BIRMINGHAM, August 2018
ABC ACCOUNT CENTRE
One Victoria Square Birmingham, B1 1BD
United Kingdom tel. +48 600 483 058
tel. +44 775 949 9418 [email protected]
INVESTMENT OFFER
It is time for a technological breakthrough!
Composite rebars
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CONTENTS
1. Study scope and characteristics
2. Company overview
3. Product description
4. Cooperation terms
5. About basalt composites
6. Market for the Basalt Composite Production Plant
7. Sales forecast for the next years of operation
8. Financial plan
9. Risk factors and threats
10. Summary
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1. Study scope and characteristics
The purpose of developing this offer is to establish cooperation with an investor in the
implementation of an investment project involving the implementation of Basalt Composite
Production Facilities. The capital needed to carry out the project described below amounts to
EUR 2,477,363, which consists of the implementation of three production lines of basalt
composites "BAZALT-TECH 2", supply of raw materials and warranty service for the first year of
production and other costs such as electricity, lease of the hall , employment.
2. Company overview
Consortium Silicon Group Ltd
SCIENTIFIC PRODUCTION FIRM „BASALT TECHNOLOGY” LLC
OŚRODEK BADAWCZO – ROZWOJOWY “MELCHIOR” SP. Z O.O.
BASALT TECHNOLOGIES SP. Z O.O.
Consortium Silicon Group Ltd
ABC Acounnt Centre, One Victoria Square, Birmingham, B1 1BD ENGLAND The Registrar of Campanies for England and Wales Incorporated on 21 czerwca 2017 Company Number: 10829415 UTR: 5602608038 Nature of business (SIC): 08910 - Mining of chemical and fertilizer minerals 20130 - Manufacture of other inorganic basic chemicals 23990 - Manufacture of other non-metallic mineral products n.e.c. 46750 - Wholesale of chemical products Officers: Marek Majcher - Scientific Director Waldemar Tomasz Wierzycki - Company Director Ośrodek Badawczo-Rozwojowy „MELCHIOR” Sp. z o.o. with registered office in 05 - 660 Warka,
ul. Gośniewska 46
The company was registered on 13.11.2015 by the District Court for the Capital City of Warsaw in
Warsaw, XIV Commercial Department of the National Court Register under No. 0000585796, NIP
7010519919
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Chairman of the Management Board - Marek Majcher The Company is authorised to carry out business e.g. in the following fields:
scientific research and development works in the area of selected natural and technical
sciences,
technical research and analyses,
manufacture of chemicals and chemical products,
activity in the field of engineering and related technical consultancy,
specialist design.
As part of its business, in 2015 the Company filed an invention named “Method of production of basalt powder, basalt fibre and other shapes”, which became patent protected in 2016 (P. 414330 PCT/PL 2016/00014). Currently, the Company's goal is to implement the invention in the production process and to commercialise the products manufactured using the invention, in particular high-grade continuous basalt fibre. In order to achieve this goal, it is necessary to build the first state-of-the-art Polish production plant with target output of 10 thousand tonnes of fibre per annum together with a domestic distribution network (ca. 10% of the production) and a foreign distribution network (ca. 90% of the production). The income from the current Company's business is insufficient to carry out the undertaking independently, therefore the Company tries to acquire third-party investors (private individuals and companies, venture capital funds, state business support organisations and others). The short period necessary to build the plant, a huge worldwide demand for basalt fibre products and high return on investment are undisputed assets of the planned undertaking. Person appointed by the Company to develop and implement the project:
Marek Majcher – Ph.D in Chemical Sciences, graduate of the D. Mendeleev University of
Chemical Technology in Moscow, employee of the Institute of Heat Power in Kiev, member
of research teams of the Technical Institute in Warsaw, the Maritime Academy in Szczecin,
the Institute of Aviation in Warsaw, academic lecturer, author of scientific and research
papers on the processes of water oxidation, combustion in closed chambers of combustion
engines, low-temperature pyrolysis, inventor and co-inventor of patent-protected
inventions in Poland and abroad (e.g. Reduxco fuel catalyst, sonochemical drying plant,
technology for the removal of excess iron and phosphorus from basalt aggregate, basalt
yarn), laureate of INNOVA awards in Brussels (2009) and GreenEvo awards (2011), holder
of the Diploma of the Minister of Science and Higher Education (2010); entrepreneur;
3. Product description
We offer a Basalt Composite Production Plant consisting of 3 production lines "BAZALT-TECH 2". Production lines "BAZALT-TECH 2" allow for the production of composite reinforcing rebars with a constant cross-section using glass, basalt or carbon fibres. The diameter of the rebars is from 4 to 25 mm. The presented line can be equipped with an additional set (additional order) for the production of composite fittings.
