Business Plan outline:

 

            This “PET” Recycling business is founded in the basis of the “PET” Bottle scrap commodity price of  $260  USD / ton. EXW This will be the Material used for producing “PET” processed Flakes to $620 USD /ton CIF Asia. (07/2004)

            This makes a Raw margin about $360 USD / ton. To operate the business.

Market:

            The market has increased rapidly in the last two years due to the increasing demand of  NON-TOXIC plastic materials.

            In the past plastic materials like PVC, Glass Fiver, PPO, etc were commonly used until research made clear this materials are toxic. This same research labeled some plastic materials like PET (Polyethylen-terephthalat) to be innocuous.

 

            The market then changed to Polyethylene, and PET scrap became a commodity.

 

            Asia is manufacturing most of the Polyethylene products for USA and domestic market, making Asia our target market.

 

            Why flakes ? :  Sanitary regulations prohibits our customers from entering waste from other countries, and the logistic costs are less representative for flakes in containers.

 

            Market Goal: is to reach from 2000 to 4000 Tons / month of our customers demand, in each plant.

 

            We can make a survey of the whole market just making reference to a Kenplas bulletin :

“There are about three dozen recycling companies in operation, two-thirds of which are located in North America. These plants have the cleaning and separation technology to convert post-consumer bottles to flake for sale to end users. Their total capacity approaches together 436 thousand tonnes (960 million lb) on a three-shift basis - evidence that there is capacity available to handle the growing demand for recycled PET.”

Suppliers:

 

            This high demand has opened doors to alternate supplies like Latin-America

 

            The actual bottle scrap source in Mexico and Latin-America comes mainly from waste deposits, and secondly Material collected from governmental programs in schools, Markets, homes etc.

 

The Plant Operation in Mexico:

 

            For a quick survey of the business plan we choose 500T per Month PET Flakes production.

 

            The PET Recycling process takes in the transformation costs:

Bales, Recollection,

Pre-wash, Grinding

Washing, Drying

Shipping

 

The projected Income statement for a plant recycling 500Ton of PET Month:

 

Revenue:

 

 

 

 

 

 

 

 

 

Net Sales

 

 

 

 

 $ 310,000.00

 

Total Revenue

 

 

 

 

 

 $ 310,000.00

 

 

 

 

 

 

 

 

 

Cost and expenses

 

 

 

 

 

 

Cost of goods Sold.

 

 

 

 $ 183,900.00

 

 

 

Direct Labor

 

 

 $   6,000.00

 

 

 

 

Direct Material

 

 

 $ 99,000.00

 

 

 

 

Manufacturing Overhead

 

 $78,900.00

 

 

 

 

 

Recollection / Bales

 $ 31,900.00

 

 

 

 

 

 

Gas and electricity

 $ 10,000.00

 

 

 

 

 

 

Maintenance

 

 $   5,000.00

 

 

 

 

 

 

CIF Asia Shipping

 $ 32,000.00

 

 

 

 

Selling Expenses

 

 

 

 $    2,000.00

 

 

General and administrative Expenses

 

 $  12,000.00

 

 

 

Rent

 

 

 $   9,000.00

 

 

 

 

 

Utilities

 

 $   1,000.00

 

 

 

 

 

Depreciation

 

 $              -  

 

 

 

 

 

Other overhead

 

 $   2,000.00

 

 

 

 

Income Taxes

 

 

 

 $   21,700.00

 

Total Cost and expenses

 

 

 

 

 $ 219,600.00

NET INCOME

 

 

 

 

 

 $ 90,400.00

 

 

1.- Net Sales: Calculated selling 500Tons at $620 CIF H.K.

 

2.1.- Costs, Direct Labor:  Calculated from paying to 20 workers including Social security, Taxes and indirect costs, working 48 Hrs / day , 20 Days / month, each worker can process 1.25 Ton per day. This includes Sorting, Pre-wash Grinding Washing Drying, loading and unloading. One shift.

