business plan nur cement plant shymkent, kazakhstan 5500

Business Plan

Nur Cement Plant

Shymkent, Kazakhstan

5500 tons per day capacity

Business Plan

May 15, 2019

www.Nurcement.com

Project Business Plan Document

Nur Cement LLP

Cement Plant

May 15, 2019

Document Number: NC8008

Version: 1.1

Prepared by Gulf Investment Enterprise, INC.

www.gieus.com

This report has been prepared by Gulf Investment Enterprise, INC,

all reasonable skill, care and diligence within the terms of the

contract with the client, incorporating our general terms and

Conditions of Business and taking account of the resources

devoted to it by agreement with the client.

We disclaim any responsibility to the client and others in respect

of any matters outside the scope of the above.

This report is confidential to the client and we accept no

responsibility of whatsoever nature to third parties to whom this

report, or any part thereof, is made known. Any such party relies

on the report at their own risk.

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Gulf Investment Enterprise,

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October 2018 Date Of First Draft

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Table of Contents

Section 1 Executive Summary …………………………….……….. 09

1.1 Cement Factory Objectives .......……………..….………... 09

1.2 Cement Factory Miss ……….………………...….…….…. 10

1.3 Our Keys to success …………………………….……….. 10

Section 2 Plant Summary ………….……………..………………….. 11

2.1 Company Information ........………………………………... 11

2.2 Plant Site Location and Condition …..………….…............ 11

2.2.1 Area …………………………………………………… 11

2.2.2 Plant site location ……………………….…..………… 12

2.2.3 Climate condition ……………………………..………. 12

2.2.4 Utilities ……………………………………………. 13

2.2.4.1 Water ………………….………………….. 13

2.2.4.2 Fuel Gas ………………………….………….. 13

2.2.4.3 Electricity ………………………………….….. 13

2.2.5 Raw material ………………………..……………. 14

2.2.6 Quality ……………………………………………. 14

Section 3 Project Scope ……………………………….…………… 14

3.1 Phase I …………….…………………………..………… 15

3.1.1 Plant Mine ……………….…………………………… 15

3.1.2 Cement Factory ……………….……………………. 17

3.1.2.1 Making clinker …………..………………….. 17

3.1.2.2 From clinker to cement …….…………………. 18

3.1.3 Components of Cement Plant ………………………... 18

3.1.3.1 Production Processes …………………….….. 18

3.1.3.2 Quarrying, Dredging and Digging …….……. 19

3.1.3.3 Crushing and Grinding ………………….....…. 19

3.1.3.4 Blending / Homogenizing ……………….... 20

3.1.3.5 Fine Grinding and Intern Storage ………….. 20

3.1.3.6 Burning, Cooling and Storage ……………….... 20

3.1.3.7 Finish Grinding …………………………….… 21

3.1.3.8 Packaging/Shipping ……………………….. 21

3.1.4 Residential Town ……………………………………… 22


3.2 Phase II (power Generation) ………………………………. 23

3.2.1 Waste Heat Recovery Power Generation System ..….. 23

3.2.2 Wind Power Plant ………………………………..……. 24

Section 4 Overall Economics of Project …………………………..…... 25

4.1 Initial Capital Investment ….………………………………..… 25

4.1.1 Initial Investment ……………………………………… 25

4.2 Annual Income/Sales Projection ……………………….. 31

4.3 Annual Operating Cost ….………………………………..… 32

4.4 Annual gain and losses …………..…………………………. 35

4.5 Important Information ………………….………………….. 35

Section 5 Market Analysis Summary …..…………………………... 36

5.1 Market segmentation …………………………………...… 36

5.2 Target market segment strategy .……………..………………. 37

5.3 Market trends ……………………………..…………….. 37

5.4 Competition …………………..…………….………………… 37

5.5 Business competitive edge ………………………………. 37

Section 6 Team …………………………………..……………………… 38

6.1 Management Team ………………………………..…………... 38

6.2 Organizational Structure ………….………………..………... 38

6.3 Personnel ……………………….………………..………… 39

6.4 Vendors …………………………………………………… 39

Section 7 Effects of Project to the Society ……………………..………... 40

7.1 Job Creation ……… ….……………………………………….. 40

7.2 Population Growth ……………………………………………. 41

7.3 Local Fiscal Impacts ……………………….……………. 41

Section 8 Risk Assessment …………………………………………… 42

8.1 Evaluation of economy/industry in which the company operates 42

8.1.1 Strengths ……………………………………………. 42

8.1.2 Weaknesses ……………………………………………. 43

8.2 Assessment of the business risk factors specific company ……. 43

8.3 Assessment of financial and project-related risk factors as well as the

quality of the management ……………………..……….. 44


Section 9 Project implementation Schedule ………….……………. 45


1.0 Executive Summary:

Cement and concrete products comprise the largest share of construction

materials worldwide. The widespread usage of cement and concrete in

construction can be attributed to their abundance, durability, and relatively

low price. Demand for this product has grown in tandem with the south

region of Kazakhstan population and urban development. The rapid

growth over the past few years has generated a greater demand more

infrastructure and inputs necessary for its construction such as cement and

concrete. Today, the demand for cement in the region is about 500

kilograms per person per year. This is significantly higher than the global

average of about 272 Kg pp/yr.

