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Management and Main Office             Factory and Warehouse:
Tbilisi, St. Nutsubidze                District of Stskheta, Agdgomiantkari,
GEPACK BLDG, P.O.Box: 59842, Georgia   P.O.Box: 23548, Georgia
Tel:+955 32 216632 – Ext:11            Tel:+955 32 216632 – Ext:12
Fax:+955 32 317423                     Fax:+955 32 317423




                                             GEPACK-SABIC Business plan
                                                                Page 1
Management and Main Office             Factory and Warehouse:
Tbilisi, St. Nutsubidze                District of Stskheta, Agdgomiantkari,
GEPACK BLDG, P.O.Box: 59842, Georgia   P.O.Box: 23548, Georgia
Tel:+955 32 216632 – Ext:11            Tel:+955 32 216632 – Ext:12
Fax:+955 32 317423                     Fax:+955 32 317423




Business Plan

                Mahmoud Al-Jammal, DDS, DESS, MS
                     Business Development Manager
                                                           m.jammal@gepack.net




                                                           21 August 2008




                                             GEPACK-SABIC Business plan
                                                                Page 2
Management and Main Office             Factory and Warehouse:
              Tbilisi, St. Nutsubidze                District of Stskheta, Agdgomiantkari,
              GEPACK BLDG, P.O.Box: 59842, Georgia   P.O.Box: 23548, Georgia
              Tel:+955 32 216632 – Ext:11            Tel:+955 32 216632 – Ext:12
              Fax:+955 32 317423                     Fax:+955 32 317423




Owners
GEPACK LLC, Georgia.

Address: District of Stskheta, village Agdgomiantkari, Georgia.

Tel: +955 32 216632

Fax: +955 32 317423

E-mail: info@gepack.net

www.gepack.net




                                                           GEPACK-SABIC Business plan
                                                                              Page 3
Management and Main Office             Factory and Warehouse:
          Tbilisi, St. Nutsubidze                District of Stskheta, Agdgomiantkari,
          GEPACK BLDG, P.O.Box: 59842, Georgia   P.O.Box: 23548, Georgia
          Tel:+955 32 216632 – Ext:11            Tel:+955 32 216632 – Ext:12
          Fax:+955 32 317423                     Fax:+955 32 317423




                     Table of Contents


1.    Table of Contents………………………………….…………………………….                              4

2.    Executive Summary……………………………………………………….……                                5

3.    General Company description ……………………………………………                            6

4.    Market Overview & Proposal………………………………………………                             7

5.    Products & Demand………………………………………………….…………                                8

6.    Development Strategy………………………………………………………..                              14

7.    Administrative Contracture………………………………………………..                           17

8.    Financial Plan…………………………………………………………….……….. 18

9.    Time Management………………………………………………………………                                  21

10.   Project Plan…………………………………………………………………………                                 22

11.   Georgian Taxation System…………………………………….……………                             23

12.   Legal Environment………………………………………………………………                                23

13.   Management Team……………………………………………………………..                                 23




                                                       GEPACK-SABIC Business plan
                                                                          Page 4
Management and Main Office               Factory and Warehouse:
                 Tbilisi, St. Nutsubidze                  District of Stskheta, Agdgomiantkari,
                 GEPACK BLDG, P.O.Box: 59842, Georgia     P.O.Box: 23548, Georgia
                 Tel:+955 32 216632 – Ext:11              Tel:+955 32 216632 – Ext:12
                 Fax:+955 32 317423                       Fax:+955 32 317423




                              2. Executive Summary
Presented project of GEPACK obtain im porting, storing, reselling, and distribution process of
SABIC™ plastics in Georgia.
Products: Polyethylene Terephthalate (PET), Polyvi nyl chloride (PVC), Polyethylene granules
(HDPE, LDPE, LLDPE), Polypropylene granules (PP), Expanded polystyrene (EPS).

GEPACK will be pioneer in dist ributing SABIC™ plastics in Georgia because of the growing
demand of this industry, and the lack of quality th at Georgian market disparately needs, as the
imported products form Ukraine, Russia, Ira n & Azerbaijan are very low quality, not to
mention the fact that the recent events of th   e past m onths with the Russian invasion, and
subsequent military conflict had a big negative impact on im ports and exports from Russia in
general, which is for the best of SABIC™ if a good plan is im plemented to fill-in the Russian
gap, and win their market share.
(Attachment 1: Georgian Export Trends 2004-2006, the drop in Russian share after 2006).
Source: siteresources.worldbank.org/INTGEORGIA/Resources/PublicLecture.ppt

GEPACK thinks that presented project will be successful, W hy? Because of non com petition
from the other m anufacturers, as the quality of products of neighbouring countries is very low
comparing with SABIC™ plastics, and the relatively better m         anufacturers are very far
geographically, so the shipping cost and delivery terms are in m ost cases not satisfactory to
major local customers, while KSA is very near to Georgia, and land shipments can be delivered
in just few days.
(Attachment 2: SABIC™ Annual Report for 2007).
(Attachment 3: SABIC™ Corporate Brochure).

In the other hand, im porter companies can be “defeated” through our pricing and distribution
polices. The only source of SABIC™ products         in Georgia is a very lim ited one, through
SABIC™ Turkish distributor, but unfortunately m ost of m ajor local custom ers f ind it so
difficult to im port from Turkey for m any reasons, m ainly the delivery term s which gives all
priority to Turkish m arket, and secondly pricing i ssues, as there are definite increase of cost
involved in re-exporting from Turkey, and double shipment cost, also extra custom fees.

Plastic product dem and in Georgia grew rapidl y especially after “Rose Revolution 2003”, as
the Georgian GDP (Gross Domestic Product: The total market value of all final goods and
services produced in a country in a given year) at 2006 reached $ 17.88 billion growing 10%
(comparing with the past year), in this year the World Bank named Georgia the top reformer in
the world.
Source: http://en.wikipedia.org/wiki/Economy_of_Georgia

At 2007 Georgian GDP growth reached even 12% (w hich is one of the m ost rapid rates in the
world) and based on the governm ental reports the annual grow of 2008 will not be less than
11% despite the m ilitary conflict with Russia. All those aspects creates good field of new
investment in FMCP (Fast Moving Consumer Products) as a result of the growing individual
income in Georgian.
Source: https://www.cia.gov/library/publications/the-world-factbook/geos/gg.html#Econ
       www.geplac.org/newfiles/others/Merab%20Tallinn(ENG).pdf
                                                                GEPACK-SABIC Business plan
                                                                                   Page 5
Management and Main Office               Factory and Warehouse:
                 Tbilisi, St. Nutsubidze                  District of Stskheta, Agdgomiantkari,
                 GEPACK BLDG, P.O.Box: 59842, Georgia     P.O.Box: 23548, Georgia
                 Tel:+955 32 216632 – Ext:11              Tel:+955 32 216632 – Ext:12
                 Fax:+955 32 317423                       Fax:+955 32 317423




                     3. General Company Description
GEPACK (Limited Liability Company) is planning to go into SABIC™ plastics im porting
and distribution business. W e are going to esta blish the first local distribution network in
Georgia dedicated for SABIC™ plastics.

GEPACK is looking on investment injection of about 2.5 Million USD. Those investments will
be directed mainly for infrastructure, distribution network, management, human resources, and
marketing. The cost of raw m aterials (it can r each multi millions of dollars) is not included in
this introductory business plan, as it is subject of discussion and negotiations with SABIC™.

We are aim ing to professionally distribute SABIC™ high quality products in Georgia, by
covering sim ultaneously both wholesales and re tail dem and in the country, noting that our
pricing policy will be strongly based on the local market requirements, and the global policies
of SABIC™. W e’ll be the only local trader to offer SABIC™ plastics in carefully designed
prices, and accurate delivery terms, which is the one and only demand of this market, after high
quality.
(Attachment 4: SABIC™ plastics certif icates and declarations of quality of one of SABIC™
products, as an example of superior quality).

GEPACK owns 3000 m 2 land in Agdgom iantkari (District of Stskheta), which is only 20 km
from Tbilisi (The capital of Georgia), and the distance to the m ain West Georgian highway is
just 700 m , remembering the capital is in the ge ographic centre of the country; our location is
considered just the perfect selection for such project.
(Attachment 5: Map of Georgia).
(Attachment 6: Diagram of GEPACK land and building).

GEPACK plan is to initiate the distribution network in 2009 depending on our storage capacity
which is a three floors concrete building with total area of 2109 m2 (703 m2 for each floor).
(Attachment 7: Diagram of GEPACK concrete storage building).

The quality and the capacity of our distribution system will be covenant f or maximum 1 year,
after that we have to expand our f    acilities, theref ore GEPACK already decided to build
additional warehouse which consists of two fl oors, and a total area of 1200 m 2 (600 m2 each)
(Attachment 8: Diagram of GEPACK Additional warehouse).

At the same time with storage capacity growt h, we’ll buy new distribution vans for expanding
our distribution network to all other main cities of Georgia.
(Attachment 9: Distribution fleet for 2009).

GEPACK's m ost powerful point is that SABI C™ products are already highly dem anded in
Georgian and Caucasian market, and our inquirers clearly shows that m ost importers are ready
to convert to SABIC™ plastics if (and only if)     a local agent or branch is established, and
committed to agreed delivery terms.
(Attachment 10: Copies of letters of intend from some Georgian suppliers).

                                                                GEPACK-SABIC Business plan
                                                                                   Page 6
Management and Main Office               Factory and Warehouse:
                 Tbilisi, St. Nutsubidze                  District of Stskheta, Agdgomiantkari,
                 GEPACK BLDG, P.O.Box: 59842, Georgia     P.O.Box: 23548, Georgia
                 Tel:+955 32 216632 – Ext:11              Tel:+955 32 216632 – Ext:12
                 Fax:+955 32 317423                       Fax:+955 32 317423




                      4. Market Overview & Proposal

In order to show in details the capacity of the Georgian market, and the feasible business value
of this m arket, we w ould like to show one important report from the Georgian
customs authority showing the exact im port of the Georgian com panies in 2007, and also the
exact names of international exporters of plastics to Georgia in the same year.

