1. SUMMARY OF THE PROJECT
The purpose of the project is the organization of a sawn timber enterprise (“Pili-Pila”) in the Autonomous Republic of Crimea, in the immediate vicinity of Simferopol. The prerequisites for the development of the project are: a shortage of affordable building materials in the republic due to the lack of land communication with the mainland; lack of established supply chains from Russian manufacturers; implementation of the state program for the development of the republic related to the development of infrastructure, housing, etc .; increased interest of private investors in construction in the republic.
Lumber is one of the most widely used building materials, which can be used for exterior and interior decoration of buildings, when installing floors, stairs, roofs, etc.
The technological chain of production organization includes the supply of round timber, its sawing and planing in place. Sales - in bulk at regional building materials bases. A certain amount can be sold by self at retail.
A limited liability company was chosen as the legal form; form of taxation - STS.
The project is attractive for investment, which is confirmed by integrated performance indicators calculated taking into account all costs and the planned revenue of the enterprise. The indicators are given in Table. one.
Table 1. Integrated project performance indicators
Discount rate (r), %
Discount rate (r-month), %
Payback period (PP), months
Discount payback period (DPP), months
Net present value (NPV), rub.
50 745 289
Return on Investment (ARR), %
Internal rate of return (IRR), %
Profitability Index (PI)
2. DESCRIPTION OF THE INDUSTRY AND COMPANY
To date, there is information in open sources about only one lumber producer throughout the republic, located in Dzhankoy. 97% of lumber comes to the Crimea in finished form from suppliers on the mainland. Moreover, their cost is on average 55-65% higher than the cost of similar materials in other regions of the Russian Federation.
At the same time, the pace of construction is growing. According to the government program for the development of the republic, the territory of Simferopol should be expanded 7 times. In addition, the volume of construction and reconstruction of tourism infrastructure is increasing. Organization of a free economic zone (SEZ Crimea) makes the region attractive for investors from other regions.
At the same time, from 50 to 70 bases of building materials that sell edged and unedged sawn timber wholesale and retail are present and successfully operate in the region. Deliveries to them are carried out from manufacturers of “forest” regions of the mainland of the Russian Federation. All these organizations are potential consumers of the products produced by the project. The total consumption of lumber in the republic and the city of Sevastopol is estimated at 12-15 thousand cubic meters per month.
The most popular type of product is edged board, which has a wide range of applications. Then - a beam, a planed board, a block house, imitation of a beam, etc. Edged boards account for at least 65% of the total market volume or 8.5 thousand cubic meters. In the coming years, stable demand growth is expected in the range of 5-10% annually.
Much attention is paid to the choice of supplier. The selection was made according to a number of parameters: quality and price of the material, convenience and cost of logistics, stability of supply of the required volumes. The production is supposed to be located no further than 5 km from the Simferopol - Gruzovoy station, which will be most convenient from the point of view of logistics organization, as transportation of raw materials is supposed to be carried out by rail.
The production facility is selected primarily from the point of view of the possibility of implementing the technological cycle, manipulating workpieces and finished material with a length of 6 m, etc. Loading equipment is leased. Given the seasonal nature of the demand for the products in question, this is a more economical option than acquiring a property.
The main sales channel is the wholesale supply of lumber to building materials bases located on the peninsula. The minimum order quantity is 30 cubic meters. Delivery is organized by Pili-Pila LLC with the involvement of a transport company or private carriers. In addition, it is possible to sell the goods in retail, subject to pickup.
Investment costs include, first of all, the purchase of technological equipment and the costs of forming the initial stock of raw materials. The list and volumes of investment costs are given in Table. 2.
Table 2. Investment costs of the project "Pili-Saw"
Warehouse and office equipment
Set of equipment
3, 500, 000
1, 500, 000
Raw material purchase
2, 000, 000
7 170 000 ₽
2 000 000, 00 ₽
Required borrowed funds:
5 170 000 ₽
3. DESCRIPTION OF GOODS
The range of products is shown in Table. 3.
Table 3. The nomenclature and description of the manufactured products of LLC “Pili-Pila”
Edged board, 25, 40, 50 mm thick; length - 6 m, 3 m
Edged board 1-2 grades of coniferous wood, according to GOST 8486-86 natural humidity
Bar 100x100, 150x150
Coniferous timber according to GOST 8486-86 natural humidity
Unedged board 25, 50, 60 mm
Unedged board, grade 1-2 from coniferous wood, natural humidity
Softwood bar, natural moisture
All lumber is made from softwood logs (spruce, pine) using specialized equipment. The supplier is the Vyatsky Forester logging company. Raw materials are of high quality and extremely low rejection rate.
The scope of lumber, as mentioned above, is extremely wide. In part, its scope depends on humidity. Natural moisture material is most often used for exterior decoration, roofing, crate, etc.