Given that all cement consumption of the region is delivered, it makes it a

necessity for the region to have its own plant to keep up with local demand.

1.1 Cement Factory Objectives:

Nur Cement has reached its objective by achieving the followings:

• Becoming the “Best quality producer in the area” complying by the nation

standards.

• Maintain 50% gross margin ratio.

• To pay off its initial capital investment in the first four years of operation.


1.2 Cement Factory Mission:

Nur Cement mission is to be able to provide a good quality and affordable product

to the market and be able to be the fuel of region’s construction and infrastructure

development at the same time to be able to return a reasonable profit to the stock

holders while impacting the economics of local people.

1.3 Our Keys to success:

Nur Cement will follow these principles in

order to achieve success in its market:

• Ownership of two key elements, mine and Power Plant

• Using the best available technology, machinery and equipment

• Employment of highly qualified, skilled and motivated personnel

throughout the organization

• Proactively participate in community development


2.0 Plant Summary:

2.1 Company information:

CEO Zholdassov Serzhan

Nationality Kazakhstan

Passport Number N094643309

Passport Issue Date 23/6/2014

Date and Place of Birth Kazakhstan, 20/12/1993

Home Address Kayp Ata str. 13, Enbekshynskiy region, Shymkent city, South-Kazakhstan

oblast, Kazakhstan

Home Fax Number 8(7252) 43-50-30

Home Tel Number 8(7252) 25-02-52

Cellular Phone Number 8(701) 744-52-92

Email Address [email protected]

Business Name LLP “Nur Cement”

Business Address Lermontov str. 152, Shymkent city, South-Kazakhstan oblast, Kazakhstan

Registered Office Lermontov str. 152, Shymkent city, South-Kazakhstan oblast, Kazakhstan

Registration Number 150540010113

Business Fax Number 8(7252) 43-50-30

Business Telephone Number 8(7252) 43-50-30

Legal Adviser(Law Firm) Onalbaeva Gulzhan Abzhapparovna

Legal Adviser Mail Address [email protected]

Legal Adviser Courier Address Nauryz str.133, Shymkent city, South-Kazakhstan oblast, Kazakhstan

2.2 Plant Site Location and Condition:

2.2.1 Area:

Shymkent, Kazakhstan was founded

in the 12th century. Shymkent grew

as a market center for trade between

Turkic nomads and the

settled Sogdians after Kazakhstan

gained independence,

https://en.wikipedia.org/wiki/Sogdian_people


the city was renamed Shymkent in 1993 as part of the government’s

campaign to apply Kazakh names to cities. The current population of

region is about 2,000,000.

2.2.2 Plant Site Location:

The Plant is located in Sayram district, on 45 km North-East of the city

of Shymkent and on 11 km South-East of the railway station Sastobe.

2.2.3 Climate Condition:

According to Shymkent recording synoptic, the following data is

available and could be considered as the climate condition of the site:

➢ Temperature:

Max. Temp: 42 C

Min. Temp: -15 C

Average Temp: 16 C

➢ Relative Humidity:

Max. Humidity: 75%

Min. Humidity: 34%

Average Humidity: 54%

➢ Annual Rainfall:

https://en.wikipedia.org/wiki/Kazakhs


Max. 576 mm (Average)

➢ Wind Speed:

Max Wind Speed: 55km/h

Average Wind Speed: 10km/h

➢ Air pressure:

Average Air Pressure: 1000hPa

2.2.4 Utilities:

2.2.4.1 Water:

Water requirement will be supplied from ground wells close to the

plant.

2.2.4.2 Fuel Gas:

A gas line with 20 psi will be

supplied from the main

distribution gas line that passes

through the property.

2.2.4.3 Electricity:

The required power of the plant will be

provided by the utility company. Total

estimated demand of the plant, is around 30

MVA, which would be supplied by high-

tension lines. All substations will be indoor

type and protected against ingress of dust.

Emergency load will be supplied by

emergency stand-by gas- generator.

2.2.5 Raw material:


Based on the preliminary

geological investigation of raw

material relating to the available

deposits, in the purchased mine by

the company, very suitable

limestone with reserve around to

500 million tons, and enough

amount of Marl-Marn, (for 90

years of working condition) are

estimated. The geological

structure of the area is simple.

2.2.6 Quality:

According to the executed geological investigation,

the chemical analysis of the surface samples, the

limestone block has high content of CaCO3 with

enough reserve.

3.0 Project Scope:

The two major area’s that could make a cement factory successful in long term is

to have a rich and long lasting mine and reduce its operation cost for long term

sustainability.

For this reason and financial resources we have split the project in two phases.

In phase one since we have already bought an excellent and only mine in the area

we will be focusing on building the plant.

In phase two we will concentrate on building our own power plant (wind) and by

applying the newest technology (heat recovery) to generate power.


