Presentation on theme: "By Mr. Zay, Mr. Ouan, Ms. Sandar, Ms. Lai 21July 2011."— Presentation transcript:
by Mr. Zay, Mr. Ouan, Ms. Sandar, Ms. Lai 21July 2011
Location Vientiane Vientiane is the capital of Lao PDR, which located in central of Laos an essential economic zone central of education(many colleges, school, NUOL) more modern city than other, have many hotels, apartments (small room)… there are a lot of SMEs who do furniture business good infrastructure transportation and logistic
Client Products and Services Bed room Furniture Living room Furniture Dining room Furniture Repair and maintenance service Etc…….
Mission and Vision - Produce Modern furniture in new life style - Make for people who need small space furniture - To know, trust and use our products
Objectives - To produce small scale furniture - To know our product’s good design and compactable - To export worldwide who needed our products - To service after sale and researching for more comfortable design
Cluster Profile Location : Vientiane, Laos PDR. Total Investment : 90 millions us dollars Area : 1.2 Hectars Clusters : 48 Nos. 2 nos. for Klin Drying 2 nos. for Hardware and metal 21 for woodworking(furniture for dining room,living room,bed room) 5 for hosting 5 for design 10 for finishing 3 for repair and maintenance Aggregate Employment : 2800 nos.
Products / ServiceAreas Allocated / sq.m AmountPrice SMEs - 48 X 100 m Parking area Security Conference Maintenance Design Quality control Sport & Canteen Storage Social affair Training centre Fire station Health care Showroom Recreation centre Road Wall TOTAL 8940 m
Cutting Machine (wood) 15 X Polishing 15 X Cutting Machine (steel) 15 X Welding Machine (steel) 15 X Welding Machine (spot) 10 X Gas Cutter 10 X Drilling Machine 30 X Screw Machine 30 X TOTAL Engineering Cost (Design,Architech,etc…..) Machinery & Equipment
Marketing analysis Product market is already exist in Laos. We have to try to export foreign countries such as China, Japan,Thailand,E.U and U.S.A Market Size Local market is 10% and International market is 90%. We have to use business machinery and trade fair for marketing. Revenues and profitability is as follow in Financial statement. Competitors Direct competitors are rubber products, plastic products and so on. Indirect competitors are steel products producer, constructors. Strength Our products are made by wood, steel so it can be use more than plastic products. Our products are compact, comfort and modernized than plastics. Weakness Production cost of our products is more than plastic so our products plastic is more than plastic.
Marketing Strategies Direct distribution For local sale directly and export market by representative Advertising and Promotion Strategy Direct Mail using a good brochure with designs Trade Shows Advertising Internet Publicity/Public Relations Marketing and Sales Plans Incentives to sale promoter
BASIC FINANCIAL ASSUMPTIONS FIXED INVESTMENT EquityLoan 1. Land & Land Development Building, Walls, Roads, etc. Construction Machinery & Equipment Office Equipment Transport Equipment Others PRE-OPERATING INVESTMENT R&D, Engineering, Design & Other Studies Patent Fees, Licenses & Standards Staff Recruitment & Training Other Development Costs Others WORKING CAPITAL DIRECT OPERATING COST 1. Raw Materials Costs Direct Labour Costs Cluster Overhead INDIRECT OPERATING COSTS Administration Staff Salary Salary for Marketing Staff Salary for Production Staff Salary for Adm. & Finance Staff Selling & Marketing Costs Office Supplies Rentals & Subcontracting Other Expenses12000 OTHER IMPORTANT ASSUMPTIONS Production Cycle (in Months)1 Percent of Working Capital Loan (in decimal)0.5 Sales for Year Sales Growth1.1 Annual Increases in Cost Items1.1 Interest Rate (in decimal)0.08 Terms of Loans (Years)3 Cash Sales (in Decimal)0.99 Tax Rate (in Decimal)0.09 Currency:US$ Start date of LoanJan-13
INVESTMENT PLAN #REF! TotalEquityLoan FIXED INVESTMENT 1. Land & Land Development Building, Walls, Roads, etc. Construction Machinery & Equipment Office Equipment Transport Equipment Others Total Fixed Investment PRE-OPERATING INVESTMENT 1. R&D, Engineering, Design & Other Studies Patent Fees, Licenses & Standards Staff Recruitment & Training Other Development Costs Others Total Pre-Operating Investment (POI) TOTAL INVESTMENTS
WORKING CAPITAL DIRECT OPERATING COST 1. Raw Materials Costs Direct Labour Costs Cluster Overhead Total Direct Operating Costs INDIRECT OPERATING COSTS 1. Administration Staff Salary Salary for Marketing Staff Salary for Production Staff Salary for Adm. & Finance Staff Selling & Marketing Costs Office Supplies Rentals & Subcontracting Other Expenses12000 Total Indirect Operating Costs (1) TOTAL ANNUAL OPERATING COSTS WORKING CAPITAL REQUIRED TOTAL PROJECT COST DEBT TO EQUITY SHARE (%) 100%99%1% (1) NOTE that this Indirect Operating Costs still needs depreciation and POI amortization.
