TOILET TISSUE BUSINESS PLAN


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TOILET TISSUE PRODUCTION

THE BUSINESS PLAN

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This is a business plan. It does not imply an offering of securities.

toilet-tissue1.0 Executive Summary.. 1

Chart: Highlights. 2

1.1 Objectives. 2

1.2 Mission.. 2

1.3 Keys to Success. 2

2.0 Company Summary.. 3

2.1 Company Ownership.. 3

2.2 Start-up Summary.. 4

Table: Start-up.. 5

Chart: Start-up.. 6

3.0 Products. 6

4.0 Market Analysis Summary.. 6

4.1 Market Segmentation.. 7

Table: Market Analysis. 7

Chart: Market Analysis (Pie). 8

4.2 Target Market Segment Strategy.. 8

4.3 Industry Analysis. 8

4.3.1 Competition and Buying Patterns. 8

5.0 Strategy and Implementation Summary.. 8

5.1 SWOT Analysis. 9

5.1.1 Strengths. 9

5.1.2 Weaknesses. 9

5.1.3 Opportunities. 9

5.1.4 Threats. 10

5.2 Competitive Edge.. 10

5.3 Marketing Strategy.. 10

5.4 Sales Strategy.. 10

5.4.1 Sales Forecast. 10

Table: Sales Forecast. 10

Chart: Sales by Year. 11

6.0 Management Summary.. 11

6.1 Personnel Plan.. 12

Table: Personnel 12

7.0 Financial Plan.. 12

7.1 Start-up Funding.. 12

Table: Start-up Funding.. 12

7.2 Important Assumptions. 13

7.3 Break-even Analysis. 13

Table: Break-even Analysis. 13

Chart: Break-even Analysis. 14

7.4 Projected Profit and Loss. 14

Table: Profit and Loss. 14

Chart: Profit Yearly.. 15

Chart: Gross Margin Monthly.. 15

Chart: Gross Margin Yearly.. 16

7.5 Projected Cash Flow.. 16

Table: Cash Flow.. 16

Chart: Cash.. 17

7.6 Projected Balance Sheet. 17

Table: Balance Sheet. 17

7.7 Business Ratios. 18

Table: Ratios. 18

Table: Sales Forecast. 1

Table: Personnel 2

Table: Profit and Loss. 3

Table: Cash Flow.. 4

Table: Balance Sheet. 6

1.0 Executive Summary

One major achievement of the present civilian administration in Nigeria in the past eleven (11) years is the growth of middle class which has been witnessed in the country. These growths continues to drive the increasing social and sanitary awareness of the need for hygienic and good quality living standard of people coupled with the geometrically exploding population and continued rural-urban drift continues to fuel the demand for toilet roll in the country.

WENAZ Nig. LTD is a Limited Liability Company specializing in the production of toilet rolls with the long term view of recycling of waste paper into jumbo reels to be used for the production of toilet rolls.

1.1 Business Opportunity:

In 2004, the federal government of Nigeria banned the importation of finished toilet roll, serviette and face tissue in order to encourage local production of the product and create the much needed employment.

Though much as been achieved in terms of local production, the market is still experiencing a deficit in supply.

The nations annual toilet roll requirement as been estimated at 105 billion units out of which local production can only meet about 800 million units. The short fall in supply translate to a market gap estimated at about three hundred and seventy five million (N 375,000,000) annually in revenue and an investment opportunity for savvy investors to exploit.

Opportunities also exist for the recycling of waste paper into jumbo reels used as raw material for the production of toilet rolls.

The demand for toilet roll would continue to expand as the standard of living of the over one hundred and forty million (140,000,000) population growing at the rate of 5.7% per annum continues to grow.

1.2 Product Description:

Toilet paper is a soft paper product (tissue paper) used to maintain personal hygiene after human defecation or urination. However, it can also be used for other purposes such as absorbing spillages or craft projects. It differs in composition somewhat from facial tissue, and is designed to decompose in septic tanks, whereas some other bathroom and facial tissues do not.

1.3 Current Business Position:

The planning and development of the company has been on going for about a month. Research has been carried out to analyze the market and likely location of the toilet roll production plant. Equipment supply has been negotiated with Ashmirt Technology Limited and prices have been agreed.