Based on this report, one can notice that the to tal annual im port of plastics raw m aterials is
233,3 thousand MT, with a total m arket value of $ 366,6 m illions, so the average m onthly
consumption of the Georgian m arket for 2007 is 19.441 MT per m onth, and if we presum ed
that the dem and is growing annually in 20% (which is m       uch m ore than reality), then the
forecast of the Georgian market in 2009 is 28.000 MT per month.

GEPACK is proud to offer direct import from SABIC™ of more than 11.000 MT as an
initial plan for cooperation in 2009, which equals more than one third of the total market
volume, and to double this amount in 2010.

As a brief summary, we would like to show the exact imports of plastics to Georgia in 2007 in
monthly bases, with the official cost:

                January 2007                                        February 2007
13,799.535    MT         $ 19,688,658.00              8,287.860     MT         $ 13,216,248.00


                 March 2007                                           April 2007
12,954.480    MT         $ 20,296,624.00             22,605.585     MT         $ 35,302,123.00


                   May 2007                                           June 2007
20,742.255    MT         $ 29,240,521.00             12,250.095     MT         $ 20,166,136.67


                   July 2007                                         August 2007
25,243.395    MT         $ 38,657,628.06             19,931.160     MT         $ 33,793,322.82


              September 2007                                        October 2007
23,914.335    MT         $ 36,949,328.02             28,493.715     MT         $ 45,505,131.00


               November 2007                                       December 2007
27,160.240    MT          $ 46,411,020.5             17,919.435     MT         $ 27,403,254.47

(Attachment 11: Copy of the Georgian Customs Authority record for 2007).
(Attachment 12: Copy of the Georgian Customs Authority record for main exporters in 2007).


                                                                  GEPACK-SABIC Business plan
                                                                                     Page 7
Management and Main Office               Factory and Warehouse:
                Tbilisi, St. Nutsubidze                  District of Stskheta, Agdgomiantkari,
                GEPACK BLDG, P.O.Box: 59842, Georgia     P.O.Box: 23548, Georgia
                Tel:+955 32 216632 – Ext:11              Tel:+955 32 216632 – Ext:12
                Fax:+955 32 317423                       Fax:+955 32 317423




                             5. Products & Demand

1- PET Resin:

Polyethylene Terephthalate, widely referred to as (PET), the required material by our clients is
PET with intrinsic viscosity (I.V.) in-between 0.83 – 0.85 dlgr.




Our f eedback showed that m ost of Georgian m anufacturers pref er the crystalline PET f or
injection stretch blow m oulding, SABIC® P ET BC-112, which is m ainly used for carbonated
soft drinks, and SABIC® PET BC-111, which is mainly used for water bottles.

The recent demand for 2009 plan is 1200 MT per m onth for Georgia, and for 2010 our plan is
to distribute double this amount to exceed 1600 MTmonth.

For SABIC® PET BC-112 the dem and is 800 MT per, and for SABIC® PET BC-111 the
demand is 400 MT per month.

(Attachment 13: SABIC® PET BC-112 official data sheet).
(Attachment 14: SABIC® PET BC-111 official data sheet).




                                                               GEPACK-SABIC Business plan
                                                                                  Page 8
Management and Main Office               Factory and Warehouse:
                Tbilisi, St. Nutsubidze                  District of Stskheta, Agdgomiantkari,
                GEPACK BLDG, P.O.Box: 59842, Georgia     P.O.Box: 23548, Georgia
                Tel:+955 32 216632 – Ext:11              Tel:+955 32 216632 – Ext:12
                Fax:+955 32 317423                       Fax:+955 32 317423




2- PVC Resin:
Polyvinyl chloride, widely referred to as (PVC ), the required m aterial by our clients is for
building m aterials, windows and doors, panels, se wer pipers, m etal-plastic profiles, plastic
pipes, laminated floor, metal tiles, sandwich Panels, panels, foam, etc.




Our feedback showed that both SABIC®         SPVC 57S, SABIC® SPVC 67S, are equally
demanded in Georgia.

The recent dem and for 2009 plan is 1600 MT        per m onth for Georgia, and for 2010 our
guaranteed demand is 2600 MTmonth.

(Attachment 15: SABIC® SPVC 57S official data sheet).
(Attachment 16: SABIC® SPVC 67S official data sheet).




                                                               GEPACK-SABIC Business plan
                                                                                  Page 9
Management and Main Office                Factory and Warehouse:
                 Tbilisi, St. Nutsubidze                   District of Stskheta, Agdgomiantkari,
                 GEPACK BLDG, P.O.Box: 59842, Georgia      P.O.Box: 23548, Georgia
                 Tel:+955 32 216632 – Ext:11               Tel:+955 32 216632 – Ext:12
                 Fax:+955 32 317423                        Fax:+955 32 317423




3- HDPE Granules:

High density Polyethylene, widely referred to as (HDPE), is the m ost dem anded plastic raw
material for the Georgian m arket of today, our clients demand the HDPE - PE-100, which our
feedback showed that the m ajor clients gl adly accept SABIC® Vestolen A6060R for the
known preferable properties for m anufacturing pressure pipes for various applications, such as
drinking water, sewage, and Gas.




The recent dem and for 2009 plan is 3600 MT  per m onth for Georgia, and for 2010 our
guaranteed demand is 6000 MTmonth.
(Attachment 17: SABIC® HDPE P6006 official data sheet).


We also a secondary dem and for one kind of HDPE called (HDPE-F00952), m ainly used for
very thin film s, and as a result all the relate d industries such as shopping bags, and wall sack
liners … etc.

The equivalent product from SABIC™ is SABIC® HDPE F00952.
The recent dem and for 2009 plan is 300 MT   per m onth for Georgia, and for 2010 our
guaranteed demand is 650 MTmonth.
(Attachment 18: SABIC® HDPE F00952 official data sheet).




                                                                 GEPACK-SABIC Business plan
                                                                                   Page 10
Management and Main Office              Factory and Warehouse:
                Tbilisi, St. Nutsubidze                 District of Stskheta, Agdgomiantkari,
                GEPACK BLDG, P.O.Box: 59842, Georgia    P.O.Box: 23548, Georgia
                Tel:+955 32 216632 – Ext:11             Tel:+955 32 216632 – Ext:12
                Fax:+955 32 317423                      Fax:+955 32 317423




4- LDPE Granules:
Low density Polyethylene, widely referred to as (LDPE), it is also dem anded in the Georgian
market, our clients dem and for this m aterial is 400 MT per m onth for 2009, and we estim ate
850 MT per month in 2010.




The mentioned demand for 2009 is divided into four parts:

1- LDPE 2100TN00 – 100 MT per month.
(Attachment 19: SABIC® LDPE 2100TN00 official data sheet).

2- LDPE 2100TN21 – 100 MT per month.
(Attachment 20: SABIC® LDPE 2100TN21 official data sheet).

3- LDPE HP0722N – 100 MT per month.
(Attachment 21: SABIC® LDPE HP0722N official data sheet).

4- LDPE 2600TC00 – 100 MT per month.
(Attachment 22: SABIC® LDPE 2600TC00 official data sheet).




                                                              GEPACK-SABIC Business plan
                                                                                Page 11
Management and Main Office             Factory and Warehouse:
                Tbilisi, St. Nutsubidze                District of Stskheta, Agdgomiantkari,
                GEPACK BLDG, P.O.Box: 59842, Georgia   P.O.Box: 23548, Georgia
                Tel:+955 32 216632 – Ext:11            Tel:+955 32 216632 – Ext:12
                Fax:+955 32 317423                     Fax:+955 32 317423




5- LLDPE Granules:

Linear Low density Polyethylene, widely refe rred to as (LLDPE), our clients im port it f or
manufacturing bags and films for many applications such as frozen food, waste bags, and films
for food-wrapping.




There is only one SABIC™ product demanded from this category; SABIC® LLDPE 118W.
The recent demand for 2009 plan is 100 MT per month, and for 2010, it is 200 MTmonth.
(Attachment 23: SABIC® LLDPE 118W official data sheet).




                                                             GEPACK-SABIC Business plan
                                                                               Page 12
Management and Main Office               Factory and Warehouse:
                Tbilisi, St. Nutsubidze                  District of Stskheta, Agdgomiantkari,
                GEPACK BLDG, P.O.Box: 59842, Georgia     P.O.Box: 23548, Georgia
                Tel:+955 32 216632 – Ext:11              Tel:+955 32 216632 – Ext:12
                Fax:+955 32 317423                       Fax:+955 32 317423




6- PP Granules:

Polypropylene, or easier to say (PP), is the s econd most demanded plastic raw m aterial for the
Georgian market, our clients dem and the PP -R "R200P", which our feedback showed that the
major clients gladly accept SABIC® Sheet extrusion 83EK10.




The recent dem and for 2009 plan is 3300 MT   per m onth for Georgia, and for 2010 our
guaranteed demand is 5000 MTmonth.
(Attachment 24: SABIC® PP 83EK10 official data sheet).


We also a secondary dem and for one kind of PP mainly used for woven bags, the equivalent
grade from SABIC™ is SABIC® PP 500P .

The recent dem and for 2009 plan is 100 MT     per m onth for Georgia, and for 2010 our
guaranteed demand is 200 MTmonth.
(Attachment 25: SABIC® PP 500P official data sheet).


                                                               GEPACK-SABIC Business plan
                                                                                 Page 13
Management and Main Office               Factory and Warehouse:
                 Tbilisi, St. Nutsubidze                  District of Stskheta, Agdgomiantkari,
                 GEPACK BLDG, P.O.Box: 59842, Georgia     P.O.Box: 23548, Georgia
                 Tel:+955 32 216632 – Ext:11              Tel:+955 32 216632 – Ext:12
                 Fax:+955 32 317423                       Fax:+955 32 317423




7- EPS Granules:
Expanded polystyrene (EPS), our dem and for this material is relatively good com paring with
recent consumption rates, 420 MT per m onth for 2009, and we estim ate 950 MT per m onth in
2010.
The m ain application f or this m aterial is to achieve im pact resistance property for furniture,
partitions, and containers.




Our clients dem and is 100 MT per m onth for 2009 of "EPS – F103" grade, which is used for
shape molding for more than 1 cm thickness, and also medium to high density block molding.

Our feedback showed that the m ajor clients gladly accept SABIC® EPS 552 as an equivalent
for this grade.
In 2010 our plan is to distribute 650 MT per month.
(Attachment 26: SABIC® EPS 552 official data
sheet).

