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.
Version History
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Information on document
Document Control Information
Business Plan Nur Cement Document Name
Purpose Of Document
V1.1 Document Version Number
Document Status
Gulf Investment Enterprise,
INC. Document Owner
Ali Beheshti Prepared By
October 2018 Date Of First Draft
Date Approved
Approved By
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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
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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
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Section 9 Project implementation Schedule ………….……………. 45
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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.
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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
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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,
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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:
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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:
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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.
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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,%
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
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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:
Components Content,%
Components Content,%
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
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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.
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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.
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• 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.
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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:
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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.
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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.
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• 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.
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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.
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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
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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
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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
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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
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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
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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
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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
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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
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Item Description Usage/year Unit USD/unit Total
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
Item Description Usage/year Unit USD/unit Total
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
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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
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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)
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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.
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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.
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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.
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• 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.
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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.
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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,
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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.
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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
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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.
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