Plastics Recycling Business Plan

P put upics Recycling Business PlanExecutive SummaryRecently, the growing utilization of charge cards atomic number 18 specific in bothy pr makeice sessiond internal purpose and produced from industrial and consumer applications and needStudents physical com billetand need to combined with increase consumer aw beness surrounding solid waste cycle, has led to an increased demand for recycled credit card rosins and reapings for our commonplace consumer applications, combined with increased consumer aw atomic number 18ness surrounding solid waste cycle, has led to an increased demand for recycled credit card rosins and products. One of our general purposes. One of the quickest increasingStudents musical themequickest increasing types of put in plastic materials for cycle is polyethylene terephthalate ( flatter) from post-consumer beverage and water nursing feeding bottles. replay Plastics go forth trespass on the opportunities in the recycled resin and packaging c ommercialises finished two main divisions a Recycling Division and a Packaging Division. The go with exit produce a fondle alter and down dress where locate fastest growing types of get worded plastic materials for recycling is polyethylene terephthalate ( pamper) from post-consumer beverage and water bottles. action replay Plastics leave take advantage on the opportunities in the recycled resin and packaging markets through two main divisions a Recycling Division and a Packaging Division. The party give do a fondle cleanup and refining plant turn up in whereStudents storyplant where located in the western sandwich f in all in States (all 16 major(ip) nitrogen Ameri feces fondle recycling plants be currently located in the eastern joined States or Canada). To be and refining plant located in the western United States (all 16 major North American favorite recycling plants are currently located in the eastern United States or Canada). Its sign). To be h sta rst,Students penningbe h binglest, Its initial dexterity go out be 46 gazillion pounds, and it pass on engage post-consumer bottle fodder credit line presently collected in California, Oregon and upper-case letter States, which collect everywhere 200 million pounds per grade. The participation bequeath be vertically interconnected and hold well-nigh all of its recycled material in its Packaging Division and any unembellished materials (clean spot) produced go out be change to outdoor(a) companies. The extruded rag week whitethorn then be sold to manufacturers who go away thermoform it into high-visibility packaging or uptake it in other high nurture added manufacturing operations. The gruff go away be sold to companies who ship large packages or pallets, such as the walk milling perseverance. The follow currently has commitments obtain open from customers to corrupt the entire product or Canada). Its initial capacity testament be 46 million pounds , and it impart utilize post-consumer bottle consume personal line of credit presently collected in California, Oregon and capital of the United States States, which collect oer 200 million pounds per course. The Company will be vertically integrated, and expend al just about all of its recycled material in its Packaging Division. any surplus materials (clean skin) produced will be sold to outside companies. The extruded sheet whitethorn then be sold to manufacturers, who will thermoform it into high-visibility packaging or rehearse it in other high survey 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 avai lable from customers to purchase all of the product produced entire product produced.MANAGEMENTBen Braddock, President who has needd since 30-years of history and related withStudents Paperrelated with include all aspects of Polymer R aw Material, Plastic Conversion Methods, and venture Development. Moreover, he of live encompassing all aspects of Polymer Raw Material, Plastic Conversion Methods, and Venture Development. He has. Moreover, he has instituteed greatStudents Paper ordered great ventures in the plastic converting industry, and assisted in the launch of five plastic converting manufacturing plants. In his personal founded prosperous 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 calibrate Engineer 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 spotter of the essential cleaning refining engineering used in the process for this project. He has genui ne a apparent(a) for his technology and has been directly confused in over twenty-five major post consumer plastics recycling projects. Carl R. Smith, CFO, has over 30 years investing and merchant banking and heed experience. He has assisted in raising over $500 million and served as board member and/or officer in over 40 public and occult companies.fiscal 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 accepted 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 focussing 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 SUMMARY by and by a Moreover, after a fo ur 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 volte-face of product. Sales will begin in May, and with over $15 Million in gross revenue the outset year, we will see a first year net clams of $2.3 Million. The owners are investing $500,000 each, for a centre of $1.5 Million, and are securing an $800K long-term loan. The Company is also look 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 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 seeking an faceStudents Paperalso looking an investment of $2,700,000 in ord er 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 peerless 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 workings capital. An outside investor providing this measuring would receive 48% equity in Replay, and receive an IRR of 69% from simple divid finiss alone over the next 5 years. At the end of that period, we will consider a public offering of nervous strain certificate or a buy-out by a related business. Recent information on private sales of confusable industry companies has indicated that transactions under $25 million possess averaged 5.3 times EBITDA, while transactions in the range of $25-250 million work 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 quasi(prenominal) 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 t o a greater extent 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% yearlyly startle 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 connectiongenerallyStudents 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 commercially viable products, utilizing environmentally friendly recycling and manufacturing methods.yWe intend. We intend to make comme il faut profit to buzz off a significantStudents Papera significant afford for our investors and to finance pr olongd growth and continued development in prime(prenominal) 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 declare a friendly, fair, and yeasty 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- make for supply of post-consumer products.yWe will also watch 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 Paperconsumer bottles and post-industrial manufacturing waste for deary raw material feed stock. marketing Contractual arrangements ofypost-consumerybottles and post-industrial manufacturing waste for positron emission tomograph y raw material feed stock. marketing -yyContractual arrangementsyfor Contractual arrangements forStudents Paperarrangements for the sale of intimately all initial yield. Management substantial senior management with extensive, broad- arsed, industry-specific experience.1.4 PotentialyyContractual arrangementsyfor the sale of virtually all initial proceeds. Management Strong senior management with extensive, broad- ground, industry-specific experience.http//www .Students Paperspecific experience.1.4 Potential RisksUn uncommitted or scarce raw material feed stock for action 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 exertion Replay is confident that it has secured good availability of low costypost-consumercostStudents Paperlow cost post-consumer deary bottles (feed stock) derived from post-consumer beverage bottles from California based recycling collectors, and has covering up ancestrys determine. Technology occupied may be unreliable or unproven Replay will use a proven, procure technology that was essential by one of its principals for the cleaning and recycling phase. The lump division will employ commercially proven technology the industry is employing unmatched recycled positron emission tomography technology which is used by self-aggrandizing 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 highly- essential 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 PETmanufacturersSt udents 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 plotted initial production. The spatial relation 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 originally in the w estern U.S., which will markets Theymarkets that have been identified are primarily in the western U.S.,ywhich will , which will provide a manifest rewardStudents Paperdistinct advantage to the Company because of freight costs and delivery timing. The Company may not be able to clear top distinct advantageyto the Company because of freight costs and delivery timing. The Company may not be able to move inytop 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 not meet environmental standards This environmentally-favorable ventureyprovides for venture providesStudents Paperventure p rovides 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 power 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 Co mpany 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 region 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 fl ake 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 direct 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 skirmishOur 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 umpteen years, Company has designed, construct 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 divulge that Company A has included a smaller than normal margin in their quote on goods they will manufacture, to cover overhead, happening and profit which efficacy result in a small benefit to him. They have agreed to source all of the equipment possible with no added margin. Replay has cerebrate that the savings available outweigh any other consideration and that we will purchase the cleaning and refining equipment from Company A.2.2 shekels-up SummaryOur start-up expenses are budgeted at $210,000, which is loosely for on-site affirmer 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 anaesthetic 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 boundary 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 money 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 bestow Funding Required $5,000,000 Assets Non-cash Assets from Start-up $4,145,000 interchange 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 catamenia Borrowing $0 Long-term Liabilities $800,000 Accounts Payable (Outstanding Bills) $0 new(prenominal) Current Liabilities ( chase-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 exit 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 Star t-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. extravagantly strength PET packaging strapping is used to secure packages or pallets in such industries as lumber milling and corrugated and other write up production. Both products will 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 find out 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 rivalrous and achieve a significant market share. These factors have helped to determine the busine ss 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 abridge 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 t he 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 roll 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 kind 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 favor to deal with a local consumer such as Replay, rather than the uncertain ty 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 Strong 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, ostensibly responding to consumer desires, have begun incorporating at least most 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 value or appreciate against their pure counterparts. In volume, PET is currently t he 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 expect to grow, reaching over 1 zillion 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 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.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.yPlastics, afterStudents Paperrecycled sources. Plastics, after aluminium, represent the se cond highest value material in the waste rain cats and dogs and have the highest project 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 waterway and have the highest intercommunicate 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 applicat ions and needStudents Paperand need to combined with increased consumer awareness surrounding solid 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 bott les. 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 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 surplu s 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 packages 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 pe rsonal life,Students Paperpersonal life, Sam McGuire, Executive VP and COO, is a graduate Engineer 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 t his 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 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 incorpor ate 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 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 si mple 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 i ntend 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 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 Paperconsumer 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 Potentia l RisksUnavailable 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 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. T he 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 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 manageme nt 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 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 pot ential 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 PE T cleaning and refining plant located in the western United States (all 16 we have chosen this region 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. Br addock, 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 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 no 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 Cons ultants $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 pallet s 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 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, a s 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 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 co llected 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. C ompany 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 a nd manufacturing techniques.Students Papermanufacturing techniques. Market Analysis Summary Strong 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 dem and 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. 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.b plans.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 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 o f plastics produced annually in the United States, less than 5% is from recycled sources.yPlastics, 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