The second dem anded grade by our clients is
"EPS – F104" with 320 MT per m onth for 2009,
which is used for large shape and m     edium
density molding.

Our feedback showed th at m ajor clients accept
SABIC® EPS 652 as an equivalent for this
grade.
In 2010 our plan is to distribute 300 MT per
month.
(Attachment 27: SABIC® EPS 652 official data
sheet).



                                                                GEPACK-SABIC Business plan
                                                                                  Page 14
Management and Main Office                 Factory and Warehouse:
                 Tbilisi, St. Nutsubidze                    District of Stskheta, Agdgomiantkari,
                 GEPACK BLDG, P.O.Box: 59842, Georgia       P.O.Box: 23548, Georgia
                 Tel:+955 32 216632 – Ext:11                Tel:+955 32 216632 – Ext:12
                 Fax:+955 32 317423                         Fax:+955 32 317423




                            6. Development Strategy

1- Marketing

Georgia is sm all country, with an area of 69,700 sq km , approxim ately one third the size of
Oman, just to give you an idea, KSA is th       irty (30) tim es bigger, bordered by Turkey,
Azerbaijan, Arm enia, Russia and the Black Sea . Strategically located east of the Black Sea;
Georgia controls m uch of the Caucasus Mountains and the routes through them . Population:
4,646,003 (July 2007 Est).

Georgian m arket is part of the Caucasian Ma rket which total size is 185 000 square km and
population of 16 256 360 (2007 Est).

The recorded history of Georgia dates back m ore than 4,000 years. The culture of Georgia has
evolved over the country' s long history, providi ng it with strong literary tradition. The unique
Georgian alphabet, which is am ong the fourteen existing ones in the world dates back to the
5th century BC.

In Georgian m arket there is big dem and on high quality plastic products and we have a very
real chance to win 50% of the m arket share, de finitely it’s not a lim it even f or the f irst year.
Our main care will be the guaranteed permanent grow of our distribution network and services.

Our m ain advantage will be the brand recognition subject; it is a usual problem     for the new
brands, but for SABIC™ the products quality is known to be superior, and its already highly
demanded, but we are going to launch well targeted advertisement campaign, to make sure that
all manufacturers and major clients know about th e instant and direct availability of SABIC™
in the Georgian market.

Our m arketing strategy will be based on perm anent m arketing works. GEPACK will always
monitor the Georgian m arket to locate new m arket players, and to m ake sure that our superior
pricing structure is always known.




                                                                  GEPACK-SABIC Business plan
                                                                                    Page 15
Management and Main Office               Factory and Warehouse:
                 Tbilisi, St. Nutsubidze                  District of Stskheta, Agdgomiantkari,
                 GEPACK BLDG, P.O.Box: 59842, Georgia     P.O.Box: 23548, Georgia
                 Tel:+955 32 216632 – Ext:11              Tel:+955 32 216632 – Ext:12
                 Fax:+955 32 317423                       Fax:+955 32 317423




2- Promotion

We think that our promotion and advertising companies have to begin one month or two before
product launching on the market. Serious promotion event will be new storage facility opening
and products presentation in Tbilisi Marriott Hote l where will be invited owners and m anagers
of biggest Georgian com panies and (Chamber of Comers & Business Federation), also will be
invited popular Georgian social and political celebrities.

Our presentation party will be coverage by Georgian public and privet TV and Radio stations.

GEPACK advertising strategy is including participation at Trade Shows in Georgia, Azerbaijan
and Armenia. Those are tree main Trade Shows in Caucasus Region.

In our region very necessary is to have TV and Radio advertisem ent during the m ost popular
programs. Especially for first year is very im portant to have such advertisem ent but it have to
be well organized from m onth to m onth, adve rtisement schedule in TV, Radio, and street
billboards will replace each other.

The images of our product have to be the best quality in best price for the perm anent freshness
of our clients.

Occasionally, GEPACK will host national TV pr ograms discussing Georgian and Caucasian
economic issues,

All above m entioned ideas will im prove our sells capacity but we thinks that the m       ain our
advantages have to be sells offers for endures and major manufacturers.




                                                                GEPACK-SABIC Business plan
                                                                                  Page 16
Management and Main Office                Factory and Warehouse:
                 Tbilisi, St. Nutsubidze                   District of Stskheta, Agdgomiantkari,
                 GEPACK BLDG, P.O.Box: 59842, Georgia      P.O.Box: 23548, Georgia
                 Tel:+955 32 216632 – Ext:11               Tel:+955 32 216632 – Ext:12
                 Fax:+955 32 317423                        Fax:+955 32 317423




3- Distribution Channels


We already m entioned above that GEPACK            m ain susses depends on well organized
distribution network.

GEPACK m ain concern is the perm anent grow of our direct distribu tion network. W e have
already very clear distribution m ap of capital Tbilisi (1,8 m illion population), and the rest of
the Georgian territories, also strategic plan for next year.

Definition:

   •   Indirect distribution: reselling SABIC™ plastics to major retailers in Georgia.
   •   Direct distribution: reselling SABIC™ plastics to Georgian manufacturers directly.

Year One:

   -   GEPACK distribution for capital Tbilisi depends on the direct method, while in the rest
       of the country, the indirect method is to be implemented.

Year Tow:

   -   GEPACK distribution for capital Tbilisi rem ains direct, while in the rest of the country
       the indirect methods are to be suspended.
   -   In order for GEPACK to implement direct method in the rest of Georgia, GEPACK will
       open store houses (rentals) in each of the fo llowing cities during last three m onths of
       the first year, to be operational in the beginning of the second year, as follows:

   •   Batumi (population, 210 000)
   •   Kutaisi (285 000)
   •   Rustavi (175000)
   •   Bojomi & Bakuriani (65 000)
   •   Telavi (28000)
   •   Zugdidi (120 000)
   •   Gori (60 000)




                                                                 GEPACK-SABIC Business plan
                                                                                   Page 17
Management and Main Office                      Factory and Warehouse:
            Tbilisi, St. Nutsubidze                         District of Stskheta, Agdgomiantkari,
            GEPACK BLDG, P.O.Box: 59842, Georgia            P.O.Box: 23548, Georgia
            Tel:+955 32 216632 – Ext:11                     Tel:+955 32 216632 – Ext:12
            Fax:+955 32 317423                              Fax:+955 32 317423




                   7. Administrative Contracture

                                       General
                                       Manager
          Secretary



                                 Assistance Manager
          Secretary




                          Financial
                            Dept.



Chief Accountant - 1
      Person                                              Procurement
                                                             Dept.
Assistant - 2 Persons

                                                                           Head of Dept. - 1
                         Marketing &                                           Person
                         Sales Dept.

                                                                        Assistant – 1 Person
  Head of Dept. - 1
      Person
                                                          Service Dept.
 Marketing Officer - 1
       Person
                                                                            IT engineer – 1
    Salesmen - 4                                                                Person
      Persons
                                     Please refer to                      Sanitary - 3 Persons
                                 "Financial Plan, Human
   Store Labour - 3               Resources", Page 20
       Persons                                                            Security - 2 Persons


                                                                          Drivers - 6 Persons




                                                                  GEPACK-SABIC Business plan
                                                                                    Page 18
Management and Main Office                   Factory and Warehouse:
                 Tbilisi, St. Nutsubidze                      District of Stskheta, Agdgomiantkari,
                 GEPACK BLDG, P.O.Box: 59842, Georgia         P.O.Box: 23548, Georgia
                 Tel:+955 32 216632 – Ext:11                  Tel:+955 32 216632 – Ext:12
                 Fax:+955 32 317423                           Fax:+955 32 317423




                                   8. Financial Plan

1. Fixed Operational Costs (FOC)
   After carefully approaching the expected ope rational costs, and estim ating the average
   monthly costs of services and operational requirem     ents, we cam e to the following
   conclusion of fixed operational costs for 2009.
   While examining the mentioned study, please note the following:

1. GEPACK is planning to organize a grand             ceremony for launching the project, this
   ceremony should be in the end of January 2009 (for further details, please refer to "GEPAC
   – SABIC Project Plan", in page 22).
2. The fixed continues cost of advertisem ent was determ ined to be $ 5000 per m               onth,
   separated from the cost of m onthly prom otion which is $ 500, a very big m             argin for
   distribution business, however sill an essen       tial m ilestone to ref lect the strength of
   GEPACK and guarantee full media exposure on SABIC™ brand name.
3. GEPACK is sitting beside a budget of $ 7,000.00 fo r organising an entertainment event for
   all m anagement and staff of GEPACK in mid March 2009, with one week vacation, to
   allow all HR to rest after excessive activities of launching the project.

                                                 2009 (Unit = $ 1000)
  Activity
                   Jan     Feb    Mar    Apr    May    Jun     Jul      Aug    Sep    Oct    Nov    Dec
    Minor
                  0.05     0.05   0.05   0.05   0.05   0.05    0.05     0.05   0.05   0.05   0.05   0.05
   Supplies
   Opening
                   10       0      0      0      0      0       0        0      0      0      0       0
  Ceremony
  Advertising      15       18     10     5       5      5       5        5      5      5      5      5
 Entertainment      0        0      7     0       0      0       0        0      0      0      0      0
   Literature     0.02     0.02   0.02   0.02   0.02   0.02    0.02     0.02   0.02   0.02   0.02   0.02
  Promotions       0.5      0.5   0.5    0.5     0.5    0.5     0.5      0.5    0.5    0.5    0.5    0.5
 Trade Shows        0        0      0    1.5      0      0       0        0     1.5     0      0      0
     Travel         1        1      1     1       1      1       1        1      1      1      1      1
  Consulting        2        2      0     0       0      0       0        0      0      0     0.5    0.5
 Depreciation     0.25     0.25   0.25   0.25   0.25   0.25    0.25     0.25   0.25   0.25   0.25   0.25
   Insurance      0.15     0.15   0.15   0.15   0.15   0.15    0.15     0.15   0.15   0.15   0.15   0.15
  Legal Fees      0.35     0.35   0.35   0.35     0      0       0        0      0      0      0      0
  Licenses &
                   0.4      0      0      0      0      0       0        0      0      0      0       0
    Permits
     Office
                   0.1     0.1    0.1    0.1    0.1    0.1     0.1      0.1    0.1    0.1    0.1      0.1
   Expenses
  Telephone       0.15     0.15   0.15   0.15   0.15   0.15    0.15     0.15   0.15   0.15   0.15   0.15
 Fast Internet     0.1      0.1   0.1    0.1     0.1    0.1     0.1      0.1    0.1    0.1    0.1    0.1
    Utilities     0.03     0.03   0.03   0.03   0.03   0.03    0.03     0.03   0.03   0.03   0.03   0.03
  Uncounted
                   10       0      0      0      0      0       0        0      0      0      0       0
   Expenses

   Totals         40.1     22.7   19.7   9.2    7.35   7.35    7.35     7.35   8.85   7.35   7.85   7.85


                                                                      GEPACK-SABIC Business plan
                                                                                        Page 19
Management and Main Office                Factory and Warehouse:
                Tbilisi, St. Nutsubidze                   District of Stskheta, Agdgomiantkari,
                GEPACK BLDG, P.O.Box: 59842, Georgia      P.O.Box: 23548, Georgia
                Tel:+955 32 216632 – Ext:11               Tel:+955 32 216632 – Ext:12
                Fax:+955 32 317423                        Fax:+955 32 317423




2. Human Resources

GEPACK LLC consists of three m           ain depa rtments (Service Dept. in Adm      inistrative
Contracture "Page 17" is under direct control      of AM, and not considered an independent
department "Adm inistratively"), the total num ber of em ployees is 30 persons, Managem ent
Dept. (9 persons), Marketing and Sales Dept. (9 persons), and Service Dept. with (12 persons),
the total salaries and expenses of HR are $ 20,700.00 per m onth, thoroughly detailed in the
following three tables (1 $ = 1.5 Georgian Laris):

                                                                           Sub-
 No.                Management                      Qty     Salary $
                                                                          Total $
                                                                                          Lari

   1    General Manager                              1      2,000.0       2,000.0      3,000.0
   2    Assistant Manager                            1      1,500.0       1,500.0      2,250.0
   3    Secretary of GM                              1       600.0         600.0        900.0
   4    Secretary of AM                              1       600.0         600.0        900.0
   5    Chief Accountant                             1      1,100.0       1,100.0      1,650.0
   6    Assistant of CA                              2       750.0        1,500.0      2,250.0
   7    Head of Procurement Department               1      1,000.0       1,000.0      1,500.0
   8    Assistant of PD                              1       750.0         750.0       1,125.0
                               Total :               9                     9,050       13,575.0
                                                                           Sub-
 No.        Marketing & Sales Dept.                 Qty     Salary $
                                                                          Total $
                                                                                          Lari

   9    Head of Marketing and Sales Dept.            1      1,100.0       1,100.0       1,650.0
  10    Marketing Officer                            1       800.0         800.0        1,200.0
  11    Salesmen                                     4       500.0        2,000.0       3,000.0
        Store, Person in
                                                     1       600.0         600.0         900.0
  12    Charge
  13    Labours (store)                              2       350.0         700.0        1,050.0
                                Total :              9                    5,200.0       7,800.0
                                                                           Sub-
 No.                Service Dept.                   Qty     Salary $
                                                                          Total $
                                                                                          Lari
  14    IT Expert                                     1      800.0         800.0        1,200.0
  15    Sanitary                                      3      350.0        1,050.0       1,575.0
  16    Security                                      2      500.0        1,000.0       1,500.0
  17    Drivers                                       6      600.0        3,600.0       5,400.0
                                     Total :         12                   6,450.0       9,675.0

                    GRAND TOTAL:                     30                  20,700.0      31,050.0




                                                                GEPACK-SABIC Business plan
                                                                                  Page 20
Management and Main Office                 Factory and Warehouse:
                 Tbilisi, St. Nutsubidze                    District of Stskheta, Agdgomiantkari,
                 GEPACK BLDG, P.O.Box: 59842, Georgia       P.O.Box: 23548, Georgia
                 Tel:+955 32 216632 – Ext:11                Tel:+955 32 216632 – Ext:12
                 Fax:+955 32 317423                         Fax:+955 32 317423




3. Offices & Stationary:
Based on the above m entioned HR study, 12 offices are needed (for item s 1-10, and item 14),
accompanying all the necessary tools for their professional efficiency and productivity, and
simultaneously implementing a very strict PC networking system, mainly used for m onitoring
daily work and preventing unnecessary expenses in terms of actual finance or in time.

Hereunder is a detailed description of needed hardware and stationary expenses:


     Name of Item                Quantity        Unit Cost $    Sub - Total $    Sub - Total GEL

 PC                                12                400           4800                7200
 PC Networking                      1               3000           3000                4500
 Laser Printer                      2                500           1000                1500
 Scanner                            2                100            200                300
 Copy machine                       1                950            950                1425
 Telephone                         20                85            1700                2550
 Telephone Server                   1               1400           1400                2100
 Fax                                2                350            700                1050
 Stationary                   For 3 months           250            250                375
 Office Furniture                  12                950           11400              17100

         TOTAL                                                    25400              38100

4. Buying Machinery & Equipment:
Based on m arket prices of late 2008, the estim       ated cost of the m entioned equipm ent
(Automatic & manual Forklifts, automatic conveyer - transporters, distribution tracks "loading
capacity 30 tons"), is between 120 – 140 thousand US Dollars, so we decided to estim ate the
fixed cost of equipment 130 thousand US Dollars.
Upon real launch of project, a new cost estimation study is a must.

5. Building additional warehouse :
The additional 600 m2 warehouse planned to be built near the main storage facility, consists of
two floor metal building, with both storage and office facilities, the total cost of this plan based
on late 2008 quotations is $ 360,000.00

6. Renting 7 warehouses around Georgia:
As mentioned earlier (Ref: Development Plan, Distribution Channels, "Page 16"), GEPACK is
to rent 7 warehouses around the country, the best-offered m onthly rentals were $ 1000 per
month according to 2008 market prices, so the whole budget is averagely $ 7000 monthly.

                                                                  GEPACK-SABIC Business plan
                                                                                    Page 21
Management and Main Office             Factory and Warehouse:
                  Tbilisi, St. Nutsubidze                District of Stskheta, Agdgomiantkari,
                  GEPACK BLDG, P.O.Box: 59842, Georgia   P.O.Box: 23548, Georgia
                  Tel:+955 32 216632 – Ext:11            Tel:+955 32 216632 – Ext:12
                  Fax:+955 32 317423                     Fax:+955 32 317423




                                9. Time Management

Hereunder is the Time Chart of GEPACK-SABIC Project, with the main phases illustrated, the
launching period for the whole project is 9 months, starting from January till September 2009.


 Registrations of legal documents & brand name
 Offices' furniture, communication devices, PCs, and stationary
 Marketing, Advertising, & Promotion                                               2008
 Market Research & Analysis
 Buying all necessary machinery & equipment
 Instillation of building anti fire system                                         Completed
 Hiring Human Resource                                                             Plan
 Additional warehouse at main location                                             On Progress
 Storehouses Rentals                                                               Delayed
 Daily Operations                                                                  2009
                                                                                    Date
                                                                                     3
                                                                                     10




                                                                                                 Jan
                                                                                     17
                                                                                     24
                                                                                     31
                                                                                     7
                                                                                     14




                                                                                                 Feb
                                                                                     21
                                                                                     28
                                                                                     4
                                                                                     11
                                                                                     18          Mar
                                                                                     25
                                                                                     4
                                                                                     11
                                                                                                 Apr


                                                                                     18
                                                                                     25
                                                                                     1
                                                                                                 May




                                                                                     15
                                                                                     29
                                                                                     4
                                                                                                 June




                                                                                     11
                                                                                     18
                                                                                     25
                                                                                     1
                                                                                                 July




                                                                                     15
                                                                                     29
                                                                                     1
                                                                                                 Aug




                                                                                     15
                                                                                     29
                                                                                     1
                                                                                                 Sep




                                                                                     15
                                                                                     29




                                                                  GEPACK-SABIC Business plan
                                                                                    Page 22
Management and Main Office                           Factory and Warehouse:
                  Tbilisi, St. Nutsubidze                              District of Stskheta, Agdgomiantkari,
                  GEPACK BLDG, P.O.Box: 59842, Georgia                 P.O.Box: 23548, Georgia
                  Tel:+955 32 216632 – Ext:11                          Tel:+955 32 216632 – Ext:12
                  Fax:+955 32 317423                                   Fax:+955 32 317423




                                     10. Project Plan
As you know, the project plan is just an overl apping of two charts, which are Finance, and
Time, and as we already went through both charts, the project's plan chart is as follows:

  Land (3000 m2)                                            $ 330,000.00
  Main storage (3 floors concrete building, 2109 m2)        $ 1,170,000.00
  Registrations of legal documents & brand name
  Offices' furniture, communication devices, PCs, and stationary                                    2008
  Marketing, Advertising, & Promotion
  Market Research & Analysis
  Buying all necessary machinery & equipment
  Instillation of building anti fire system                                                        Completed
  Human Resource (Management & Staff)                                                              Plan
  Additional warehouse at main location                                                            On Progress
  Storehouses Rentals                                                                              Delayed
  Fixed Operational Costs
  (FOC)                                                                                             2009
          Sub - Totals                                                                             Date
                51.10                                20.7         15     15                 0.4       3
                20.10                                       0.1   20                                 10




                                                                                                              Jan
                50.70               40.1                          10                        0.6      17
                30.70                                       0.3   5                  25.4            24
                90.70                                             80     0.6   10           0.1      31
                28.70                                20.7                      8                      7
                22.70               22.7                                                             14




                                                                                                              Feb
                 0.00                                                                                21
                10.60                                                    0.6   10                    28
                20.70                                20.7                                             4
                19.70               19.7                                                             11

                                                                                                              Mar
                 0.00                                                                                18
                10.60                                                    0.6   10                    25
               100.95                          80    20.7                            0.25             4
                 9.20               9.2                                                              11
                                                                                                              Apr


                80.00                          80                                                    18
                 5.60                                                    0.6    5                    25
                20.70                                20.7                                             1
                                                                                                              May




               120.00                          120                                                   15
                12.95               7.35                                 0.6    5                    29
               100.70                          80    20.7                                             4
                                                                                                              June




