation
for mine life is as follows ;
- Zircon Reserve : 1,000,000 (one million) ton (in 963 Ha)
- Mine Life : 27.8 years (twenty seven years and eight months)
* 1,000,000 ton/36,000 ton/annual (based on monthly 3000t)
C. Keys to Success
1. What do you need, or must happen, for you to succeed?
- KMP needs spirals installed in mining site.
- KMP needs magnetic separators, screen, slurry pumps etc in mining site.
- And needs upgrading current facilities in plant.
2. ABOUT COMPANY
The material in this section is an introduction to the firm.
A. Company Background
1. We, PT. Kalimantan Minerals Persada, are a zircon mining company located in
West Kalimantan, Indonesia and it was established in 2011. KMP produces zircon,
ilmenite and rutile, and also KMP produces alluvial golds in its mining area.
2. The Shareholder of PT. KMP as follow:
2.1. Mr. Christian Sung - 50% of the total shares paid-up
2.2. Mrs. Adriana - 50% of the total shares paid-up
Mr. Christian Sung who is a Chinese Indonesian is founder of PT. Kalimantan
Minerals Persada and previously he has 50% of company share, but he is an
entrepreneur, and provided KMP until operates its zircon plant by own capital
mostly supported from Korea since the beginning.

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Figure 1 : Previous Shareholders of PT. KMP
Value 1 shares = IDR. 90.000
Paid Up (IDR) Outstanding (IDR)
Company Shares (Equity) 100 1,000,000 90,000,000,000
Mr. Christian Sung 0.74 7,407 500,000,000 500,000,000
Mrs. Adriana 0.74 7,407 500,000,000 500,000,000
Oustanding Shares 98.51851852 985,185 89,000,000,000 89,000,000,000
Total 100 1,000,000 1,000,000,000 89,000,000,000 90,000,000,000
*Note US$.1,00 = IDR.12.000
Company Shares Percentage (%) Share Number
Capital (IDR)
Total Value (IDR)
3. The Board Management
3.1. Commissioner - Mrs. Adriana, Indonesian Nationality
3.2. Director - Mr. Christian Sung, Chinese Nationality
Figure 2 : KMP’s Chronological history
(Source) Company reports

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4. Marketability : The global market for zirconium is projected to reach 1.7 million
metric tons by 2024 (Currently market is approx.. 1.1 mil ton), driven by the
growing demand for ceramic wall and floor tiles and expanding applications for
zirconium metal, zirconia and zirconium-based chemicals. And emerging new uses
of zirconium alloys are in dental implants and orthopedic prosthetics and in digital
tile printing as well. China represents the largest market worldwide supported by
the massive domestic production capacity for zirconium sponge. Asia-Pacific,
excluding China, ranks as the fastest growing market with a CAGR 6.4% over the
analysis period led by factors such as increasing establishment of foundries,
refractories, and metal processing plants as well.
Zircon Deposit : KMP implemented drilling work in 2012 and 2017, based on 2nd
drilling work, the deposit considered to be 130,000,000 ton ores, equivalent to
1,000,000 Metric ton of final zircon product in 963 Ha area.
In Nov ~ Dec 2017, KMP had drilled in mining area, the result is 89,705 ton for 85
Ha , so, we expect the zircon reserve will be approx. 1,000,000 ton which derived
from 1,055 ton per Ha.
Quality Control : With skilled plant managers, KMP produces final zircon sand
with international standard quality, with low impurities of TiO2 (below 0.1%) etc.
even KMP uses separation machine from China, KMP has previously sent a 150
ton trial shipment to Jakarta, arranging successful product movement from the
mine site to Jakarta port. The quality of KMP zircon sand had accepted by zircon
silicate company in Jakarta.
Localization : KMP zircon team consists of Korean, Chinese and Indonesian
nationals, mining in a remote province needs mutual understanding among
members with different nationalities, KMP admits all different nationals and try to
understand them, and localization also helps KMP to reduce the cost of other
expenses and incidents in mining area.
B. Resources, Facilities and Equipment
1. KMP had built our mineral benefication plant (MSP : Mineral Separation Plant) in
the end of 2014, KMP produces zircon, ilmenite and rutile by using spirals in
mining area, and operating shaking tables, magnetic separators and electric
separators in plant area. And KMP also produces some alluvial gold from our
mining area.
2. Our land is called APL (“Areal Penggunaan Lain” in Indonesian Language) which
means that “Land allocated for any non forest purpose”. And the equipment PT.
KMP uses are specified as below;

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Figure 3: Zircon Processing plants
Figure 4: Australian spirals – made by Minerals Technologies.

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3. KMP imported initial shaking tables and all the separators from Gelin Mining
Machinery Company in Ganzhou, China in 2014, and also Mineral Technologies
in Australia supplied 36 pcs of Spirals (Twelve(12)-triple starts MG separator) and
KMP plan to install them in mining area.
4. KMP had already bought the facilities, there are no unpaid expenses to providers
from China and Australia.
C. Marketing Methods
1. Currently KMP plant is not in operation due to the limited working capitals from
head office in Korea. The fact that Auto Industrial Group(AIG) has oil palm
plantation in Myanmar, and AIG’s priority is Oil palm project since there would be
a big loss if AIG does not maintain and subsidy the plantation project.
2. For getting middling ores from mining site, we hire local people to operate spiral
separators, for improving returns, we manage and assist local people to work
efficiently in the site, and let them work 2 shifts a day
For customers, KMP has to verify product quality with low impurities and the
product specification should be steady. It will improve returns from customers.
3. Initially, for exporting zircon sand, once we have a certain stock in our plant, we
offer to our customers, mostly order is confirmed from customers within 2-3 weeks.
And for next stage, we prefer to contract with customers a certain volume for 6
months.
4. Cost production, delivery product and service
Figure 5: Cost of Zircon Sand production
Cost of Zircon Sand
Mining Cost US$/t 386
Processing Cost US$/t 164
Transport & Duties US$/t 250
Admin & Other US$/t 30
Total Operating Costs US$/t 830
5. KMP sends samples of zircon sand to buyers, and buyers inspect ZrO2+HfO2 (min
66.00%), TiO2 (max 0.1%), U+Th (max 500ppm) and whiteness, mostly buyers
inspect these 4 parameters, and when zircon sand meets their spec, they issue L/C
(normally 2 month usance L/C) for trial order.

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D. Shareholder, Management and Organization
On May 26, 2017 the composition of shareholder and board management has changed
through Extra Ordinary Shareholder meeting of PT. KMP, and the resolution as follow:
1. Sale and purchase shares for 20% of the shares owned by Mr. Christian Sung to
Mr. Alexander Davey Marindra;
2. Sale and purchase shares for 50% of the shares owned by Mrs. Adriana to Mr.
Hasanudin;
3. Now after the Resolution of Extra Ordinary Shareholder Meeting, the the
composition of shareholders as follow:
3.1. Mr. Hasanudin - 50% of the total shares paid-up;
3.2. Mr. Alexander Davey Marindra - 20% of the total shares paid-up;
3.3. Mr. Chirstian Sung - 30% of the total shares paid-up.
Figure 6: Current Shareholders of PT. KMP
Mr. Hasanudin 0.74 7,407 500,000,000
Mr. Christian Sung 0.44 4,444 300,000,000
Mr. Alexander Davey Marindra 0.30 2,963 200,000,000
Oustanding Shares 98.52 985,185 89,000,000,000
Total 100 1,000,000 1,000,000,000 89,000,000,000
*Note US$.1,00 = IDR.12.000
Company Shares Percentage (%) Share Number
Capital (IDR)
Total Value (IDR)
4. Also, the Resolution of Extra Ordinary Shareholder Meeting was changing the
Board Management Member of PT. KMP, and then the structure as follow:
4.1. Directors
a. President Director - Mr. Choi Jung Pil, Korean Nationality
b. Director - Mr. Hasanudin, Indonesian Nationality
c. Director - Mr. Yoo Seungkrok, Korean Nationality
Mr. Yoo Seungkrok, Director of PT. KMP (also CEO of PT. R&R A
Indoensia) is managing the zircon plant, who started KMP zircon project
from the beginning of exploration in Kalimantan. He operates the plant with
Chinese Manager and local zircon managers.