1.4 Financial Potential:

The company expects to generate N4,305,000 in net revenues within the first year of operation at a conservative rate of eight (8) hours of operation per day (40% installed capacity) based on sale of toilet roll only. Revenues and earnings are expected to increase if the production hour is extended into double shift operating for eight (8) hours each and eight (8) hours apart.

1.5 The Request:

The company is currently seeking for N 4,700,000 to cover the cost of the plant and initial working capital of the company. We have provided a detailed breakdown of the application of this fund in the Finance section of this document.

The longest lead item is the delivery and installation of the plant which would take approximately 60 days. In essence, operation is expected to start within 90 days of availability of funds.

Chart: Highlights

1

1.1 Objectives

The objectives of WENAZ Nig:

  • To maintain a professionally run organisation through training and retraining of staff to ensure skills acquisition and service efficiency
  • To develop our product to suit the exact requirement of our clientele
  • To develop superior expertise in the production of toilet rolls.
  • To use cutting edge technology in our business processes
  • To market aggressively through channels, adverts, promotional product as well as the electronic and print media

1.2 Mission

The mission of the company is: ‘to operate a production plant committed to excellence in the production of high quality product that will be accepted across the industry.

1.3 Keys to Success

The Vision of the Company is to become the leading toilet roll production company in the Nigerian market.

To fulfil its vision, the company will:

  • Utilise local and available abundant resources
  • Partner with host community
  • Adhere to best practices
  • Recruit and retain the right people
  • Automate its processes from inception in order to produce faster turnaround times and unique capabilities
  • Be goal – oriented
  • Empower our people to deliver customer satisfaction through appropriate training.

2.0 Company Summary

The plant that will be set up will have an initial capacity of one (1) ton per day with a planned expansion within two (2) years of operation subject to the condition of the market to include a waste paper processing plant.

Since the condemnation of bucket latrine and the adoption of water closet system, the demand for toilet roll have been on the rise, though was dominated by foreign brands before year 2004 and at such not much was contributed to the Gross Domestic Product (GDP) of the country.

The equipment and raw material required for production can be sourced locally and both luxury and economy brands can be produced targeting different segments of the market.

Our objective is to process quality product available to the people we work with at the right price, and in the desired quantity.

2.2 Product Description:

Toilet paper is a soft paper product (tissue paper) used to maintain personal hygiene after human defecation or urination. However, it can also be used for other purposes such as absorbing spillages or craft projects. It differs in composition somewhat from facial tissue, and is designed to decompose in septic tanks, whereas some other bathroom and facial tissues do not.

2.3 Location:

Toilet roll production can be sited in any urban centre populated with people of high hygienic standard and consciousness.

Lagos, the commercial nerve centre of Nigeria is no doubt the largest market for toilet rolls in Nigeria and it is also close to the source of raw materials. There are about 10 toilet roll production companies in Lagos. Other cities where the project can be sited include Aba, Port Harcourt, Abuja, Onitsha, Asaba, Kano, Kaduna amongst others.

In addition, we believe that the choice location of our plant at 11 Ledega Street, Idado Ibuje Lekki, Lagos will attract quality workforce and customers alike.

2.4 Technology:

The toilet roll production plant is a stationary one to be sourced locally. The plant is made up of the core cutting machine, core gluing machine, jumbo reel winding machine and band saw cutting machine.

The plant would be sourced from an experienced fabricator of plants in Nigeria, hence, the durability of the plant and spare parts would not be a problem.

2.1 Company Ownership

2.5 Ownership Structure:

The company, formed in 2010 is a wholly owned Nigerian company and currently has only 1 shareholder, Mr. Moses.

2.6 Legal Considerations

The federal government grants the owner the right do business with the registered business name of WENAZ Nig, having registered duely with the Corporate Affairs Commission {CAC}

2.2 Start-up Summary

Machinery and Equipment:

The relevant machinery and equipment, all of which are locally available includes:

  • core cutting machine
  • core gluing machine
  • jumbo reel winding machine
  • band saw machine.

The equipments would be sourced from Ashmirt Technology.