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Line elements: 1. Spools with basalt roving 2. Impregnation, calibration and shaping unit 3. Heating module 4. Cooling module 5. Cutting unit 6. Packing unit (optional)
1 2 3 4 5 6
For the production of various composite profiles, simple replacing of the calibration and shaping head is required. Changing the production abilities takes about 2 hours. Recommended production hall conditions for three production lines: • Recommended hall length: approx. 36 m • Required hall width: from 7,5 m • Recommended ceiling height in the hall: 3 m • Height difference along the technological platform: 40 mm • Ventilation: not less than 40 m3 / min • Room temperature: not lower than 16 ° C • The power consumption is: 120 kWh / max 135 kWh /
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4. Cooperation terms Net price: 420 000 EUR including delivery and assembly on site. The price includes: • Individual preparation of the production organization chart. • Selection and provision of suitable raw materials at special prices reserved only for BASALT TECHNOLOGIES Participants. • Arrangement of the production facility; ventilation etc. • Quality certificates. • Production, delivery, assembling and commissioning. • Staff training. • Technological support. • Warranty service (12 months from commissioning date). Payment schedule: 50% prepayment 30% payment after production 20% payment after assembly and commissioning Delivery time: 60-90 days. The term of the contract - up to 3 months from the date of payment of the advance payment to the contractor's account, depending on the additional requirements of the ordering party. The offer expires on October 31, 2018. Additional notes: 1. We offer an individual investment feasibility study in terms of organization, technology and economy at a price of PLN 12,300. gross, depending on the scope and complexity of the project. 2. We offer our specialists' support and service after the warranty period, as well as deliveries (on the basis of a separate contract) of additional equipment, e.g. microwave treatment of the composite, coating the composite with quartz sand and other according to needs. 3. We guarantee attractive discounts for the purchase of other products from our offer (e.g. basalt roving, polymer resin) for the buyers of our production lines. 4. Details will be included in a separate delivery contract. 5. About basalt composites Basalt rocks had been forming on the surface of the Earth for millions of years under the influence of atmospheric factors. They are one of the strongest, silicate natural rocks. The basalt rock fibres are characterized by high natural strength, are resistant to aggressive environment and have a long lifetime, have insulating properties, are a natural, ecologically clean raw material. Previously, the widespread use of basalt fibres was limited by the rather complicated and unknown technological process of their production, up to the late 90s. Products based on continuous basalt fibres – are an innovative new type of composite materials. Application of such materials is important in the construction of key industrial facilities with a high degree of fire hazard. The properties of basalt products allow to replace a wide spectrum of traditional materials.