3.1 Phase I:

3.1.1 Plant Mine:

Cement mine has been

purchase for the company up

front that brings the raw

material cost close to zero.

The distance from the Plant is

about 3 kilometers. It was

explored in 1962 in St.

George GRE UKGU by the

instructions of the former

South-Kazakhstan Economic

Council.

The field folded rocks of the Lower

Carboniferous eruptive complex,

represented tephra-basalts and tuffs,

basalts and trachy basalts that compose

the core daubabinsk brachysyncline. The

total area of effusion is 60 square

kilometers, capacity 100-250 meters. Plot

area of 2.5 square kilometers of detailed

exploration, power utility thickness of 5-

100 m., Dikes 3-5 m. Overburden is

represented by loams capacity 0.2-15 5 m.

(average of 4 m).

Chemical composition effusion below.

Components Content,%


Minimum Maximum Minimum Maximum

SiO 2 50 70 CaO 8 12

Al 2 O 3 13 18 MgO 1 8

Fe 2 O 3 7 9 K 2 O, Ka 2 O 5 8

Active: SiO 2 - up to 1,0%, AL 2 O 3 - 3.0 - 4.5%

Physical and mechanical properties effusion: bulk density of 2.3 t / m3,

the natural moisture content of 3%; Activity 14,7-103,7 mg (activity


on rocks with 50-70 mg account 59.2%); average activity by the

method of absorption of lime 98.6 mg. Effusions can be recommended

as the active mineral additive into the Portland cement and pozzolan

Portland cement in an amount of 30-80% (GOST 6269-63) as well as

for the production of mineral wool.

The field is not flooded. Mining conditions are favorable for the

development of his career. Stocks USSR GKZ approved by categories

A, B, C1 and C2 (protocol №4213, 1964).

Kazygurt limestone deposit (94) is located in the Lenger district, on 30-

35 km South-East of the Shymkent city, 12 km North-West of the

railway station Toguz.

The field is composed of limestone Visean Lower Carboniferous.

Limestone composition is divided into two packages: the bottom - light

gray with interblended massive silicified dark gray limestone, the power

of 120 m., And silicified limestone cataclastic, in the southern part of

the field capacity of 290-295 m. Useful thickness occurs according to

the surrounding rocks, fall to the north-north-east at angles of 50-60 0.

Overburden - limestone, clay, sandstone of Jurassic age with capacity

from 5 to 40 m. The limestone karst, is 9%.

The chemical composition of limestone are shown below.

Physical and mechanical properties:

bulk density of 2.6 g/cm3 ; tensile strength, kg/cm 2: compressive dry

1156-1974, 1069-1938 in water-saturated after 25 cycles of freezing

908-1475.

The chemical composition of isolated pure limestone, suitable for the

production of Portland cement that meets the requirements of GOST

23464-79, and silicified dolomites limestone’s used as crushed stone

and gravel in concrete grades according to GOST 8267-77 500-600, for

1000. In the rubble of the brand manufacture of Portland cement as a

clay component can be used Shymkent loess deposits may use

overburden loam with Kazygurt field. The mixture for clinker saturation

factor of 0.92 should contain 63.2% of lime component and 33.8% clay.

3.1.2 Cement Factory:



Minimum Maximum Average Minimum Maximum Average

SiO 2 0.33 16.2 8.12 CaO 45.39 54.0 49.89

Al 2 O 3 0.09 0.92 0.50 MgO 0.1 5.14 2.62

Fe 2 O 3 0.14 1.79 0.94 K2 O, Ka2 O 37.5 43.0 40,20


Basically, cement is produced in two steps: first, clinker is produced

from raw materials. In the second step cement is produced from cement

clinker. The first step can be a dry, wet, semi-dry or semi-wet process

according to the state of the raw material.

3.1.2.1 Making clinker:

The raw materials are delivered in bulk, crushed and homogenized

into a mixture which is fed into a rotary kiln. This is an enormous

rotating pipe of 60 to 90 m long and up to 6 m in diameter. This

huge kiln is heated by a 2000°C flame inside of it. The kiln is

slightly inclined to allow for the materials to slowly reach the other

end, where it is quickly cooled to 100-200°C.


Four basic oxides in the correct proportions make cement clinker:

calcium oxide (65%), silicon oxide (20%), alumina oxide (10%)

and iron oxide (5%). These elements mixed homogeneously

(called “raw meal” or slurry) will combine when heated by the

flame at a temperature of approximately 1450°C. New compounds

are formed: silicates, aluminates and ferrites of calcium. Hydraulic

hardening of cement is due to the hydration of these compounds.

The final product of this phase is called “clinker”. These solid

grains are then stored in huge silos.

3.1.2.2 From clinker to cement:

The second phase is handled

in a cement grinding mill.

Gypsum (calcium sulphates)

and possibly additional

cementations (such as blast

furnace slag, coal fly ash,

natural pozzolanas, etc.) or

inert materials (limestone) are

added to the clinker. All

constituents are ground

leading to a fine and

homogenous powder. The

cement is then stored in silos

before being dispatched either

in bulk or bagged.