Plant size and Production Volume:

The capacity of the plant is one {1) metric ton of jumbo reel per day ,producing 20,000 double ply toilet roll in 24 hours and working for 250 days in a year, the expected output is five million {5,000,000) toilet rolls.

Plant Location:

The plant would be located at Lagos, which is close to the source of raw material and ready market for the products to be produced.

Accommodation:

The plant requires little space for operations and can be accommodated in a three (3) bedroom apartment, where the raw material and finished product would be stored. However for future expansion, it is advisable to hire a warehouse type of accommodation.

Raw Material:

The essential raw materials needed are jumbo reels, core paper and white glue while the packaging material are the wrapping paper on which the producers brand name and address will be printed ,cellophane and staple pins.

Utilities:

The plant requires electricity to power the electric motors. However due to the erratic supply of electricity in the country, an electric power generator would be installed for steady supply of power.

Labour Requirement:

The entire production plant of one (1) per day would require about five (5) staffs for production.

Raw Material Suppliers and Fabricators Contact Details:

Below are the contact details of some of the plant fabricators /agents in Nigeria.

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4.0 Market Analysis Summary.. 6

4.1 Market Segmentation.. 7

Table: Market Analysis. 7

Chart: Market Analysis (Pie). 8

4.2 Target Market Segment Strategy.. 8

PLEASE DONATE TO ACCESS COMPLETE DETAILS:

4.3 Industry Analysis. 8

4.3.1 Competition and Buying Patterns. 8

5.0 Strategy and Implementation Summary.. 8

5.1 SWOT Analysis. 9

5.1.1 Strengths. 9

5.1.2 Weaknesses. 9

5.1.3 Opportunities. 9

5.1.4 Threats. 10

5.2 Competitive Edge.. 10

5.3 Marketing Strategy.. 10

5.4 Sales Strategy.. 10

5.4.1 Sales Forecast. 10

Table: Sales Forecast. 10

Chart: Sales by Year. 11

6.0 Management Summary.. 11

6.1 Personnel Plan.. 12

Table: Personnel 12

7.0 Financial Plan.. 12

7.1 Start-up Funding.. 12

Table: Start-up Funding.. 12

7.2 Important Assumptions. 13

7.3 Break-even Analysis. 13

Table: Break-even Analysis. 13

Chart: Break-even Analysis. 14

7.4 Projected Profit and Loss. 14

Table: Profit and Loss. 14

Chart: Profit Yearly.. 15

Chart: Gross Margin Monthly.. 15

Chart: Gross Margin Yearly.. 16

7.5 Projected Cash Flow.. 16

Table: Cash Flow.. 16

Chart: Cash.. 17

7.6 Projected Balance Sheet. 17

Table: Balance Sheet. 17

7.7 Business Ratios. 18

Table: Ratios. 18

Table: Sales Forecast. 1

Table: Personnel 2

Table: Profit and Loss. 3

Table: Cash Flow.. 4

Table: Balance Sheet. 6

6

Chart: Gross Margin Monthly

7

Chart: Gross Margin Yearly

8

7.5 Projected Cash Flow

Table: Cash Flow

Pro Forma Cash Flow

FY 2016

FY 2017

FY 2018

Cash Received
Cash from Operations
Cash Sales

₦24,900,000

₦24,900,000

₦24,900,000

Subtotal Cash from Operations

₦24,900,000

₦24,900,000

₦24,900,000

Additional Cash Received
Non Operating (Other) Income

₦0

₦0

₦0

Sales Tax, VAT, HST/GST Received

₦0

₦0

₦0

New Current Borrowing

₦0

₦0

₦0

New Other Liabilities (interest-free)