Finished products are stored in a closed unheated warehouse on a pallet, which are then transported to the customer. During storage, a temperature and humidity regime is provided that does not allow the wood to rot and dry out.
4. SALES AND MARKETING
Since these products (subject to GOST) have slightly pronounced differences in consumer characteristics, the main competitive advantage is the price and stability of supplies. Stability is ensured by the territorial proximity of production and the possibility of cutting materials under the order within a day from the moment of order. Such terms are unattainable for deliveries from the mainland - the delivery time in this case may be at least 10-14 days.
In addition, the competitive advantage of the enterprise as a whole is the ability to implement a more flexible pricing policy. The bulk of the suppliers of lumber from the mainland carry out shipment on the condition of prepayment, or payment upon receipt. The presence of the employees of Pili-Pila LLC directly on the spot allows us to evaluate the assets of each client, its solvency and reputation, which, in turn, allows us to offer more flexible terms of payment for goods - installment payment, goods credit, etc. Given the difficult economic situation in the country, this is a huge plus.
The main promotion activities are aimed at wholesale distribution channels: advertising in specialized catalogs, construction portals. However, active sales are the main tool. The sales representative establishes contacts and negotiates with the heads and specialists of the supply departments of wholesale bases, as well as construction companies.
By the end of the first season of the project, the client structure of the company should consist of 2-3 anchor clients, providing up to 60% of sales; the remaining 40% should fall on 10-20 small customers. It is planned to achieve the planned revenue results by the end of the first construction season, as thanks to the preliminary work, there are already clear agreements with a number of companies in the region regarding cooperation.
Direct shipment is carried out by a specialist in the sales department located on the territory of the Pili-Pila production and warehouse complex. Shipment is carried out without the consent of the management upon prepayment. Shipment on a postpay basis, deferred payment, etc. carried out only by agreement with the director of the enterprise. Shipment is made within a working day from the moment of confirmation of its possibility on condition of self-delivery and within 2-3 working days if necessary by delivery by Pili-Pila LLC.
The competitive environment is represented by only one lumber producer located in Dzhankoy. However, according to reports, the organization today is experiencing a serious shortage of working capital. If earlier its territorial location was successful from the point of view of logistics, then after closing the border with Ukraine, this location becomes uncomfortable. There is no information on the input prices of this enterprise, however, the wholesale price offered by it to its customers is 8800 rubles. per m3 of edged lumber 1-3 grades of natural moisture. There is also reason to believe that the company does not have a permanent reliable supplier of raw materials, which leads to fluctuations in wholesale prices and profitability, as well as instability in product quality.
5. PRODUCTION PLAN
Lumber “Pili-Pila” is produced from high-quality round timber supplied from one of the largest loggers in the country. Delivery is carried out by rail to the station "Simferopol - Cargo" in open wagons. Loading of one gondola car - up to 90 m3. The rhythm of supply - 2 times a month, volume - depending on the need.
The volume of production is regulated in accordance with the forecast of demand for the week ahead. Line productivity - 150 m3 / shift. Planned loading of equipment upon reaching planned sales volumes - 80%. The warehouse turnover is planned at the level of 1 week.
The equipment supplier is selected on the basis of a detailed analysis of the technical characteristics of the machines, cost, delivery conditions, as well as feedback on the quality of the equipment and the quality of the supplier.
Equipment delivery time is 14 calendar days from the date of payment. The supplier carries out arrangement, commissioning, equipment setup and staff training. The duration of commissioning is 5 working days. The planned duration of training is 5 working days. In the future, the equipment supplier undertakes to carry out at its own expense the necessary additional training, work on setting up and repairing the equipment, not only during the warranty period, but also after. Terms of service in the warranty and post-warranty period are governed by the service contract.
In order to increase production efficiency, it was decided to purchase a ready-made aggregate production line instead of individual machines. The line performs a full cycle of work on loading the stream, removing the slab and grinding it, calibrating the beam and sawing it in accordance with the task.
Finished products are stored in a warehouse, which is a covered unheated room with good ventilation. Lumber is stacked in piles with the obligatory use of wooden logs to ensure adequate ventilation. Lack of air circulation can lead to the formation of rot, mold and fungus.
Variable costs include the cost of raw materials and transportation costs. The cost of transporting 1 car from the supplier to the production is 250 000 rubles with a load of 90 m3. Thus, if the cost of raw materials is in the range of 3, 500 rubles / m3, the cost of transportation will be approximately 2, 800 rubles / m3. In addition, the costs of transshipment of raw materials from the railway station to production are taken into account. Thus, the variable costs per 1 m3 will amount to 6, 500 rubles.
Table 4. Variable costs and the formation of the wholesale price of sales of goods
GOODS / SERVICES
COSTS UNITS, rub.
TRADING VALUE, %
UNIT COST, rub.
