Agenda - pcoic.org.cn · PDF fileAgenda 1. EXECUTIVE SUMMARY ... The project promoter counts...
Transcript of Agenda - pcoic.org.cn · PDF fileAgenda 1. EXECUTIVE SUMMARY ... The project promoter counts...
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Agenda
1. EXECUTIVE SUMMARY
2. WHY INVEST IN URUGUAY
3. PROJECT GOAL
4. PROMOTERS, MANAGEMENT and ADVISERS
5. PRODUCTS OFFERED
6. LOCATION
7. PLANT CHARACTERISTICS
8. TARGET MARKETS and MARKETING CHANNELS
9. INVESTMENT - PRELIMINARY HIGHLIGHTS
APPENDIX: TAX BENEFITS GRANTED BY URUGUAY´S INVESTMENT LAW
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1. Executive Summary
Investment Project "Eco Mineral Water“ aims to build and operate a Natural Oligomineral Water bottling plant in Uruguay. This plant will be designed entirely to meet the international markets requirements, and will have an extraordinary level of design and will count with a state of the art technology.
The project promoter counts with a good track record in strategic planning activities and development of architectural and engineering projects in Uruguay. In turn, he has been assisted by the best advisers of the beverage industry and national and international suppliers for the implementation of the investment project.
An excellent quality product at a very competitive cost will be obtained. The quality of the water to be bottled is superior to that of the main Premium Waters of the world. The main target markets will be: Mexico, USA, China, Brazil, India, Qatar, UEA, EU, etc. These markets will be attended by a direct sales force and international agreements with brokers.
The total investment amounts to USD 34,1 MM. It will be financed with a mix of Equity (49%) and LTD (51%). The project will be granted with the declaration of national interest from the COMAP with the respective tax exemptions for the project. The capital investment will be applied to the purchase of land where the water wells are found, the building of the plant, capital expenditures, working capital and initial debt interest payments. The project will be implemented within 18 months.
ADEQUATE
INFRASTRUCTURE
DYNAMIC ECONOMY
HIGHLY
COMPETITIVE
GLOBALLY INTEGRATED
INSTITUTIONAL &
FINANCIAL STRENGTH &
LOW COUNTRY RISK
INVESTMENT-FRIENDLY ECONOMY HIGH TRANSPARENCY
GREAT BUSINESS
ENVIRONMENT & ECONOMIC
FREEDOM
OUTSTANDING QUALITY
OF LIFE
HIGHLY SKILLED & COMPETITIVE
HUMAN RESOURCES
2. 10 Reasons to invest in Uruguay
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3. Project Goal
The goal is to build in the Sierras de Minas, a completely ecologic bottling plant, which will not alter the environment and surroundings. The plant will be conceived entirely to meet the international markets
requirements, and will have an extraordinary level of design and will count with a state of the art technology.
Trace Mineral Bottling Water
Plant
The plant will use "state of the art "technology provided by leading companies in the water and beverage industry
First plant of its kind to be built in Uruguay and the region. The plant will be designed and constructed in accordance with the requirements of the FDA and similar institutions for mineral water bottling plants (carbonated and not carbonated). The production will be sold 100% abroad.
An excellent quality product at a very competitive cost will be obtained. The quality of the water to be bottled is superior to that of the main Premium Waters of the world.
The project will usufruct the fiscal benefits granted by Uruguay (Exemption of Corporate Income Tax, Wealth Tax, VAT, customs duties), which added to the financial structuring (49% debt), makes the project very profitable
“Eco Mineral Water” will produce Trace Mineral Natural Water
Promoter counts with a good track record in strategic planning activities and development of architectural and engineering projects in Uruguay.
-Miguel Ángel Varela Vignoli (59) is Uruguayan and has worked professionally from 1970
to date with its study of urban architecture, advising architects, construction companies
and private investors in technical and financial feasibility of various constructions. He has
advised major undertakings that have been built in the country, such as: Shopping Centers
Lecueder Group (Montevideo Shopping, 3 Cruces Terminal Shopping Mall and Gates),
Hotels (Cottage and Radisson). He has also participated in the structuring of buildings of
great importance as Green Field Tower, Torre Mayor, World Trade Center, Tower Aquarius,
Sagittarius, among others. At the same time, Miguel was a shareholder of a construction
company from the years 1975 to 1983. Miguel holds a Master degree in aerodynamics
(Argentine) as part of its hobby (motorsport), which then turned into a parallel
professional work. 6
4. Promoter, Management and Advisors
Mr. Varela participated in the expansion of General Electric International, advising on
architectural aspects. Varela has worked as a consultant for various companies and urban
architects, such as Candia Bros., Scafiezzo, Pastore, Tieger and Braselli, Atijas-Weiis, Pintos
Risso, Kimelman, Rodolfo López Rey, Guillermo Gomez Platero, Bazzurro Claudio, Jaime
Boxer, Nicholas Guerra, Eduardo Strauch, etc.
