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Mall "Monarch Plaza"
Presented: Vitaflex Ltd.
Sector: Development, Commercial real estate, Retail objects
Region: CIS, Republic of Belarus
Investment amount: 32000000 USD
Projects ID: PRJ000284

ENTERPRISE AND REAL ESTATE SALES OFFERWITH
Presented: Németh Csilla
Sector: Industry, Rural economy, Food industry, Livestock farming
Region: Abroad, Hungary
Investment amount: 5700000 Еuro
Projects ID: PRJ000340

Construction of youth - student hostel
Presented: Yerevan Medical Institute after Mehrabyan
Sector: Development, Culture, Commercial real estate, Hotels, Education
Region: CIS, Republic of Armenia
Investment amount: 2500000 USD
Projects ID: PRJ000362

Launching Prefabricated Building Based on Light Gauge Steel Framing production

ID:PRJ000400 // Update: 2014-05-08 // Hits: 15495

Region:
Turkey, Abroad
Sector:
Development, Construction materials
Rights holders:
Building constructions production, Development and Construction
Project rating:
 5 points (9001 vote)
Presentation    
Investment amount:
22 320 000 USD

Presentation aim:
Co-investment

Project description
Project "Launching the Production of Prefabricated Buildings Based on Light Gauge Steel Framing (LGSF)", Start-up. The essence of the project: creation of automated plant - a leader in the sphere of  integrated production of load-bearing frames of buildings up to 6 stories high (machinery production). The proposed integrated manufacturing technology LGSF has nothing to do with technology of cold-molded production of light profiles of galvanized steel, that is not widely spread due to noncompliance of quality and price of the products with modern construction requirements (expensive with poor quality).  
The global positioning of the LGSF production - clean environmental friendly technologies (no additional measures needed for the environment protection).   Innovation: integrated software for frames of buildings design and their production on the automated line.   Patents of Finnish and USA Companies on a method of connecting cold-molded steel profiles into frameworks and on technological equipment that makes the connection.   Production capacity: up to 500 thousand square meters of real estate a year in form of frames.   The project is designed for the regions of Siberian Federal District, but is also relevant for the whole CIS. The project combines in itself main streams of socio-economic development: technological and managerial innovations, industrialization of production and construction of residential, commercial and other property, participation in national priority projects.   The set of equipment is chosen in such a way as to ensure the company a competitive advantage in the market and product diversification in real estate markets (residential, commercial, industrial) to reduce investment risks. Products (part of the products is new to the Russian market, i.e. there are no direct competitors): - Sets of cold-molded galvanized steel profiles, rolled according to the projects of buildings and that have a number of improvements in joining into frameworks, laying pipes and cables, and more; - Frames of buildings: load-bearing walls, floors, roof trusses; - Building envelopes of high factory readiness (with a possibility of installing windows, doors, ventilated facades).   The products of the highest accuracy of machine-building fully correspond to the modern world idea of energy saving, environmental friendliness, aesthetics and technological effectiveness. The principles of maximum automation of the production processes and management processes, achievement of superior performance and competitiveness of the company on domestic and foreign markets lay in the heart of the company production organization.  
The Project strategy provides establishment of assembly plants in SFD regions, on the basis of which organization of network of high readiness products and product diversification in real estate markets and related areas. Project prospects: -      Creation of investment, production and construction holding with producers of the best modern building materials, construction companies, developers and other interested companies. Such holding would allow to: reduce the cost of one square meter of real estate by means of optimization and international certification of holding companies business processes; create public-private partnerships in key regions for large developer and building projects realization; develop the mortgage lending on the basis of modern technologies of rapidly erected buildings and life supporting infrastructure.
-      Active participation in the implementation of the priority government project "Affordable and Comfortable Housing for Russian Citizens" and other government programs and projects;
-      Initiation and implementation of major development projects of comprehensive territory development;
-      Attraction of available funds (government, corporate, international) into regional projects;
-      Listing of securities of the holding on stock exchanges in the Russian Federation and abroad is planned.   Strategic Business Plan (SBPl) consists of the following: - Book 1 of the project SBPl - 77 pages; - Book 2 of the SBPl, technology and assessment of the cost of construction - 13 pages; - Book 3 of the SBPl, marketing research report - 167 pages.   Scenario of the Project: A scenario with building of new production on 4 hectares parcel of land is selected as a main one. Total cost is 22.32 million U.S. dollars.   The main participants of the project are: initiators; investor and developer, providing services in a form of a collateral of 130 hectares of land that he owns in order to have an opportunity to credit purchasing of the main technological equipment. Obtaining of a loan in a Finnish bank for SPV company on securities of ECA is planned.   The structure of financing: Owners’ funds (authorized share capital) - 4.46 million U.S. dollars; Credit Resources - 17.86 million U.S. dollars. The proposed financial model is the most effective one because according to the law of the Russian Federation getting direct investment in the form of technological equipment for $1.5 million US dollars allows to save investment funds. Realization of the pilot project on comprehensive territory development using LGSF technology is planned on 130 hectares of land owned by the developer after the launch of own production (the formation of products sales).