3.1.3 Components of the Cement Plant:

3.1.3.1 PRODUCTION PROCESSES:

The production of cement takes place with several steps:

• Quarrying of limestone and shale.

• Crushing and Grinding.

• Blending / Homogenizing.


• Fine grinding and intern storage.

• Burning, cooling and storage.

• Finish grinding.

• Storage Packaging and/or shipping.

3.1.3.2 Quarrying, Dredging and Digging:

Quarrying of limestone and shale

is accomplished by using

explosives to blast the rocks from

the ground. After blasting, huge

power shovels are used to load

dump trucks or small railroad cars

for transportation to the cement

plant, which is usually nearby.

The ocean floor is dredged to

obtain the shells, while clay and

marl are dug out of the ground

with power shovels. All of the raw

materials are transported to the

plant.

3.1.3.3 Crushing and Grinding:

After the raw materials have been

transported to the plant, the

limestone and shale which have

been blasted out of the quarry

must be crushed into smaller

pieces. Some of the pieces, when

blasted out, are quite large. The

pieces are then dumped into

primary crushers which reduce

them to the size of a softball. The

pieces are carried by conveyors to

secondary crushers which crush

the rocks into fragments usually

no larger than 3/4 inch across.


3.1.3.4 Blending / Homogenizing:

After the rock is crushed, plant chemists analyze the rock and raw

materials to determine their mineral content. The chemists also

determine the proportions of each raw material to utilize in order

to obtain a uniform cement product. The various raw materials are

then mixed in proper proportions and prepared for fine grinding.

3.1.3.5 Fine Grinding and Intern Storage:

When the raw materials have been

blended, they must be ground into

a fine powder. The dry process of

fine grinding is accomplished with

a similar set of ball or tube mills;

however, water is not added during

the grinding. The dry materials are

stored in silos where additional

mixing and blending may be done.

3.1.3.6 Burning, Cooling and Storage:

Burning the blended materials is the key in the process of making

cement. The dry mix is fed into the kiln, which is one of the largest

pieces of moving machinery in the industry. It is generally twelve

feet or more in diameter and 500 feet or more in length, made of

steel and lined with firebrick. It revolves on large roller bearings

and is gradually slanted with the intake end higher than the output

end.

As the kiln revolves, the materials roll and slide downward for

approximately four hours. In the burning zone, where the heat can

reach 3,000 degrees Fahrenheit, the materials become

incandescent and change in color from purple to violet to orange.

Here, the gases are driven from the raw materials, which actually

change the properties of the raw materials. What emerges is

“clinker” which is round, marble-sized, glass-hard balls which are

harder than the quarried rock. The clinker is then fed into a cooler

where it is cooled for storage.

3.1.3.7 Finish Grinding:


The cooled clinker is mixed with a

small amount of gypsum, which

will help regulate the setting time

when the cement is mixed with

other materials and becomes

concrete. Here again there are

primary and secondary grinders.

The primary grinders leave the

clinker, ground to the fineness of

sand, and the secondary grinders

leave the clinker ground to the

fineness of flour, which is the final

product ready for marketing.

3.1.3.8 Packaging/Shipping:

The final product is

shipped either in bulk

(ships, barges, tanker

trucks, railroad cars, etc.)

or in strong paper bags

which are filled by

machine. One bag of

Portland cement contains

50 kilogram of cement.

When cement is shipped,

the shipping documents may include “sack weights.” This must

be verified by the auditor since only the cement is taxable. “Sack

weights” must be excluded.


3.1.4 Residence town:

The social and economic effects of our

facilities have been studied

extensively. Major heavy industries,

have historically occurred in rural

areas with few nearby towns. In cases

where the facility or site was far from

existing settlements, the organizations

heading the effort would build a new

town to house the workers. Since our

study focuses on the effects of utility-

scale solar facilities upon existing

population centers, this literature

review will exclude information on

towns built purely for a new facility.

This town complex will accommodate

up to 350 employees with their

respective families for a period of 3

years of design and 20 years after the

launch of the operation, including:

• Housing units in blocks of 6 units, with apartments for families of 4

persons.

• Residential Suite 3 story block of 4 units, with apartments for single

employees.

• 3 bedroom villa to accommodate managers, engineers and

technicians with their families.

• Residential Units for senior executives and guests of the villa.

• 3-storey hotel with 30 rooms for the restaurant, lobby, coffee shop,

dining and ... 3-in-1 block on the ground floor for visitors group.

• Public buildings, including: Elementary and secondary schools,

indoor sports complex, Outdoor sports complex, clinics and health

centers, shops, stores, restaurants and coffee shops, chapel, library,

town building maintenance management, repairs and maintenance, the

crew, town facilities, indoor car parks, amusement parks for children

and adults, buildings spare warehouse fire and ...

• Minibuses, cars, Nissan to transport workers to the site and back.


• Streets and sidewalks, landscaping, outdoor sports grounds, lawns,

planting trees in the streets and a dedicated area, the fence around town

to a height of 2 meters (concrete and metal fencing).

