Construction of Cost-Effective and Safe Roads in African Markets

The company wants to launch the construction of cost-effective roads. Funding is needed to purchase construction equipment.

The roads will be a combination of three substances that provide dust suppression, dust stability and road capping and bonding agent.
The project is relevant in industries that handle huge traffic activity. The concept can also be used in municipal and government roads.

The project will seek to transform the road infrastructure in the country. As indicated earlier the method of road construction is cost-effective and safe. The cost-effective element will drive stakeholders to implement projects which were abandoned due to lack of funding. Another merit of the new concept is that the road construction period will be shortened when comparing it to conventional road construction.

The company will offer its products under two segments: Projects and Distribution. Projects incorporate the road construction service, whilst distribution is the supply of the polymers and bio-polymers materials to those customers involved in road construction. Projects will be split into New projects and Service and Maintenance.

Revenue will be generated through distribution and undertaken of new projects and servicing of roads.

The project is expected to take-off in March 2013, and currently efforts are underway for the construction of a pilot road which will be used for demonstration purposes and marketing.

The payback period in case of loan investment is 3 years and Return on investment for equity investors is in the range 10-15% p.a.

Direct competitors are the contractors of conventional roads.

We are different on the methods used to construct roads, and also on the overall cost involved in projects. Additionally it takes them long to complete their projects. Their services are limited to tarred roads but with the new method, mining sites, commercial zones and forestry fields will be serviced.

The advantage is sustainable due to our cost leadership especially now when financing of projects is a major concern. The success cannot be repeated since the method is protected by patents.

Currently roads infrastructure in the country is in poor state, in the future government and local authorities will focus on the improvement of country side roads. Furthermore as the economic growth is expected to rise, and mining sectors are being one of the major drivers, activity increase in mining will rely so much on improved road infrastructure in mining sites.

Revenue will be realised through contracts.

The method is a success in other parts of the World.

We have experience in project management, and other partners have experience in civil engineering.

Funding is needed to purchase construction equipment, and for the stocking of the critical raw materials (polymers and bio-polymers).

The project requires a huge financing base, which in our current state we are not able to provide.

Two rounds of financing are expected ($500,000 each).

External funding of $1,100,000.00 from international investors in the form of equity and debt is being sought. Equity: $1,000,000; Debt: $100,000

Debt: $100,000 USD, payback - 3 years, interest rate - 7%

Equity stake of 49% against $1,000,000, dividends yield - 10% p/a

We are looking for a silent investor.