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4.2. Commissioer
Mr. Alexander Davey Marindra, Indonesian Nationality
5. KMP has major 3 (three) categories of operation:
5.1. Mining site;
5.2. Processing plant
5.3. Export/sales
in the each division, KMP has expertise managers with many year experiences in
zircon/sand mining. The Director believes that mining is a sort of team work
6. The lines of authority.
7. Who acts as the president/CEO? Spokesperson? Chief Financial Officer?
President : Choi Jung Pil
Mr. Choi Jung Pil is President of PT. KMP and stays in Seoul, Korea, he decides
and manages overall zircon project in Indonesia. But mostly he is involved in
funding and exports.
CFO : Charles Park
Charles is currently CFO of Auto Industrial Co., Ltd in Seoul, Korea. Charles has
experience in developing projects in emerging markets having previously worked
as the CEO of Myanmar Auto Corp, a related entity to Auto Industrial which built
oil palm plantation project in Myanmar.
Executive Director : Yoo Seungkrok
Mr. Yoo Seungkrok is Director of PT. KMP, he is one of the directors who started
KMP’s zircon project in Indonesia, he is more like a marketing director but also he
knows very well how the benefication machine works, and how KMP deals with
local residents. He has worked in Auto Industrial Group for 13 years and has lived
in Indonesia over 10 years and he speaks Indonesian language as well, which
makes the mining project smoother and makes more friendly relationship with
local people.

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8. KMP has a Director who has power to decide employees’ salaries and conducts all
the performances in mining site and plant area.
9. President Director, Mr. Choi Jung Pil is currently Director of Auto Industrial
Group, he studied Business management in USA and worked as a marketing
manager in wireless solution company and researched new biz solutions (such as
Bluetooth and NFC) for mobile phone and automobile market.
10. PT. KMP has operated its plant for 3 years in Sintang, one of Korean staffs lived in
Indonesia over 20 years, he meets the local people for any occasion and incidents,
he knows how to deal with them and how to control them.
11. President Director, Mr. Choi Jung Pil: He is a marketing director for seeking a
business partner and for building new opportunities, he has a good network in
China, and he has several zircon end-users in China and Korea. He is also
involved a Korean Government zirconia project in a consortium with several
institutes and Universities, and it’s product is zirconia dental block for dental
implants market.
Mr. Yoo Seungkrok is currently Director of Auto Industrial Group, and also
Executive Director of PT. KMP, studied in University in Seoul, Korea, worked as
coordinator for overseas road project for a construction company, and joined IT
company and launched new IT products and proposed SI solution biz to customers.
Now he is like a trader for agricultural and mining items, and he is in charge of
Indonesian zircon project, he has ever traded palm oil related byproducts,
manganese ores and zircon sands.
12. For beneficiating (separating) mineral sands in plant, we need a plant manager
from China, mostly Bryan has ever met some plant managers in Hainan province,
KMP needs a Chinese plant manager who specialized in zircon, ilmenite rutile,
leucoxene, monazite as well. KMP has some rare earths as well. Rare earths needs
to be considered for next project.
13. For KMP’s zircon production, Bryan Yoo of General Manager is one of key
personnel who runs zircon project, and a local site manager/a local plant manager/a
Chinese zircon manager, they are also key people in KMP’s zircon production.
14. Normally we ask for advices to Manufacturers of machine “Gelin Mining
Machinery (China)” and “Minerals Technologies (Australia)”.
15. Management has regularly avenues with employees such as sports activities and
seminars for zircon related industry.
16. Sketch a diagram of lines of authority for your operation.

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Figure 7 : Diagram of lines of Authority
E. Ownership Structure
1. The primary stakeholders are PT. R&R A Indonesia and Christian Sung, a silent
partner, the details are as follows;
Figure 8 : List of primary stakeholders
2. As described on the above, Auto Industrial Group in Korea established the joint
venture company with PT. R&R A Indonesia to establish PT. KMP, which is PT.
R&R A Indonesia owns 70% of shares of PT Kalimantan Minerals Persada, and
the Foreign Partner Mr. Christian Sung is a kind of silent partner, he involves in
management of PT. KMP at all as the Director/President.
3. For export zircon sand, we are ready for production, what we need is to meet the
minimum specification of exporting zircon sand, which is 65.5%(ZrO2 + HfO2).

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But for ilmenite/rutile sand, we need export quota which can be processed in
Ministry of Trade, we had checked that it would take about 3 months to get export
quota from the ministry.
For the drilling, exploring and mining PT. KMP has the licenses issued by the
Local Government of the Republic of Indonesia.
For the Indepdent surveyor, PT. KMP has appointed the PT. Sucofindo, Jakarta
Office https://www.sucofindo.co.id/.
For the Drilling, Mining and Exploring, PT. KMP has appointed the Intertek,
Indonesia Branch Office, http://www.intertek.com/contact/asiapacific/indonesia/
F. Social Responsibility
1. In Indonesia, we have Reclamation policy, before zircon production, we submit
plan for reclamation in the mining area, and after mining zircon, we have to
backfill and plant some trees. But for backfiling in Zircon mining, land is
automatically backfilled during zircon production. So, it costs not much comparing
with general coal mining.
2. We do not use any chemicals for zircon production, we only separate zircon sands
out of other minerals.
3. In our processing plant, near our plant we do not have any local residents nearby,
and our plant is around 150 meters away from main road, so there will be no local
issues for the noise/dust/timing/odour. And for mining site as well, there are no
residents living in our mining site, our location is at least 1-2 km away from local
village.
Figure 9 : Satellite photo of zircon Plant

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4. Basically, company has to not only look more profitable, but also enlighten local
people and develop local communities by creating jobs and giving more
opportunities and visions in the communities.
5. In Indonesia, there have been many changes in regulations and acts by
Central/Local Governments, So, we have to follow up any changes in these
regulations.
6. We have a safety manager who can train employees not exposed to hazardous
materials, and we train employees to get used to operational manuals for machine
and equipment.
G. Internal Analysis
1. Our strengths are high deposit of zircon in mining area, and we can sell byproducts
as well which were separated during zircon production, such as ilmenite, rutile,
leucoxene and gold.
Our weakness is that KMP’s zircon sand does not have any brand power in zircon
industry, KMP needs to enhance its brand power by continuous production and
supply.
2. SWOT Analysis.
Figure 10 : SWOT Analysis for zircon project.
3. Firstly, it is High zircon reserve of 130,000,000 ton of zircon ore(equivalent to
1,000,000 ton of zircon final product) in mining area and secondly, we have zircon
expertise are ready for zircon production. Thirdly, we have various mineral sands
which we can sell in the market.

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4. We can build on producing value added byproducts, for example, rutile is generally
used for making welding rods, we can consider welding rod plant near our plant.
Also we can consider adding values on rare earth elements(REE) in our mining
area since we have monazite in river sands.
4.1. Location
Currently, PT KMP has 2 offices and located as follow:
a. c/o PT. R&R A Indonesia
Ruko Citra Grand R7/16, Kelurahan Jatiraden, Kecamatan Jatisampurna
17433, Bekasi West Java Province the Republic of Indonesia
Telp/Fax. +62 21 2906 5662
b. Jl. Prof. DR. M. Yamin No. 88 E-F RT.002/RW.009
78121, Kelurahan Kota Baru Kecamatan Pontianak Selatan
West Kalimantan Province the Republic of Indonesia
4.2. Resources
The resources of PT. KMP will devided into:
a. Human Resources
PT. KMP has deployed 2 (two) man power as the expertriate who hold
the position on the Board Management as Directors, and local man
power for the business back up like administration and hard worker to
provide the operational of company.
b. Equipment and Machinery
For the Zircon Project, PT. KMP imported for all the equipment and
machinery to drilling, exploring and mining.
c. Technology
Zircon is a common accessory to trace mineral constituent of most
granite and felsic igneous rocks. Due to its hardness, durability and
chemical inertness, zircon persists in sedimentary deposits and is a
common constituent of most sands. Zircon is rare within mafic rocks
and very rare within ultramafic rocks aside from a group of
ultrapotassic intrusive rocks such as kimberlites, carbonatites, and
lamprophyre, where zircon can occasionally be found as a trace mineral
owing to the unusual magma genesis of these rocks.
Zircon forms economic concentrations within heavy mineral sands ore
deposits, within certain pegmatites, and within some rare alkaline
volcanic rocks, for example the Toongi Trachyte, Dubbo, New South
Wales Australia in association with the zirconium-hafnium minerals
eudialyte and armstrongite.

