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Building materials shop: profitability, assortment, starting purchase
Project Summary The project involves the organization of a building materials store in a city with a population of 50-500 thousand people. The store area is about 200 m2, of…

Continue reading →

Business plan for the production of fiberglass reinforcement

1. PROJECT SUMMARY
The goal of the project is to organize an enterprise for the production of fiberglass reinforcement. Location – pos. Reconstructor of the Rostov region. Sales are carried out directly by construction and installation organizations, as well as wholesale bases of building materials.

Production is located on rented premises, equipment is purchased in the property. Production technology is transferred along with the equipment of its supplier. The project is distinguished by high profitability and medium risk, which is primarily due to the relative novelty of the product for the Russian market. In addition, the high profitability of the business is provided by the simplicity of the manufacturing technology of this product.

Integral indicators of project efficiency allow judging its high investment attractiveness.

2. DESCRIPTION OF COMPANY AND INDUSTRY
Reinforcement is one of the most used materials in construction. It is used to reinforce concrete building parts and structures. Concrete structures reinforced with reinforcement are called reinforced concrete. Historically, steel reinforcement is used for this purpose, the production of which is sufficiently material and capital-intensive. At the same time, it has a number of weak points: instability to corrosion, high mass, etc. Fiberglass reinforcement is a modern alternative – it is much lighter, not subject to negative environmental influences, and the cost of its production is minimal.

Production, in order to reduce the cost of renting the premises, located within 10 km from the city of Rostov-on-Don, in the village. Reconstructor. Sales region – Rostov region. Considering the fact of stable growth in construction volumes, even in a difficult economic environment, the market for rebar is very wide. According to Rostovstat, in 2015 in the Rostov region more than 575,000 m2 of housing was commissioned, which is 13% more than in 2014. 52% of this amount is accounted for individual housing construction. Industrial construction and construction of public buildings do not demonstrate such a growth rate, however, construction volumes are stable.

The technology of frame-monolithic construction that is widely spread today involves the use of reinforcement in large volumes. Thus, the main sales channel is the delivery of material directly to construction sites by agreement with the construction and installation organization that performs concrete work. In addition, about 10% of the total volume is planned to be implemented through the database of building materials, where they can be purchased by individuals for individual construction.

The level of competition in the segment is quite high. In addition, this type of products has no pronounced consumer properties, there are analogues and substitutes on the market. The most commonly used traditional steel fittings, it accounts for at least 70% of the market. Nevertheless, due to the high-quality processing of the regional market, it is possible to go beyond the remaining 30% attributable to fiberglass, thus expanding the boundaries of the market.

To fulfill the targets for revenue, an enterprise must have partnerships with a number of construction organizations. At the moment, the owner of the company has established links with a number of design and construction organizations, which, according to preliminary estimates, can guarantee the sale of up to 50% of the planned volume of production of valves. To ensure the required level of sales, there are two sales representatives in the staff of the company, who constantly process the market, search for objects and partners.

The project is not limited in time, but strategic planning is carried out for a five-year period. According to the basic vision of the owner, according to the results of five years of work, the enterprise’s market share should be at least 10% of the volume of fiberglass reinforcement and at least 3% of the total volume of the regional market.

The appropriate organizational and legal form for this enterprise is an individual entrepreneur; according to the results of comparing various options, a simplified taxation system with the object “income minus expenses” was chosen. The sum of the required investment costs is 3.33 million rubles, a significant share of which is accounted for by the acquisition of equipment and the formation of working capital until it reaches payback. Also, it is assumed the initial purchase of raw materials at 1.5 million rubles.

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