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4. Promoter, Management and Advisors (cont.)
The promoter is in advanced negotiations with key personnel for other areas, including
Plant Manager and Sales Manager. For reasons of ongoing commitment, these persons
were not included in this document because they occupy key positions in
the beverage industry.
The Promoter has been assisted by the best advisers of the beverage industry and national and international suppliers for the implementation of the
investment project
TECHNOLOGICAL SUPPLIERS
LEGAL AND FINANCIAL ADVISORS
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METALLIC STRUCTURES ADVISORY
LIQUEFIED GASES SUPPLIER
PRINTING AND GRAPHIC SUPPLIER ELECTRICAL ENGINEERING ADVISORY
www.sidel.com
www.ppv.com.uy
www.husky.ca
www.winstonsa.com.uy
www.uy.airliquide.com
www.aluminios.com
www.pvn.com.uy
Promotores, Management y Asesores (Cont.) 4. Promoter, Management and Advisors (cont.)
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5. Offered Products
The company will produce 6 formats of Trace Mineral Natural Water
The composition of groundwater obtained - trace mineral - and the efficiency in the production
process due to the technology to be used, will permit to obtain an excellent quality product at a
low cost. The mentioned above, coupled with steady growth prospects of regional and global
demand of natural mineral water, the optimization of the project´s financial structure, and the
obtaining of fiscal benefits which will be granted by the Executive Power once the project is
declared of national interest, are the key success factors of this project.
-250cc bottles carbonated and not carbonated
-330cc bottles carbonated and not carbonated
-500cc bottles carbonated and not carbonated
The plant will be located in the site of the “Fuente del Puma”, in the Province of Lavalleja (Uruguay)
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6. Country localization and Province of Lavalleja
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6. Plant Location
Exploitation flow rates indicate that the currently available exploitation is of a volume of around 948 m3 daily.
- Área: 33Ha.9431 m2
- Location: The terrain that will occupy the bottling plant is located about 12 km. S of the town of Minas, in the Province of Lavalleja, with access to National Routes.
- Topographic features : The area is dominated by a rugged topography, associated with subsurface geological composition; with slopes easily exceed 10%, in the foothills of the Sierra of Minas. Surface water drain through glens and streams boxed in by steep rock, emphasizing the Arroyo Minas Viejas, Cañada Durazno and Cañada Espinillo.
A totally ecological, natural and unique surrounding, free of any contamination, which has characterized Uruguay as a “Natural Country”.
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6. Location - Ecological Environment
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The plant will have 4 industrial premises of 30m wide x 80m long x 6m,12m high. The distribution is as follows: In the 1st industrial premise: the injection machines will be installed (Husky Brand), the Preforms (PET) and Bottle Covers. It will also have 2 tanks:
- 1 for storage of raw materials to process. - 1 for placing of finished products, Preforms (PET) and Bottle Covers.
The 2nd. industrial premise: plant installation "Bottle Filling and Palletizing"
-Blowing Preform s - Put together of Packs -Bottle Filling -Wrapping Packs -Carbonate and / or liquid Nitrogen -Thermo Forming Packs -Covering the Package - Put together of Pallet -Labeling (2 Roll Quattro Labeling) -Pallet Reel -Product Coder - Rails for product transportation - Machine Room - CCO2 Tanks & Liquid Nitrogen
7. Plant Characteristics
The plant will be designed 100% for export, to meet the requirements of the FDA, CE and similar institutions.
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The 3rd and 4th industrial premise, a warehouse for finished pallets and other services sector: -Office of Plant Manager -Toilets -Head Office Maintenance -Dining -Laboratory Technical -Dressing -Kitchen -Staff Meeting Room -Rooms or from Spares parts and tools -Power Plants, Transformers, and Panels Electrical -Environment and perimeter of the Plant
As to its environment, a landscaped treatment will be given, with circulations of material (stone or concrete). The perimeter will be fenced with mesh and security cameras. The entrance to the plant will have a reception cabin, control of personnel entry and exit of goods and products. Regarding the water wells, these will have stone cabins and surveillance systems with cameras and alarms. This plant does not generate any emissions to the environment of contaminants, since it is designed without any transformation of fuels; all electrical systems are used (clean energy) and high technology with low power consumption in its applications. Besides, the cargo transportation done with elevators and palletizers will also use clean energy (electric).