                 0.00                                                                                11
                 7.35               7.35                                                             18
                 5.60                                                    0.6    5                    25
                27.95                      7         20.7                            0.25             1
                                                                                                              July




                 7.35               7.35                                                             15
                 5.60                                                    0.6    5                    29
                27.70                      7         20.7                                             1
                                                                                                              Aug




                 7.35               7.35                                                             15
                 5.60                                                    0.6    5                    29
                27.70                      7         20.7                                             1
                                                                                                              Sep




                 8.85               8.85                                                             15
                 5.60                                                    0.6     5                   29
                                      Land & Building                      $ 1,500,000.00
           Total Cost                                                                             $ 2,443,050.00
                                           Plan 2009                       $ 943,050.00



                                                                               GEPACK-SABIC Business plan
                                                                                                 Page 23
Management and Main Office               Factory and Warehouse:
                Tbilisi, St. Nutsubidze                  District of Stskheta, Agdgomiantkari,
                GEPACK BLDG, P.O.Box: 59842, Georgia     P.O.Box: 23548, Georgia
                Tel:+955 32 216632 – Ext:11              Tel:+955 32 216632 – Ext:12
                Fax:+955 32 317423                       Fax:+955 32 317423




                       11. Georgian Taxation System

Although it is considered one of the m ost transparent and even inspiring system s of the world,
but in our project we have a separate plan to legally avoid paying so much Taxes.
The Georgian governm ent charges 25% of net income as Incom e Tax, and for our kind of
activity there is no Social Tax, while the Tax of Added Value (VAT) is 18% (to be paid with
customs).
The Property Tax is 1%, and finally the Profit tax is 15%.
(Attachment 28: Georgian Tax Code)



                             12. Legal Environment

 License……………………………………………………………….…                                         Available
 Permits.…………………………………………………………………                                         Not required
 Health, workplace, or environmental regulations...……………………                Available
 Special regulations………………………………….…..…………...…                              Not required
 Zoning or building code…………………………………..……………                               #174
 Insurance coverage……………………………………..………………                                  Yes
 Trademarks, copyrights or patents…………………………...………...                      Available



                            13. Management Team

 ● Board of Directors:                             ● Management advisory board:
      Mr. Archil Mkheidze, Chairman.                    Dr. Mahmoud Al-Jammal,
      Dr. Mahmoud Al-Jammal                             Manager.
      Mr. Zviadi Baramia

 ● Attorney:                                       ● Accountant:
       Mr. Nino Chokheli                                Mr. Russudan Mikadze.

 ● Banker :                                        ● Consultant :
      TBC Bank, Mr. Nato Chokheli,                      Mr. George Akhaladze,
      Back-office Manager.                              Coca-Cola Bottlers Georgia,
                                                        Financial Manager.




                                                               GEPACK-SABIC Business plan
                                                                                 Page 24

