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Business plan for the production of plastic windows

1. PROJECT SUMMARY
The goal of the project is to organize an industrial enterprise in Krasnodar. Products – plastic windows. Distribution channels: construction organizations, dealer network, building materials stores. Price segment – economy.

Despite the difficult economic situation in the country, the decline in the pace of new construction and the decline in the window and door construction market, the project has significant prospects due to the business model that is not typical for this market. Sales costs are minimized due to the absence of its own physical retail network; operating costs are reduced due to optimization of warehouse stock and the lack of own installation teams, project sales and partner (dealer) network are actively used. In addition, a new distribution channel for this segment is used – building materials stores.

2. DESCRIPTION OF COMPANY AND INDUSTRY
Since the project relates to the construction infrastructure, it is advisable to consider such interrelated markets as: the construction market, the market of building materials and the market of translucent structures.

According to IndexBox, the construction materials market in the first half of 2018 was subject to the following influences:

reduction in residential construction (-16% over the same period last year)

some increase in non-residential construction (+ 3% over the same period last year)

decrease in the production of basic building materials (-8% over the same period last year)

growth in production of finishing materials (+ 5% over the same period last year)

decline in investment in construction (-1.6% by 2015)

Since December 2014, there has been a permanent decline in sales in the primary housing market. During this time, sales fell by about 30-35%. The largest decline in housing construction was observed in February 2016, after which there is a gradual increase in this indicator. The decline in sales was primarily caused by a decrease in the number of people who bought property with their own savings. To improve the investment background in the industry, the state has taken a number of measures to stimulate the housing market (subsidy programs).

In non-residential construction, the volume of construction of commercial real estate has decreased, the share of agricultural and industrial buildings has increased

Against the background of a decline in real incomes of the population, demand is shifting towards building materials of a low price segment.

Business plan for the production of plastic windows
Traditionally, more than 60% of investments in fixed assets in Russia relate to the construction industry. At the same time, there is a tendency of growth of this indicator in a crisis. In 2015, 5,945.5 billion rubles were invested in the construction industry. According to forecasts of the Ministry of Economic Development, the positive value of investment indicators in the industry should be expected in 2017; expected growth rate in 2017-2019 – 2.7% per year.

The driver of growth (decrease in the rate of decline) in sales of building materials and materials was the increase in the volume of repair work against the background of a decrease in the volume of construction.

Figure 2. Dynamics of production of basic construction and finishing materials in the 1st half of 2015 – 1st half of 2016 (data from Rosstat, IndexBox)

Business plan for the production of plastic windows
The share of imported components (primarily PVC profile) in the plastic window market (according to O.N.A.-marketing data) significantly decreased – from 35% in 2006 to 2% in 2015. According to experts, the most likely scenario for the development of the market in 2016 is its fall within 15%.

Competition in the industry today is relatively low due to the small number of players and established spheres of influence.

Dynamics of the market of plastic windows in Russia in 2006-205, mln. Sq. m

Business plan for the production of plastic windows

According to experts, in the coming years we should expect the following trends:

the most attractive segment for manufacturers of building materials are building materials that can be used for repairs – repairs are carried out by the population constantly, regardless of the state of the economy; the demand at the same time is shifting towards the low price segment;

the weakening of the national currency will lead to an increase in the value of both the equipment used in construction and production.

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