3.2 Phase II (power Generation):

To be able to generate the consumed

electricity by the plant which covers the

cement factory and the city in order to reduce

the operating cost as well as risk of national

grid dependency we are planning for the next

phase of the project to implement the two

options indicated below.

3.2.1 Waste Heat Recovery Power Generation System:

We can provide plants with much higher energy efficiency in response

to environment-friendliness by combining our Waste Heat Recovery

Power Generation System. This system utilizes the thermal energy of

the exhaust gas from SP (NSP) and clinker cooler, and thus generates

and covers 30%-40% of electric consumption in a cement plant.

The Cement Plant Waste Heat Power Generation Plant generates

electric power by a steam turbine utilizing steam produced from the heat

of two sources--pre-heater waste gas (PH waste gas) and air quenching

cooler waste gas (AQC waste gas).

Furthermore by building several greenhouse farms adjunct to the plant

we will not only use the heat but also the co2 generated by the plant.


3.2.2 Wind Power Plant:

The selected site for the wind

farm is located near a small

village Zhuzumdyk. The village

is in Zhuzumdyk Baidibek

district of South Kazakhstan

Oblast (SKO), 120 km north-

east of the city of Shymkent, and

80 km from the Cement factory.

The site was chosen on the recommendation of experts Akimat of the

South Kazakhstan region. Earlier site for the construction of wind farms

in the area p.Shayan was selected by the Institute

The use of wind farm and the replacement of electricity from coal-fired

power plants will contribute to the fulfillment of international

obligations of the Republic of Kazakhstan to reduce greenhouse gas

emissions under the United Nations Framework Convention on Climate

Change, a party which is the Republic of Kazakhstan since 1997.

The planned construction site is located within the wind farm 2 km from

the n. Zhuzumdyk. The territory is a hilly plain terrain with elevations

of about 300-340 meters above sea level. The territory has an area of

over 20 square meters kilometer and is currently available for wind

energy development. Wind power from 20 to50 MW can be placed

within this area.


4.0 Overall Economics of Project:

4.1 Initial Capital Investment:

Item Description Amount

1 Registration fees, company establishment,

project insurance, etc…. 3,500,000

2 Cost of initial staff training 1,500,000

3 Capital investment for plant 262,848,256

4 Capital investment for town 75,326,000

5 Working Capital required 11,076,875

Total initial investment 354,251,131

Table 1: Total initial investment capital required


4.1.1 Initial investment:

• Cement factory Plant.

Table 2: Building requirement.

Table 3: Mine machinery requirement.

Table 4: Plant Equipment, tools, and

Machinery.

Table 5: Initial Capital Investment for

plant.

• Residence Town.

Table 6: Town Building requirement.

Table 7: Initial Capital Investment for Town.

• Working Capital.

Table 8: Total Annual working capital.

Item Description Area/m2 USD/m2 Total USD

1 Industrial building 80,000 400 32,000,000

2 General offices 5,000 300 1,500,000

3 Shower/locker/restaurant 5,000 300 1,500,000

4 Storage facility for raw

materials spare parts 10,000 400 4,000,000

5 Repair shop 700 400 280,000

Total 39,280,000

Table 2: Building requirement


Item Vehicle name Number unit price USD Total price(USD)

1 Forklift 2 ton dual fuel 4 20,000 80,000

2 Pickups 5 35,000 175,000

3 Minibuses 4 50,000 200,000

4 Fire truck 1 150,000 150,000

5 Crane 15Ton 1 45,000 45,000

6 Crane 35Ton 1 150,000 150,000

7 Mechanical Shovel 2 70,000 140,000

8 Loader 2 65,000 130,000

9 Dump truck 4 110,000 440,000

10 Wagon drill 2 60,000 120,000

11 Ambulances 1 115,000 115,000

12 Trash Removal truck 2 30,000 60,000

Total vehicles (USD) 1,805,000

Table 3: Mine machinery requirement


Equipment, tools and machinery

item Description Number Total

price(USD)