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Basalt products based on threads due to their properties are widely used in various industrial sectors, including constructions, and specialized constructions: • Hydraulic engineering, fittings for the construction of dams, materials for soil irrigation. • Construction of port facilities, sea platforms - fittings and construction materials from basalt plastics. • Building materials and structures, tiles, thermal insulation materials, fittings, reinforcement of cement and road surfaces. Profiles made of basalt plastic for construction: rods, fittings, pipes. • Fields of use of pipes: - for fluids with abrasive components, - for a chemically aggressive environment, - for cold potable water, for hot potable and industrial water, - for an aggressive and neutral environment, - food industry (pipes for transporting liquid food products); • Manufacture of basalt fibre fittings for edge reinforcing structures: -of dykes, for water dams, many others. The basalt fibre is unmatched when it comes to its corrosion-resistance in seawater environment. For countries with a long coastline, which can include most of the European countries, also the United States and the countries of Central and South America, the issue of strengthening coastal structures is the most up-to-date and the amount of basalt fibre consumption in this field can be huge. Basalt fittings have a form of particularly strong shafts with a diameter of 4 to 25 mm, of any construction length, with a cross-section and a profile in the shape of a spiral. Composite basalt fittings are designed for use in concrete constructions with compression reinforcement and reinforced concrete (reinforced concrete) instead of traditional steel fittings. Area of application The fittings are used - based on the requirements of the design documentation - in the construction of buildings and structures for various purposes. 1. The fittings are intended for use in industrial road constructions 2. It can be used as buildings` concrete structures reinforcement and reinforcement of other structures erected for various purposes. 3. Can be used for reinforcement of light and heavy concretes (foam concrete, floor concrete, surface concrete, monolith foundations) 4. In layered construction of brick houses. 5. As dowels, strengthening the thermal insulation of external walls of buildings. 6. As grids and shafts in constructions. 7. As flexible joints of three-layer stone walls in buildings and other buildings, in urban, industrial and agricultural construction, including the supporting layer, the lining layer and the layer with a hard lining. 8. It can be used to build bank fortifications. 9. In marine and port buildings. 10. In drainage and plumbing installations. 11. For lining roads and building fences. 12. As part of the infrastructure of chemical enterprises. 13. In concrete products with reinforcement and reinforced concrete (supports and columns lighting, power line poles, insulating traverses of power line poles; road and pavement slabs, fence plates, ornamental building constructions, posts and supports; train tracks underlay; connecting elements of collectors, pipelines and line pipes (heat centres, waterworks) in municipal economy systems. 14. In building houses with unfinished formwork. 15. They can also be used in systems used to increase the resistance of buildings to seismic vibrations - these are both existing buildings and built from scratch. The use of non-metallic fittings - in contrast to metal reinforcements - doubles and triples the construction's life. It protects them against the harmful effects of an aggressive environment (containing hydrochlorides, alkaline compounds, alkali salts and acids).
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Metal fittings in the composition of reinforced concrete products and constructions - this is the most important element, but also the weakest and most susceptible to damage. Under the influence of moisture and hydrochlorides, located in concrete, the fittings are subject to corrosion, which ultimately leads to reduced durability, causes the need for repairs and - consequently - damages reinforcement of concrete structures. In order to ensure a longer period of use of reinforced concrete structures, it is worth to use basalt fittings, which results in long-term preservation of constructions in an intact condition. The advantage of basalt fittings: - Improved physical and mechanical properties. The durability of a composite armature is eight times higher than that of steel; - Low specific gravity (it is over six times lighter than steel, when exchanging fittings with the same basalt strength is eight times lighter); - No susceptibility to corrosion and rotting. Very limited change in mechanical properties under the influence of acids, salts and bases. - It exhibits exceptional resistance to chemical compounds. - Is a current insulator, not susceptible to changes in radio and electromagnetic waves (changing the strength properties of the valves under the action of the electromagnetic field is excluded); - Low coefficient of linear expansion. Basalt fittings are base reinforcement material, used in multilayer warming and protection against cold. It provides effective thermal insulation and the lack of "cold bridges" in multi-layer protective constructions of thermal insulation and in the layers of facade insulation. The period of use of the thermal insulation structure containing this fitting is long due to the low thermal conductivity coefficient, high corrosion resistance and the lack of the phenomenon of gradual frosting of the insulation layer along the length of the fittings; - Wide range of working temperatures. 6. Market for the Basalt Composite Production Plant Basalt products are already absolutely export production. They are used by interested companies from: Japan, USA, Germany, France, Italy, India, South Africa, Singapore, UAE and other countries. Demand for basalt fibre materials due to their properties and diversity of application areas is high. The demand of the Japanese market for a continuous basalt thread at the end of 2007 was 2 - 2.5 thousand. tons per year. By 2010, it was already 5 - 6 thousand. tons per year. At the moment it is already 20,000. tons per year. At the same time, i.e. at the beginning of 2007, the production of roving around the world was about 5 - 6 thousand. tons annually, which indicates that the entire market is still very absorbent. At present, Japan produces roving in cooperation with Ukrainian producers. The production volume of the close analogue of continuous basalt thread - continuous glass fibre all over the world in 2007 amounted to approx. 2.5 million tons, and the demand - over 3 million tons for a total value of 10 - 12 billion USD. The world's largest consumers are: US - 44%, Europe - 25.0%, Asia - 24%, other American countries - 3.4%, Russia - 1.4%, other CIS countries - 1.2%. Most production is exported to: Canada ("Albarie Canada Ltd"), Czech Republic ("Sumperk"), the Netherlands ("Lapinus Fibers P.V."), Japan ("YEIB Co Ltd"). Over 80% of composites based on continuous glass fibre belong to the automotive industry. From the point of view of ecology, the most valuable is the reuse and regeneration of glass plastic composites, and the most visible is the use of engine parts and car bodies. At least that's what we can hear from the specialists in the United States and Japan, where the largest part of the basalt roving is directed.