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Australia leads the world in zircon mining, producing 37% of the world
total and accounting for 40% of world EDR (economic demonstrated
resources) for the mineral. South Africa is Africa’s main producer, with
30% of world production, second after Australia.
3. ABOUT PRODUCTS AND/OR SERVICES
Zircon: Raw material for zircon silicate used for ceramic, refractories, foundries, Basically,
KMP plans to sell zircon sands to mostly zirconium silicate companies in the market.
Ilmenite: Ilmenite is blended and processed to create titanium dioxide, a high quality white
pigment which is ultraviolet (UV), water and chemically resistant while also being non-toxic.
More than half of all titanium dioxide pigment is used in the production of paints (household,
industrial and automotive etc.) as it reflects the sun’s harmful UV rays and protects paint
from peeling. Titanium dioxide is also an important ingredient in the manufacturing of
sunscreen, cosmetics, plastics, ink, paper, toothpaste and some foods such as flour and icing
sugar to improve their brightness, raw material for titanium dioxide used for titanium
pigment industry.
KMP wish to sell ilmenite sands to titanium dioxide companies.
Rutile: Rutile is used in three major applications: titanium dioxide pigment, flux core
welding wire and titanium metal production.
Rutile, when processed into titanium dioxide pigment, can be used in the same products as
ilmenite. Rutile is sometimes the preferred source for titanium dioxide pigment as it provides
the most efficient product with the least waste in manufacture.
KMP wish to sell rutile sands to titanium dioxide companies.
Others: Gold, Monazite, Leucoxene, Rare Earth.
1. KMP’s zircon sand is not a unique product. But KMP only can try to make our zircon
best quality.
If KMP zircon sand is already approved and get reputation by many end-users, KMP
zircon sand can be sold in the market easily.
Zircon market price has potential increase on the demand and price for a few years a go,
below:

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Figure 11 : Zircon Supply Demand Price
(Source) TZMI
Figure 12: Zircon sand ready for shipment in KMP plant.

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Figure 13: KMP Zircon sand being inspected by Jakarta buyer.
Figure 14: KMP Zircon sand being inspected by Jakarta buyer.

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2. KMP is producing raw material (mineral sands) which processed more precisely
beneficiated from river sands.
3. For price-wise, Indonesian zircon sand stands around 5% lower than the price of
Australian iluka zircon sands, but for the quality-wise, there is no big difference
between Indonesian sands and Australian sands. Concerns on Indonesian Sands for end-
users are how much volume we supply continuously.
4. KMP has drilled in 2012 and 2017, KMP did best survey in the mining area and
conducted internal feasibility study for the mining area. They had ever operated mining
site and processing plant from 2014 to 2016. These researches and experiences will help
KMP to facilitate in resuming zircon production.
4. INTERNAL MARKET ASSESSMENT
A. Examining the General Market
1. More than 50% of all zircon is used in the ceramics industry due to zircon’s ability
to impart opacity, (whiteness and brightness) and to create glazes on products such
as tiles, sanitary-ware (baths, sinks and toilets) and crockery. Zircon is a hard and
tough material as it maintains its physical and chemical composition when
subjected to high temperatures and corrosive environments. It is an extremely good
foundry and refractory material, used in refractory bricks, especially in furnaces for
steel and glass making.
Figure 15 : Zircon market worldwide.
(Source) Iluka reports

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2. This table shows various segments in zircon market.
Figure 16: Zircon market segments
(Source) Iluka reports
3. What zircon customers need is steady supply of zircon product with stabilized
specification from Indonesia. End-users know that Indonesian zircon is almost
similar to the Australian sand, even the impurities of TiO2 is a bit lower than
Australian sands.
4. Zirconium is fundamental raw material in many industrial sectors and substitutes
are also not abundant in worldwide resources so far. This would make zircon more
specific raw material for current and future market.

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Figure 17: Zircon market trends
According to the figure 14 on the above, it implies that modernization, thrifting and
substitution in ceramics reached limits.
And digital printing could bring higher quality tiles (higher zircon content) to
traditionally low quality markets(India/Brazil) and has allowed emerging producers
to compete easier.
As thus, we see this trend to higher quality tiles positive for zircon (both volume
and value-in-use)
5. Demand of Zircon is increasing so fast last 2 years, and will increase 1.7 mil ton by
2024. Approximately 1,000,000 ton of zircon reserve in KMP zircon mine is one of
opportunities and threats will be new enrtrants, but we are already one of frontiers
of zircon mining company in Indonesia, we produce our zircon sand systematically
and we will provide assurance for our sands to end-users. We sure we can compete
with any other entrants.

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6. Zircon Five Forces Model
Figure 18 : Zircon Five Forces Model.
For new entry, KMP can compete with new entrant by assuring product quality
through producing systematically and separation know-how of mineral sands.
For suppliers power, KMP can manage local people who worked in mining area,
which enhance its productivity. And for buyers power, KMP can give assurance on
its product quality.
Regarding substitute, we see currently, there is some substitute for zircon sand, but
they are not abundant in resource market, this makes zircon more specific raw
material. And KMP also try to find add valued products from the mineral sands.
This is what we can think of.
7. The global zirconium market is expected to grow at a CAGR of approximately
6.4% during the forecast period (2018-2024). The major factor driving the market
growth is the growing use of zirconium in foundries and refractories. Furthermore,
a strong growth in the global automobile production and mechanical engineering
industries is stimulating the demand for cast parts, which, in turn, is accelerating
the growth of zirconium market.
8. The ceramic industry is the largest end user of zircon. Urbanization is the leading
driver of the ceramic industry. The living standards are directly linked to the use of
ceramics. Asia-Pacific is leading consumer of ceramics, and China and India
account for the majority of the ceramic market, followed by Vietnam and Indonesia
in the Asia-Pacific region. The substitutes for zircon include white clay, feldspar,
and kaolin in ceramics. However, these minerals lack the properties of zircon,
hence limiting their use and efficiency.

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9. KMP’s mining license is already issued with export permit, so, there will be no
legal issues for the permits.
For environments, KMP needs to backfill when KMP closes zircon mine. But the
cost of backfill is not much since KMP uses wet zircon mining that means that land
is likely to be backfilled right away while KMP is producing middling ores in
mining pit.
For regulations, they may be changed frequently by Indonesian Government, we
need to follow up all the regulations & acts issued by the Government as we do in
most developing countries.
B. Customer Analysis
1. For the buyers of zircon sand, mostly they are zircon silicate companies who
produce zircon powder of 325 mesh by milling zircon sands, some of zircon
silicate companies also produce titanium dioxide by milling ilmenite and rutile.
Some refractory company uses zircon sand as well but its spec is a bit lower than in
ceramic industry.
In this regard, KMP prefers to sell to zircon silicate companies.
2. KMP sells zircon sands (about 60 mesh) to zircon silicate companies and zircon
chemical/zirconia companies, and KMP also sells ilmenite and rutile to TiO2
pigment producers.
3. In Indonesia, KMP (Including PT. R&R A Indonesia) has experienced in many
other businesses over 10 years, we see problems to customers are quality control
and stable production volume from mining area.
KMP’s zircon reserve is approx. 1,000,000 ton, and KMP has systematic
production flow which was organized/built by our expertise team who already
experienced in coal mining in Indonesia and sand mining in Hainan province in
China. KMP’s professionals will manage/control all the production process in
order to achieve efficient zircon production volume.
4. We assume that for retaining a customer, most important thing is keep a promise,
for instance, the quality of zircon should be continuously steady from our
processing plant, because some customers still worry about quality of Indonesian
zircon sands.
5. KMP has customer service management strategy as follow:
5.1. Respond as quickly as possible.
One of the biggest factors in good customer service is speed, especially
when a client is requesting something that’s time sensitive.