33 280 ₽
Fixed costs consist of rent, advertising, utility bills, etc. (Table 5). Required production area - about 200 m2, warehouse - 300 m2. It is also necessary to provide a room for staff toilets, toilets and showers, a room for eating, office space. Thus, the total area will be about 600 m2.
Some types of costs (advertising, utility bills, loader rental, etc.) are seasonal in nature, but the average values for the year are taken into account.
Table 5. Fixed costs
AMOUNT PER MONTH., Rub.
Telephony and Internet
270 125 ₽
It is especially important to ensure a high level of labor safety. All workers employed in the production undergo mandatory training, certification and annual re-certification of safety measures. The main requirements for employees when hiring them are at least 5 years of work experience in production (not necessarily woodworking), responsibility, and the absence of bad habits.
6. ORGANIZATIONAL PLAN
During the implementation of the project, the following main stages can be distinguished: order and delivery of equipment, installation and configuration of equipment and training of workers, the first stage of the project, the second stage of the project.
Order and delivery of equipment - 14 calendar days. Installation, commissioning and training - 10 working (14 calendar) days. The first stage of the project implementation means the period preceding the achievement of planned sales figures. The second stage of implementation is the direct activity of the enterprise in accordance with the established targets. The exit to the second stage is planned for 6 months of work.
Management functions are carried out by the director - an employee with experience in the woodworking industry or in the lumber trade. It is critical to have work experience as a director (deputy director) of an enterprise.
Customer acquisition is carried out by sales representatives. The main work falls on the off-season to prepare the soil for the season. Customer service is carried out by sales specialists who process incoming requests, issue invoices and control payment, arrange shipment.
All employees are carefully selected before making a hiring decision. As a result, recruitment is for the purpose of long-term cooperation, and not seasonal work. Workers retain their salaries even in the off-season, when production and sales activities are not actually carried out.
Table 6. Staffing and payroll
Number of people
326 000, 00 ₽
Social Security contributions:
97 800, 00 ₽
₽ 423, 800.00
Figure 1. Organizational chart of Pili-Pila LLC
7. FINANCIAL PLAN
The financial plan is designed for a five-year perspective. All types of costs of the enterprise are taken into account. Based on a comparison of various options, according to the calculation results, a simplified taxation system with the object “income minus expenses” was selected.
The cash flow statement is given in Appendix 1. The cost structure of the enterprise is reflected in Table. 4, 5, 6. The total amount of investment costs is 7.17 million rubles. Of these, 2.0 million - own funds. 5.17 million rubles it is planned to attract in the form of a bank loan at 18% per annum for a period of 48 months. Payments are made by annuity payments with a delay of the first payment of three months. Investments in current assets amount to 1.5 million rubles. - this will provide the enterprise with working capital until its return on payback.
8. EVALUATION OF EFFICIENCY
To assess the investment attractiveness of the project, generally accepted integral indicators are used - net present value, return index, internal rate of return, etc. Integral indicators are given in Table. one.
The discount rate is chosen at the level of 15%, which is typical for the organization of new production of non-innovative products; a market for the sale of products already exists. At such a discount rate, all integral indicators have very high values, which suggests a high investment attractiveness of the project. The payback period is 6 months, and the net profit after the enterprise reaches the planned targets will be 15.65 million rubles. in year.
9. RISKS AND WARRANTIES
Since the business area under consideration is well developed both in the world and in domestic practice, the risks associated with the implementation of this project are low. The low level of competition and high demand for this type of product also allows us to talk about good project prospects.
However, it is necessary to take into account all possible risks associated with the implementation of the project. Risk assessment and measures to prevent and / or eliminate the consequences are given in Table. 7.
Table 7. Probable risks and measures to prevent them
Probability of occurrence
Severity of consequences
Absence from planned sales
Active work of sales representatives in the first stages of the project; active market processing; ensuring competitive prices and delivery conditions
Change in geopolitical environment
Minimization of stocks; transfer of funds to maximum liquid assets
Deterioration of the economic situation in the country and region
Ensuring a relatively high share of sales due to budget construction projects, as they are least affected by market conditions
Direct Competitor Entering the Market
Ensuring a strong market position already at the first stage of the project due to flexible pricing policy and delivery conditions; установление прочных партнерских взаимоотношений с ключевыми клиентами
Перебои с поставкой сырья по причине прекращения паромной переправы из-за метеоусловий
Обеспечение запаса сырья на неделю и неснижаемого запас на случай форс-мажора – на 4 смены
Перебои с поставками сырья по вине поставщика
Постоянный мониторинг рынка и поддержание отношений с альтернативными поставщиками
Raw material price increases
Указание в договоре поставки условий повышения цен – информирование не менее чем за 1 месяц, возможность фиксирования цен на некоторый объем товара и т.д.
При учете всех возможных факторов риска и реализации мероприятий по их предотвращению, можно говорить о том, что проект низкорисковый. А, следовательно, представляет интерес для инвестора.
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