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The advantage of basalt fittings: - Improved physical and mechanical properties. The durability of a composite armature is eight times higher than that of steel; - Low specific gravity (it is over six times lighter than steel, when exchanging fittings with the same basalt strength is eight times lighter); - No susceptibility to corrosion and rotting. Very limited change in mechanical properties under the influence of acids, salts and bases. - It exhibits exceptional resistance to chemical compounds. - It Is a current insulator, not susceptible to changes in radio and electromagnetic waves (changing the strength properties of the valves under the action of the electromagnetic field is excluded); - Low coefficient of linear expansion. Basalt fittings are basic reinforcement material, used in multilayer warming and protection against cold. It provides effective thermal insulation and the lack of "cold bridges" in multi-layer protective constructions of thermal insulation and in the layers of facade insulation. The period of use of the thermal insulation structure containing this fitting is long due to the low thermal conductivity coefficient, high corrosion resistance and the lack of the phenomenon of gradual frosting of the insulation layer along the length of the fittings; - Wide range of working temperatures. Competitive advantage There is a constant increase in the use of composites, due to the following factors: • They are lighter than traditional materials, which reduces energy consumption, • Compatibility of the use of composites boils down to reducing the size and shortening the assembly time, • Increases corrosion resistance, • Has unique dielectric properties of composites, which also give an ecological advantage. The essential differences of the composite Continuous Basalt Fibre in comparison with composite glass fibres and steel (primarily acid, alkaline and thermo-resistance, low hygroscopicity) determine the advantage of using CWB in all aspects. Basalt is 30% stronger than glass fibres, has greater adhesion and a higher Young module. The basic advantages of products manufactured basalt Basalt composites in most cases can replace steel and other metal, non-metallic, and plastic components. Composite materials from Continuous Basalt Fibre are: • 8 x stronger than the strength of alloy steel; • 1.3 x stronger than glass fibre products; • 10 x lower cost than carbon fibre materials.
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7. Sales forecast for the next years of operation.
The planned sales volume in individual years has been developed based on the sale of basalt rods with
a diameter of Ø8 mm, Ø10 mm and Ø12 mm. The price of basalt rods was determined on the basis of the
conversion factor in relation to the price of steel rebars. Steel rods with diameters Ø12 mm, Ø14 mm and
Ø16 mm are replaced with basalt rebars with diameters of Ø8 mm, Ø10 mm and Ø12 mm respectively.
Sales price of basalt rebars [EUR / m]:
0,45 EUR/ m – Ø8 mm
0,62 EUR/ m – Ø10 mm
0,81 EUR/ m – Ø12 mm
Sales volume of basalt rebars [m / year]:
2 414 880 m – Ø8 mm
2 099 520 m – Ø10 mm
1 317 600 m – Ø12 mm
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Income from the sale of basalt rebars [EUR / year]:
1 086 969 EUR – Ø8 mm
1 301 702 EUR – Ø10 mm
1 067 356 EUR – Ø12 mm
Total: EUR 3 455 645
Total revenues 2019-2023
Basalt rebars
Income 3 455 645 EUR/ year
Net profit 1 020 752 EUR/ year
8. Financial plan. Assumptions. The financial plan was developed based on the sale of the production of basalt rods with diameters Ø8 mm, Ø10 mm and Ø12 mm, assuming that each rod diameter will be produced by all three lines in parallel over four months of the year. For example, a basalt rod with a diameter of Ø8 mm will be produced by three lines at 1, 4, 7, 10 months; Ø10 mm in 2, 5, 8, 11 months and Ø12 mm in 3, 6, 9, 12 months. Planned investment expenses: • 420,000 EUR - three production lines for basalt composites • EUR 1 825 719 - purchase of raw materials • EUR 152 613 - costs of hiring and renting a hall • EUR 79 031 - electricity costs Total: EUR 2 477 363
FINANCIAL METRICS
NPV 3 259 584
Discount rate after tax 12,0%
Corp. tax rate 27%
IRR 243%
Payback period 1
ROI year 5 243%
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Planned annual revenues: Total revenues
2019-2023 Basalt rebars
Income 3 455 654 EUR/ year Net profit 1 020 752 EUR/ year
Planned annual project costs:
Total costs 2019-2023 Basalt rebars