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5.2. Know the customers needed.
Great interactions begin with knowing your customers wants and needs.
Customers love personalization. Get to know your customers, remember
their names and previous conversations. If needed, make a note of what was
discussed previously so you can refer to it the next time you meet, for an
example: when Starbucks launched a new campaign focusing on improving
relationships between their staff and customers, each person who introduced
themselves by name received a free latte. In total, more than 350,000 free
drinks were given away.
5.3. Fix your mistakes
Not taking responsibility of your mistakes is a sure fire way to getting a bad
reputation. Transparency is important in business and customer service is no
different. Always strive for a high quality output as it shows you have a high
level of standards, for an example: An Amazon customer ordered a new
PlayStation for his son for Christmas. When the shipping company delivered
the parcel, the customer was away and had a neighbor sign for the package.
The neighbor left the package outside the customer’s house (in which it soon
disappeared). When the customer realized what had happened, he was left in
complete shock.
Even though Amazon was not to blame for this mistake, they were quick to
resolve this by not only sending a new PlayStation in time for Christmas, but
did not charge for the extra shipping.
5.4. Go the extra mile.
Going the extra mile will not only result in an indebted and happy customer,
it can also go a long way in terms of keeping yourself on their radar for
future business.
A three year old named Lily Robinson wrote a letter to Sainsbury’s, a UK
grocery store, a letter asking why ‘tiger bread was called tiger bread and not
giraffe bread?’. To Lily’s surprise, Chris King, the customer service
manager of Sainsbury’s responded with “I think renaming it to giraffe bread
is a brilliant idea!”. Several months later, the bread was renamed to giraffe
bread.
5.5. Think long term – A customer is for life.
Think long term when dealing with customers. By keeping customers happy,
they will be loyal and through word of mouth, will do the marketing for you.
C. Industry Analysis
The Global market for zirconium is projected to reach 1.7 mil by 2024, driven by the
growing demand for ceramic wall and floor tiles and expanding applications of zircon metal,
zirconia and zirconium-based chemicals. Chemical and physical properties of zirconium
which are beneficial in a wide range of application areas include high flammability; high
resistance to corrosion by alkalis, acids, and salt water etc. ; lightweight when compared to
metals such as steel, strong and high strength with hardness similar to copper.

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Other factors benefiting market prospects include increasing urbanization and the resulting
demand for zirconium-based construction materials such as sanitaryware and tableware;
emerging new uses of zirconium alloys in dental implants and orthopedic prosthetics given
their high fracture toughness and abrasion resistance; proposed additions in nuclear power
capacity against the backdrop of the focus on carbon free electricity and the resulting
demand for zirconium metal in nuclear reactor cores and rods.
China represents the largest market worldwide, supported by the massive domestic
production capacity for zirconium sponge. Asia-Pacific, excluding China, ranks as the fastest
growing market with a CAGR of 6.4%, over the analysis period led by factors such as
increasing establishment of foundries, refractories, and metal processing plants.
Figure 19: Zircon sands imported in China for last 7 years.

26
Figure 20: Indonesian Zircon sands price trend.
(Source) Asian Metal.com
Figure 21: Indonesian Zircon sands price trend.
(Source) Asian Metal.com

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D. Strategic Alternatives
R&D
At KMP, we are laser focused to understand, recognize, conceptualize, and engineer easy-to-
use tools that solve everyday problems and stand by them from project start to finish. Our
diverse in-house engineering capabilities include custom chip design, software and firmware,
display technology, mechanical design, rapid prototyping, and industrial design intended for
a lifetime of rugged use.
DESIGN
We keenly research, review, and propel the best of the best with our mantra “Form fits
function.” Our industrial design emphasizes real world usage. Every curve, every angle,
from the battery door release, power button, ergonomic grip, viewing angles, pivot points –
no detail is too small or insignificant. While often imitated, we are never duplicated with all
Zircon®
products being highly proprietary and well protected by patents.
QUALITY
KMP’s customer motivation expands into all areas of our operations, including our efficient
and tightly controlled assembly operations utilizing highly-refined technologies, supplier
partnerships, just-in-time inventory, and on-line integration. All components and facilities
are controlled and/or monitored by Zircon to ensure rapid delivery of high-quality products.
TO BE THE THE LEADER
There’s a reason why, since the inception of the original StudSensor™
, we are the #1 choice
for both miners and professionals. Our long-lasting, high-quality, and innovative tool line
continues to set industry standards. We’re continuously raising our own expectations of what
we design, deliver and provide to end users worldwide. Expect no less than the very best
from KMP – we are the tool experts.
5. RUN STRATEGY IMPLEMENTATION
A. Production
1. KMP uses spiral separators in mining area and we increasing the mineral grade of
HMC (Heavy mineral Concentrate) by beneficiating raw materials before processing
in plant. This is how KMP produces zircon sand in the mining pit.

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Figure 22: Zircon Production Process.
Figure 23 : Spirals operation in mining site.

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Figure 24: Middling ore processed from spirals in mining site.
2. KMP produces zircon sand with quality of 66% (ZrO2+HfO2) which processed from
raw materials (HMC, grade is around 20%)
Figure 25: KMP’s Zircon Sand Spec
3. KMP has experienced in zircon mining and production, they have expertise in our
team who are able to produce stable quality of zircon.

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4. Spiral Benefication, Magnetic Benefication and Electric Benefication. These are
typical processes for separating zircon efficiently from other mineral sands.
5. We will process the producing product, below Figure 26, This is how KMP produces
zircon and other mineral sands.
Figure 26: Zircon production process
Figure 27 : Comparsion table for zircon sand
PT. KMP 2018.10.20
(Zr.Hf)O2 ≥ 66.686% (Zr.Hf)O2 ≥ 66% (Zr.Hf)O2 ≥ 66% (Zr.Hf)O2 ≥ 66% (Zr.Hf)O2 ≥ 66% (Zr.Hf)O2 ≥ 66%
TiO2 ≤ 0.07% TiO2 ≤ 0.10% TiO2 ≤ 0.10% TiO2 ≤ 0.10% TiO2 ≤ 0.12% TiO2 ≤ 0.15%
Fe2O3 ≤ 0.03% Fe2O3 ≤ 0.10% Fe2O3 ≤ 0.10% Fe2O3 ≤ 0.10% Fe2O3 ≤ 0.06% Fe2O3 ≤ 0.10%
(Zr.Hf)O2 ≥ 65% (Zr.Hf)O2 ≥ 65% (Zr.Hf)O2 ≥ 66% (Zr.Hf)O2 ≥ 65% (Zr.Hf)O2 ≥ 65%
TiO2 ≤ 0.30% TiO2 ≤ 0.30% TiO2 ≤ 0.10% TiO2 ≤ 0.15% TiO2 ≤ 0.15%
Fe2O3 ≤ 0.15% Fe2O3 ≤ 0.25% Fe2O3 ≤ 0.10% Fe2O3 ≤ 0.10% Fe2O3 ≤ 0.10%
South Africa
Premium Sand
Tronox(Former:Namakwa)
Standard Sand
Australia
South Africa
RBM-ZIG
Indonesia
Indonesian Zircon
Premium Sand
South Africa
RBM-ZSG
Standard Sand
South Africa
Premium Sand
Tronox (Former:Tiwest)
China
Comparison Table of Zircon Sand
Iluka-MB Premium
Premium Sand
Indonesia
PT. KMP Zircon Sand
Premium Sand
Australia
Iluka-Eucla Premium
Premium Sand
Australia
Premium Sand
RBM-ZUG
Standard Sand
Vietnam Zircon
Vietnam
Standard Sand
Hainan Wenchang
As you see comparison table of KMP zircon sand specification, it shows that KMP
zircon sands are relatively excellent in content of zircon and impurities which can be
competing with other zircon sands in the market.

