Executive Summary of Business Plan
For ACR Copper tube plant

• The Enterprise (THE COMPANY)
THE COMPANY is an industrial services company located at Egypt and founded since 1994.
* Our company is Private Sector Company specialized in providing inspection and evaluation services for industrial plants in oil, gas, power station and metal fabrication sectors
* Since 2001 we started extending our activity as industrial services for supporting and helping local investors on marketing survey and searching for promising investment opportunity due to our good and continues contact with the industrial field in Egypt
* At 2002 we have recommended the copper tube plant as promising opportunity project could be established in Egypt and after long survey on the local market and international market we could not complete the execution plane due to shortage of funds as the investor have been told us.
* Since this date we still believe that this project have a great success and day after day we seeing the increasing needs of this product.
• Managing Team
* The managing director of THE COMPANY graduated from Faculty of Petroleum and mining engineering as metallurgical engineer and has long experience in metal industry consultation and product quality control on metallic product
* THE COMPANY has a staff of professional metallurgical and mechanical engineers have enough experience in construction and manufacturing process
* THE COMPANY have the ability to contact with other international specialized consultant could help us in our project.


Introduction About Project
Copper and Copper alloy tubes are one of the most feeding bi-products source to the air-conditioning and refrigeration and other industrial applications . The demand for copper tubes has increased dramatically over the last 10 years.
The Egyptian local market is based entirely on the import of the different sizes of copper tubes to be used in the HVAC, refrigeration and other industrial applications.
The Egyptian local market for copper and copper-alloy tubes has shown a dramatic increase in demand over the last three years (7600 tons/year in 2007)
The average number of air conditioning units produced by local manufacturers in Egypt last year is estimated by 600,000 units.
The average number of refrigerator units produced by local manufacturers in Egypt last year is estimated by 500,000 units.

Opportunities
1- There is no local manufacturing for this product in Egypt or even in the gulf area.
2- The preliminary market study showing a growing demand for this product in many industrial applications as showing here after in the table of copper tube application.
3- There are many advantages for manufacturing this product in Egypt.
3.1- Unique geographic location of Egypt relative to the biggest market in the Middle East which is the gulf area.
3.2- Low labors cost.
3.3- Low cost of energy.
3.4- Large base of qualified engineers and technicians.
3.5- Partnership agreement with the European Union.
3.6- THE COMPANY has good contact with expected local customers and even in the gulf area.
3.7- No importation over head which is evaluated at about 25% of the FOB price.
3.8- Low taxes fee in Egypt.

1- There are many other copper and copper alloy tubes and pipes available for specialized applications.
2- Tube made to other ASTM standard is also intended for plumbing applications, although ASTM B ** is by far the most widely used. ASTM standard classifications B 698 list six plumping tube standards including B 88.

Market Profile

Core Sector Consumer Sector
• Chemicals and Fertilizers • Air Conditioner and Refrigerators
• Petrochemicals and Oil Refineries • Water Coolers and Deep Freezers
• Electronics and Telecommunication • Food Processing and Cold Storage
• Ship Building and Automotive Transport • Furniture and Interior Decoration
• Power Generation and Energy Distribution • Electrical and Building Hardware
• Atomic Energy, Space Research and Defense • Writing Instruments and Office Accessories
• Machine Building and General Engineering • Domestic Gadgets and Home Appliances

Copper Tube market shear Current Suppliers to Egypt(2007)

There are about 24 countries exporting copper and copper-alloy tubes to Egypt for a total amount of about 16.5 million $ dollars during last year.
However only two countries are dominating over 55% of the market share.
The biggest exporting country is USA followed by France as showing in the below.

Country Market Share
china 33.2 %
UK 25.49 %
USA 13.3 %
Others 28.1%

Egyptian Potential Customers

* Air Conditioning Manufacturers:

1- Miraco Carrier
2- Unionair
3- Power
4- Euroair
5- Trane
6- Philco
7- Gibson
8- LG (Under Construction)

** Air Conditioning Agent (able to use copper tube for maintenance and repairs)
1- Mitsubishi
2- York

*** Refrigeration Manufacturers:
1- Goldi
2- Siltal
3- Keriazi
4- Ideal
5- Electrostar
6- Kelvanator
7- Alaska
8- GMC

The average production of Air-conditioning unit during the last two years is about 450,000 units per year.
The average production for refrigerator units during the last two years is about 600,000 units per year.
The maintenance market required about 15% of the amount of the copper tube used on the above figures.

Gulf Area Potential
Our market survey made through local companies working in the field of air conditioning gave us the following figures:
1- The consumption of copper tube used in air conditioning industry in Saudi Arabia is about 60 millions Saudi Rails.
2- The consumption of copper tube used in air conditioning industry in United Emirate is about 20 millions Drahm.
3- The consumption of copper tube used in air conditioning industry in Kuwait is about 1 millions Kuwait dinars.
* All companies we discussed with are willing to use and distribute our product in the gulf area due to the lower price expected comparing with their other sources.

Key of Competition

We will depend mainly on three keys on competition to have what we planed from the market shear.
1. High quality product by using up to date quality control management system and equipment (see table of quality equipment).
2. Low price of our product comparing with the product imported to the local market even from Far East.
3. The availability of our product in short time.

Cost and Profit Estimation
The average pure copper price this month (Marsh 2008) at LME (London metal exchange) is about 8800 USD/Ton
• 5% to be add shipping cost = 440,00 USD/Ton
• 15% custom and other taxes = 1320,00 USD/ton
• The price of row martial at factory will be about = 8,800 + 440,00 + 1320,00
• = 10560 USD
• The production cost in Europe and United State 3,500 USD/Ton
• china and other Far East manufactures = 2,300 USD/Ton
• According to coast estimation in Egypt and in accordance the cost of labor, power source, other facility the estimation of the production cost will be = 3,300 USD/Ton
So the final product cost / ton will be as follows:
Raw Copper / Ton 10560
Production Cost / Ton 3000
---------------------------------------------------------
Production coast Total 13,560 USD/ton

International prices
The international price of different kinds of copper tube is ranged between 16,000 USD in a simple manufacturing process up to 20,000 USD for the special manufacturing and treatment
(this prices is fob./ton)
If we conceder our production will be including various kind of copper tube according to the market need so we will depend on the average price = 17,000 USD / ton
There are other costs to be added in case of importing this product.
• Shipment cost 5%
• Taxes and costume 15%
• At least agent commission = 5 %
Total 25 % x 17000 = 4250 USD/ ton

So the consumer price for the imported product = 17000 + 4250
= 21,250 USD/Ton

Sealing price

** We willing to introduce our product to the local market with price of
=17,000 USD/Ton Average

Profit estimation
According to the cost estimation and raw material the total cost for the product as maintained before will be = 13,860 USD/Ton.

*** The expected profit will be 17,000 – 13,860
= 3,140 USD/Ton.
Our plane will start with 5,000 ton / year as production rate
annual expected profit = 10,000 x30,140 = 30,700,000 USD
other expenses for maintenance, taxes etc….. = 30% from profit
EXPECTED NET PROFIT = 30,700,000 X 70% =21,490,000 USD

Capital Distribution
• 2.5 USD Million for building and land and other facilities.
( Already designed and ready for construction)
• 11 USD Million for production line.
• ( Already designed and waiting order for construction)
• 1,5 USD Million for R&D ,consultation and product registration .
• 8 USD Million for running cost and row material
-----------------------------------------------------
23 Million USD = Total or Equivalent on EUR

• I prefer equity financing through coroporate company

Kind Regards