Cost 2 057 363 EUR/ year Taxes 377 539 EUR/ year Profit and loss statement in the table:
(in the thousands EUR) 2019* 2020* 2021* 2022* 2023*
*estimated data
A Total netto sales 3 455,6 3 455,6 3 455,6 3 455,6 3 455,6
B Operating expences 2 057,4 2 057,4 2 057,4 2 057,4 2 057,4
K Gross profit (loss) (I+/-J) 1 398,2 1 398,2 1 398,2 1 398,2 1 398,2
L Income tax 377.5 377,5 377,5 377,5 377,5
N Profit (loss) netto (K-L-M) 1 020,7 1 020,7 1 020,7 1 020,7 1 020,7
9. Risk factors and threats. SWOT analysis
Strengths of the venture • technology designed for comprehensive multi-stage implementation • technology proven in other industries and other composite materials on an industrial scale • the company consulted the proposed technology with research workers already operating basalt factories, as well as institutes specialized in metallurgy and materials science • solution ready for implementation • devices come from reliable producers from Russia, Ukraine, Western Europe (Germany, Belgium, Great Britain) • completed technical recognition regarding implementation in Poland and the EU • implementation does not require additional long-term training • low consumption of media • technology used and proven in the mining industry • no risk in terms of the market and supply of raw material • global use of diversified products • insurance guarantee for an investment project
Weaknesses of the venture • pilot technology not used so far in the steel and mining industries • unproven performance on an industrial scale in the steel industry
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Capabilities • the possibility of obtaining huge savings in the purchase of steel products • the possibility of obtaining savings from the logistics limitations to three technological lines (transport, storage, handling, etc.) • the possibility of comprehensive outsourcing of ecologically and financially effective management of composite materials • using the environmental effects obtained in order to build positive company perception on the global market • reduction of ecological and financial effects regarding the use of composite materials instead of steel • gaining a competitive advantage by the investor) by implementing unique technology in a very important area of production activity 10. Summary The most important Strategic Information Basalt materials replacing steel elements are absolutely unbeatable materials. All strength parameters, durability, desired adhesion with other materials used in construction (concrete, etc.), indifference to external factors (like temperature, humidity) and neutrality towards transported raw materials (drinking water, crude oil), and easy access to already finished product (basalts are ready-made enriched natural alloys, whose chemical composition has been unified and melted in the Earth's core, and then transported to the surface), make this material unique, and thanks to available technologies - easier to manufacture than steel or glass (does not require cooling down, brightened). The most important Financial Information The production costs of half products for basalt materials are very similar to the production costs of semi-finished products for other materials, e.g. steel. The advantage of basalt lies in the efficiency of using materials to create the final product: from semi-finished products we get 4 times more final material than in steel! The most important Information regarding Operational Activities An additional asset is the high subsidy factor due to innovation and breakthrough construction technology (in addition to standard construction, also in seismic areas, in aggressive environments where resistance to seawater, acidic environments, in countries with a long coastline is required, or very much high temperatures as well as very high temperature fluctuations. Outlook The largest recipients of the product are the United States, Russia as well as the rest of Europe and Asia. The demand for the use of continuous basalt fibre grows enormously. Demand is still higher than supply by around 17%.
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If you are interested in this undertaking, please contact us directly by e-mail or visit us. We are looking forward to do business with you! Project coordinator: Waldemar Wierzycki, tel. +48 600 483 058, +44 775 949 9418
email: [email protected]
We invite you to cooperate!
CONSORTIUM SILICON GROUP LTD ABC ACCOUNT CENTRE
One Victoria Square Birmingham, B1 1BD
United Kingdom tel. +48 600 483 058, tel. +44 775 949 9418