Project status
An independent market research is carried out, a strategic business plan for the project is developed, the company for the project realization is created, its web site, logo, etc. are designed. Negotiations with the manufacturers of the technological equipment are held, agreements to supply and use the intellectual property are reached.   The negotiations are held, a number of letters of intent concerning formation of loan collateral, building orders of products portfolio and creation of regional assembly plants and sales network are signed. An agreement with the Government of the Novosibirsk region (NR) is reached concerning signing of an investment memorandum for provision of a number of preferences for the Project (½ of the loan interest rate repayment, exemption from subject of federation taxes, formation the plant products sales in social housing building) in accordance with the laws of the Novosibirsk Region.   Negotiations are held, an agreement on the Project replicating in the Kirov region of Russia is signed.   Negotiations with interested parties concerning the Project financing in the amount of 20% from the total investment needs (4.46 million US dollars) are continued. Some of these companies already build low-rise villages and high rise buildings with enclosing structures from LGSF and are going to consider their future participation in the creation of several LGSF plants in Russian regions.   The first round of negotiations with the largest foreign investor willing to participate in the project if it [the Project] has the main sponsor (senior partner / investor) is finished.   The search for an interested investor (Russian / foreign) is continued.   The main investment proposal for participation in this project is to sell up to 49% of the share capital to the project participants and to raise loans for the amount of 17.86 million US dollars. An investor can quit the project in 4 - 6 years from the date of investment by selling his share to other partners or interested investors on the stock market.   Summary of the project, presentation of the technology and design and discussion of all possible scenarios and financial models are available upon request. Should you be interested in the Project, a strategic business plan can be sent for examination, its actualization can be done according to the scenario agreed on with you.
Documents

Key economic indicators

  1. Completion term - 10 years
  2. Breakeven term - 4.2 years
  3. Total profit - 166 000 000 USD
  4. Net present value (NPV) - 43 392 000 USD
  5. Internal rate of return (IRR) - 53 % per annum

Corporate structure

When constructing the process model of the Company the concept of the value added chain IBL (the International Business Language) is used.   Organizational Structure is divisional, project-oriented (management of large part of the works will be fulfilled using project methods, i.e. implementation of local projects: creation of public-private partnerships, creation of holding, realization of a number of major marketing projects.)   Staff of the plant consists of 100 people. Work is performed in three shifts. Production is characterized by the highest level of process automation and control (ERP & CMR).   Highly qualified permanent staff will be secured by: - Effective system of incentives; - Motivation of the management team (part of the share capital); - Staff development.   See presentation of the project.   Construction and optimization of business processes of the company and establishment of the Quality Management System (QMS of the Company) are planned in the investment phase of the Project. The plant will be certified in accordance with international standards of quality management system ISO 9000 at the end of the first year of production.

Marketing information

Market research has shown that at full capacity the plant leaves for three years.

Project management

Key management includes:  
• Vasilyev Alexander – managing director. Work experience: -    worked in a large Russian open-end company "NCCP" where he organized and carried out tests, implemented new machines and automation systems and created foreign economic activity department; -    17 years experience in entrepreneurship and private small and middle-sized businesses management; -    experience in creation and management of companies; -    Experience in making business with a number of large international companies, organizing distribution networks for western companies in Siberia.  
•    Ivankin Vladimir – candidate for the position of financial director. Work experience: -    Advisory company director (13 years, management consulting); -    Worked in a multinational auditing company (Deloitte & Touche); -    entrepreneurship and private small high-tech businesses management; -    director of foreign economic activity department in a bank; -    Management of the laboratory and large projects in state defense enterprises.  
•    Godik Leonid – doctor of science, recipient of the Prize of the Russian Federation Government  – candidate for the position of technical director/senior principal engineer. Work experience: -    9 years as a head of a technical division and 1.5 years as a director of engineering services in Novokuznetskiy Metallurgical Complex; -    creation of antirecession programs; -    creation, implementation and certification of the company quality management system; -    Management of the enterprise (as an executive director) producing modern heaters and a number of construction materials.   Performance Evaluation of the company is based on the Balanced Scorecard (BSC), that allows to implement strategic plans of the company, supervising them on the basis of key performance indicators (KPI).  

Further information

The financial model of the Project is the model that includes local projects: the marketing project for the construction of demonstration houses, creation of public-private partnerships, creation of the holding company and improvement of the company management system.   The investment parameters of the Project are calculated for 20% discount rate.

Contact information



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