1 Furnace 1

2 Raw mill 1

3 Cement mill 2

4 Crusher 1

5 Cement Silos 1

6 Mine raw materials 1

7 Electrical Equipment and Control Totally

8 Cable and transformer Totally

9 Lighting, etc Totally

10 Clinker transport and storage 1

11 Chalk transfer 1

12 Transport raw materials 1

13 Storage of raw materials 1

14 Dusting system 1

15 Loading Home 1

16 spare parts 1

17 Laboratory and workshop

18 Installation

Total machinery / equipment and devices (USD) 164,147,960

Table 4: Plant Equipment, tools, and Machinery


Item Description Total USD

1 Land/50 hectares 5,000,000

2 Mine 100 years reprove 15,000,000

3 Buildings 39,000,000

4 Computer equipment, laboratory equipment,

facility, furniture, etc 8,000,000

5 Land development 6,000,000

6 Special purpose vehicle(table 6) 1,805,000

7 Equipment, tools and machinery(table 5) 164,147,960

Sub total 238,952,960

10% unforeseen items 23,895,296

Total plant initial investment 262,848,256

Table 5: Initial Capital Investment for plant

Item Description Total m2 Cost/m2 in USD Total in USD

1 School 500 300 150,000

2 Clinic 300 400 120,000

3 Shops 300 300 90,000

4 Restaurant 500 300 150,000

5 Cultural center 1,000 300 300,000

6 Sport complex 1,500 500 750,000

7 Hotel 1,000 300 300,000

8 Hoisting 60,000 300 18,000,000

Total 19,860,000

Table 6: Town Building requirement


Item Description Total USD

1 Building 19,860,000

2 Equipment & furniture for buildings 15,000,000

3 Land (20hectars) 3,000,000

4 Land development

Alignment, equation, green space, parking, etc 3,800,000

5 Road development

Curbing, etc 10,000,000

6

Utilities

Lights post, power station, water & sewage station,

phone, internet, utility tunnels, trash burner, etc

17,000,000

Sub total 68,660,000

10% un for Sean items 6,866,000

Total town development 75,326,000

Table 7: Initial Capital Investment for Town


Item Description time(day) The required

amount (USD)

1 Raw material Auxiliary

and packaging 90 1,467,500

2 spare parts 90 500,000

3 Payroll production 90 1,560,000

4 Fuel and Energy 90 6,328,875

5 Repair and Maintenance 90 380,000

6 Inventory in process and

made 30 312,500

other unforeseen items 5% 528,000

Total working capital 11,076,875

Table 8: Total Annual working capital

4.2 Annual income/sales projection:

Most customer purchase cement in 50kg bags

rather than in bulk, there for we have made our

bases of calculation on 80% bay sale and 20% bulk

sale. We have considered 335 days year with

avenged production of 5500 tons per day. The

table below shows total projected revenue per

year.

Item Product Ton/day Ton/year USD/ton Total sales

1 50kg bagged gray

cement 4400 1,474,000 100 147,400,000

2 Bulk gray cement 1100 368,500 880 29,480,000

Total projected annual income in USD 176,880,000

Table 9: Annual sales projection


4.3 Annual Operating Cost:

Item Description Amount

1 Salaries 6,240,000

2 Raw materials 5,870,000

3 Utilities 25,315,500

4 Inventory 11,950,000

5 depreciation 30,010,696

6 plant annual insurance 1,000,000

7 sales and distribution cost 1%

of the sales 1,768,800

Total 82,154,996

Table 10: Annual Operation Cost

Item Description Usage/year Unit USD/unit Total

price(USD)

1 Lime stone +

clay 2,000,000 Ton - 0

2 Iron ore 26,000 Ton 85 2,210,000

3 Marl mish an 500,000 Ton 3 1,500,000

4 Gypsum stone 64,000 Ton 25 1,600,000

5 Additives

material 1,000 Ton 200 200,000

6 Fire resistance

brick 1,200 Ton 300 360,000

Total 5,870,000

Table 11: Annual Raw material Cost



price(USD)

1 50kg paper

bag 35,000,000 number 0.05 3,750,000

2

spare parts

5% of table

4

1 8,200,000

Total 11,950,000

Table 12: Annual Inventory Cost


price(USD)

1 Electricity 180,000 KW/h 13 23,400,000

2 Water 630,000 Cubic/meter 0.99 623,700

3 Gas 180,000 Cubic/meter 0.51 91,800

4 Oil &

Greece 100 Ton 500 50,000

5 Petroleum 100,000 liter 1.5 150,000

6 Telephone,

internet, etc 1 1 1,000,000

Total 25,315,500

Table 13: Annual Utility Cost


Item Description Number Monthly

salary loaded

Total Monthly

USD

1 Director/managers 4 10,000 40,000

2 Expert 20 5,000 100,000

3 Tech 30 3,000 90,000

4 Skilled workers 80 1,500 120,000

5 Workers 150 800 120,000

6 Administrative 50 1,000 50,000

Total employees 334 - 520,000

Total annual salary 6,240,000

Table 14: Annual Payroll Cost

Item Description total USD %/year annual Dep

1 Road and land

development 19,800,000 8.5 1,683,000

2 buildings 59,140,000 8.5 5,026,900

3 equipment & machinery 181,147,960 10 18,114,796

4 mines equip 1,805,000 20 361,000

5 office equip & supplies 23,000,000 20 4,600,000

6 mine 15,000,000 1.5 225,000

Total annual depreciations 30,010,696

Table 15: Annual Depreciation


4.4 Annual gain and losses:

Item Description Amount in USD

1 proceeds from sale 176,880,000

2 annual operation cost 82,154,996

3 annual loan interest to be paid 14,000,000

Profit / Loss for each year

prior to taxes 80,725,004

Table 16: Annual gain and losses

4.5 Important Information:

IRR = Annual Profit / Total Initial Investment ×100% =

(80,725,004/ 354,251,131)×100% = 23%

Payback Period (years) = 100/23 = 4.4 Years

Cost Per Unit (USD/Ton) = Annual Operation Cost / Total Tons of cement

produced = 96,154,996 / 1,842,500 = 52 (USD / Ton)


5.0 Market Analysis Summary:

In total Kazakhstan is consuming more than 8,2

million tons per year. This makes cement

consumption per capita 482 kg. Growth of the

cement market in Kazakhstan keeps at a rate of

12-15% for the last 4 years, and most likely this

rate will already increase in the current year –

there are preconditions in the form of substantial

production gain.

