(1) The business plan proposes a calcium carbonate exploiting and processing plant in Vietnam with an annual production capacity of over 1 million metric tons.
(2) The project aims to introduce continuous kiln technology for the first time in Vietnam to improve production efficiency and quality compared to traditional small kilns.
(3) Financial analysis shows the project has a net present value of $483.5 million and internal rate of return of 72%, significantly higher than the required 7% return, indicating the project is highly feasible and profitable.
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Calcium Carbonate Processing Plant Business Plan
1. Business Plan for
CalCium CarBonate
exPloiting and ProCessing Plant
August, 2011
VMC
2. COPYRIGHT
This business plan is an intellectual property of Linh Thanh Quang Binh Joint Stock Company. It, therefore,
must not be copied, reproduced, sold, leased, transferred, reused; in whole or in part, unless granted official
written consent from and by Linh Thanh Quang Binh Joint Stock Company.
3. Content
1. INTRODUCTION 5
tHe ProJeCt
ProJeCt oWner
ProJeCt’s goals
2. LEGAL BASIS OF THE PROJECT 8
3. ASSUMPTIONS 9
4. MARKET ANALYSIS 10
QuiCKlime
HYdrated lime
PreCiPitated CalCium CarBonate
nano PreCiPitated CalCium CarBonate
5. COMPETITION ANALYSIS 20
QuiCKlime
HYdrated lime
PreCiPitated CalCium CarBonate
nano PreCiPitated CalCium CarBonate
6. SWOT ANALYSIS 23
strengtHs
WeaKnesses
oPPortunities
tHreats
7. IMPACT ON ENVIRONMENT AND SOLUTIONS 25
existing situation
imPaCt on enVironment and solutions
8. THE PROPOSED PLANT 27
loCation and land
reserVe oF inPut material
tHe teCHnologY
Planned ProduCtion CaPaCitY
ProJeCted ProduCtion sCHedule
9. SALES FORECAST 35
10. PROJECT FINANCING 36
CaPital struCture and sourCes
loan
11. TAXATION 38
12. INFLATION 39
13. PROFITABILITY DISCUSSION 40
14. INVESTMENT APPRAISAL 42
15. CONCLUSION AND RECOMMENDATION 43
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4. EXECUTIVE SUMMARY
as demand for high quality lime products has escalated dramatically over the last few years, while production
onshore is still heavily relying on traditional method carrying out by small-scale kilns operated by households
or small-sized proprietors with extremely high level of environment contamination. Further, such supply can, by
no means, satisfy market demand, resulting in a huge amount of lime imported. as one might expect, lime is a
bulk product that have proved to be uneconomical if shipped for long distances. import of this input material
has, therefore, caused the output products to be incurred considerably high cost price.
reserves of calcium carbonate, the core material for manufacturing lime of all kinds, are more than adequate
in Vietnam; yet the obsolete technologies currently embraced by Vietnamese manufacturers have so far
undermined the capacity and quality of supply across the nation. this triggers a necessity of investment in
advanced technology and production line for the sake of relieving domestic users’ dependence on imported
lime.
indeed, linh thanh’s project of Calcium carbonate exploiting and Processing Plant in Quang Binh with capacity,
in full, of more than 1 million metric tons per year could be a sound solution for the Vietnam market. given the
total reserve of standard limestone of 58,600 million cubic metres on site, the supply of input material is virtually
very much abundant. the mining area, moreover, is opencast and only 800 metres away from the manufacturing
plant. mining conditions are favourable as the location is close to power grid and road network, yet far from
residential areas. especially, the mining area is located in an isolated valley, thereby having much less impact in
respect of noise, dust, and vibrations on the plant area and surrounding environment.
as this project is in effect, continuous kiln technology shall be implemented for the very first time in Vietnam,
solving the problem entailing the current traditional kiln method. equipment and technology which are supplied
and transferred respectively by a globally reputed italian company can meet most customer demands.
the total investment cost of this Project is estimated to be approximately usd 60 million, for which usd 36.5
million shall be raised from loans, usd 4 million shall be funded by equity, and the remainder shall be financed
by retained earnings and short-term loans. the investment is entitled to corporate income tax holiday for 04
years from the first profit making year and a reduction of 50 percent for the following 09 years. in respect of
other income, the Company shall apply the income tax rate of 25 percent.
net Present Value is computed to be around usd 483.5 million which is highly positive, and the internal rate
of return to be approximately 72 percent which is more than ten times the required rate of return of 7 percent
such calculations, carried out with utmost meticulousness, strongly suggest that the project is highly feasible
and well worth undertaking.
in recapitulation, this is (1) a project implementing breakthrough technology, backed by quite a number of other
advantages, that might help reform the market of calcium carbonate products in Vietnam, and (2) a worthwhile
investment with extremely handsome return for devoted investors.
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VIETNAM MINING CORPORATION