The Plastic Trade is Highly Profitable

Opportunity Snapshot

Investment Opportunity

• Customer Orientation: Domestic plastic processing plants and new materials manufacturers
• Business Model: import trade
• Project advantages:
1. There is a high domestic demand and there will be a long-term profitability in relevant foreign upstream markets and the domestic market because of different international comparative advantages

I. Project motivation:

1. The State is proposing an energy conservation policy
2. It has become a long-term trend to lower the consumption of energy and raw materials, reduce emissions and control environmental pollution
3. The energy substitution, benefits from renewable resources and the research, use and substitution of new materials have cultivated a vast emerging market

II. The environment policy for waste plastic:

1. The State encourages the recycling of renewable resources
2. For the import, the State encourages people to efficiently recycle resources for reuse, but also firmly forbids the import of waste and environmental pollutants

III. The market environment of waste plastic:

1. The upstream raw material: extensive. It is relatively high-cost to recycle waste plastics in Western countries, while some developing countries are not able to take advantage of waste resources. Therefore, their waste plastics are collected for general export.
2. The downstream market: With the research and application of alternative materials and new materials, the industry of waste plastic recycling and reproduction and new materials production has gradually developed since 2005 in China. Now, the industry is booming, creating a broad market for the import of waste plastic.

Conclusion: As the raw material for the production of new materials, at present, there is a high demand for waste plastic in China and it is the right time to import waste plastic.

IV. The plan for the import of waste plastic (omitted).

V. Estimate of the profit from the import of waste plastic: According to the present import channels and market conditions, the profit is expected as follows (take one year as a period):

1. Cycle: It is usually 3 months from the organization of supply to the handling of import procedures and marketing
2. Profits: A single purchase cycle is about 17% -22% and there are 4 cycles in a year.
P1 = 1.17x1.17x1.17x1.17 = 1.87
P2 = 1.22x1.22x1. 22x1.22 = 2.21
3. Description: The above “cycle” is based on a conservative and secure mode of import organization; the single-cycle profit takes an intermediate level in the current market; the one-year return is calculated based on the theory that full use of all funds is made. However, it is often not possible to make full use of funds in the actual purchase process. So, there will be a deviation between the actual profit and the theoretical calculated result. VI. Possible risks in the import of waste plastic and solutions: Credit risks from customers: To identify customers by their use of various trading means and adopt the most secure payment method possible in the international trade; Market risks: (omitted)

Investors can contact us on Merar.

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