5.1 Market Segmentation:

Out of 8,2 million tons of the consumed

cement the import cement made 19% or 1,6

million tons, it is by half exceeds a previous

year's indicator making 1 million tons. 2/3

of all import cement was delivered from

Russia, and Uzbekistan, Iran and other

cement producers make the remaining

third. The bulk of cement is imported by

rail, about 3% of cement is

delivered by the sea through Aktau sea port, the part of cement is delivered

to Kazakhstan by trucks from Russia (West Kazakhstan, Aktyubinsk,

Kustanay, North Kazakhstan and Pavlodar regions).

Traditionally the largest sales markets are the capitals: Almaty and its

region consumed 2 million tons of cement and Astana and Akmola region

– 1,2 million tons. Market capacity of the South Kazakhstan (Taraz,

Shymkent and Kyzylorda) made 2.1 million tons this year.


5.2 Target Market Segment Strategy:

Company is planning two strategies from the beginning to:

• Invest in advertising, marketing &

extensive dealer network to create brand

awareness reflects the management’s

long-term vision and product positioning

strategy.

• Sales of 50% of its product via

long term (10 years) contract to region

major developers see appendix 1.

5.3 Market Trends:

Due to massive urban development pan in south Kazakhstan the rate of

market demand for cement is rapidly increasing and most likely it will be

the highest in the nation.

5.4 Competition:

The closest gray cement factory to the

south region of Kazakhstan is Amity

with 350 kilometer distance. Beside

quality, price is the main key factor in

making the product a head of

completion. Given that we have

minimal transportation cost compare to

our closet competition will make us

highly competitive.

5.5 Business Competition Edge:

Given that all cement consumption in

shymkent region is delivered to the region via

rail or truck and there is no local factory it

makes it extremely feasible to build the

factory in this region.


Nur cement LLP has the best and only mine in the area with over 200

hectares of prime land which collectively makes the company the potential

leader for this project in the region.

6.0 Team:

6.1 Management team:

The management team is simply the partners

in this business. They are Zholdassov

Nurmakhan Miyatovich, Ali Beheshti, Sarang

Azmoodeh, Ali Khorasani, and Nurzhan

Zholdassov (Detailed resume are included in

Appendix 2).

6.2 Organizational Structure:

• Zholdassov Nurmakhan Miyatovich, Chief Executive Officer: As

the top manager, the CEO, he is typically responsible for the entire

operations of the plant. It is his responsibility to implement decisions and

initiatives and to maintain the smooth operation of the plant, with the

assistance of the management team.

• Nurzhan Zholdassov, Chief Operational Officer: as the COO, she

looks after issues related to marketing, sales, production and personnel.

More hands-on than the CEO, the COO looks after day-to-day activities

while providing feedback to the CEO.

• Sarang Azmoodeh, Chief Financial Officer: Also reporting directly

to the CEO, she is responsible for analyzing and reviewing financial data,

reporting financial performance, preparing budgets and monitoring

expenditures and costs. The CFO routinely checks the corporation's

financial health and integrity.

• Ali Beheshti, Chief Information Officer: She reports directly to the

CEO and is a more internally oriented person focused on technology

needed for running the Plant.

• Ali Khorasani, Chief Revenue Officer: He is responsible for all

revenue generation processes in an organization, and is ultimately

accountable for driving better integration between all revenue-related

areas.

http://en.wikipedia.org/wiki/Marketing

http://en.wikipedia.org/wiki/Sales

http://en.wikipedia.org/wiki/Manufacturing

http://en.wikipedia.org/wiki/Personnel

http://en.wikipedia.org/wiki/Feedback


• Marc Allen Hackel, Chief Visionary Officer: As the CVO, he

decides on the general direction of a company, and has a broad and

comprehensive knowledge of all matters related to the business of the

organization and the vision required to steer its course into the future. The

CVO is generally in charge of defining corporate strategies, working plans,

and often product ideas.

6.3 Personnel:

Apart from the management team, other personnel include:

1. Workers.

2. Technicians.

3. Engineers.

4. Administrative.

5. Doctors.

6. Driver.

7. Teachers.

6.4 Vendors:

The main general contractor has been chosen for the Engineering,

Construction, commissioning, and training of the staff. The company has

built over 22 Cement factories and their detailed resume is shown in

Appendix 3.


7.0 Effects of Project to the Society:

Traditional resource development facilities affect

existing rural areas in a variety of ways. Effects

vary greatly among different industries and

facility locations; thus, quantitative data on

impacts is hard to come by. However, we focus on

three broad areas:

• Job creation.

• Population growth.

• Local fiscal impacts.