 

 

2.2.- Direct Material: Material paid price is calculated: (Worst case scenario)

            $180 USD/Ton Not baled to collect near < 20Km

$238 USD/Ton Baled Delivered in the recycling plant door.

NOTE that Price is contracted under a contract basis with the local government and is set by the investor to warrantee his ROI.

 

2.3.- Manufacturing Overhead:

            Recollection: Calculated at $58.00 USD / Ton  of collecting one TON of not baled bottles, for a contracted freight company < 20Km.

 

            Gas and electricity Bill: Calculated for 8 Hours a day, 48 Hrs /week, 20 days /month ( One Shift )

 

            Maintenance: Calculated as a provision.

 

            CIF Asia Shipping: Calculated at $1400 USD for a 22Tons 40’ HQ container (Flakes), Land-Rail-Ship and domestic customs delivered to H.K. port.

 

3.- Selling Expenses: Calculated as a provision.

 

4.- General and Administrative Expenses:

 

            Rent: Calculated for a 3000 Sq Meters facility ( 27,000 Sq Ft ) at $35.00 Pesos per Sq Meter.

 

            Utilities: Calculated as provision, for  telephone and administrative related expenses

 

            Depreciation and Loans: Not  contemplated.

 

            Other Overhead: Calculated as provision for insurance, office supplies, or cleaning services, and PNUMA donation.

 

5.- Income Taxes: Calculated as a 7% IRS provision. ** (see Notes)

 

6.- Net Income: is about 29% of total Revenues.

 

The Plant Investment:

 

            PET Recycling plant investment budget has been calculated for 500T:

 

1.- Facility Reconditioning:

Electrical and gas installation, Machinery moving, installation and setup.

 

2.-Machinery and Equipment:

            One Flake Washer tank with water recycling equipment

            One gas Water Heater with pollution filters

            Two Grinders for 4 Tons per Hour.

            A hot Air Dryer tunnel

            One 2 Ton Fork lift

            One Truck 3.5 to 10 Ton

            Optional Conveyors

 

Please refer to the attached documents with this assets and service costs, loans an financial plans.

 

ROI:

 

            Depending on the asset financial options, see information attached.

 

The "Red Global de Reciclaje y Medio Ambiente" Network:

            This Recycling program is sponsored by"Red Global de Reciclaje y Medio Ambiente" in junction with local Governments.

 

            The main task and challenge committed in this program is informing  and “teaching”  citizens, governments, and society, the waste recycling options, this efforts could be only financed by the sponsor and investor donations.

 

            As a consequence the recycling  business will be improved as even as society and governments “Learn” the right way to separate and handle the waste generated.

 

            This is one of the reasons why finding good quality and quantity PET scrap in Latin-American countries is not as easy, against those found in “Waste Recycling “ educated countries.

 

The ASSIC partnership and Plant Management Services:

 

            Our company is offering investors, the recycling plant  setup in Latin-America, operation, management , administration, and logistics to achieve the goal.

 

            Offering the investor the ability to extend operations in Mexico and Latin-America, under the Network and governments moral and legal sponsorship.

 

            Partnership is always open to negotiation on the base of the generated profits or per TON basis.

 

( See documents attached for details)

 

            Please if interested let us know, fill the attached form to start sending detailed information.

 

            We hope you can also assist form 22th to 26th to our next meeting at Puerto Rico.

 

Best Regards,

 

            Enrique Viveros Mateos

            Director.

Arturo Velásquez

V.P.

 

ASSIC, Maquiladora  S.A. de C.V.
Calle Lerma No. 2 Col. Los Parajes
Tlalnepantla Estado de Mexico,
C.P. 54120
MEXICO
tel: 525-5-5311-0207
fax: 525-5-5317-1218
Mr. ENRIQUE VIVEROS M.
enrique1@assic.com.mx
www.assic.com.mx