Investment Offer
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Investment offer 1. Project name and information of organization: Project name: "Reconstruction of manufacture workshop with a warehouse and the household house for production organization of automobile composite cylinders for CNG" Project location: Hrodno region, Novogrudok Company full name (project initiator): JSC «Novogrudok gas equipment plant» Owner ship: non-state Registration date: 03.05.2000 Authorized fund accounts for 775,152 ths USD Authorized fund structure: state 99,82 %, non-state entities 0,18% 2. Market characteristics Description of the current tendencies of development of the industry: • market capacity: near 250,0 millions euro • key market players: public transport of the Republic of Belarus, bus plants of the RB, Gomel ARZ, "Neman"; plants of the Russian Federation: LIAZ, KAVZ. NEFAZ, GAZ Group plants, etc. extent of state regulation (price regulation, activities licensing, etc.): No. This investment project is directed on creation of production of composite gas cylinders for the compressed natural gas (CNG) on the basis of production capacities of JSC Novogrudok gas equipment plant. The basis for development of production of composite gas cylinders of CNG are: - the protocol of intentions of cooperation between the Government of the Republic of Belarus and JSC Gazprom on development of use of natural gas as motor fuel; - The resolution of Department of Economic Affairs of the Republic of Belarus dd 29.04.2013 No. 28 "On approval of a complex of actions for expansion of use of natural gas as motor fuel"; - The executive order of the Government of the Russian Federation No. 767-r dd May 13, 2013 "On the order of the making motor transport run on gas motor fuel". others (to be specified): In case of agreements "Gazprom" guarantees that within 10 years the price of gas motor fuel will constitute no more than 50% of the diesel fuel cost. The analysis of development of the world market of gas fuel shows that production of metane composite cylinders is a perspective project. As the world practice shows, demand for such cylinders will only grow. For implementation of this investment project of JSC Novogrudsky Plant of the Gas Equipment has the developed production, engineering and transport infrastructure, the highly skilled personnel. For implementation of this investment project JSC Novogrudok gas equioment plant has the developed production, engineering and transport infrastructure, the highly skilled personnel. The implementation, provided by the project of the technical solutions, will allow to create high-technology modern production, to provide release of the perspective, competitive products meeting the European requirements with the minimum material, energy and labor costs per unit of products. Key economic indicators of the sector: • annual industrial output (in current prices): 409,753 billion rubles • profitability of sales in industry (in %): 11,6 • average monthly nominal salary of workers in industry: 4782,5 thousand rubles. 3. Project description: The characteristic of production planned: • main consumers: Bus manufacturers and cargo vehicles in the Russian Federation and RB, JSC Gazprom TransGas Belarus; owners of a public transport, etc. • main competitors: JSC Rugazko, Russian Federation and Norway; X-perion, Germany, Ullit, France, Santek, Turkey, etc. • products sales channels: Participation in Programms of the Russian Federation on conversion of automobile transport to CNG. State and commercial organizations • Total investment costs according to the project, in total 12466,6 ths. US dollar, including capital costs: 7730,1 ths. US dollar. Need for project financing at the expense of the investor: 12466,6 thousand USD, Type of investor participation: % of shares purchase % of authorized fund purchase joint venture creation other: (to be specified) credit resources of investor and foreign Investment structure: Research and development; Construction; Preparation for production; Equipment and license purchase; Real estate purchase; Replenishment of current assets; Other: Necessity of import: Equipment; Raw material; Production techniques; Component parts; Other: Performance indicators: Year of project 2016 2017 2018 2019 2020 realization Expected sales, $ 8626,3 28754,3 28754,3 28754,3 28754,3 ths. Expected market 3,5 12,0 12,0 12,0 12,0 share (%) Expected export of production, $ 7763,8 7763,7 7763,7 7763,7 7763,7 ths. Share of export in 90,0 90,0 90,0 90,0 90,0 total sales (%) • the expected geographic structure of export is as follows: Country (region): Russian Federation, share of export: 90%; Country (region): Ukraine, share of export: 7%; Country (region): Tajikistan, share of export: 2%; Other regions: share of export:1% • Expected number of employees for the project realization: 30 ; • other significant characteristics: Purchase of complete plant on the plug-and-produce basis on production of composite cylinders of the 4th type for storage of CNG i.e. technology, the equipment, a design of a product and certification on compliance to the European regulations of UNECE R110 is provided. 4. Exploitability and competitive advantages Description of infrastructure available: access to railway lines and roads Warehouses, logistical terminals Possibility to expand production and install additional facilities Possibility to create the necessary infrastructure via state budgetary financing other (to be specified): Degree of production availability (available industrial area, land allocation, other): there are a project business plan, floor, warehouse and other necessary spaces and infrastructure available Strategic competitive advantages Dominance at the domestic market; Complexity and continuality of the technological process; Logistical advantages; Experienced management; Price factor; Other: Implementation of this project will allow JSC Novogrudok gas equipment olant to put on the market new goods which has no analogs in the Republic of Belarus. It will allow to strengthen entities position in the market of the gas equipment and to provide sales of products in the planned amounts by release of high-quality, competitive, best-selling products. Production of composite cylinders will allow the entity to execute the program for import substitution of this type of products in the territory of the Republic of Belarus. Investor’s benefits: Market entry; Access to large contract works; Participation in the procedure of public purchases; Local raw materials; Benefits granted; Other: 5 . Preliminary performance indicators of the project Revenue, excluding VAT (after an exit to design capacity) 28754,3 thousands USD; Simple payback period of the project (PBP): 4,7 years/year; Dynamic payback period of the project (DPBP): 6,4 years/year; Internal return rate (IRR) of 22,3%; The net discounted income (NPV) of 3345,6 thousand euros. 5. Contact information Executive in charge (Full Name, position): Kasalapov Alexander Fakeevich, leading engineer of the chief mechanical engineer department Tel. +375 1597 4 07 57 GSM. +375 296 217 540 Fax 1597 34297 e-mail [email protected] Issue date of the investment offer: 21/02/2014 .