2. PLASTICS EXTRUSION AND NYLON FILM MANUFACTURING TO BE LOCATED IN ABUJA METROPOLITAN AREA OF NIGERIA. INVESTMENT PLAN PROPOSED AND PRESENTED BY UCHECHUKWU AUSTIN ONYEJIAKA (Houston, Texas)
3. PLASTICS AND NYLON In this modern era, a world without plastics is unimaginable. In Nigeria, the plastic Industry has seen a remarkable average annual growth rate of around 15 percent during the last five years against a global average of 8 percent despite severe technical and institutional impediments
5. Extruder Specifications OUTPUT DEPENDS UPON GRADE OF MATERIAL, SIZE OF PRODUCT, AMBIENT TEMP., PROCESSING & OPERATING PARAMETERS, ETC. Procurement of Machines would be from the Peoples Republic of China(cheaper). Deposit need to be paid two months before desired delivery date. An advance of 30% of total value of machine to be paid before fabrication is commenced in CHINA. Delivery to Lagos would take one month before installation and production can commence.
11. PROBLEMS Lack of information on potential markets is an impediment to regional growth and export opportunities Interrupted power supply is not only expensive, affecting production but also damages the expensive machines. Incentive for deletion of product line is limited to a few components Lack of adequate training institutes Lack of financial assistance
12. TARGET MARKET How old are they? – All ages What gender are they? – All gender Where do they live? - Everywhere What is their family structure (children, family, etc.)? - Varied What is their income? - Low to High income bracket What do they do for a living? – All occupations What is their lifestyle like? – All lifestyles Hobbies of people around? - Everything What motivates them? – Thirst for water and food Size of your target market? – Above 10 million
14. COMPETITION The competitors would be producing plastic film both near and far from our proposed factory location This means that we would have some competition but the market is very big and not yet saturated. It is less than 50% served.
15. MARKETING PLAN Products and/or Services: - Plain rolls of plastic film (commonly called nylon), Printed rolls of nylon for use in Sachet water production, Printed Shopping bags, Dry-cleaning bags. Pricing Strategy: - All prices would be based on weight and additional services. In Nigeria weights are measured in Kilograms (Kg). The contribution margin would be 25% of sales price or as competitive as possible. Volume discounts available depending on size and complexity of job. Sales/Distribution Plan: - The finished products would be sold at location or delivered on request to customers that have prepaid for it. Delivery would be free for specific distances from factory location. Extra distances would be charge according to distance from factory according to Kg delivered. Advertising and Promotions Plan: - There would be little need for advertising because of the nature of products being sold. There would be promotions to encourage bulk purchase and continued patronage
16. TARGET CUSTOMERS Printers: These printers would use our blown film as raw material for printing label for various Sachet water manufacturers. They would constitute more than 50% of our customer base. They would buy plain rolls of Nylon film at a rate with a contribution margin of above 20%. Sachet Table Water producers: They would buy blown films that has been cut and sealed on the bottom for the purpose of using them to pack the water pouches that they produce. Because of the fact that it has been cut and sealed, the selling price would be dependent on market forces or competition. Contribution rate would be above 25%. Shop Owners and Others: The shop owners would be supplied shopping bags that has been produced and cut to specific sizes according to the request of the retailers. The price would be dependent on expected margin or competition. Contribution rate would be above 30%.
17. FACILITY AND MACHINES NEEDED Factory & office Space:Warehouse space would be rented to commence operation. This would be rented for two years and after this period; the company would have to procure land to build a permanent facility. Warehouse Rent: N1, 185,000 per year ($7800 per year) Extruders: Two units (2) – Cost: - $18,000 each (Estimate if purchased from China) = $36,000 Automatic Electronic High Speed Sealing and Cutting Machines: one unit Cost: - $16,000 each (Estimate if purchased from China) = $16,000 Flexographic Printing Machine: One Unit (1) 4 colors type Cost: - $23,000 each (Estimate if purchased from China) = $23,000 PE and PP Recycling Pelletizing Machine: One Unit (1) type Cost: - $20,000 each (Estimate if purchased from China) = $20,000 Extra machine needed Three-phase Transformers for Electricity: 240v Delta Primary, 208v wye / 120v secondary, Three Phase, 60HZ Cost: - $10,000 for 150 KVA model
20. STEPS Sign crucial Equipment Purchase agreement in China BEFORE AUGUST 2010, make initial payments and accept delivery of equipment upon final payments have been made by October 2010 Sign Factory lease by end of October 2010 Complete leasehold improvements and installations by November 2010 Product training from equipment company Set-up equipment and complete testing by December 2010 Finalize and print marketing materials Open for business by January 2011 Launch promotional plan and Sell like Crazy…..
21. RISK & ASSURANCE OF INVESTMENT Minimum investment would be $20,000 and most of such investment would be converted to shares of the company, (which would be limited by shares), Every Investor or their representative would have access to the accounts, purchase receipts, bank statements or other financial records of the company/factory, Investors would have the right to have one of their representative working in the company to act as the eyes and ears of the Investor, Investors would share in the profits and losses of the company in the ratio of their shares in the company, Some Investments would be classed as LOANS to the company that must be paid back within a two year time frame with the agreed interest paid on the Loan.
22. INVESTMENT DETAILS For the sum of $150,000 or supply of necessary Machinery, Investors would get 40% (combined) stake in Basic Global manufacturing company or any other agreed name The total investment would be repaid back within two years and with an interest of 25% added at the maturity of the investment Venture capital would be repaid before dividends are shared for investors of Basic Global Company Investment capital would be secured with own share of the company or landed property Option of buying back a minimum of 10% of company shares from investors after two years of operation at double the initial value of the shares
23. BANKING AND ACCOUNTING All Shareholders would have the right to be members of the board of Directors The Company would maintain a Corporate Current account with a reputable Nigerian bank Directors would have the right to request Company Bank account statements (in writing) from the bank at least once every month All cash income would be paid into the company account within three (3) days of receipt. No cash payments above N50,000 ($350) allowed. All accounts records to be computerized within two days of transaction and made available online.