7. Plant Characteristics
The plant will be “Eco-friendly”
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7. Plant Characteristics – Industrial Premises
Floor – View Fronts
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7. Machinery -HUSKY- Cover Injector
Inyectora de Tapas
Cover Injector
Finished Covers Elevator Finished Covers
Control and Ozonisation
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7. Machine-HUSKY-Pre-Molded and Injection PET
Auxiliary Equipment for Pre-Molding of PET Preform
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7. Machinery -SIDEL- Combi 34 XS
COMBI 34 XS Machine
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7. Machinery -SIDEL- Filling Combi 34 XS
Bottle Filling
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7. Machinery -SIDEL -Palletizer
Robotic Palletizer for Pallet
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8. Product: Presentation, Price, Markets
An excellent product will be offered, with a quality superior than those of the most renowned Premium Waters brands of the world.
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8. Product: Presentation, Price, Markets
Eco Mineral Water will be sold at an inferior price than the principal
Premium Waters of the world.
*Quality Values: Acidity (PH), Total Dissolved Solids (TDS), Calcium (Ca), Sodium (Na), Chloride (Cl), Sulphate (SO4), Nitrate (NO3) Source: Data from Aquamaestro.com & Mineral Water official websites.
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8. Product: Presentation, Price, Markets
The product will have 3 presentations, and may be sold under an own brand or private brand. The markets will be attended by a direct sales
force and international agreements with brokers.
-Trace Mineral Natural Water -Quality Premium carbonated and not carbonated Sizes : 250 ml, 330 ml, 500ml - Presentations: PET
250ml 0,10 – 0,13 USD 330ml 0,14 – 0,17 USD 500ml 0,18 – 0,21 USD
-Direct Sales Force
-International Brokers
-Own Brand
-Private Brand (Supply
Agreement)
TARGET MARKETS
México, USA, China, Brasil, India, Qatar, UAE, UE
PRODUCT PRICE MARKETING
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9. Investment - Preliminary Highlights
The total investment will be executed in 18 months.
34.1 Million USD (28.7 USD MM Fixed Assets + 3.9 MM in Working Capital + 1.0 MM USD Debt Service + USD 470 K Operating Deficit). Total Investment
USD 2.2 MM USD Land Purchase, 4.1 MM USD Plant Civil Works, 18.9 MM USD Plant Machinery , 600 K USD Offices and Other Equipment, 2.9 MM USD Pre-Operating Expenses, Others and Unforeseen
Fixed Assets Investment
51,5 MM USD per year (9 year average ). Sale of 365 MM bottles /year (average ) Sales Revenues
68,000 bottles per hour Production Capacity
15.1 MM USD / year (9 year average ) Production Costs
10,0 MM USD / year (9 year average ) Operating Expenses
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9. Investment - Preliminary Highlights
26,4 MM USD/year (9 year average) EBITDA
51% LTD (10 years, 2 years of grace in capital; Interest Rate: 5,0% - 7,0%); 49% Equity
Financing Structure
14,1 MM USD Corporate Income Tax exemption; 8 years of exemption in Wealth Tax of Civil Work and 100% in fixed asset moveable goods; 100% of VAT in Civil Work; 100% of VAT in Equipment and Machinery Imports; 100% of Customs Duties; 100% of VAT in Purchase of Domestic Equipment
Tax Benefits
19,2 MM USD /year (9 year average) Net Profit
The investment will be financed with 51% LTD and 49% Equity
Payback: 21 months after investment period (18 months) IRR = 71,9% NPV (@ 15%) = 70,3 MM USD
Economic-Financial Feasibility
18 Months. In the fourth semester can begin to deliver the merchandise. Investment
Execution Timeline
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9. Investment - Preliminary Highlights - Gantt
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Uruguay´s government recognizes the important role of the Foreign Direct Investment (FDI) and maintains a favorable investment
climate.
The country has a track record of attracting large investments in agricultural, industrial, services and infrastructure.
The current Investment Promotion System is delineated in Law Nº 16.906 (“Investment Law”), which was approved in 1998. This law
declares that the promotion and protection of investments made by domestic and foreign investors in the country is an issue of national
interest.