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6. Motivation is more important for develop business unit, it will lead you work more
actively and more efficiently.
7. Enterprise Expansion
When we achieve producing on 1,000 ton/month, we will establish new business
what will provide directly on shipping, for more benefits such as reduce operational
costs and expenses and get more profit.
8. Integrate
Shipping and mining is the integrate business, and will become on single point
customer service for zircon product.
9. Network.
So long Mr. Yoo Seungkrok, the Director of KMP has experience on business trade
for Zircon Product and most of the customers has known.
10. What is the anticipated timeline?
Jan 2019 : funds are invested (loan).
Jan 2019 – end of May 2019 : installed all new equipments and machinery
June 2019 – end Dec 2019 : start produce 500 ton/month
Jan 2020 – long term : start produce 1,000 ton/month
B. Resource Needs
In order to effectively organize our business, we deploy the resources are available.
1. Human
For mining site, we need a site manager who controls/educates local labors to work
properly and he also experienced in sand & gold mining. And for processing plant, a
kind of electric engineer with experienced in zircon processing is needed as well.
KMP already has local and Chinese manager for zircon project.
KMP has already operated its processing plant, they already have production managers
for mining site and processing plant.
2. Financial
When was starting the Zircon Project, KMP has already invested US$. 7,500,000 (seven
million and fife hundred thousand United State Dollars).
For initial stage of project, KMP needs US$. 6,000,000 (six millions US$) for
producing additional 500 ton of zircon sand per month, and they will produce 1,000 ton
per month with operational fund of US$. 6,000,000 (six millions US$).

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The financial purpose for US$. 6,000,000 (six million United State Dollar) will used to:
2.1. US$. 2,000,000 - for the operational costs
2.2. US$. 4,000,000 - for purchase new equipment and machinery to replacement
the existing.
3. Physical
KMP produces 1,000 ton of zircon sand (ZrO2+HfO2 : 66%) per month, besides we get
2,500 ton of ilmenite and around 20 ton of rutile sand.
In order to produce 1,000 ton per month, KMP needs spirals, magnetic separators, some
equipment.
Mining Site:
Zircon feeding material 130,000 ton/month
And processed by spirals, we get approx. 5000 ton middling ore (ZrO2 20%) / month
Processing Plant :
KMP processes middling ore in KMP plant and final zircon (ZrO2+HfO2 : 66%) will be
1000 ton per month.
C. Sourcing/Procurement Strategy
1. Firstly, we generally consider quality of product and its technical services, we already
had purchased machine from China and Australia, their products and services are
mechanically well designed with expected separation functions, and we plan to order
again to the manufacturers. Especially technical supports are fast and excellent from
them.
2. Mostly we search reliable suppliers from internet, we judge them by their experience,
mostly mining machinery suppliers are based in China, Australia, and Malaysia.
D. Marketing Strategy
1. Over 50% of zircon sand is used as an opacifier in the ceramics industry with other end
uses being foundry applications and specialty markets. Over the past few years global
zircon demand was relatively steady at 1.1m tpa, However demand is expected to grow
over the next 5 years in line with global GDP at ~3% per annum.
Market demand of Zircon Sand is dominated by China (50%) and Europe (20%) and
now we see emerging market in India as well. Thus, we plan to focus on China, Europe
and India market.
2. Mr. Yoo Seungkrok, Director of KMP has ever attended in Zircon Conference in China
so, mostly KMP wish to promote its products in Zircon Conferences organized by
Ruidow or TZMI.

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3. Over 50% of zircon is consumed in ceramic industry, and 30% is in refractory &
foundry, and 20 % used in Zirconia/Zircon Chemicals. KMP sells its zircon to zircon
silicate producers and they are mostly based in Xiamen, Guwangzhou and Hainan
Province in China. And Executive Director Mr. Yoo Seungkrok has already visited
several end-users’ zircon silicate plants. He plans to sell zircon sand to the zircon
silicate companies since mostly they need around 3000 ton of zircon sand raw material
for producing 3000 tons of zircon silicate per month.
4. KMP has ever sold zircon to an Indonesian silicate company in Jakarta, for the zircon
sand, Mr. Yoo Seungkrok Director of PT. KMP has already acquainted with some
buyers in China. Once KMP starts supplying zircon in the market, KMP wish to make a
6 month (or so) contract with end users.
5. In Zircon Sand Industry, China is the biggest market, and consumes 500,000 – 600,000
ton per year which is 50% of zircon in worldwide. KMP prefers to have a long term
contract with some Chinese buyers. And also KMP prefers to export to European
market as well since mostly the import price in Europe is a bit higher than the price
transacted in China.
6. KMP has produced zircon sand from 2015 with a Chinese manager who experienced in
zircon processing in Hainan Province, China. And they tested zircon products during
pilot productions with Intertek, CCIC in Jakarta, and the quality of KMP zircon was
over 66% which is considered to be acceptable in the market. And they had ever
supplied 150 ton zircon to a zirconium silicate company in Jakarta in 2015. So, we are
sure that KMP is qualified supplier of zircon sand Indonesia.
Mr. Yoo Seungkrok also has traded 250 ton of zircon sand to China in 2016, he
received L/C in favor of Auto Industrial Group in Korea, and he exported zircon to
China end-user in Xiamen in the name of other zircon plant in Pontianak since PT.
KMP was not ready for production.
7. For pricing zircon sand, we have an index price in Asianmetal.com or Ferroalloy.net
After we check the current prices of Australian Iluka sand prices, and we offer our
prices a bit lower than the price of Iluka zircon sand.
And for pricing Ilmenite and Rutile, we do the same for pricing.
E. Hedging, forward pricing, options.
The ultimate purpose of hedgiing, forward pricing, options are to prepare for risk mitigation.
The mitigation includes reduction of the likelihood that a risk event will occur and/or
reduction of the effect of a risk event if it does occur.
5. Risk Mitigation
Our Risk Mitigation for the strategies and analysis are:
a. Characterize the root causes of risks that have been identified and quantified in
earlier phases of the risk management process;
b. Evaluate risk interactions and common causes;

34
c. Identify alternative mitigation strategies, methods, and tools for each major risk;
d. Assess and prioritize mitigation alternatives;
e. Select and commit the resources required for specific risk mitigation alternatives;
f. Communicate planning results to all departmenets for implementation.
6. Risk Response and Mitigation Tools
Some risks, once identified, can readily be eliminated or reduced. However, most risks
are much more difficult to mitigate, particularly high-impact, low-probability risks.
Therefore, risk mitigation and management need to be long-term efforts by project
directors throughout the project.
a. Responding to the Level of Uncertainty
If a project is determined to have a low level of uncertainty, then the optimal policy
is to proceed expediently in order to increase the present value of the project by
completing it as soon as possible and thereby obtaining its benefits sooner. Fixed-
price contracts, perhaps with schedule performance incentives, are appropriate for
this type of project. Everything else being equal, projects that take longer generally
cost more and deliver less value to the owner.
b. Dealing With High-Impact, Low-Probability Risks
High-impact, low-probability events in general cannot be covered by contingencies.
In these cases, the computation of the expected loss for an event as the product of the
loss if the event occurs times the probability of the event is largely meaningless.
c. Risk Transfer and Contracting
There is a common adage about risk management—namely, that the owner should
allocate risks to the parties best able to manage them. Although this sounds good, it
is far easier said than done. It is impossible, for example, to assign risks when there
is no quantitative measurement of them. Risk allocation without quantitative risk
assessment can lead to attempts by all departments to shift the responsibility for risks
to others, instead of searching for an optimal allocation based on mutually
recognized risks.
d. Risk Buffering (Hedging)
Risk buffering (or risk hedging) is the establishment of some reserve or buffer that
can absorb the effects of many risks without jeopardizing the project. A contingency
is one example of a buffer; a large contingency reduces the risk of the project
running out of money before the project is complete. Buffering can also include the
allocation of additional time, manpower, machines, or other resources used by the
project. It can mean oversizing equipment or buildings to allow for uncertainties in
future requirements.
e. Risk Avoidance
Risk avoidance is the elimination or avoidance of some risk, or class of risks, by
changing the parameters of the project. It seeks to reconfigure the project such that
the risk in question disappears or is reduced to an acceptable value. The nature of the
solution may be engineering, technical, financial, political, or whatever else
addresses the cause of the risk. However, care should be taken so that avoiding one
known risk does not lead to taking on unknown risks of even greater consequence.