₦0

₦0

₦0

New Long-term Liabilities

₦0

₦0

₦0

Sales of Other Current Assets

₦0

₦0

₦0

Sales of Long-term Assets

₦0

₦0

₦0

New Investment Received

₦0

₦0

₦0

Subtotal Cash Received

₦24,900,000

₦24,900,000

₦24,900,000

Expenditures

FY 2016

FY 2017

FY 2018

Expenditures from Operations
Cash Spending

₦1,249,992

₦1,249,992

₦1,249,992

Bill Payments

₦1,159,565

₦39,256,107

₦18,710,582

Subtotal Spent on Operations

₦2,409,557

₦40,506,099

₦19,960,574

Additional Cash Spent
Non Operating (Other) Expense

₦0

₦0

₦0

Sales Tax, VAT, HST/GST Paid Out

₦0

₦0

₦0

Principal Repayment of Current Borrowing

₦0

₦0

₦0

Other Liabilities Principal Repayment

₦0

₦0

₦0

Long-term Liabilities Principal Repayment

₦0

₦0

₦0

Purchase Other Current Assets

₦0

₦0

₦0

Purchase Long-term Assets

₦0

₦0

₦0

Dividends

₦0

₦0

₦0

Subtotal Cash Spent

₦2,409,557

₦40,506,099

₦19,960,574

Net Cash Flow

₦22,490,443

(₦15,606,099)

₦4,939,426

Cash Balance

₦23,490,443

₦7,884,344

₦12,823,770

Chart: Cash

9

7.6 Projected Balance Sheet

Table: Balance Sheet

Pro Forma Balance Sheet

FY 2016

FY 2017

FY 2018

Assets
Current Assets
Cash

₦23,490,443

₦7,884,344

₦12,823,770

Inventory

₦16,250,000

₦2,545,833

₦2,545,833

Total Current Assets

₦39,740,443

₦10,430,177

₦15,369,604

Long-term Assets
Long-term Assets

₦2,500,000

₦2,500,000

₦2,500,000

Accumulated Depreciation

₦235,000

₦470,000

₦705,000

Total Long-term Assets

₦2,265,000

₦2,030,000

₦1,795,000

Total Assets

₦42,005,443

₦12,460,177

₦17,164,604

Liabilities and Capital

FY 2016

FY 2017

FY 2018

Current Liabilities
Accounts Payable

₦33,627,387

₦504,065

₦1,630,434

Subtotal Current Liabilities

₦33,627,387

₦504,065

₦1,630,434

Total Liabilities

₦33,627,387

₦504,065

₦1,630,434

Paid-in Capital

₦5,000,000

₦5,000,000

₦5,000,000

Retained Earnings

(₦200,000)

₦3,378,056

₦6,956,113

Earnings

₦3,578,056

₦3,578,056

₦3,578,056

Total Capital

₦8,378,056

₦11,956,113

₦15,534,169

Total Liabilities and Capital

₦42,005,443

₦12,460,177

₦17,164,604

Net Worth

₦8,378,056

₦11,956,113

₦15,534,169

7.7 Business Ratios

Table: Ratios

 

Ratio Analysis

FY 2016

FY 2017

FY 2018

Industry Profile

Sales Growth

n.a.

0.00%

0.00%

0.00%

Percent of Total Assets
Inventory

38.69%

20.43%

14.83%

0.00%

Other Current Assets

0.00%

0.00%

0.00%

100.00%

Total Current Assets

94.61%

83.71%

89.54%

100.00%

Long-term Assets

5.39%

16.29%

10.46%

0.00%

Total Assets

100.00%

100.00%

100.00%

100.00%

Current Liabilities

80.05%

4.05%

9.50%

0.00%

Long-term Liabilities

0.00%

0.00%

0.00%

0.00%

Total Liabilities

80.05%

4.05%

9.50%

0.00%

Net Worth

19.95%

95.95%

90.50%

100.00%

Percent of Sales
Sales

100.00%

100.00%

100.00%

100.00%

Gross Margin

34.74%

34.74%

34.74%

0.00%

Selling, General & Administrative Expenses

20.37%

20.37%

20.37%

0.00%

Advertising Expenses

1.61%

1.61%

1.61%

0.00%

Profit Before Interest and Taxes

20.53%

20.53%

20.53%

0.00%

Main Ratios
Current

1.18

20.69

9.43

0.00

Quick

0.70

15.64

7.87

0.00

Total Debt to Total Assets

80.05%

4.05%

9.50%

0.00%

Pre-tax Return on Net Worth

61.01%

42.75%

32.90%

0.00%

Pre-tax Return on Assets

12.17%

41.02%

29.78%

0.00%

Additional Ratios

FY 2016

FY 2017

FY 2018

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