PROJECTED PROFIT AND LOSS #REF! Year 1Year 2Year 3Year 4Year 5 Planned Production (in units) SALES DIRECT OPERATING COST 1. Raw Materials Costs Direct Labour Costs Cluster Overhead Total Direct Operating Costs GROSS PROFIT INDIRECT OPERATING COSTS 1. Administration Staff Salary Salary for Marketing Staff Salary for Production Staff Salary for Adm. & Finance Staff Selling & Marketing Costs Office Supplies Rentals & Subcontracting Other Expenses12000
TOT IND. OPE. COST BEF DEP’N & POI Depreciation POI Amortization84800 TOTAL IndiOPERATING COSTS OPERATING PROFIT INTEREST00000 PROFIT BEFORE TAX TAX PROFIT BEP44%41%39%36%34% DEPRECIATION CALCULATOR Value (Eu)Period (Yrs)Annual Dep’n 1. Building Machinery & Equipment Office Equipment Vehicles Others TOTAL DEPRECIATION CALCULATOR Value (Eu)Period (Yrs)Amort. / Year 1. Pre-Operating Investment
PROJECTED CASH FLOW #REF! Yr. 0Yr. 1Yr. 2Yr. 3Yr. 4Yr. 5 Sales Cash In-Flow 1. Cash Sales Receivable Equity Fixed Investment Loan0 5. Working Capital Loan Beginning Cash Balance Total Cash In-Flow Cash Out-Flow 1. Total Investment
Cash Out-Flow 1. Total Investment Direct Operating Costs Total Ind. Ope Costs bef. Dep'n & POI Interest Tax Total Cash Out-Flow Net Cash Loan Payments 1. Principal for Fixed Investment Loan Principal for Working Cap Loan Total Loan Payments Ending Cash Balance
PROJECTED BALANCE SHEET Year 0Year 1Year 2Year 3Year 4Year 5 ASSETS CURRENT ASSETS 1. Cash Receivable Inventories Total Current Assets FIXED ASSETS 1. Land & Land Development Building, Walls, Roads, etc. Construction Machinery & Equipment Office Equipment Vehicles Others12000 Total Fixed Assets Accumulated Depreciation Book Value of Fixed Assets POI Accumulated POI Book Value of POI TOTAL ASSETS
LIABILITIES & EQUITY CURRENT LIABILITIES 1. Account Payable 2. Working Capital Loan E Total Current Liabilities E LONG TERM LIABILITIES 1. Fixed Investment Loan Total Long Term Liabilities EQUITY 1. Owner’s Equity Current Profit Total Equity TOTAL LIABILITIES & EQUITY ROA= (Profit/Total Assets)x100% CHECK
Conclusions and Recommendations Conclusion - As mention above: now market need a lot of SSF - cluster has enough advantages to be able to remain competitive. Now we are ready to produce SSF Recommendation - Government should provide: tax credits, innovative financing for furnishings manufacturers, investments in furniture research and development and job training to enhance the skills of legacy manufacturing workers - government could provide grants for researching innovation in furniture manufacturing.