Weitere ähnliche Inhalte

GEPACK-SABIC Business Plan for Importing and Distributing Plastics in Georgia

  • 1. Management and Main Office Factory and Warehouse: Tbilisi, St. Nutsubidze District of Stskheta, Agdgomiantkari, GEPACK BLDG, P.O.Box: 59842, Georgia P.O.Box: 23548, Georgia Tel:+955 32 216632 – Ext:11 Tel:+955 32 216632 – Ext:12 Fax:+955 32 317423 Fax:+955 32 317423 GEPACK-SABIC Business plan Page 1
  • 2. Management and Main Office Factory and Warehouse: Tbilisi, St. Nutsubidze District of Stskheta, Agdgomiantkari, GEPACK BLDG, P.O.Box: 59842, Georgia P.O.Box: 23548, Georgia Tel:+955 32 216632 – Ext:11 Tel:+955 32 216632 – Ext:12 Fax:+955 32 317423 Fax:+955 32 317423 Business Plan Mahmoud Al-Jammal, DDS, DESS, MS Business Development Manager m.jammal@gepack.net 21 August 2008 GEPACK-SABIC Business plan Page 2
  • 3. Management and Main Office Factory and Warehouse: Tbilisi, St. Nutsubidze District of Stskheta, Agdgomiantkari, GEPACK BLDG, P.O.Box: 59842, Georgia P.O.Box: 23548, Georgia Tel:+955 32 216632 – Ext:11 Tel:+955 32 216632 – Ext:12 Fax:+955 32 317423 Fax:+955 32 317423 Owners GEPACK LLC, Georgia. Address: District of Stskheta, village Agdgomiantkari, Georgia. Tel: +955 32 216632 Fax: +955 32 317423 E-mail: info@gepack.net www.gepack.net GEPACK-SABIC Business plan Page 3
  • 4. Management and Main Office Factory and Warehouse: Tbilisi, St. Nutsubidze District of Stskheta, Agdgomiantkari, GEPACK BLDG, P.O.Box: 59842, Georgia P.O.Box: 23548, Georgia Tel:+955 32 216632 – Ext:11 Tel:+955 32 216632 – Ext:12 Fax:+955 32 317423 Fax:+955 32 317423 Table of Contents 1. Table of Contents………………………………….……………………………. 4 2. Executive Summary……………………………………………………….…… 5 3. General Company description …………………………………………… 6 4. Market Overview & Proposal……………………………………………… 7 5. Products & Demand………………………………………………….………… 8 6. Development Strategy……………………………………………………….. 14 7. Administrative Contracture……………………………………………….. 17 8. Financial Plan…………………………………………………………….……….. 18 9. Time Management……………………………………………………………… 21 10. Project Plan………………………………………………………………………… 22 11. Georgian Taxation System…………………………………….…………… 23 12. Legal Environment……………………………………………………………… 23 13. Management Team…………………………………………………………….. 23 GEPACK-SABIC Business plan Page 4
  • 5. Management and Main Office Factory and Warehouse: Tbilisi, St. Nutsubidze District of Stskheta, Agdgomiantkari, GEPACK BLDG, P.O.Box: 59842, Georgia P.O.Box: 23548, Georgia Tel:+955 32 216632 – Ext:11 Tel:+955 32 216632 – Ext:12 Fax:+955 32 317423 Fax:+955 32 317423 2. Executive Summary Presented project of GEPACK obtain im porting, storing, reselling, and distribution process of SABIC™ plastics in Georgia. Products: Polyethylene Terephthalate (PET), Polyvi nyl chloride (PVC), Polyethylene granules (HDPE, LDPE, LLDPE), Polypropylene granules (PP), Expanded polystyrene (EPS). GEPACK will be pioneer in dist ributing SABIC™ plastics in Georgia because of the growing demand of this industry, and the lack of quality th at Georgian market disparately needs, as the imported products form Ukraine, Russia, Ira n & Azerbaijan are very low quality, not to mention the fact that the recent events of th e past m onths with the Russian invasion, and subsequent military conflict had a big negative impact on im ports and exports from Russia in general, which is for the best of SABIC™ if a good plan is im plemented to fill-in the Russian gap, and win their market share. (Attachment 1: Georgian Export Trends 2004-2006, the drop in Russian share after 2006). Source: siteresources.worldbank.org/INTGEORGIA/Resources/PublicLecture.ppt GEPACK thinks that presented project will be successful, W hy? Because of non com petition from the other m anufacturers, as the quality of products of neighbouring countries is very low comparing with SABIC™ plastics, and the relatively better m anufacturers are very far geographically, so the shipping cost and delivery terms are in m ost cases not satisfactory to major local customers, while KSA is very near to Georgia, and land shipments can be delivered in just few days. (Attachment 2: SABIC™ Annual Report for 2007). (Attachment 3: SABIC™ Corporate Brochure). In the other hand, im porter companies can be “defeated” through our pricing and distribution polices. The only source of SABIC™ products in Georgia is a very lim ited one, through SABIC™ Turkish distributor, but unfortunately m ost of m ajor local custom ers f ind it so difficult to im port from Turkey for m any reasons, m ainly the delivery term s which gives all priority to Turkish m arket, and secondly pricing i ssues, as there are definite increase of cost involved in re-exporting from Turkey, and double shipment cost, also extra custom fees. Plastic product dem and in Georgia grew rapidl y especially after “Rose Revolution 2003”, as the Georgian GDP (Gross Domestic Product: The total market value of all final goods and services produced in a country in a given year) at 2006 reached $ 17.88 billion growing 10% (comparing with the past year), in this year the World Bank named Georgia the top reformer in the world. Source: http://en.wikipedia.org/wiki/Economy_of_Georgia At 2007 Georgian GDP growth reached even 12% (w hich is one of the m ost rapid rates in the world) and based on the governm ental reports the annual grow of 2008 will not be less than 11% despite the m ilitary conflict with Russia. All those aspects creates good field of new investment in FMCP (Fast Moving Consumer Products) as a result of the growing individual income in Georgian. Source: https://www.cia.gov/library/publications/the-world-factbook/geos/gg.html#Econ www.geplac.org/newfiles/others/Merab%20Tallinn(ENG).pdf GEPACK-SABIC Business plan Page 5
  • 6. Management and Main Office Factory and Warehouse: Tbilisi, St. Nutsubidze District of Stskheta, Agdgomiantkari, GEPACK BLDG, P.O.Box: 59842, Georgia P.O.Box: 23548, Georgia Tel:+955 32 216632 – Ext:11 Tel:+955 32 216632 – Ext:12 Fax:+955 32 317423 Fax:+955 32 317423 3. General Company Description GEPACK (Limited Liability Company) is planning to go into SABIC™ plastics im porting and distribution business. W e are going to esta blish the first local distribution network in Georgia dedicated for SABIC™ plastics. GEPACK is looking on investment injection of about 2.5 Million USD. Those investments will be directed mainly for infrastructure, distribution network, management, human resources, and marketing. The cost of raw m aterials (it can r each multi millions of dollars) is not included in this introductory business plan, as it is subject of discussion and negotiations with SABIC™. We are aim ing to professionally distribute SABIC™ high quality products in Georgia, by covering sim ultaneously both wholesales and re tail dem and in the country, noting that our pricing policy will be strongly based on the local market requirements, and the global policies of SABIC™. W e’ll be the only local trader to offer SABIC™ plastics in carefully designed prices, and accurate delivery terms, which is the one and only demand of this market, after high quality. (Attachment 4: SABIC™ plastics certif icates and declarations of quality of one of SABIC™ products, as an example of superior quality). GEPACK owns 3000 m 2 land in Agdgom iantkari (District of Stskheta), which is only 20 km from Tbilisi (The capital of Georgia), and the distance to the m ain West Georgian highway is just 700 m , remembering the capital is in the ge ographic centre of the country; our location is considered just the perfect selection for such project. (Attachment 5: Map of Georgia). (Attachment 6: Diagram of GEPACK land and building). GEPACK plan is to initiate the distribution network in 2009 depending on our storage capacity which is a three floors concrete building with total area of 2109 m2 (703 m2 for each floor). (Attachment 7: Diagram of GEPACK concrete storage building). The quality and the capacity of our distribution system will be covenant f or maximum 1 year, after that we have to expand our f acilities, theref ore GEPACK already decided to build additional warehouse which consists of two fl oors, and a total area of 1200 m 2 (600 m2 each) (Attachment 8: Diagram of GEPACK Additional warehouse). At the same time with storage capacity growt h, we’ll buy new distribution vans for expanding our distribution network to all other main cities of Georgia. (Attachment 9: Distribution fleet for 2009). GEPACK's m ost powerful point is that SABI C™ products are already highly dem anded in Georgian and Caucasian market, and our inquirers clearly shows that m ost importers are ready to convert to SABIC™ plastics if (and only if) a local agent or branch is established, and committed to agreed delivery terms. (Attachment 10: Copies of letters of intend from some Georgian suppliers). GEPACK-SABIC Business plan Page 6
  • 7. Management and Main Office Factory and Warehouse: Tbilisi, St. Nutsubidze District of Stskheta, Agdgomiantkari, GEPACK BLDG, P.O.Box: 59842, Georgia P.O.Box: 23548, Georgia Tel:+955 32 216632 – Ext:11 Tel:+955 32 216632 – Ext:12 Fax:+955 32 317423 Fax:+955 32 317423 4. Market Overview & Proposal In order to show in details the capacity of the Georgian market, and the feasible business value of this m arket, we w ould like to show one important report from the Georgian customs authority showing the exact im port of the Georgian com panies in 2007, and also the exact names of international exporters of plastics to Georgia in the same year. Based on this report, one can notice that the to tal annual im port of plastics raw m aterials is 233,3 thousand MT, with a total m arket value of $ 366,6 m illions, so the average m onthly consumption of the Georgian m arket for 2007 is 19.441 MT per m onth, and if we presum ed that the dem and is growing annually in 20% (which is m uch m ore than reality), then the forecast of the Georgian market in 2009 is 28.000 MT per month. GEPACK is proud to offer direct import from SABIC™ of more than 11.000 MT as an initial plan for cooperation in 2009, which equals more than one third of the total market volume, and to double this amount in 2010. As a brief summary, we would like to show the exact imports of plastics to Georgia in 2007 in monthly bases, with the official cost: January 2007 February 2007 13,799.535 MT $ 19,688,658.00 8,287.860 MT $ 13,216,248.00 March 2007 April 2007 12,954.480 MT $ 20,296,624.00 22,605.585 MT $ 35,302,123.00 May 2007 June 2007 20,742.255 MT $ 29,240,521.00 12,250.095 MT $ 20,166,136.67 July 2007 August 2007 25,243.395 MT $ 38,657,628.06 19,931.160 MT $ 33,793,322.82 September 2007 October 2007 23,914.335 MT $ 36,949,328.02 28,493.715 MT $ 45,505,131.00 November 2007 December 2007 27,160.240 MT $ 46,411,020.5 17,919.435 MT $ 27,403,254.47 (Attachment 11: Copy of the Georgian Customs Authority record for 2007). (Attachment 12: Copy of the Georgian Customs Authority record for main exporters in 2007). GEPACK-SABIC Business plan Page 7
  • 8. Management and Main Office Factory and Warehouse: Tbilisi, St. Nutsubidze District of Stskheta, Agdgomiantkari, GEPACK BLDG, P.O.Box: 59842, Georgia P.O.Box: 23548, Georgia Tel:+955 32 216632 – Ext:11 Tel:+955 32 216632 – Ext:12 Fax:+955 32 317423 Fax:+955 32 317423 5. Products & Demand 1- PET Resin: Polyethylene Terephthalate, widely referred to as (PET), the required material by our clients is PET with intrinsic viscosity (I.V.) in-between 0.83 – 0.85 dlgr. Our f eedback showed that m ost of Georgian m anufacturers pref er the crystalline PET f or injection stretch blow m oulding, SABIC® P ET BC-112, which is m ainly used for carbonated soft drinks, and SABIC® PET BC-111, which is mainly used for water bottles. The recent demand for 2009 plan is 1200 MT per m onth for Georgia, and for 2010 our plan is to distribute double this amount to exceed 1600 MTmonth. For SABIC® PET BC-112 the dem and is 800 MT per, and for SABIC® PET BC-111 the demand is 400 MT per month. (Attachment 13: SABIC® PET BC-112 official data sheet). (Attachment 14: SABIC® PET BC-111 official data sheet). GEPACK-SABIC Business plan Page 8