Domestic and foreign investors are treated equally
Foreign investments do not require prior authorization or registration
Free transferability of capital and profits overseas
In 2007 the government approved by decree (455/007) a new regulation of the “Investment Law”, which stimulates productive investment
granting fiscal benefits to those companies that invest in projects that contribute to reach the goals of the economic policy, independent of
the amount to be invested, the sector of activity nor juridical form.
3. Uruguay´s New Investment Promotion Regime 3. Uruguay´s New Investment Promotion Regime
Uruguay´s New Investment Promotion Regime
The benefit investments are those that at least achieve one of the following objectives:
Generate employment
Increase merchandises and services exports
Use of cleaner technology
Invest in R + D + I
Location in less developed area (favor decentralization)
Increase national value added
Generate positive impact on the GDP
The new Regime extends the tax benefits that an investment can access, democratizing the access and simplifying the required procedures for obtaining benefits. Through this new regulation the base of
beneficiaries is extended and SME have better accessibility conditions.
Uruguay´s New Investment Promotion Regime
a. Increase the GDP/Investment ratio so as to increase total factor productivity and capital-labor
relationship.
b. Broadening the base of beneficiaries.
c. Providing access to the benefits to SME.
d. Giving more benefits to enterprises that have a greater impact on the
economy according to the criteria and objectives of the economic policy
e. Monitor the project implementation to achieve greater transparency.
Goals of the New Investment Promotion Regime
The benefits for companies whose investments are promoted by the Executive Branch include:
- Wealth Tax (WT)
Exemption from WT on civil works projects for up to 8 years if located in
Montevideo and up to 10 years if located outside the capital; and
exemption from WT on fixed asset moveable goods during the entire useful
life of these goods.
-Import taxes and fees
Exemption from import taxes and fees for moveable fixed
asset goods that are declared non-competitive to national industry.
-Value Added Tax (VAT)
Return of 100% of VAT for local acquisition (duly documented) of materials and services used for civil works projects.
Benefits
-Fees and salaries in priority technological development areas
Calculate the amounts corresponding to salaries and fees for the project's
scientific and technological development in priority areas for 1.5 times
the payment of Corporate Income Tax with a maximum being equal to
the amount of the tax that does not benefit from investment exemptions
established in the system.
- Corporate Income Tax (CIT)
Exemption from CIT for an amount and maximum term (equivalent to up
to 100% of the invested amount, during a term of 25 years) that will be
applied to the objectives and indicators matrix according to the type and size
of the project..
WITH THIS INVESTMENT PROMOTION SYSTEM, INVESTORS CAN OBTAIN AN EXEMPTION THAT
GOES FROM 51% TO 100% OF THE INVESTMENT.
Benefits
The company must present its investment project to the COMAP (Application Commission depending on the Ministry of
Economy & Finance) requesting promotional status. COMAP studies the investment projects and evaluates them according to
an indicators matrix so as to grant benefits.
The evaluation period from the time the project is received by COMAP varies
according to classification.
The periods COMAP has to establish rulings are as follows:
- Small projects: 30 work days (may be extended if more information is required).
- Medium-sized projects: 45 work days (may be extended if more information is required).
- Large projects: 60 work days (may be extended if more information is required).
In the case that the time period expires without a ruling by COMAP, it shall be understood that COMAP has recommended
that the Executive Branch grant the benefits established for the project.
Straight forward procedure to obtain benefits
Once COMAP makes its ruling (or when there is a default approval), the Executive Branch has an undetermined time period to sign the resolution that grants the benefits to the company. After the investment project receives promotional status, COMAP will monitor the project. The company must present accounting statements with an audit report for all projects and a sworn declaration with information for the analysis of compliance with indicators for benefit application.
URUWOOD
Straight forward procedure to obtain benefits
In accordance with Decree 455/007, eligible investments to obtain benefits include the acquisition of the
following fixed asset goods:
-Moveable goods directly involved in the company's activity
(excluding non-utility vehicles and moveable goods for residences).
-Fixed improvements (excluding those for residences).
-Intangible goods determined by the Executive Branch.
Eligibility criteria
URUWOOD
To determine the Corporate Income Tax exemption amount, the project must first be classified
according to the investment amount in Indexed Units (UI). The classification table is as follows:
Investment Project Classification
Investment Project Classification
URUWOOD
The exemption amount is determined on the tax to be paid, not on taxable income. The exempted
tax shall be equivalent to a % of the amount invested in fixed or intangible assets included in the
promotional declaration, whose maximum amount depends on the investment classification in
accordance with the following table: