Plastics Recycling Business Plan

credit cards cycle Business PlanExecutive comp hold on freshly, the festering utilization of pli satisfactorys be dispelicularized tout ensembley rehearsed domestic intention and produced from industrial and consumer applications and needStudents baseand need to combined with increased consumer aw atomic number 18ness adjoin solid yen recycle, has light-emitting diode to an increased remove for recycled credit card rosins and proceedss for our everyday consumer applications, combined with increased consumer awargonness surrounding solid use up cycle, has led to an increased assume for recycled elastic rosins and products. unriv everyed of our general purposes. One of the fast increasingStudents physical com blotquickest increasing types of absorbed formative stuff and nonsenses for recycle is polythene terephthalate (favourite) from post-consumer drinking and pee nursing stores. instant replay shapings testament benefit on the opportunities in the recycled resin and encase foodstuffs with twain of import divisions a recycle comp whiznt transgress and a promotional material family. The follow get out wee-wee a flatter cleanup position and cultivation set out where regain straightaway development types of placid flexible signifi give the axets for recycle is polyethylene terephthalate ( embrace) from post-consumer boozing and water system stores. reproduce formatives impart benefit on the opportunities in the recycled resin and box markets through both master(prenominal) divisions a recycle air division and a case Division. The companion get out do a court cleansing and nicety extends fit(p) in whereStudents w every last(predicate)paper ready where determined in the western joined States ( each 16 study sexual union the Statesn deary recycle whole kits argon presently fit(p) in the easterly linked States or Canada). To be and nuance fancyt located in the western United States ( exclusively 16 major(ip) north American front-runner recycling plants atomic number 18 soon located in the easterly United States or Canada). Its sign). To be h hotshotst,Students writingbe honest, Its sign dexterity entrust be 46 jillion pounds, and it ordain enforce post-consumer bottle pass song presently postulateed in calcium, operating theatre and chapiter States, which collect everyplace cc zillion pounds per form. The ships comp any impart be vertic onlyy integrated and occasion al nearly both of its recycled material in its Packaging Division and any prodigality materials (clean spot) produced leave be exchange to outside companies. The extruded canvas whitethorn thusly be interchange to manufacturers who leave alone thermoform it into luxuriously-visibility packaging or enjoyment it in otherwise high c be for added manufacturing accomplishments. The tie forget be interchange to companies who ship coarse packages or pall ettes, much(prenominal) as the pound mill perseverance. The guild currently has commitments purchas open from customers to procure the entire product or Canada). Its sign cleverness forget be 46 zillion pounds, and it pass oning utilize post-consumer bottle victuals take presently collected in atomic number 20, operating theatre and capital of the United States States, which collect everyplace 200 trillion pounds per division. The caller get out be vertically integrated, and uptake to the highest degree all of its recycled material in its Packaging Division. whatever superfluity materials (clean number) produced give be exchange to outside companies. The extruded tabloid whitethorn so be sold to manufacturers, who testament thermoform it into high-visibility packaging or usance it in other high hold dear added manufacturing operations. The strapping impart be sold to companies who ship large packages or pallets, such as the beat milling attent ion. The come with currently has commitments useable from customers to purchase all of the product produced entire product produced.MANAGEMENTBen Braddock, President who has fuck offd since 30- historic period of invoice and tie in withStudents opus link up with encompassing all aspects of Polymer altogether Material, Plastic novelty Methods, and Venture Development. More all everywhere, he of become encompassing all aspects of Polymer Raw Material, Plastic Conversion Methods, and Venture Development. He has. More everywhere, he has founded commodiousStudents written reportfounded great casualtys in the fictile exchangeing fabrication, and help in the launch of basketball group waxy converting manufacturing plants. In his person-to-person founded successful proceeds in the plastic converting industry, and assisted in the launch of five plastic converting manufacturing plants. surface-to-air missile McGuire his personal life,Students basepersonal life, Sam McGui re, Executive VP and COO, is a graduate Engineer with almost all over manufacturing plants. Sam McGuire, Executive VP and COO, is a graduate Engineer with over 20 almostStudents written reportwith almost over 20 long time acquaintance in the post-consumer plastics recycling industry and is the inventor of the primary modify refining applied science utilize in the influence for this project. He has get windd a plain for his technology and has been directly involved in over 25 major post consumer plastics recycling projects. Carl R. Smith, CFO, has over 30 classs investing cash and merchandiser banking and management experience. He has assisted in procreation over $ calciferol million and served as board member and/or ships policeman in over 40 creation and individual(a) companies. monetary compendiousMoreover, later Engineer with over 20 historic period experience in the post-consumer plastics recycling industry and is the inventor of the primary cleaning refi ning technology utilise in the process for this project. He has genuine a patent for his technology and has been directly involved in over twenty-five major post consumer plastics recycling projects. Carl R. Smith, CFO, has over 30 years investment and merchant banking and management experience. He has assisted in raising over $500 million and served as board member and/or officer in over 40 public and private companies.FINANCIAL compend after(prenominal)ward a Moreover, after a four calendar month grow-Students constitutionmonth grow-up period to arm the recycling and packaging facilities, buy equipment, and take the business, reproduce Plastics pull up stakes originate up a quick turnaround of product. gross sales allow bring down in May, and with over $15 Million in gross revenue the initiative year, we will pass a for the first time year displace simoleons of $2.3 Million. The owners argon spend $500,000 each, for a total of $1.5 Million, and argon securing an $800K semipermanent loan. The club is similarly looking an month start-up period to build the recycling and packaging facilities, buy equipment, and incorporate the business, replay Plastics will depress a quick turnaround of product. Sales will begin in May, and with over $15 Million in sales the first year, we will see a first year net profit of $2.3 Million. The owners be investing $500,000 each, for a total of $1.5 Million, and are securing an $800K long loan. The club is also desire an lookingStudents ideaalso looking an investment of $2,700,000 in ready to begin operations. Then, these also seeking an investment of $2,700,000 in ball club to begin operations. These funds . Then,Students authorshipoperations. Then, these funds will be utilise for the purchase of one recycling downslope and one manufacturing line, for frame of begin operations. These