7.1 Job creation:

Proponents of resource development often extol the positive effects these

facilities will have on local employment. However, job creation is often

dependent on several facility characteristics, including project scale and

technology. While the local labor pool may be qualified for less-skilled

jobs, often local hiring will not satisfy the demand in professional,

technical, and supervisory areas. While local laborers may be hired, local

unemployment levels may not necessarily decrease, especially when the

unemployed do not have the skills required for the new positions. Just as

the quality of local labor plays a part in employment impacts, so does the

quantity of available labor. A town will likely experience greater

employment effects if its job applicants do not have to compete with the

job applicants in other nearby towns.

Similarly, our facilities may also generate secondary employment effects.

Secondary employment refers to jobs created indirectly by the facility. For

example, if a new facility attracts workers to the area, local stores will

likely see an increase in business, which may lead to new jobs at the stores.

The magnitude of indirect employment effects are largely determined by

the new project and are dependent on factors such as employee wages and

the company’s likelihood of purchasing local goods.


7.2 Population Growth:

Rapid population growth is a common experience in rural towns near new

resource facilities. When an area’s labor pool is inadequate for an project,

outside labor will likely move to the area to fill the gap. Like a facility’s

impact on employment, in-migration is also dependent on several facets of

the project, including the facility’s scale. Towns with larger populations

(greater than 1,000 individuals) and with developed services will likely

experience greater rates of population growth than areas without developed

services. Generally, such towns may see their population grow as much as

10- 15 percent annually. With the influx of new individuals, secondary

industries in the town may also begin to grow; more individuals will move

to the area to fill these secondary positions.

7.3 Local Fiscal Impacts:

States impose a severance tax, which taxes a

facility by the amount of a resource extracted.

A portion of severance tax revenue may be

funneled to an “impact fund” for affected

communities. States may also levy a

corporation income tax. However, taxes and

fees collected at both the state and federal

level will specifically benefit local

municipalities affected by the extractive

facility.

In addition to funds that come from federal government, local

municipalities may benefit from a facility’s indirect and induced effects.

Local workers hired by the facility will likely live in town, thereby

increasing the demand for housing and possibly spurring construction of

new housing stock. Local workers will spend their earnings in town,


boosting the economy. An influx of new workers will create a demand for

more stores and restaurants, which will in turn hire workers who will spend

their incomes locally.

8.0 Project Risk Assessment:

Risk is the chance of something uncertain happening

which has an impact upon objectives of the organization.

In order to reduce the overall risk of the investment we

have studied the exposure, probability and consequences

of the items below.

8.1 Evaluation of economy/industry in which the company operates:

2012 2013 2014(e) 2015(f)

GDP growth (%) 5.0 6.0 4.6 1.0

Inflation (yearly average) (%) 5.1 5.8 6.9 6.1

Budget balance (% GDP) 4.5 5.2 4.3 3.8

Current account balance (% GDP) 0.4 -0.3 0.6 -0.6

Public debt (% GDP) 12.4 12.9 13.7 14.5

8.1.1 STRENGHTS:

• Expected increase in oil exports thanks to exploitation of Kashagan

oil field.

• Plentiful foreign direct investments.

• Strategic position between Asia and Europe.


8.1.2 WEAKNESSES:

• Economic dependence on raw materials (oil, gas, uranium, iron).

• High external debt.

• Weak banking system.

• Persistent shortcomings in legal and institutional framework.

• Risk of political instability if succession to President Nazarbayev is

rushed.

8.2 Assessment of the business risk factors specific company:

• Location- The plant is not only very close to (3 KM) limestone

reserves but also near the end-user market this bring the cost of

transportation for raw materials and finished good very low, therefore the

products could be sold in advanced. Appendix “1” indicates more than 50%

of the production pre-sold for 10 years.

• Operation Efficiency – uninterrupted supply of quality power is

essential for better operating efficiency, cost of power and fuel consumption

is 30-35% of the operating cost. This plant currently depend to national

power grid and Gas for energy source, however as expansion they are

looking for investment in wind power generation for source of electricity,

this not only reduce the operating cost but also minimizes the dependency

to national grid.

• Raw materials – Ownership of the mine eliminates the risk of raw

material availability.

• Regional demand-supply dynamics – Due to varying levels of

infrastructure/real estate/industrial development in the south region it better

places the plant.

• Governmental Intervention – Over the years, the industry has moved

from a phase of government determining capacity, production and pricing

to fully decontrolled stage.

• Branding – Company has a budget from

the beginning to invest in advertising,

marketing & extensive dealer network to create

brand awareness reflects the management’s


long-term vision and product positioning

strategy.

8.3 Assessment of financial and project-related risk factors as well

as the quality of the management:

• Management team- The Company has signed an agreement with a

region top operating company in the cement industry and have made them

a partner to ensure success operation of the plant for many years to come.

• Financial risk – We have ensured any quotes come from reputable

sources. We have reviewed similar projects and by having an independent

third party financial advisor, we are monitoring and verifying all payments.

• Strategic risk – To ensure that the funds are use appropriately and

the objective goals of the company has been met we have hired process

auditor to make sure all organization processes that has been outlined is

followed.

• Operational-safety risk – The Company has established safety risk

assessment protocol that is required to be followed.

business plan nur cement plant shymkent, kazakhstan 5500

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