Feasibility Study 1 JV «AGRO KLASTER QUVA» LLC Feasibility Study 2 Contents Memorandum of confidentiality ...................................................................................... 5 1. SUMMARY OF THE PROJECT ...................................................................................... 7 2. PROJECT INITIATOR .................................................................................................. 12 2.1. Details, status, structure ....................................................................................... 12 2.2. Market position, existing business connections and business reputation. ............ 13 2.3. The existing and foreseeable potential. ................................................................ 14 2.4. The justification of entrepreneurial idea. .............................................................. 15 3. THE ESSENCE OF THE PROPOSED PROJECT .............................................................. 16 3.1. The location of the agrarian .................................................................................. 16 3.2. Location of greenhouses ....................................................................................... 17 3.3. Project objective ................................................................................................... 17 4. THE ESSENCE OF THE AGROCLUSTER ....................................................................... 18 5. MARKET AND MARKETING CONCEPT. ...................................................................... 19 5.1. Supply and demand. ............................................................................................. 19 5.1.1. Structure and characteristics of the market. Product characteristics and its competitiveness in the market. ...................................................................................... 19 5.1.2. The existing potential of the industry, competitors, assessment of prospects and problems of development of the industry, territorial location, the number of products. 20 5.1.3. The existing demand, the main factors and indicators predicting its growth. .... 23 5.2. Marketing concept, sales forecast. ....................................................................... 25 5.2.1. Location of markets, market segmentation. ...................................................... 25 5.2.2. Expected competition from existing potential local and foreign producers. ...... 25 5.2.3. Sales program, sales organization. ..................................................................... 26 5.3. Money revenue plan. ............................................................................................ 27 5.4. EVALUATION OF MARKETING COSTS. ................................................................... 28 6. MATERIAL RESOURCES. ............................................................................................ 28 6.1. Availability of raw materials, proven reserves of raw materials. ........................... 28 JV «AGRO KLASTER QUVA» LLC Feasibility Study 3 6.1.1. The requirement for the quality of raw materials, methods of its preparation, compliance of local raw materials with the requirements of technology. ...................... 28 6.1.2. Basic raw material. ............................................................................................. 29 6.1.3. Calculation of energy needs. .............................................................................. 29 6.2. The cost estimation section. ................................................................................. 29 7. DESCRIPTION OF AGROCLUSTER COMPLEX. ............................................................. 29 8. EQUIPMENT INVENTORY (MACHINERY). .................................................................. 31 9. TECHNOLOGY AND DESIGN. ..................................................................................... 35 9.1. Production capacity and development over the years. ......................................... 35 10. TECHNOLOGY AND EQUIPMENT. .......................................................................... 37 10.1. Rationale for the choice of technology and equipment, process flow diagrams, advantages and disadvantages, equipment reliability and supplier warranty. ............... 37 11. ORGANIZATION OF PRODUCTION AND OVERHEAD COSTS. .................................. 39 11.1. Organizational structure of the enterprise. ........................................................ 39 11.2. Overhead expenses (factory-wide, administrative). ........................................... 39 11.3. Organizational structure of project management. ............................................. 39 11.4. The cost estimation section. .............................................................................. 40 12. LABOR FORCE. ....................................................................................................... 40 12.1. The need for human resources. ......................................................................... 40 12.2. Requirements to the personnel, the need and organization of their training. ... 41 12.3. Analysis of labor resources and wage costs. ...................................................... 42 12.4. The cost estimation section. .............................................................................. 42 13. THE SCHEME OF THE PROJECT. ............................................................................. 42 13.1. The implementation phase of the project. ......................................................... 42 13.2. The budget of the project. ................................................................................. 42 14. FINANCIAL EVALUATION. ...................................................................................... 42 14.1. Summary of capital costs of the project. ............................................................ 42 14.2. The scheme of financing of the project. ............................................................. 43 14.3. Total expense of products sold. ......................................................................... 43 14.4. Evaluation of economic efficiency, taking into account the payback. ................ 43 JV «AGRO KLASTER QUVA» LLC Feasibility Study 4 14.5. Assessment of the impact of financial results on the country's economy. ......... 44 14.6. Depreciation of long-term assets. ...................................................................... 45 15. CALCULATION OF PROFITS AND LOSSES. ............................................................... 46 15.1. Calculation of profits and losses of the enterprise. ............................................ 46 16. THE CALCULATION OF CASH FLOW ....................................................................... 46 16.1. Cash flow statement .......................................................................................... 46 17. THE INSURANCE ISSUES. ....................................................................................... 47 18. GUARANTEES. ....................................................................................................... 47 19. ASSESSMENT OF THE EFFECTIVENESS OF THE IMPLEMENTATION ........................ 47 20. RISK FACTOR ......................................................................................................... 49 20.1. Marketing risks: ................................................................................................. 49 20.2. Financial risk: ..................................................................................................... 49 21. SWOT-analysis ...................................................................................................... 49 22. SUMMARY ............................................................................................................ 51 JV «AGRO KLASTER QUVA» LLC Feasibility Study 5 Memorandum of confidentiality Feasibility study (FS) of the investment project is a set of calculation and analytical materials, which contain the necessary source data, technical solutions, organizational measures, cost, evaluation and other indicators, considering and analyzing which can be concluded about the viability and sufficient effectiveness of the project. This FS is submitted for consideration on a confidential basis solely for decision on the financing of the project and cannot be used for copying or any other purposes, as well as transferred to third parties. The main purpose of the FS is to confirm to the financier or lender the sufficient economic efficiency of the project, financial stability and solvency of the future enterprise (created on the basis of the project under consideration) in terms of timely fulfillment of contractual obligations, ensuring cost recovery, obtaining sufficient profit, timely repayment, etc. Thus, the FS is the main pre-investment project document, the main purpose of which is to provide answers to questions about the possibility, expediency and comprehensive feasibility of continuing work on the investment project. It is necessary for all subjects of the organization for the implementation of the investment process for this project to the customer, investor, implementer (contractor), financing or lending Bank and others. Those who are familiar with the project take responsibility and guarantee not to proliferate the information contained in the FS. Please return the FS if it is not of interest to participate in its realization. The FS is an object