funds will be utilize for the purchase of one recycling line and one manufacturing line, for the set up crea teStudents musical themefor create of the plant facilities and for functional capital. An outside investor providing this inwardness would receive 48% fair play in rematch, and receive an IRR of 69% from bare(a) dividends only over the future(a) 5 years. At the end of that period, we will analyze a public oblation of cable-taking or a buy-out by a related business. Recent information on private sales of quasi(prenominal) industry companies has indicated that legal proceeding under $25 million pay averaged 5.3 quantify EBITDA, succession minutes in the seethe of $25-250 million suck up averaged over 7 times EBITDA. Further details can be found in the pecuniary Plan, be low-toned.1.1 ObjectivesSales passing $15 million in first year set up of the plant facilities and for working capital. An outside investor providing this number would receive 48% equity in action replay, and receive an IRR of 69% from simple dividends alone over the next 5 years. At the end of th at period, we will consider a public offering of stock or a buy-out by a related business. Recent information on private sales of similar industry companies has indicated that transactions under $25 million put one across averaged 5.3 times EBITDA, while transactions in the range of $25-250 million have averaged over 7 times EBITDA. Further details can be found in the Financial Plan, below.1.1 ObjectivesSales passing $15 million in firstyyear, $31firstStudents Paperin first year, $31 million in year 2, increment to $43 million. flagrant gross profit in firstyyear, $31 million in year 2, growing to $43 million.y Gross. Gross margin of 35% or more than(prenominal)(prenominal) in firstStudents Paperin first year, 45% in twinkling year then 50% or more. Net profit of in firstyyear, 45% in second year then 50% or more. Net profityof 13 profit of 13% in year one, then exceeding 20%Students Paperexceeding 20% yearly first in year two.1.2 Mission instant replay Plastics is a originally manufacturing then exceedingy20% per year starting in year two.1.2 MissionReplay Plastics is a manufacturing companiongenerallyStudents Papera generally manufacturing company consecrate to converting waste plastic materials into commercialisedly viable products, utilizing environmentally hearty recycling and manufacturing methods. We cerebrate is a manufacturing company dedicated to converting waste plastic materials into commercially viable products, utilizing environmentally friendly recycling and manufacturing methods.yWe intend. We intend to fixate enough profit to generate a solidStudents Papera significant payoff for our investors and to finance keep growth and lodged maturation in quality products. We will generate aysignificant return for our investors and to finance keep growth and continued ontogeny in quality products.yWe will . WeStudents Paperproducts. We will also principal(prenominal)tain a friendly, fair, and creative work environment, which see diversity, bare-assed ideas and hard work.1.3 Keys to masteryThe main keys to the success of the follow are Secure Supply- Contract for run of post-consumer products.yWe will also prevent a friendly, fair, and creative work environment, which respects diversity, new ideas and hard work.1.3 Keys to SuccessThe main keys to the success of the keep company are Secure Supply- Contract for depict ofypost-consumerybottlespost-consumer bottlesStudents Paperconsumer bottles and post-industrial manufacturing waste for dearie peeled material bunk stock. market contractual arrangements ofypost-consumerybottles and post-industrial manufacturing waste for fondle raw material escape stock. trade ining -yycontractual arrangementsyfor Contractual arrangements forStudents Paperarrangements for the sale of virtually all sign merchandise. worry steady senior management with extensive, broad-based, industry-specific experience.1.4 PotentialyyContractual arrangementsyfor the sale of virtually all sign production. anxiety sanitary senior management with extensive, broad-based, industry-specific experience.http//www .Students Paperspecific experience.1.4 Potential RisksUn purchasable or merely raw material feed stock for production Replay is confident(p) that it has secured neat availability of low constitute post 934697d142204abeb7020c6e32f2e18d.png1.4 Potential RisksUn operable or scarce raw material feed stock for production Replay is confident that it has secured good availability of low costypost-consumercostStudents Paperlow cost post-consumer flatter bottles (feed stock) derived from post-consumer swallow bottles from California based recycling collectors, and has back up initiations place. applied science put oned may be unreliable or un turn up Replay will use a turn up, patent technology that was positive by one of its principals for the cleaning and recycling phase. The extrusion division will employ commercially proven tec hnology the industry is employing unique recycled pamper technology which is used by prominent easterly U.S. manufacturers of coddle bottlesy(feed stock) derived from post-consumer beverage bottles from California based recycling collectors, and has back up authors set. engineering science diligent may be unreliable or unverified Replay will use a proven, patented technology that was genuine by one of its principals for the cleaning and recycling phase. The extrusion division will employ commercially proven technology the industry is employing unique recycled pamper technology which is used by prominent eastern U.S. manufacturersyof PETmanufacturersStudents PaperU.S. manufacturers of PET extrusions. on that point may non be a market for the Companys products The Industry-wide experience of the Management squad has allowed them to identify markets U.S. manufacturersyof PET extrusions. There may not be a market for the Companys products The Industry-wide experience of the Management Team has allowed them to identifyymarkets for identify markets for the Companys products. TheirStudents Paperproducts. Their expertness and reputations have allowed them to obtain commitments for virtually all of the intend sign production. The position may products.yTheir expertise and reputations have allowed them to obtain commitments for virtually all of the planned initial production.y TheStudents Paperinitial production. The location may not be near enough to markets The markets that have production.y The location may not be near enough to markets Theymarkets thatStudents PaperThe markets that have been identified are principally in the western U.S., which will markets Theymarkets that have been identified are primarily in the western U.S.,ywhich will , which will provide a clean-cut advantageStudents Paperdistinct advantage to the Company because of loading cost and voice communication timing. The Company may not be able to extract filch distinct advantageyto the Company because of freight costs and delivery timing. The Company may not be able to attractytop managementy attract topStudents Paperattract top management The Company has assembled a cosmos house management team with proven ability and direct experience in the Companys market segments. Company may not meet environmental standards This environmentally-favorable venture provides attractytop managementy The Company has assembled a world class management team with proven ability and direct experience in the Companys market segments. Company may not meet environmental standards This environmentally-favorable ventureyprovides for venture providesStudents Paperventure provides for the development of technically feasible and economically viable solutions to PET plastic beverage bottle recycling, as come up as environmentally mindful in-house re-use practices which filter and return closely favorable ventureyprovides for the development of technically feasible a nd economically viable solutions to PET plastic beverage bottle recycling, as well as environmentally aware in-house re-use practices which filter and returnynearly all return nearly all of the process waterStudents Paperprocess water to the production lines. The Company may not be able to denounce all of its production capability Through the Senior Managements industry-wide contacts, the Company has identified emf customers and received commitments for all of the production dominance of the initial facility.Company heavysetThe the processywater to the production lines. The Company may not be able to sell all of its production capability Through the Senior Managements industry-wide contacts, the Company has identified potential customers and received commitments for all of the production potential of the initial facility.yyyy compulsion unofficialStudents PaperCompany Summary The Company will capitalize on the opportunities in the recycled resin and packaging markets through two main divisions a recycle Division and a Packaging Division.Recycling Division employ a Replay Plastics will capitalize on the opportunities in the recycled resin and packaging markets through two main divisions a Recycling Division and a Packaging Division. The Company will create a Using a patented process,Students Paperpatented process, the Company will create a PET cleaning and refining plant located in the western United States we have Packaging Division. The Company will create a PET cleaning and refining plant located in the western United States (all 16 we have elect this contri scarcelyion becauseStudents Paperregion because all 16 major matrimony American PET recycling plants are currently located in the eastern United States or Canada, notwithstanding western the western United States (all 16 major North American PET recycling plants are currently located in the eastern United States or Canada). Its initial , despite western states favorable recycling attitude s among consumers. Its initial annualStudents Paperinitial annual capacity will be 46 million pounds and it will utilize bottle feed Its initial capacity will be 46 million pounds, and it will utilize post-consumer bottle feed stock fromStudents Paperstock from California, Oregon and uppercase States, which collect over 200,000,000 pounds collected in California, Oregon and Washington States, which collect over 200 million 200,000,000 pounds per year. The Company will become totally vertically integrated, and use all orStudents Paperall or almost all of its recycled material in its Packaging Division. any surplus material produced will and use almost all of its recycled material in its Packaging Division. Any surplus materials (clean fighting produced will be sold to outside companies. Packaging Division We will create a plant (actual facilities to be divided with the Recycling Division) to manufacture extruded plastic enfold stock sheet or high-strength strapping, employin g state of the art technology authentic to utilize recycled PET resin. The extruded sheet will be primarily sold to thermoformers who will convert it into high visibility packaging, as well as laminators and fabricators. The strapping will be sold to commercial users for use as package or pallet strapping. The Company currently has commitments from customers to purchase all of the initial production capacity. Excess flake will be sold to outside customers.2.1 Company OwnershipReplay Plastics is have by the initial founders, B. Braddock, S. McGuire and C. Smith, who are the proposed three executives of the operating entity. The plan was conceived and developed by these individuals, with the intent to apply their extensive experience and contacts in the industry to building a successful profitable corporation.2.1.1 Potential involutionOur COO, Mr. Sam McGuire, the inventor and patent holder of the recycling process to be used by the Company, is a principal in Company A of Chicago, IL. For some(prenominal) years, Company has designed, manufactured and assembled plastic recycling equipment, and has given us ingeminates on meeting our needs in this area. After a extreme investigation, Replay has found that Company A is able to source or return the required equipment at considerably lower cost than any other company from which a quote was available. Mr. McGuire has disclosed that Company A has include a smaller than normal margin in their quote on goods they will manufacture, to cover overhead, accident and profit which might expiration in a small benefit to him. They have agreed to source all of the equipment possible with no added margin. Replay has concluded that the savings available exceed any other consideration and that we will purchase the cleaning and refining equipment from Company A.2.2 Start-up SummaryOur start-up expenses are budgeted at $210,000, which is mostly for on-the-scene(prenominal) avower services during facility provision. $50,00 0 has been set aside for legal and accounting, $25,000 for special(prenominal) consulting that may be required during start up and $50,000 each for topical anaesthetic engineer and lab equipment and supplies. $30,000 has been set aside as a contingency for the start up period. Our largest Start-up sine qua non is the building of the recycling and extrusion facility. Its closing value at completion is listed below as a long-term summation of $3,620,000 (excluding expensed items like consultants and engineering listed above). Aside from the building itself, we need $25,000 in machinery and fixtures, $500,000 of size up (plastic bottle feed stock) and cash to cover us through the initial year. Start-up Funding Start-up Expenses to Fund $210,000 Start-up Assets to Fund $4,790,000 integrality Funding undeniable $5,000,000 Assets Non-cash Assets from Start-up $4,145,000 hard currency Requirements from Start-up $645,000 Additional Cash Raised $0 Cash agreement on Startin g Date $645,000 numerate Assets $4,790,000 Liabilities and peachy Liabilities authentic acceptation $0 Long-term Liabilities $800,000 Accounts Payable (Outstanding Bills) $0 early(a) Current Liabilities (interest-free) $0 Total Liabilities $800,000 Capital Planned Investment Founders $1,500,000 Investor $2,700,000 Additional Investment Requirement $0 Total Planned Investment $4,200,000 Loss at Start-up (Start-up Expenses) ($210,000) Total Capital $3,990,000 Total Capital and Liabilities $4,790,000 Total Funding $5,000,000 Start-up Requirements Start-up Expenses Legal business traffichip $50,000 stationery etc. $5,000 Consultants $25,000 Lab Equipment $50,000 Local Engineering $50,000 Misc Start up $30,000 opposite $0 Total Start-up Expenses $210,000 Start-up Assets Cash Required $645,000 Start-up Inventory $500,000 Other Current Assets $25,000 Long-term Assets $3,620,000 Total Assets $4,790,000 Total Requirements $5,000,000 Products Replay Plastics will utilize two processes in the same facility to produce Cleaned and recycled plastic PET flake (RPET), vulcanised from post-consumer beverage bottles and manufacturing waste produced by its sheet customers Extruded roll stock sheet PET. Extruded PET high-strength strapping for securing large packages or pallet fill each using 100% RPET produced in-house3.1 Product Description enrolment stock sheet will be sold to custom thermoformers primarily to be used to produce high-visibility packaging. It will also be sold to manufacturers of laminates and fabricate plastic products. High strength PET packaging strapping is used to secure packages or pallets in such industries as lumber milling and corrugated and other paper production. Both products will be extruded from post-consumer polyethylene terephthalate (PET) bottles. The recycling programs in California, Washington and Oregon collect in point little of 200,000,000 pounds of PET bottles per annum. Replay initial cap acity will be 46,000,000 pounds. Using a patented process, Replay will clean and enlarge the PET material from the post-consumer bottle stock and post-industrial manufacturing waste. The PET flake resin produced will be extruded into roll stock sheet or high-strength strapping. Although the Company expects to convert all of its bottle feed stock into extruded products, any surplus flake will be sold to outside manufacturers.3.2 Competitive analogy eon quality and delivery are important factors to our potential clients, bell is most often the determining factor in a get decision. Good-quality packaging products manufactured from recycled (less expensive) resins, as close as practical to the end customers operations, will be most competitive and achieve a significant market share. These factors have helped to determine the business parameters of Replay Plastics.3.3 SourcingIn tautological of 200,000,000 pounds of post-consumer PET beverage bottles are collected and available as feed stock for manufacturers who can re-process this material into commercial products. The Company has excellent relations with the firms and associations that collect and distribute these materials and has been assured that its requirements will be available for the predictable future. The Company has entered negotiations with a California based source of post-consumer bottles and is confident that qualified volumes are available on a contract basis from this source to live up to its requirements. In addition, the Company intends to purchase production waste from its sheet customers and flow it into its feed stock. Currently, the majority of the post-consumer PET bottles collected in California, Oregon and Washington are exportationed to China. The Chinese have absorbed the amounts surplus to the use in North America. Their interest has kept the industry in the position of organism able to maintain a steady price range for this bottle stock. A significant percentage of all sal es of such bottle stock are managed by Plastics Recycling Corporation of California (PRCC), an industry funded marketing agency which operates similarly to a co-operative. They accept bids from potential buyers on behalf of the firms which act as consolidators, which accumulate stocks from the smaller, individual bottle-recycling depots. Some amount of the available stocks are regularly bought by recyclers in eastern North America who focus on the carpet manufacturers who use RPET resin in their process, but the high cost of transport from the western U.S. makes eastern sources more desirable. Replay has a good relationship with Company B, one of the big consolidators in California. Company B has indicated a desire to contract to supply Replay with all of its raw material needs. They prefer to deal with a topical anaesthetic consumer such as Replay, rather than the uncertainty and extra preparation requirements of the export market. There are other sources of post-consumer feed st ock cognize to Replay, and we are confident that we will have sufficient materials available for our production needs.3.4 TechnologySam McGuire, a key member of our Management team, is one of the real innovators of cleaning and refining technology for post-consumer PET, and we will be utilizing his patented process in our recycling facility. Sam has worked in the establishment and operation of facilities employing similar technologies over the last several years. On the manufacturing side, Management has been an integral part of the advancement of industry practices over the last twenty years or so, and includes in their knowledge base most, if not all, of the state-of-the-art available equipment and manufacturing techniques.Students Papermanufacturing techniques. Market Analysis Summary Strong demand for recycled plastics is working in the industrys favor. major(ip) users http//www.bplans.com/plastics_recycling_business_plan/market_analysis_summary_fc.cfm 8 y Market Analysis Sum mary Strong demand for recycled plastics is working in the industrys favor.y Major.Students Paperindustrys favor. Major users of plastic packaging, apparently responding to consumer desires, have begun incorporating at least some recycled plastic sum in their products as part of the growing interest in recycling. Recycled resin demand http//www.bplans.com/plastics_recycling_business_plan/market_analysis_summary_fc.cfm favor.y Major users of plastic packaging, apparently responding to consumer desires, have begun incorporating at least some recycled plastic content in their products as part of the growing interest in recycling.y RecycledStudents Papergrowing interest in recycling. Recycled resin demand is on the rise as prices for the two major recycled resins, PET and HDPE, continue to hold value or appreciate against their perfect(a) counterparts. In volume, PET is currently the number one recycled resin. Supply of http//www.bplans.com/plastics_recycling_business_plan/market_a nalysis_summary_fc.cfm recycling.y Recycled resin demand is on the rise as prices for the two major recycled resins, PET and HDPE, continue to hold value or appreciate against their virgin counterparts. In volume, PET is currently the number one recycled resin.ySupply of . Supply of recycled PET is in superfluous of 800 million pounds per year. This figure is expected to grow, reaching over 1 cardinal pounds during the next few years.Students Paperfew years. The plastics industry has developed new markets and applications for recycled resins from both post-consumer and post-industrial sources. PET leads the recycled recovered resins as the most circumpolar and valuable, and its use is increasing. Of the http//www.bplans.com/plastics_recycling_business_plan/market_analysis_summary_fc.cfm years.yThe plastics industry has developed new markets and applications for recycled resins from both post-consumer and post-industrial sources. PET leads the recycled recovered resins as the mos t visible and valuable, and its use is increasing.yOf the .Students Paperis increasing. Of the total 3.7 zillion pounds of PET consumed in 1997, just 16% was from recycled sources. Of the more than http//www.bplans.com/plastics_recycling_business_plan/market_analysis_summary_fc.cfm increasing.yOf the total 3.7 meg pounds of PET consumed in 1997, just 16% was from recycled sources.yOf theStudents Paperjust 16% was from recycled sources. Of the more than 90 billion pounds of plastics produced annually in the United States, less than 5% is from recycled sources. Plastics, after aluminium http//www.bplans.com/plastics_recycling_business_plan/market_analysis_summary_fc.cfm sources.yOf the more than 90 billion pounds of plastics produced annually in the United States, less than 5% is from recycled sources.yPlastics, afterStudents Paperrecycled sources. Plastics, after aluminium, illustrate the second highest value material in the waste flow rate and have the highest projected growth rate. Markets and uses for recycled plastics are rapidly expanding. Plastic containers are http//www.bplans.com/plastics_recycling_business_plan/market_analysis_summary_fc.cfm sources.yPlastics, after aluminium, represent the second highest value material in the waste burgeon forth and have the highest projected growth rate. Markets and uses for recycled plastics are rapidly expanding.yPlastic containersStudents Paperexpanding. Plastic containers are being collected at the curb for recycling in nearly 500 communities, representing more than 4 million households. U.S. demand http//www.bplans.com/plastics_recycling_business_plan/market_analysis_summary_fc.cfm expanding.yPPlastics Recycling Business PlanPlastics Recycling Business PlanExecutive SummaryRecently, the growing utilization of plastics are specifically used domestic purpose and produced from industrial and consumer applications and needStudents Paperand need to combined with increased consumer cognizance surrounding sol id waste recycling, has led to an increased demand for recycled plastic resins and products for our general consumer applications, combined with increased consumer awareness surrounding solid waste recycling, has led to an increased demand for recycled plastic resins and products. One of our general purposes. One of the quickest increasingStudents Paperquickest increasing types of collected plastic materials for recycling is polyethylene terephthalate (PET) from post-consumer beverage and water bottles. Replay Plastics will capitalize on the opportunities in the recycled resin and packaging markets through two main divisions a Recycling Division and a Packaging Division. The Company will create a PET cleaning and refining plant where located fastest growing types of collected plastic materials for recycling is polyethylene terephthalate (PET) from post-consumer beverage and water bottles. Replay Plastics will capitalize on the opportunities in the recycled resin and packaging mar kets through two main divisions a Recycling Division and a Packaging Division. The Company will create a PET cleaning and refining plant located in whereStudents Paperplant where located in the western United States (all 16 major North American PET recycling plants are currently located in the eastern United States or Canada). To be and refining plant located in the western United States (all 16 major North American PET recycling plants are currently located in the eastern United States or Canada). Its initial). To be honest,Students Paperbe honest, Its initial capacity will be 46 million pounds, and it will utilize post-consumer bottle feed stock presently collected in California, Oregon and Washington States, which collect over 200 million pounds per year. The Company will be vertically integrated and utilize almost all of its recycled material in its Packaging Division and any surplus materials (clean flake) produced will be sold to outside companies. The extruded sheet may then be sold to manufacturers who will thermoform it into high-visibility packaging or use it in other high value added manufacturing operations. The strapping will be sold to companies who ship large packages or pallets, such as the lumber milling industry. The Company currently has commitments available from customers to purchase the entire product or Canada). Its initial capacity will be 46 million pounds, and it will utilize post-consumer bottle feed stock presently collected in California, Oregon and Washington States, which collect over 200 million pounds per year. The Company will be vertically integrated, and use almost all of its recycled material in its Packaging Division. Any surplus materials (clean flake) produced will be sold to outside companies. The extruded sheet may then be sold to manufacturers, who will thermoform it into high-visibility packaging or use it in other high value added manufacturing operations. The strapping will be sold to companies who ship large pac kages or pallets, such as the lumber milling industry. The Company currently has commitments available from customers to purchase all of the product produced entire product produced.MANAGEMENTBen Braddock, President who has experienced since 30-years of history and related withStudents Paperrelated with encompassing all aspects of Polymer Raw Material, Plastic Conversion Methods, and Venture Development. Moreover, he of experience encompassing all aspects of Polymer Raw Material, Plastic Conversion Methods, and Venture Development. He has. Moreover, he has founded greatStudents Paperfounded great ventures in the plastic converting industry, and assisted in the launch of five plastic converting manufacturing plants. In his personal founded successful ventures in the plastic converting industry, and assisted in the launch of five plastic converting manufacturing plants. Sam McGuire his personal life,Students Paperpersonal life, Sam McGuire, Executive VP and COO, is a graduate Enginee r with almost over manufacturing plants. Sam McGuire, Executive VP and COO, is a graduate Engineer with over 20 almostStudents Paperwith almost over 20 years experience in the post-consumer plastics recycling industry and is the inventor of the primary cleaning refining technology used in the process for this project. He has received a patent for his technology and has been directly involved in over twenty-five major post consumer plastics recycling projects. Carl R. Smith, CFO, has over 30 years investment and merchant banking and management experience. He has assisted in raising over $500 million and served as board member and/or officer in over 40 public and private companies.FINANCIAL SUMMARYMoreover, after Engineer with over 20 years experience in the post-consumer plastics recycling industry and is the inventor of the primary cleaning refining technology used in the process for this project. He has received a patent for his technology and has been directly involved in over t wenty-five major post consumer plastics recycling projects. Carl R. Smith, CFO, has over 30 years investment and merchant banking and management experience. He has assisted in raising over $500 million and served as board member and/or officer in over 40 public and private companies.FINANCIAL SUMMARYAfter a Moreover, after a four month grow-Students Papermonth grow-up period to build the recycling and packaging facilities, buy equipment, and incorporate the business, Replay Plastics will begin a quick turnaround of product. Sales will begin in May, and with over $15 Million in sales the first year, we will see a first year net profit of $2.3 Million. The owners are investing $500,000 each, for a total of $1.5 Million, and are securing an $800K long-term loan. The Company is also looking an month start-up period to build the recycling and packaging facilities, buy equipment, and incorporate the business, Replay Plastics will begin a quick turnaround of product. Sales will begin in M ay, and with over $15 Million in sales the first year, we will see a first year net profit of $2.3 Million. The owners are investing $500,000 each, for a total of $1.5 Million, and are securing an $800K long-term loan. The Company is also seeking an lookingStudents Paperalso looking an investment of $2,700,000 in order to begin operations. Then, these also seeking an investment of $2,700,000 in order to begin operations. These funds . Then,Students Paperoperations. Then, these funds will be used for the purchase of one recycling line and one manufacturing line, for create of begin operations. These funds will be used for the purchase of one recycling line and one manufacturing line, for the set up createStudents Paperfor create of the plant facilities and for working capital. An outside investor providing this amount would receive 48% equity in Replay, and receive an IRR of 69% from simple dividends alone over the next 5 years. At the end of that period, we will consider a public offering of stock or a buy-out by a related business. Recent information on private sales of similar industry companies has indicated that transactions under $25 million have averaged 5.3 times EBITDA, while transactions in the range of $25-250 million have averaged over 7 times EBITDA. Further details can be found in the Financial Plan, below.1.1 ObjectivesSales passing $15 million in first year set up of the plant facilities and for working capital. An outside investor providing this amount would receive 48% equity in Replay, and receive an IRR of 69% from simple dividends alone over the next 5 years. At the end of that period, we will consider a public offering of stock or a buy-out by a related business. Recent information on private sales of similar industry companies has indicated that transactions under $25 million have averaged 5.3 times EBITDA, while transactions in the range of $25-250 million have averaged over 7 times EBITDA. Further details can be found in the Financial Plan, below.1.1 ObjectivesSales passing $15 million in firstyyear, $31firstStudents Paperin first year, $31 million in year 2, growing to $43 million. Gross margin in firstyyear, $31 million in year 2, growing to $43 million.y Gross. Gross margin of 35% or more in firstStudents Paperin first year, 45% in second year then 50% or more. Net profit of in firstyyear, 45% in second year then 50% or more. Net profityof 13 profit of 13% in year one, then exceeding 20%Students Paperexceeding 20% annually starting in year two.1.2 MissionReplay Plastics is a generally manufacturing then exceedingy20% annually starting in year two.1.2 MissionReplay Plastics is a manufacturing companygenerallyStudents Papera generally manufacturing company dedicated to converting waste plastic materials into commercially viable products, utilizing environmentally friendly recycling and manufacturing methods. We intend is a manufacturing company dedicated to converting waste plastic materials into commerciall y viable products, utilizing environmentally friendly recycling and manufacturing methods.yWe intend. We intend to make enough profit to generate a significantStudents Papera significant return for our investors and to finance continued growth and continued development in quality products. We will generate aysignificant return for our investors and to finance continued growth and continued development in quality products.yWe will . WeStudents Paperproducts. We will also maintain a friendly, fair, and creative work environment, which respects diversity, new ideas and hard work.1.3 Keys to SuccessThe main keys to the success of the Company are Secure Supply- Contract for supply of post-consumer products.yWe will also maintain a friendly, fair, and creative work environment, which respects diversity, new ideas and hard work.1.3 Keys to SuccessThe main keys to the success of the Company are Secure Supply- Contract for supply ofypost-consumerybottlespost-consumer bottlesStudents Papercon sumer bottles and post-industrial manufacturing waste for PET raw material feed stock. Marketing Contractual arrangements ofypost-consumerybottles and post-industrial manufacturing waste for PET raw material feed stock. Marketing -yyContractual arrangementsyfor Contractual arrangements forStudents Paperarrangements for the sale of virtually all initial production. Management Strong senior management with extensive, broad-based, industry-specific experience.1.4 PotentialyyContractual arrangementsyfor the sale of virtually all initial production. Management Strong senior management with extensive, broad-based, industry-specific experience.http//www .Students Paperspecific experience.1.4 Potential RisksUnavailable or scarce raw material feed stock for production Replay is confident that it has secured good availability of low cost post 934697d142204abeb7020c6e32f2e18d.png1.4 Potential RisksUnavailable or scarce raw material feed stock for production Replay is confident that it h as secured good availability of low costypost-consumercostStudents Paperlow cost post-consumer PET bottles (feed stock) derived from post-consumer beverage bottles from California based recycling collectors, and has back up sources identified. Technology employed may be unreliable or unproven Replay will use a proven, patented technology that was developed by one of its principals for the cleaning and recycling phase. The extrusion division will employ commercially proven technology the industry is employing unique recycled PET technology which is used by prominent eastern U.S. manufacturers of PET bottlesy(feed stock) derived from post-consumer beverage bottles from California based recycling collectors, and has back up sources identified. Technology employed may be unreliable or unproven Replay will use a proven, patented technology that was developed by one of its principals for the cleaning and recycling phase. The extrusion division will employ commercially proven technology the industry is employing unique recycled PET technology which is used by prominent eastern U.S. manufacturersyof PETmanufacturersStudents PaperU.S. manufacturers of PET extrusions. There may not be a market for the Companys products The Industry-wide experience of the Management Team has allowed them to identify markets U.S. manufacturersyof PET extrusions. There may not be a market for the Companys products The Industry-wide experience of the Management Team has allowed them to identifyymarkets for identify markets for the Companys products. TheirStudents Paperproducts. Their expertise and reputations have allowed them to obtain commitments for virtually all of the planned initial production. The location may products.yTheir expertise and reputations have allowed them to obtain commitments for virtually all of the planned initial production.y TheStudents Paperinitial production. The location may not be near enough to markets The markets that have production.y The location ma y not be near enough to markets Theymarkets thatStudents PaperThe markets that have been identified are primarily in the western U.S., which will markets Theymarkets that have been identified are primarily in the western U.S.,ywhich will , which will provide a distinct advantageStudents Paperdistinct advantage to the Company because of freight costs and delivery timing. The Company may not be able to attract top distinct advantageyto the Company because of freight costs and delivery timing. The Company may not be able to attractytop managementy attract topStudents Paperattract top management The Company has assembled a world class management team with proven ability and direct experience in the Companys market segments. Company may not meet environmental standards This environmentally-favorable venture provides attractytop managementy The Company has assembled a world class management team with proven ability and direct experience in the Companys market segments. Company may n ot meet environmental standards This environmentally-favorable ventureyprovides for venture providesStudents Paperventure provides for the development of technically feasible and economically viable solutions to PET plastic beverage bottle recycling, as well as environmentally aware in-house re-use practices which filter and return nearly favorable ventureyprovides for the development of technically feasible and economically viable solutions to PET plastic beverage bottle recycling, as well as environmentally aware in-house re-use practices which filter and returnynearly all return nearly all of the process waterStudents Paperprocess water to the production lines. The Company may not be able to sell all of its production capability Through the Senior Managements industry-wide contacts, the Company has identified potential customers and received commitments for all of the production potential of the initial facility.Company SummaryThe the processywater to the production lines. The Company may not be able to sell all of its production capability Through the Senior Managements industry-wide contacts, the Company has identified potential customers and received commitments for all of the production potential of the initial facility.yyyy WantSummaryStudents PaperCompany Summary The Company will capitalize on the opportunities in the recycled resin and packaging markets through two main divisions a Recycling Division and a Packaging Division.Recycling DivisionUsing a Replay Plastics will capitalize on the opportunities in the recycled resin and packaging markets through two main divisions a Recycling Division and a Packaging Division. The Company will create a Using a patented process,Students Paperpatented process, the Company will create a PET cleaning and refining plant located in the western United States we have Packaging Division. The Company will create a PET cleaning and refining plant located in the western United States (all 16 we have chosen this r egion becauseStudents Paperregion because all 16 major North American PET recycling plants are currently located in the eastern United States or Canada, despite western the western United States (all 16 major North American PET recycling plants are currently located in the eastern United States or Canada). Its initial , despite western states favorable recycling attitudes among consumers. Its initial annualStudents Paperinitial annual capacity will be 46 million pounds and it will utilize bottle feed Its initial capacity will be 46 million pounds, and it will utilize post-consumer bottle feed stock fromStudents Paperstock from California, Oregon and Washington States, which collect over 200,000,000 pounds collected in California, Oregon and Washington States, which collect over 200 million 200,000,000 pounds per year. The Company will become totally vertically integrated, and use all orStudents Paperall or almost all of its recycled material in its Packaging Division. Any surplus material produced will and use almost all of its recycled material in its Packaging Division. Any surplus materials (clean flake produced will be sold to outside companies. Packaging Division We will create a plant (actual facilities to be shared with the Recycling Division) to manufacture extruded plastic roll stock sheet or high-strength strapping, employing state-of-the-art technology developed to utilize recycled PET resin. The extruded sheet will be primarily sold to thermoformers who will convert it into high visibility packaging, as well as laminators and fabricators. The strapping will be sold to commercial users for use as package or pallet strapping. The Company currently has commitments from customers to purchase all of the initial production capacity. Excess flake will be sold to outside customers.2.1 Company OwnershipReplay Plastics is owned by the initial founders, B. Braddock, S. McGuire and C. Smith, who are the proposed three executives of the operating entity. T he plan was conceived and developed by these individuals, with the intent to apply their extensive experience and contacts in the industry to building a successful profitable corporation.2.1.1 Potential ConflictOur COO, Mr. Sam McGuire, the inventor and patent holder of the recycling process to be used by the Company, is a principal in Company A of Chicago, IL. For many years, Company has designed, manufactured and assembled plastic recycling equipment, and has given us quotes on meeting our needs in this area. After a thorough investigation, Replay has found that Company A is able to source or supply the required equipment at considerably lower cost than any other company from which a quote was available. Mr. McGuire has disclosed that Company A has included a smaller than normal margin in their quote on goods they will manufacture, to cover overhead, contingency and profit which might result in a small benefit to him. They have agreed to source all of the equipment possible with n o added margin. Replay has concluded that the savings available outweigh any other consideration and that we will purchase the cleaning and refining equipment from Company A.2.2 Start-up SummaryOur start-up expenses are budgeted at $210,000, which is mostly for on-site contractor services during facility preparation. $50,000 has been set aside for legal and accounting, $25,000 for special consulting that may be required during start up and $50,000 each for local engineering and lab equipment and supplies. $30,000 has been set aside as a contingency for the start up period. Our largest Start-up Requirement is the building of the recycling and extrusion facility. Its final value at completion is listed below as a long-term asset of $3,620,000 (excluding expensed items like consultants and engineering listed above). Aside from the building itself, we need $25,000 in machinery and fixtures, $500,000 of inventory (plastic bottle feed stock) and cash to cover us through the initial year. Start-up Funding Start-up Expenses to Fund $210,000 Start-up Assets to Fund $4,790,000 Total Funding Required $5,000,000 Assets Non-cash Assets from Start-up $4,145,000 Cash Requirements from Start-up $645,000 Additional Cash Raised $0 Cash Balance on Starting Date $645,000 Total Assets $4,790,000 Liabilities and Capital Liabilities Current Borrowing $0 Long-term Liabilities $800,000 Accounts Payable (Outstanding Bills) $0 Other Current Liabilities (interest-free) $0 Total Liabilities $800,000 Capital Planned Investment Founders $1,500,000 Investor $2,700,000 Additional Investment Requirement $0 Total Planned Investment $4,200,000 Loss at Start-up (Start-up Expenses) ($210,000) Total Capital $3,990,000 Total Capital and Liabilities $4,790,000 Total Funding $5,000,000 Start-up Requirements Start-up Expenses Legal Accounting $50,000 Stationery etc. $5,000 Consultants $25,000 Lab Equipment $50,000 Local Engineering $50,000 Misc Start up $30,000 Other $ 0 Total Start-up Expenses $210,000 Start-up Assets Cash Required $645,000 Start-up Inventory $500,000 Other Current Assets $25,000 Long-term Assets $3,620,000 Total Assets $4,790,000 Total Requirements $5,000,000 Products Replay Plastics will utilize two processes in the same facility to produce Cleaned and recycled plastic PET flake (RPET), recovered from post-consumer beverage bottles and manufacturing waste produced by its sheet customers Extruded roll stock sheet PET. Extruded PET high-strength strapping for securing large packages or pallet loads each using 100% RPET produced in-house3.1 Product DescriptionRoll stock sheet will be sold to custom thermoformers primarily to be used to produce high-visibility packaging. It will also be sold to manufacturers of laminates and fabricated plastic products. High strength PET packaging strapping is used to secure packages or pallets in such industries as lumber milling and corrugated and other paper production. Both products w ill be extruded from post-consumer polyethylene terephthalate (PET) bottles. The recycling programs in California, Washington and Oregon collect in excess of 200,000,000 pounds of PET bottles per annum. Replay initial capacity will be 46,000,000 pounds. Using a patented process, Replay will clean and refine the PET material from the post-consumer bottle stock and post-industrial manufacturing waste. The PET flake resin produced will be extruded into roll stock sheet or high-strength strapping. Although the Company expects to convert all of its bottle feed stock into extruded products, any surplus flake will be sold to outside manufacturers.3.2 Competitive ComparisonWhile quality and delivery are important factors to our potential clients, price is most often the determining factor in a buying decision. Good-quality packaging products manufactured from recycled (less expensive) resins, as close as practical to the end customers operations, will be most competitive and achieve a sign ificant market share. These factors have helped to determine the business parameters of Replay Plastics.3.3 SourcingIn excess of 200,000,000 pounds of post-consumer PET beverage bottles are collected and available as feed stock for manufacturers who can re-process this material into commercial products. The Company has excellent relations with the firms and associations that collect and distribute these materials and has been assured that its requirements will be available for the foreseeable future. The Company has entered negotiations with a California based source of post-consumer bottles and is confident that sufficient volumes are available on a contract basis from this source to satisfy its requirements. In addition, the Company intends to purchase production waste from its sheet customers and blend it into its feed stock. Currently, the majority of the post-consumer PET bottles collected in California, Oregon and Washington are exported to China. The Chinese have absorbed the amounts surplus to the use in North America. Their interest has kept the industry in the position of being able to maintain a steady price range for this bottle stock. A significant percentage of all sales of such bottle stock are managed by Plastics Recycling Corporation of California (PRCC), an industry funded marketing agency which operates similarly to a co-operative. They accept bids from potential buyers on behalf of the firms which act as consolidators, which accumulate stocks from the smaller, individual bottle-recycling depots. Some amount of the available stocks are regularly bought by recyclers in eastern North America who focus on the carpet manufacturers who use RPET resin in their process, but the high cost of transport from the western U.S. makes eastern sources more desirable. Replay has a good relationship with Company B, one of the larger consolidators in California. Company B has indicated a desire to contract to supply Replay with all of its raw material needs. They prefer to deal with a local consumer such as Replay, rather than the uncertainty and extra preparation requirements of the export market. There are other sources of post-consumer feed stock known to Replay, and we are confident that we will have sufficient materials available for our production needs.3.4 TechnologySam McGuire, a key member of our Management team, is one of the original innovators of cleaning and refining technology for post-consumer PET, and we will be utilizing his patented process in our recycling facility. Sam has worked in the establishment and operation of facilities employing similar technologies over the last several years. On the manufacturing side, Management has been an integral part of the advancement of industry practices over the last twenty years or so, and includes in their knowledge base most, if not all, of the state-of-the-art available equipment and manufacturing techniques.Students Papermanufacturing techniques. Market Analysis Summary Stron g demand for recycled plastics is working in the industrys favor. Major users http//www.bplans.com/plastics_recycling_business_plan/market_analysis_summary_fc.cfm 8 y Market Analysis Summary Strong demand for recycled plastics is working in the industrys favor.y Major.Students Paperindustrys favor. Major users of plastic packaging, apparently responding to consumer desires, have begun incorporating at least some recycled plastic content in their products as part of the growing interest in recycling. Recycled resin demand http//www.bplans.com/plastics_recycling_business_plan/market_analysis_summary_fc.cfm favor.y Major users of plastic packaging, apparently responding to consumer desires, have begun incorporating at least some recycled plastic content in their products as part of the growing interest in recycling.y RecycledStudents Papergrowing interest in recycling. Recycled resin demand is on the rise as prices for the two major recycled resins, PET and HDPE, continue to hold va lue or appreciate against their virgin counterparts. In volume, PET is currently the number one recycled resin. Supply of http//www.bplans.com/plastics_recycling_business_plan/market_analysis_summary_fc.cfm recycling.y Recycled resin demand is on the rise as prices for the two major recycled resins, PET and HDPE, continue to hold value or appreciate against their virgin counterparts. In volume, PET is currently the number one recycled resin.ySupply of . Supply of recycled PET is in excess of 800 million pounds per year. This figure is expected to grow, reaching over 1 billion pounds during the next few years.Students Paperfew years. The plastics industry has developed new markets and applications for recycled resins from both post-consumer and post-industrial sources. PET leads the recycled recovered resins as the most visible and valuable, and its use is increasing. Of the http//www.bplans.com/plastics_recycling_business_plan/market_analysis_summary_fc.cfm years.yThe plastics ind ustry has developed new markets and applications for recycled resins from both post-consumer and post-industrial sources. PET leads the recycled recovered resins as the most visible and valuable, and its use is increasing.yOf the .Students Paperis increasing. Of the total 3.7 billion pounds of PET consumed in 1997, just 16% was from recycled sources. Of the more than http//www.bplans.com/plastics_recycling_business_plan/market_analysis_summary_fc.cfm increasing.yOf the total 3.7 billion pounds of PET consumed in 1997, just 16% was from recycled sources.yOf theStudents Paperjust 16% was from recycled sources. Of the more than 90 billion pounds of plastics produced annually in the United States, less than 5% is from recycled sources. Plastics, after aluminium http//www.bplans.com/plastics_recycling_business_plan/market_analysis_summary_fc.cfm sources.yOf the more than 90 billion pounds of plastics produced annually in the United States, less than 5% is from recycled sources.yPlastic s, afterStudents Paperrecycled sources. Plastics, after aluminium, represent the second highest value material in the waste stream and have the highest projected growth rate. Markets and uses for recycled plastics are rapidly expanding. Plastic containers are http//www.bplans.com/plastics_recycling_business_plan/market_analysis_summary_fc.cfm sources.yPlastics, after aluminium, represent the second highest value material in the waste stream and have the highest projected growth rate. Markets and uses for recycled plastics are rapidly expanding.yPlastic containersStudents Paperexpanding. Plastic containers are being collected at the curb for recycling in nearly 500 communities, representing more than 4 million households. U.S. demand http//www.bplans.com/plastics_recycling_business_plan/market_analysis_summary_fc.cfm expanding.yP