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f. Risk Control
Risk control refers to assuming a risk but taking steps to reduce, mitigate, or
otherwise manage its impact or likelihood. Risk control can take the form of
installing data-gathering or early warning systems that provide information to assess
more accurately the impact, likelihood, or timing of a risk. If warning of a risk can
be obtained early enough to take action against it, then information gathering may be
preferable to more tangible and possibly more expensive actions.
F. Contracting
Currently, KMP does not use the contracting agency to provide the marketing service,
regarding all the customers make direct contract sale and purchase the zircon product to
fulfil their need.
We can supply diectly the zircon product to the worldwide market demand, regarding the
demand for the zircon material always ask the miners location, and KMP has the resources
and can supply directly for zircon material.
For the production operator, KMP does not need the service provider. All the resources for
zircon miners have owned by KMP, but regarding we need the capitalization to be used
replacement the equipment and machinery, then we will run well.
The standard requirement of the service miners provider is the equipment and machinery
should ready and owned by the KMP. The service miners provider only supply the
manpower to be the operator of the miner, or with the favourite called, the service provider is
the outsourcing company for the man power.
G. Assets, Liability and Insurance
Profit & Loss: Revenue – Expenses = Net Profit
You probably already look at this report frequently to check up on your total revenue and
expenses. At the end of the year, your total expenses are subtracted from your total income
to calculate your profit. All business owners are familiar with the profit and loss equation,
because it can give you a clear picture of where the money is coming from and where it’s
being spent.
But the profit and loss alone doesn’t show you everything. Here’s why.
Balance Sheet: Assets = Liabilities + Equity
The other report that small business owners need to understand is their balance sheet. It
includes a summary of your total assets, liabilities, and equity. Many small business owners
know that the balance sheet is important, but they don’t really understand what it’s telling
them.

36
While the purpose of the P&L is to show how your business performed over a specific time
period, the purpose of the balance sheet is to show the financial position of your business on
any given day. The balance sheet can tell you how much money your business has in the
bank and how likely it is that your business will be able to meet all of its financial
obligations.
It can also tell you how much profit (or loss) the business has retained since it started.
Assets Liabilities Equity
Assets: What You Have
An asset is something the business owns. Some common asset accounts include cash or bank
accounts, accounts receivable (monies owed to you by your customers), inventory, fixed
assets (buildings, machinery, or furniture), and investments. Intangible assets like patents,
trademarks, or non-compete covenants count, too.
Asset accounts are classified as either short term, or long term. A short-term asset means that
the asset will be used, sold, or liquidated to pay for liabilities within a year; and a long-term
asset won’t be used or sold within the year.
Liabilities: What You Owe
Balance sheet liabilities are what the business owes, whether to an individual, another
business, or an institution, like a bank. Some examples of liabilities are accounts payable
(monies owed to your vendors), business loans, and amounts owed to customers for gift
certificates or prepaid services. Liability accounts are classified just like asset accounts—
either short- or long-term.
Equity: What You Really Own
Equity can be looked at as the net worth of the business. If we rewrite the equation for the
balance sheet another way, it actually makes much more sense: Assets – Liabilities = Equity.
Equity accounts take the form of contributions (money invested into the company),
distributions (money taken out of the company by the owners), and retained earnings (the
cumulative profit or loss of the business since its inception). At the end of each fiscal year,
the net profit (or loss) from the profit and loss is added to (or subtracted from) retained
earnings and the amounts in the income and expense accounts reset to zero.
Depending on the business entity, equity accounts can have many different names. For sole
proprietors, for example, their equity accounts are usually called Owner’s Equity for money
put into the business, and Owner’s Draw for money given back to the owner. And a
corporation has a Common Stock account (the initial investment into the company),
Additional Paid in Capital (APIC, or additional amounts invested by the shareholders), and
Shareholder’s Distributions or Dividends Paid (amounts taken out of the company by the
shareholders as a return of their investment or share of the company’s profits).

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H. Performance Standards
1. Miners Operation: ISO 14001 – 2015
ISO 14000 is a family of standards related to environmental management that exists to
help organizations:
a. Minimize how their operations (processes, etc.) negatively affect the environment
(i.e. cause adverse changes to air, water, or land);
b. Comply with applicable laws, regulations, and other environmentally oriented
requirements;
c. Continually improve in the above.
2. Asset Management Standard: ISO 55001 – 2014
Standardization in how business is grown and managed Increased concern over risk
awareness Industrial disasters, financial instability, civil unrest and economic duress of
certain nations Balancing force for international trade.
The Fundamentals of Asset Management:
2.1. Assets exist to provide value to the organization and its stakeholders Value
2.2. Asset management translates the organizational objectives into technical and
financial decisions and plans Alignment
2.3. Leadership and workplace culture are determinants of realization of value
Leadership
2.4. Asset management gives assurance that assets will fulfill their required purpose
3. Quality Management: ISO 9000 - 2008
ISO 9001:2008 specifies requirements for a quality management system where an
organization needs to demonstrate its ability to consistently provide product that meets
customer and applicable statutory and regulatory requirements, and aims to enhance
customer satisfaction through the effective application of the system, including
processes for continual improvement of the system and the assurance of conformity to
customer and applicable statutory and regulatory requirements.
4. Finance and Accounting Standard.
International Financial Reporting Standards, usually called “IFRS”, they are standards
issued by the IFRS Foundation and the International Accounting Standards Board
(IASB) to provide a common global language for business affairs so that company
accounts are understandable and comparable across international boundaries. They are a
consequence of growing international shareholding and trade and are particularly
important for companies that have dealings in several countries.
The characteristics Financial and Accounting Standard:
4.1. Objective of financial statements
4.2. Qualitative characteristics of financial information
4.3. Elements of financial statements
4.4. Recognition of elements of financial statements
4.5. Capital Concept and capital maintenance
a. Concepts of capital
b. Concepts of capital maintenance and the determination of profit

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4.6. Requirements
4.7. Criticisms
5. We use the International Standard procedure, to achieve:
5.1. Quality address how well the work is performed and/or how accurate or how
effective the final product is. Quality refers to accuracy, appearance, usefulness,
or effectiveness.
5.2. Quantity addresses how much work is produced. A quantity measure can be
expressed as an error rate, such as number ore percentage of errors allowable per
unit of work, or as a general result to be achieved. When a quality or quantity
standard is set, the Fully Successful standard should be high enough to be
challenging but not so high that it is not really achievable.
5.3. Timeliness addresses how quickly, when or by what date the work is produced.
The most common error made in setting timeliness standards is to allow no
margin for error. As with other standards, timeliness standards should be set
realistically in view of other performance requirements and needs of the
organization.
5.4. Cost-Effectiveness addresses dollar savings to the Government or working within
a budget. Standards that address cost-effectiveness should be based on specific
resource levels (money, personnel, or time) that generally can be documented and
measured in agencies' annual fiscal year budgets. Cost-effectiveness standards
may include such aspects of performance as maintaining or reducing unit costs,
reducing the time it takes to produce a product or service, or reducing waste.
6. What output levels could you attain?
Jan 2019 : funds are invested (loan).
Jan 2019 – end of May 2019 : installed all new equipments and machinery
June 2019 – end Dec 2019 : start produce 500 ton/month
Jan 2020 – long term : start produce 1000 ton/month
7. What efficiency levels will you reach?
On 2014 - KMP has achieved efficiency up to 30%
8. What procedures will be used to monitor performance? To monitor the performance,
KMP will use International Standard Organization for Quality Management,
Production, Operation and Environment.
9. Who is responsible for monitoring performance? All the Department Head of KMP will
responsible for monitoring the performance of his organization, and Mr. Yoo
Seungkrok of the KMP Director will evaluate the result on every semester.
10. What industry benchmarks will be used to assess performance? We use the industry
benchmarks for Gold Dust Mining, Steam Coal Mining.

