Kenyan Firm Seeking Funding for CCA Timber Treatment Plant

Opportunity Snapshot

  • Country: Kenya Kenya
  • Industry: Energy, Natural Resources, Mining
  • Stage: Expansion/Growth
  • Years in operations: 4, Employees: 18
  • Investment size: $250,000 / min. $200,000
  • ROI: 20% in 3 years
  • Type of investment: Debt, Equity

Investment Opportunity

We are looking at setting up a timber treatment plant with reasonable returns to the investors. We intend to enhance productivity.

General Description:
We are a Kenyan registered firm dealing in the production of eucalyptus power poles for use in electricity distribution in Kenya. We have secured government and private plantations from where we get our raw materials from. We then harvest the same and transport the raw poles to treatment plants after which we deliver to the government agencies who then utilize the poles for electricity distribution. We have a contract for supplying the same with the government agencies. Our turnover is approximately 200-300 poles per month. One of the pledges the current government was elected on was on increasing the current electricity supply form 10% to 40 % in a span of four years and a universal laptop program for every class one entrant-meaning most of the schools have to be connected to the national electricity grid. This has created an upsurge in poles with current statistics showing that as a nation we require almost 500,000 poles yearly. Therefore there exists a great demand for poles.

Performance and Goals:
We are currently producing 200-300 poles roughly. This amounts to a turnover of approx. US $ 50,000. We would like to see this increased through enhancement and efficiency of our production process. We have machinery which we harvest and process but the treatment phase inhibits our production.

Difference from Competition:
We have the ability to procure the raw material - eucalyptus plantations. This is key to the success of this business. This way one is able to control quality and quantity as supplies of the same are hard to come by.

Personal Talents:
We bring experience, technical know-how and most useful contacts in both government and private sector.

Already Invested:
We already have the harvesting process sorted with harvesting equipment-power saws, timber gauges farming tractors, trucks, and experienced manpower already developed. We have the plantations and the challenge left would be transport and treatment.

Planned Return:
In our first year we expect to treat 20,000 poles thus would translate to almost US $ 900,000 with a net of 20% from treatment alone.

Repayment Schedule:
We would wish for a 8-12 month grace period then begin paying the investor. The repayment terms would be mutually agreed upon by all parties.

Unresolved Problems:
Currently none.

Investor Requirements:
Knowledge of the industry would be an added advantage. Managerial and organisational skills would be of great benefit to us.

Competitive Advantage

We have secured eucalyptus plantations. This is highly critical in this industry as this determines the sort of end product one will have at the end of the production process.

Use of financing

The financing will be primarily be used for the purchase of treatment plant and facilities.

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