  • 9. Management and Main Office Factory and Warehouse: Tbilisi, St. Nutsubidze District of Stskheta, Agdgomiantkari, GEPACK BLDG, P.O.Box: 59842, Georgia P.O.Box: 23548, Georgia Tel:+955 32 216632 – Ext:11 Tel:+955 32 216632 – Ext:12 Fax:+955 32 317423 Fax:+955 32 317423 2- PVC Resin: Polyvinyl chloride, widely referred to as (PVC ), the required m aterial by our clients is for building m aterials, windows and doors, panels, se wer pipers, m etal-plastic profiles, plastic pipes, laminated floor, metal tiles, sandwich Panels, panels, foam, etc. Our feedback showed that both SABIC® SPVC 57S, SABIC® SPVC 67S, are equally demanded in Georgia. The recent dem and for 2009 plan is 1600 MT per m onth for Georgia, and for 2010 our guaranteed demand is 2600 MTmonth. (Attachment 15: SABIC® SPVC 57S official data sheet). (Attachment 16: SABIC® SPVC 67S official data sheet). GEPACK-SABIC Business plan Page 9
  • 10. Management and Main Office Factory and Warehouse: Tbilisi, St. Nutsubidze District of Stskheta, Agdgomiantkari, GEPACK BLDG, P.O.Box: 59842, Georgia P.O.Box: 23548, Georgia Tel:+955 32 216632 – Ext:11 Tel:+955 32 216632 – Ext:12 Fax:+955 32 317423 Fax:+955 32 317423 3- HDPE Granules: High density Polyethylene, widely referred to as (HDPE), is the m ost dem anded plastic raw material for the Georgian m arket of today, our clients demand the HDPE - PE-100, which our feedback showed that the m ajor clients gl adly accept SABIC® Vestolen A6060R for the known preferable properties for m anufacturing pressure pipes for various applications, such as drinking water, sewage, and Gas. The recent dem and for 2009 plan is 3600 MT per m onth for Georgia, and for 2010 our guaranteed demand is 6000 MTmonth. (Attachment 17: SABIC® HDPE P6006 official data sheet). We also a secondary dem and for one kind of HDPE called (HDPE-F00952), m ainly used for very thin film s, and as a result all the relate d industries such as shopping bags, and wall sack liners … etc. The equivalent product from SABIC™ is SABIC® HDPE F00952. The recent dem and for 2009 plan is 300 MT per m onth for Georgia, and for 2010 our guaranteed demand is 650 MTmonth. (Attachment 18: SABIC® HDPE F00952 official data sheet). GEPACK-SABIC Business plan Page 10
  • 11. Management and Main Office Factory and Warehouse: Tbilisi, St. Nutsubidze District of Stskheta, Agdgomiantkari, GEPACK BLDG, P.O.Box: 59842, Georgia P.O.Box: 23548, Georgia Tel:+955 32 216632 – Ext:11 Tel:+955 32 216632 – Ext:12 Fax:+955 32 317423 Fax:+955 32 317423 4- LDPE Granules: Low density Polyethylene, widely referred to as (LDPE), it is also dem anded in the Georgian market, our clients dem and for this m aterial is 400 MT per m onth for 2009, and we estim ate 850 MT per month in 2010. The mentioned demand for 2009 is divided into four parts: 1- LDPE 2100TN00 – 100 MT per month. (Attachment 19: SABIC® LDPE 2100TN00 official data sheet). 2- LDPE 2100TN21 – 100 MT per month. (Attachment 20: SABIC® LDPE 2100TN21 official data sheet). 3- LDPE HP0722N – 100 MT per month. (Attachment 21: SABIC® LDPE HP0722N official data sheet). 4- LDPE 2600TC00 – 100 MT per month. (Attachment 22: SABIC® LDPE 2600TC00 official data sheet). GEPACK-SABIC Business plan Page 11
  • 12. Management and Main Office Factory and Warehouse: Tbilisi, St. Nutsubidze District of Stskheta, Agdgomiantkari, GEPACK BLDG, P.O.Box: 59842, Georgia P.O.Box: 23548, Georgia Tel:+955 32 216632 – Ext:11 Tel:+955 32 216632 – Ext:12 Fax:+955 32 317423 Fax:+955 32 317423 5- LLDPE Granules: Linear Low density Polyethylene, widely refe rred to as (LLDPE), our clients im port it f or manufacturing bags and films for many applications such as frozen food, waste bags, and films for food-wrapping. There is only one SABIC™ product demanded from this category; SABIC® LLDPE 118W. The recent demand for 2009 plan is 100 MT per month, and for 2010, it is 200 MTmonth. (Attachment 23: SABIC® LLDPE 118W official data sheet). GEPACK-SABIC Business plan Page 12
  • 13. Management and Main Office Factory and Warehouse: Tbilisi, St. Nutsubidze District of Stskheta, Agdgomiantkari, GEPACK BLDG, P.O.Box: 59842, Georgia P.O.Box: 23548, Georgia Tel:+955 32 216632 – Ext:11 Tel:+955 32 216632 – Ext:12 Fax:+955 32 317423 Fax:+955 32 317423 6- PP Granules: Polypropylene, or easier to say (PP), is the s econd most demanded plastic raw m aterial for the Georgian market, our clients dem and the PP -R "R200P", which our feedback showed that the major clients gladly accept SABIC® Sheet extrusion 83EK10. The recent dem and for 2009 plan is 3300 MT per m onth for Georgia, and for 2010 our guaranteed demand is 5000 MTmonth. (Attachment 24: SABIC® PP 83EK10 official data sheet). We also a secondary dem and for one kind of PP mainly used for woven bags, the equivalent grade from SABIC™ is SABIC® PP 500P . The recent dem and for 2009 plan is 100 MT per m onth for Georgia, and for 2010 our guaranteed demand is 200 MTmonth. (Attachment 25: SABIC® PP 500P official data sheet). GEPACK-SABIC Business plan Page 13
  • 14. Management and Main Office Factory and Warehouse: Tbilisi, St. Nutsubidze District of Stskheta, Agdgomiantkari, GEPACK BLDG, P.O.Box: 59842, Georgia P.O.Box: 23548, Georgia Tel:+955 32 216632 – Ext:11 Tel:+955 32 216632 – Ext:12 Fax:+955 32 317423 Fax:+955 32 317423 7- EPS Granules: Expanded polystyrene (EPS), our dem and for this material is relatively good com paring with recent consumption rates, 420 MT per m onth for 2009, and we estim ate 950 MT per m onth in 2010. The m ain application f or this m aterial is to achieve im pact resistance property for furniture, partitions, and containers. Our clients dem and is 100 MT per m onth for 2009 of "EPS – F103" grade, which is used for shape molding for more than 1 cm thickness, and also medium to high density block molding. Our feedback showed that the m ajor clients gladly accept SABIC® EPS 552 as an equivalent for this grade. In 2010 our plan is to distribute 650 MT per month. (Attachment 26: SABIC® EPS 552 official data sheet). The second dem anded grade by our clients is "EPS – F104" with 320 MT per m onth for 2009, which is used for large shape and m edium density molding. Our feedback showed th at m ajor clients accept SABIC® EPS 652 as an equivalent for this grade. In 2010 our plan is to distribute 300 MT per month. (Attachment 27: SABIC® EPS 652 official data sheet). GEPACK-SABIC Business plan Page 14
  • 15. Management and Main Office Factory and Warehouse: Tbilisi, St. Nutsubidze District of Stskheta, Agdgomiantkari, GEPACK BLDG, P.O.Box: 59842, Georgia P.O.Box: 23548, Georgia Tel:+955 32 216632 – Ext:11 Tel:+955 32 216632 – Ext:12 Fax:+955 32 317423 Fax:+955 32 317423 6. Development Strategy 1- Marketing Georgia is sm all country, with an area of 69,700 sq km , approxim ately one third the size of Oman, just to give you an idea, KSA is th irty (30) tim es bigger, bordered by Turkey, Azerbaijan, Arm enia, Russia and the Black Sea . Strategically located east of the Black Sea; Georgia controls m uch of the Caucasus Mountains and the routes through them . Population: 4,646,003 (July 2007 Est). Georgian m arket is part of the Caucasian Ma rket which total size is 185 000 square km and population of 16 256 360 (2007 Est). The recorded history of Georgia dates back m ore than 4,000 years. The culture of Georgia has evolved over the country' s long history, providi ng it with strong literary tradition. The unique Georgian alphabet, which is am ong the fourteen existing ones in the world dates back to the 5th century BC. In Georgian m arket there is big dem and on high quality plastic products and we have a very real chance to win 50% of the m arket share, de finitely it’s not a lim it even f or the f irst year. Our main care will be the guaranteed permanent grow of our distribution network and services. Our m ain advantage will be the brand recognition subject; it is a usual problem for the new brands, but for SABIC™ the products quality is known to be superior, and its already highly demanded, but we are going to launch well targeted advertisement campaign, to make sure that all manufacturers and major clients know about th e instant and direct availability of SABIC™ in the Georgian market. Our m arketing strategy will be based on perm anent m arketing works. GEPACK will always monitor the Georgian m arket to locate new m arket players, and to m ake sure that our superior pricing structure is always known. GEPACK-SABIC Business plan Page 15
  • 16. Management and Main Office Factory and Warehouse: Tbilisi, St. Nutsubidze District of Stskheta, Agdgomiantkari, GEPACK BLDG, P.O.Box: 59842, Georgia P.O.Box: 23548, Georgia Tel:+955 32 216632 – Ext:11 Tel:+955 32 216632 – Ext:12 Fax:+955 32 317423 Fax:+955 32 317423 2- Promotion We think that our promotion and advertising companies have to begin one month or two before product launching on the market. Serious promotion event will be new storage facility opening and products presentation in Tbilisi Marriott Hote l where will be invited owners and m anagers of biggest Georgian com panies and (Chamber of Comers & Business Federation), also will be invited popular Georgian social and political celebrities. Our presentation party will be coverage by Georgian public and privet TV and Radio stations. GEPACK advertising strategy is including participation at Trade Shows in Georgia, Azerbaijan and Armenia. Those are tree main Trade Shows in Caucasus Region. In our region very necessary is to have TV and Radio advertisem ent during the m ost popular programs. Especially for first year is very im portant to have such advertisem ent but it have to be well organized from m onth to m onth, adve rtisement schedule in TV, Radio, and street billboards will replace each other. The images of our product have to be the best quality in best price for the perm anent freshness of our clients. Occasionally, GEPACK will host national TV pr ograms discussing Georgian and Caucasian economic issues, All above m entioned ideas will im prove our sells capacity but we thinks that the m ain our advantages have to be sells offers for endures and major manufacturers. GEPACK-SABIC Business plan Page 16
  • 17. Management and Main Office Factory and Warehouse: Tbilisi, St. Nutsubidze District of Stskheta, Agdgomiantkari, GEPACK BLDG, P.O.Box: 59842, Georgia P.O.Box: 23548, Georgia Tel:+955 32 216632 – Ext:11 Tel:+955 32 216632 – Ext:12 Fax:+955 32 317423 Fax:+955 32 317423 3- Distribution Channels We already m entioned above that GEPACK m ain susses depends on well organized distribution network. GEPACK m ain concern is the perm anent grow of our direct distribu tion network. W e have already very clear distribution m ap of capital Tbilisi (1,8 m illion population), and the rest of the Georgian territories, also strategic plan for next year. Definition: • Indirect distribution: reselling SABIC™ plastics to major retailers in Georgia. • Direct distribution: reselling SABIC™ plastics to Georgian manufacturers directly. Year One: - GEPACK distribution for capital Tbilisi depends on the direct method, while in the rest of the country, the indirect method is to be implemented. Year Tow: - GEPACK distribution for capital Tbilisi rem ains direct, while in the rest of the country the indirect methods are to be suspended. - In order for GEPACK to implement direct method in the rest of Georgia, GEPACK will open store houses (rentals) in each of the fo llowing cities during last three m onths of the first year, to be operational in the beginning of the second year, as follows: • Batumi (population, 210 000) • Kutaisi (285 000) • Rustavi (175000) • Bojomi & Bakuriani (65 000) • Telavi (28000) • Zugdidi (120 000) • Gori (60 000) GEPACK-SABIC Business plan Page 17