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FINANCIAL PLAN
A. Financial Projections
1. How will you fund the business?
On early, KMP ran the business for zircon supplier using capital originating
from the deposit of capital from the shareholders, to carry out export trade
transactions to several business partners who already had an emotional
relationship, especially on the network owned by the Founder, Shareholders,
Directors, making it easier to build business trust to supply Zircon.
After a year of running a business, in 2012, KMP received the title of Award as
“the Best Supplier for Zircon product”, thus providing a challenge for KMP
Management to develop business as a miner and provider of Zircon materials.
2. What are your desired debt and equity position?
Most companies need a combination of equity and debt (from time to time) to stay
healthy and thrive. Often, business owners choose not to get equity from a third party.
Instead, they try to grow their equity from within.
Equity is the “at risk” capital in a company. Shareholders inject equity, either when the
company starts or from time to time when necessary. Profits left in the company on a
permanent basis also contribute to equity.
As a company makes net profits, it has two choices: dividend out the profits or hold
onto them as equity. If you are a partnership or limited liability company, the term for
taking profits is distribution. If you are a sole proprietor, you would take them as
owner’s draw.
Retained earnings are the profits that stay in the company and contribute to the net
worth of a company. To be healthy, a company should have positive retained earnings.
Sometimes companies use their equity to support operations during a tough economic
cycle. Occasionally a company suffers enough losses to turn their positive retained
earnings to a negative position. Once retained earnings and equity are negative, the net
worth is also negative. When this happens, shareholders can put more capital into the
company to increase the cash equity base.
Companies can turn this negative equity position to positive if they can shave expenses
and turn losses around. Given enough profits, a company’s net worth can again turn
positive.

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3. KMP is searching the provider for the debt funds:
3.1. Financing company (investor, banking, insurance);
3.2. Business partner who interested on merger and acquisition
3.3. Holding company in Korea.
4. The role of leasing play in KMP financial strategy:
4.1. Free Cash Flow
This is a measure of the firm’s financial soundness and shows how efficiently its
financial resources are being utilized to generate additional cash for future
investments. It represents the net cash available after deducting the investments
and working capital increases from the firm’s operating cash flow. Companies
should utilize this metric when they anticipate substantial capital expenditures in
the near future or follow-through for implemented projects.
4.2. Economic Value-Added
This is the bottom-line contribution on a risk-adjusted basis and helps management
to make effective, timely decisions to expand businesses that increase the firm’s
economic value and to implement corrective actions in those that are destroying its
value. It is determined by deducting the operating capital cost from the net income.
Companies set economic value-added goals to effectively assess their businesses’
value contributions and improve the resource allocation process.
4.3. Asset Management
This calls for the efficient management of current assets (cash, receivables,
inventory) and current liabilities (payables, accruals) turnovers and the enhanced
management of its working capital and cash conversion cycle. Companies must
utilize this practice when their operating performance falls behind industry
benchmarks or benchmarked companies.
4.4. Financing Decisions and Capital Structure
Here, financing is limited to the optimal capital structure (debt ratio or leverage),
which is the level that minimizes the firm’s cost of capital. This optimal capital
structure determines the firm’s reserve borrowing capacity (short- and long-term)
and the risk of potential financial distress. Companies establish this structure when
their cost of capital rises above that of direct competitors and there is a lack of new
investments.
4.5. Profitability Ratios
This is a measure of the operational efficiency of a firm. Profitability ratios also
indicate inefficient areas that require corrective actions by management; they
measure profit relationships with sales, total assets, and net worth. Companies must
set profitability ratio goals when they need to operate more effectively and pursue
improvements in their value-chain activities.
4.6. Growth Indices
Growth indices evaluate sales and market share growth and determine the
acceptable trade-off of growth with respect to reductions in cash flows, profit
margins, and returns on investment. Growth usually drains cash and reserve
borrowing funds, and sometimes, aggressive asset management is required to
ensure sufficient cash and limited borrowing. Companies must set growth index
goals when growth rates have lagged behind the industry norms or when they have
high operating leverage.

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4.7. Risk Assessment and Management
A firm must address its key uncertainties by identifying, measuring, and
controlling its existing risks in corporate governance and regulatory compliance,
the likelihood of their occurrence, and their economic impact. Then, a process must
be implemented to mitigate the causes and effects of those risks. Companies must
make these assessments when they anticipate greater uncertainty in their business
or when there is a need to enhance their risk culture.
4.8. Tax Optimization
Many functional areas and business units need to manage the level of tax liability
undertaken in conducting business and to understand that mitigating risk also
reduces expected taxes. Moreover, new initiatives, acquisitions, and product
development projects must be weighed against their tax implications and net after-
tax contribution to the firm’s value. In general, performance must, whenever
possible, be measured on an after-tax basis. Global companies must adopt this
measure when operating in different tax environments, where they are able to take
advantage of inconsistencies in tax regulations.
5. Will you use outside investors for equity capital?
We will use outside investors for the equity capital base on our financial projection
below:
Figure 28 : Five Year Financial Projection
PT. KMP (Unit: Ton, $000)
Vol.(ton) Amount % Vol.(ton) Amount % Vol.(ton) Amount % Vol.(ton) Amount % Vol.(ton) Amount %
Zircon 3,000 4,350 12,000 17,400 12,000 17,400 12,000 17,400 12,000 17,400
Rutile 60 48 240 192 240 192 240 192 240 192
Ilmenite 7,500 1,275 30,000 5,100 30,000 5,100 30,000 5,100 30,000 5,100
5,673 22,692 22,692 22,692 22,692
Production 37.93% 37.93% 37.93% 37.93% 37.93%
Transport &
Other Costs
39.98% 42.62% 42.62% 42.62% 42.62%
37.34% 41.44% 41.44% 41.44% 41.44%
28.00% 31.08% 31.08% 31.08% 31.08%Net Profit 1,589 7,052 7,052 7,052 7,052
Corporate Tax (25%) 530 2,351 2,351 2,351 2,351
Profit Before Tax 2,118 9,403 9,403 9,403 9,403
Cost_Total 3,555 13,289 13,289 13,289 13,289
Tax & Other Expense 40 159 159 159 159
Depreciation 110 110 110 110 110
EBITDA 2,268 9,672 9,672 9,672 9,672
6,060 6,060 6,060 6,060
165 360 360 360 360
Costs
1,650 6,600 6,600 6,600 6,600
1,590
Revenue
Revenue_Total
Monthly 500 ton /6 mn Monthly 1000 ton Monthly 1000 ton Monthly 1000 ton Monthly 1000 ton
5 Year Financial Projection
Description
2019 2020 2021 2022 2023
6. KMP has strategic financial risks:
6.1. Identifying the financial risks, and their sources or causes.
a. Credit risk, or default risk, which arises from the inability of one party to pay
or fulfill its obligations to another, such that they will be in default. If a
company is unable to collect its receivables from customers, they will have
poor cash inflow and lost income.

42
b. Market risk, which arises from a decline in the market subsequently resulting
to reduced or lost value of investments. If the assets of the business will
decline in value, but all else remain the same, the net worth of the company
will also decline.
c. Liquidity risk, which arises when the assets or securities owned by the
business cannot be immediately converted into cash when needed. This results
to the business being in danger of defaulting on its obligations, such as
making loan payments to creditors and dividend payments to the owners and
investors. The owners or members of the board of directors may end up
becoming personally liable for the debts of the business.
d. Operational risk, which arises from problems or issues in the conduct of daily
operations of the business, such as machine breakdowns, failure of business
processes and manpower errors. Mistakes committed may result to
considerable financial losses, and that is simply one of the many operational
risks that businesses have to deal with on a daily basis.
e. Interest rate risk, which arises from drastic changes in interest rates,
particularly the sudden drops that lead to financial losses. This is often an
offshoot of the market risk, since interest rates are directly affected by
movements in the economy.
f. Foreign exchange risk, which arises from movements in foreign markets.
Foreign exchange rates of currencies will definitely have an impact on the
earnings of a business with foreign operations or conduct foreign transactions.
6.2. Measuring the level and impact of the financial risks and their effects.
a. Period or time horizon over which the financial risk is expected to take place.
A company may find the risk to be greater if it is unable to collect its
receivables over a three-year period than when customers are unable to pay
within one year.
b. Materiality. Cost-benefit analysis may show that certain costs are greater than
the benefits derived from then. Generally, higher incurrence of costs is seen as
more material and, therefore, more risky. A company may set a certain ceiling
or maximum amount for its materiality level, meaning if the losses exceed that
level, then it is material and, definitely poses high risk.
c. Volatility of economic and financial environment. Businesses that are in an
industry with a volatile nature, such as the banking industry or industries
subjected to frequent fluctuations of costs and interests, may set lower
thresholds for financial risk.
d. Confidence levels of managers. This is largely personal, on the part of the
members of management. Some managers are “braver” than others, so they
have higher tolerance for risks, while businesses ran by largely conservative
managers are bound to be more cautious.
6.3. Determining plans and strategies to address the risks, and implementing them.
a. Identification of periods of slow and low cash inflows through various
forecasting techniques, and planning cash budgets around them;
b. Close monitoring of cash inflows and outflows on a regular basis (e.g. daily,
weekly, bi-monthly or monthly);
c. Performing aging of receivables regularly to monitor payment of debtor-
customers to identify accounts that are already past due and take the necessary
action to collect them;