  • 18. Management and Main Office Factory and Warehouse: Tbilisi, St. Nutsubidze District of Stskheta, Agdgomiantkari, GEPACK BLDG, P.O.Box: 59842, Georgia P.O.Box: 23548, Georgia Tel:+955 32 216632 – Ext:11 Tel:+955 32 216632 – Ext:12 Fax:+955 32 317423 Fax:+955 32 317423 7. Administrative Contracture General Manager Secretary Assistance Manager Secretary Financial Dept. Chief Accountant - 1 Person Procurement Dept. Assistant - 2 Persons Head of Dept. - 1 Marketing & Person Sales Dept. Assistant – 1 Person Head of Dept. - 1 Person Service Dept. Marketing Officer - 1 Person IT engineer – 1 Salesmen - 4 Person Persons Please refer to Sanitary - 3 Persons "Financial Plan, Human Store Labour - 3 Resources", Page 20 Persons Security - 2 Persons Drivers - 6 Persons GEPACK-SABIC Business plan Page 18
  • 19. Management and Main Office Factory and Warehouse: Tbilisi, St. Nutsubidze District of Stskheta, Agdgomiantkari, GEPACK BLDG, P.O.Box: 59842, Georgia P.O.Box: 23548, Georgia Tel:+955 32 216632 – Ext:11 Tel:+955 32 216632 – Ext:12 Fax:+955 32 317423 Fax:+955 32 317423 8. Financial Plan 1. Fixed Operational Costs (FOC) After carefully approaching the expected ope rational costs, and estim ating the average monthly costs of services and operational requirem ents, we cam e to the following conclusion of fixed operational costs for 2009. While examining the mentioned study, please note the following: 1. GEPACK is planning to organize a grand ceremony for launching the project, this ceremony should be in the end of January 2009 (for further details, please refer to "GEPAC – SABIC Project Plan", in page 22). 2. The fixed continues cost of advertisem ent was determ ined to be $ 5000 per m onth, separated from the cost of m onthly prom otion which is $ 500, a very big m argin for distribution business, however sill an essen tial m ilestone to ref lect the strength of GEPACK and guarantee full media exposure on SABIC™ brand name. 3. GEPACK is sitting beside a budget of $ 7,000.00 fo r organising an entertainment event for all m anagement and staff of GEPACK in mid March 2009, with one week vacation, to allow all HR to rest after excessive activities of launching the project. 2009 (Unit = $ 1000) Activity Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Minor 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05 Supplies Opening 10 0 0 0 0 0 0 0 0 0 0 0 Ceremony Advertising 15 18 10 5 5 5 5 5 5 5 5 5 Entertainment 0 0 7 0 0 0 0 0 0 0 0 0 Literature 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 Promotions 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 Trade Shows 0 0 0 1.5 0 0 0 0 1.5 0 0 0 Travel 1 1 1 1 1 1 1 1 1 1 1 1 Consulting 2 2 0 0 0 0 0 0 0 0 0.5 0.5 Depreciation 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 Insurance 0.15 0.15 0.15 0.15 0.15 0.15 0.15 0.15 0.15 0.15 0.15 0.15 Legal Fees 0.35 0.35 0.35 0.35 0 0 0 0 0 0 0 0 Licenses & 0.4 0 0 0 0 0 0 0 0 0 0 0 Permits Office 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 Expenses Telephone 0.15 0.15 0.15 0.15 0.15 0.15 0.15 0.15 0.15 0.15 0.15 0.15 Fast Internet 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 Utilities 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 0.03 Uncounted 10 0 0 0 0 0 0 0 0 0 0 0 Expenses Totals 40.1 22.7 19.7 9.2 7.35 7.35 7.35 7.35 8.85 7.35 7.85 7.85 GEPACK-SABIC Business plan Page 19
  • 20. Management and Main Office Factory and Warehouse: Tbilisi, St. Nutsubidze District of Stskheta, Agdgomiantkari, GEPACK BLDG, P.O.Box: 59842, Georgia P.O.Box: 23548, Georgia Tel:+955 32 216632 – Ext:11 Tel:+955 32 216632 – Ext:12 Fax:+955 32 317423 Fax:+955 32 317423 2. Human Resources GEPACK LLC consists of three m ain depa rtments (Service Dept. in Adm inistrative Contracture "Page 17" is under direct control of AM, and not considered an independent department "Adm inistratively"), the total num ber of em ployees is 30 persons, Managem ent Dept. (9 persons), Marketing and Sales Dept. (9 persons), and Service Dept. with (12 persons), the total salaries and expenses of HR are $ 20,700.00 per m onth, thoroughly detailed in the following three tables (1 $ = 1.5 Georgian Laris): Sub- No. Management Qty Salary $ Total $ Lari 1 General Manager 1 2,000.0 2,000.0 3,000.0 2 Assistant Manager 1 1,500.0 1,500.0 2,250.0 3 Secretary of GM 1 600.0 600.0 900.0 4 Secretary of AM 1 600.0 600.0 900.0 5 Chief Accountant 1 1,100.0 1,100.0 1,650.0 6 Assistant of CA 2 750.0 1,500.0 2,250.0 7 Head of Procurement Department 1 1,000.0 1,000.0 1,500.0 8 Assistant of PD 1 750.0 750.0 1,125.0 Total : 9 9,050 13,575.0 Sub- No. Marketing & Sales Dept. Qty Salary $ Total $ Lari 9 Head of Marketing and Sales Dept. 1 1,100.0 1,100.0 1,650.0 10 Marketing Officer 1 800.0 800.0 1,200.0 11 Salesmen 4 500.0 2,000.0 3,000.0 Store, Person in 1 600.0 600.0 900.0 12 Charge 13 Labours (store) 2 350.0 700.0 1,050.0 Total : 9 5,200.0 7,800.0 Sub- No. Service Dept. Qty Salary $ Total $ Lari 14 IT Expert 1 800.0 800.0 1,200.0 15 Sanitary 3 350.0 1,050.0 1,575.0 16 Security 2 500.0 1,000.0 1,500.0 17 Drivers 6 600.0 3,600.0 5,400.0 Total : 12 6,450.0 9,675.0 GRAND TOTAL: 30 20,700.0 31,050.0 GEPACK-SABIC Business plan Page 20
  • 21. Management and Main Office Factory and Warehouse: Tbilisi, St. Nutsubidze District of Stskheta, Agdgomiantkari, GEPACK BLDG, P.O.Box: 59842, Georgia P.O.Box: 23548, Georgia Tel:+955 32 216632 – Ext:11 Tel:+955 32 216632 – Ext:12 Fax:+955 32 317423 Fax:+955 32 317423 3. Offices & Stationary: Based on the above m entioned HR study, 12 offices are needed (for item s 1-10, and item 14), accompanying all the necessary tools for their professional efficiency and productivity, and simultaneously implementing a very strict PC networking system, mainly used for m onitoring daily work and preventing unnecessary expenses in terms of actual finance or in time. Hereunder is a detailed description of needed hardware and stationary expenses: Name of Item Quantity Unit Cost $ Sub - Total $ Sub - Total GEL PC 12 400 4800 7200 PC Networking 1 3000 3000 4500 Laser Printer 2 500 1000 1500 Scanner 2 100 200 300 Copy machine 1 950 950 1425 Telephone 20 85 1700 2550 Telephone Server 1 1400 1400 2100 Fax 2 350 700 1050 Stationary For 3 months 250 250 375 Office Furniture 12 950 11400 17100 TOTAL 25400 38100 4. Buying Machinery & Equipment: Based on m arket prices of late 2008, the estim ated cost of the m entioned equipm ent (Automatic & manual Forklifts, automatic conveyer - transporters, distribution tracks "loading capacity 30 tons"), is between 120 – 140 thousand US Dollars, so we decided to estim ate the fixed cost of equipment 130 thousand US Dollars. Upon real launch of project, a new cost estimation study is a must. 5. Building additional warehouse : The additional 600 m2 warehouse planned to be built near the main storage facility, consists of two floor metal building, with both storage and office facilities, the total cost of this plan based on late 2008 quotations is $ 360,000.00 6. Renting 7 warehouses around Georgia: As mentioned earlier (Ref: Development Plan, Distribution Channels, "Page 16"), GEPACK is to rent 7 warehouses around the country, the best-offered m onthly rentals were $ 1000 per month according to 2008 market prices, so the whole budget is averagely $ 7000 monthly. GEPACK-SABIC Business plan Page 21
  • 22. Management and Main Office Factory and Warehouse: Tbilisi, St. Nutsubidze District of Stskheta, Agdgomiantkari, GEPACK BLDG, P.O.Box: 59842, Georgia P.O.Box: 23548, Georgia Tel:+955 32 216632 – Ext:11 Tel:+955 32 216632 – Ext:12 Fax:+955 32 317423 Fax:+955 32 317423 9. Time Management Hereunder is the Time Chart of GEPACK-SABIC Project, with the main phases illustrated, the launching period for the whole project is 9 months, starting from January till September 2009. Registrations of legal documents & brand name Offices' furniture, communication devices, PCs, and stationary Marketing, Advertising, & Promotion 2008 Market Research & Analysis Buying all necessary machinery & equipment Instillation of building anti fire system Completed Hiring Human Resource Plan Additional warehouse at main location On Progress Storehouses Rentals Delayed Daily Operations 2009 Date 3 10 Jan 17 24 31 7 14 Feb 21 28 4 11 18 Mar 25 4 11 Apr 18 25 1 May 15 29 4 June 11 18 25 1 July 15 29 1 Aug 15 29 1 Sep 15 29 GEPACK-SABIC Business plan Page 22
  • 23. Management and Main Office Factory and Warehouse: Tbilisi, St. Nutsubidze District of Stskheta, Agdgomiantkari, GEPACK BLDG, P.O.Box: 59842, Georgia P.O.Box: 23548, Georgia Tel:+955 32 216632 – Ext:11 Tel:+955 32 216632 – Ext:12 Fax:+955 32 317423 Fax:+955 32 317423 10. Project Plan As you know, the project plan is just an overl apping of two charts, which are Finance, and Time, and as we already went through both charts, the project's plan chart is as follows: Land (3000 m2) $ 330,000.00 Main storage (3 floors concrete building, 2109 m2) $ 1,170,000.00 Registrations of legal documents & brand name Offices' furniture, communication devices, PCs, and stationary 2008 Marketing, Advertising, & Promotion Market Research & Analysis Buying all necessary machinery & equipment Instillation of building anti fire system Completed Human Resource (Management & Staff) Plan Additional warehouse at main location On Progress Storehouses Rentals Delayed Fixed Operational Costs (FOC) 2009 Sub - Totals Date 51.10 20.7 15 15 0.4 3 20.10 0.1 20 10 Jan 50.70 40.1 10 0.6 17 30.70 0.3 5 25.4 24 90.70 80 0.6 10 0.1 31 28.70 20.7 8 7 22.70 22.7 14 Feb 0.00 21 10.60 0.6 10 28 20.70 20.7 4 19.70 19.7 11 Mar 0.00 18 10.60 0.6 10 25 100.95 80 20.7 0.25 4 9.20 9.2 11 Apr 80.00 80 18 5.60 0.6 5 25 20.70 20.7 1 May 120.00 120 15 12.95 7.35 0.6 5 29 100.70 80 20.7 4 June 0.00 11 7.35 7.35 18 5.60 0.6 5 25 27.95 7 20.7 0.25 1 July 7.35 7.35 15 5.60 0.6 5 29 27.70 7 20.7 1 Aug 7.35 7.35 15 5.60 0.6 5 29 27.70 7 20.7 1 Sep 8.85 8.85 15 5.60 0.6 5 29 Land & Building $ 1,500,000.00 Total Cost $ 2,443,050.00 Plan 2009 $ 943,050.00 GEPACK-SABIC Business plan Page 23
  • 24. Management and Main Office Factory and Warehouse: Tbilisi, St. Nutsubidze District of Stskheta, Agdgomiantkari, GEPACK BLDG, P.O.Box: 59842, Georgia P.O.Box: 23548, Georgia Tel:+955 32 216632 – Ext:11 Tel:+955 32 216632 – Ext:12 Fax:+955 32 317423 Fax:+955 32 317423 11. Georgian Taxation System Although it is considered one of the m ost transparent and even inspiring system s of the world, but in our project we have a separate plan to legally avoid paying so much Taxes. The Georgian governm ent charges 25% of net income as Incom e Tax, and for our kind of activity there is no Social Tax, while the Tax of Added Value (VAT) is 18% (to be paid with customs). The Property Tax is 1%, and finally the Profit tax is 15%. (Attachment 28: Georgian Tax Code) 12. Legal Environment License……………………………………………………………….… Available Permits.………………………………………………………………… Not required Health, workplace, or environmental regulations...…………………… Available Special regulations………………………………….…..…………...… Not required Zoning or building code…………………………………..…………… #174 Insurance coverage……………………………………..……………… Yes Trademarks, copyrights or patents…………………………...………... Available 13. Management Team ● Board of Directors: ● Management advisory board: Mr. Archil Mkheidze, Chairman. Dr. Mahmoud Al-Jammal, Dr. Mahmoud Al-Jammal Manager. Mr. Zviadi Baramia ● Attorney: ● Accountant: Mr. Nino Chokheli Mr. Russudan Mikadze. ● Banker : ● Consultant : TBC Bank, Mr. Nato Chokheli, Mr. George Akhaladze, Back-office Manager. Coca-Cola Bottlers Georgia, Financial Manager. GEPACK-SABIC Business plan Page 24