43
d. Sending communications or collection reminders to customers about their due
amounts; and
e. Maintaining a strong relationship with financial institutions, banks and other
lenders that the business has obligations to.
7. The operating procedures, such as developing cash flow budgets or spending limits, will
you have to ensure adequate money for debt repayment:
7.1. Determine the time frame for cash flow.
7.2. Estimate sales units.
7.3. Estimate timing of income.
7.4. Itemise and add expenditure.
7.5. Calculate the surplus or deficit for each time period.
7.6. Review sales units, timing of sales income and expenditure.
7.7. Finalise the budget.
8. What are the important assumptions that underlie your projections? These assumptions
may be associated with both external or internal factors.
Business plans are required for all small businesses seeking loans or investors. Financial
assumptions and projections are critical components of all business plans. Three
universal financial presentations are expected in all business plans. You must include a
projected income statement, balance sheet and cash flow statement for the coming three
to five years. Along with the numbers, include a narrative that explains your
assumptions and how the line items were computed.
8.1. Income statement
8.2. Balance sheet
8.3. Cash flow statement
9. Financial aspects of KMP will monitor:
9.1. Preparation of key financial statements;
9.2. Preparation of aged debtors trial balance;
9.3. Preparation of inventory records;
9.4. Preparation of working capital statements and financial ratios;
9.5. Preparation of funds and cash flow statements;
9.6. Analysis overhead;
9.7. Analysis marketing expenses
9.8. Analysis of HR
9.9. Creation dashboard and competitive analysis
10. The procedures will be used for monitoring overall business performance is
International Standard Organization, we use to monitoring the performance such as ISO
9000 – 2008, ISO 55001 – 2015, ISO 14000
11. The level of performance will shoot KMP’s targets for next year and in five years. They
should be financial performance standards used to monitor the overall business.

44
B. Contingency Plan
1. What will you do if you can’t follow through with your primary plan?
We will try with another strategy, like merger and acquisition to accelerate the business
performance.
2. KMP is preparing an emergency in zircon project, throught analysis:
2.1. What is the problem
2.2. Data availability
2.3. Alternatives communication with the customer
2.4. Alternatives communication with the employees
2.5. Regulatory report
2.6. Access to funds in the event of termination
3. The business function never stop regarding one of the key members of the management
team will take offer all the business activity with the reason the zircon product always
have demand on the market.
BOARD MANAGEMENT RESOLUTION
1. Company Net Asset Value US$. 7,500,000 (seven million and fife hundred thousand United
State Dollars).
2. Financial Statement
2.1. Balance sheet
a. Cash in bank (US$) - 100,000
b. Cash in hand (US$) - 75,000
c. Account receiveable - 150,000
d. Inventory
 Product inventory - 1,500,000
 Parts inventory - 200,000
e. Totally - 2,025,000
2.2. Debt - 1,000,000
2.3. Income Statement
a. Company’s gross revenue 2017 (US$) - 18,000,000
b. Company’s gross expenses 2017 (US$) - 10,000,000
c. Company’s earning before taxes 2017 (US$) - 8,000,000
d. Company’s net income 2017 (US$) - 6,800,000

45
3. Sale and Purchase Share (Acquisition Shares) & Capitalization Table
Figure 29: Acquisition Shares of PT. KMP
Mr. Hasanudin 0.74 7,407 500,000,000
Mr. Christian Sung 0.44 4,444 300,000,000
Mr. Alexander Davey Marindra 0.30 2,963 200,000,000
Oustanding Shares 98.52 985,185 89,000,000,000
Total 100 1,000,000 1,000,000,000 89,000,000,000
*Note US$.1,00 = IDR.12.000
Capital (IDR)
Total Value (IDR)Percentage (%)Company Shares Share Number
4. Company Asset (Equity)
Figure 30: Assets of PT. KMP
Assets Quantity Percentage (%) Price (IDR) Total Amount (IDR)
Total Asset Value 100 90,000,000,000
Land (m2) 22,573 16 648,000 14,627,304,000
Plant Building & Dorm, Stocpile 3,200 44 12,382,875 39,625,200,000
Equipment, Machinery & Parts 150 24 142,804,640 21,420,696,000
Permits 16 14,326,800,000
Total 100 90,000,000,000
*Note US$.1,00 = IDR.12.000
5. KMP needs US$. 15,000,000 (fifteen million US Dollars) as a working capital for producing
1,000 ton of zircon sand per month.
6. KMP has spent approx. US$. 7,500,000 for zircon project in Indonesia
7. Standard Operation for the Use of Funds
International Financial Reporting Standards, usually called IFRS, are standards issued by the
IFRS Foundation and the International Accounting Standards Board (IASB) to provide a
common global language for business affairs so that company accounts are understandable
and comparable across international boundaries.
They are a consequence of growing international shareholding and trade and are particularly
important for companies that have dealings in several countries. They are progressively
replacing the many different national accounting standards. They are the rules to be followed
by accountants to maintain books of accounts which are comparable, understandable,

46
reliable and relevant as per the users internal or external. IFRS, with the exception of IAS 29
Financial Reporting in Hyperinflationary Economies and IFRIC 7 Applying the Restatement
Approach under IAS 29, are authorized in terms of the historical cost paradigm.
IAS 29 and IFRIC 7 are authorized in terms of the units of constant purchasing power
paradigm. IAS 2 is related to inventories in this standard we talk about the stock its
production process etc IFRS began as an attempt to harmonize accounting across the
European Union but the value of harmonization quickly made the concept attractive around
the world.
8. Within one year, cash flow shall be stablized positive since min 1,000 ton of zircon is
produced every month.
9. We have 5-year projection of zircon production. Please see the atthaced
Figure 31 : Five Year Financial Projection
PT. KMP (Unit: Ton, $000)
Vol.(ton) Amount % Vol.(ton) Amount % Vol.(ton) Amount % Vol.(ton) Amount % Vol.(ton) Amount %
Zircon 3,000 4,350 12,000 17,400 12,000 17,400 12,000 17,400 12,000 17,400
Rutile 60 48 240 192 240 192 240 192 240 192
Ilmenite 7,500 1,275 30,000 5,100 30,000 5,100 30,000 5,100 30,000 5,100
5,673 22,692 22,692 22,692 22,692
Production 37.93% 37.93% 37.93% 37.93% 37.93%
Transport &
Other Costs
39.98% 42.62% 42.62% 42.62% 42.62%
37.34% 41.44% 41.44% 41.44% 41.44%
28.00% 31.08% 31.08% 31.08% 31.08%Net Profit 1,589 7,052 7,052 7,052 7,052
Corporate Tax (25%) 530 2,351 2,351 2,351 2,351
Profit Before Tax 2,118 9,403 9,403 9,403 9,403
Cost_Total 3,555 13,289 13,289 13,289 13,289
Tax & Other Expense 40 159 159 159 159
Depreciation 110 110 110 110 110
EBITDA 2,268 9,672 9,672 9,672 9,672
6,060 6,060 6,060 6,060
165 360 360 360 360
Costs
1,650 6,600 6,600 6,600 6,600
1,590
Revenue
Revenue_Total
Monthly 500 ton /6 mn Monthly 1000 ton Monthly 1000 ton Monthly 1000 ton Monthly 1000 ton
5 Year Financial Projection
Description
2019 2020 2021 2022 2023
Note)
Jan 2019 : funds are invested.
June 2019 : start produce 500 ton/month
Jan 2020 : start produce 1,000 ton/month
10. Once funds are invested, we produce 1,000 ton/month within 12 months, and produce zircon
1,000 ton/month within 1 year after funds are invested.
Jakarta, October 20,2018
PT. W2P Management Business
Setiono Winardi (M. +6281315421509, Wa.+628179875789)
Email: setiono@ilm.co.id or winardi67@gmail.com

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