Professional Documents
Culture Documents
Executive Summary
Production and sales of solid wooden
boards
1. Company profile
EXECUTIVE SUMMARY
2009
The company specializes in production of solid wooden boards made of Angarsk pine 1. The
company is located in Krasnoyarsk. Long-term contracts with large timber enterprises secure
stable supplies of round wood for the whole year regardless of weather conditions. Efficient
operations provide the company an ability to promptly produce and deliver wooden boards at the
order of a customer.
Opportunities Threats
Internal origin
1
Angarsk pine provides high quality timber, which is valued for its good density.
EXECUTIVE SUMMARY
2009
- Increase in round wood export tax from 25 to 80 percent (expected in 01.01.2010) will
likely stimulate demand for intensive processing of timber.
- Production volume of Russian timber industry decreased by 15% during the first quarter
of 2009.
3. Product characteristics
Solid wooden board is natural, ecologically clean product of wood deep processing. It is used for
production of following goods:
- ladders,
- furniture panels,
- table tops,
- decorative panels and elements,
- parquet,
- windowsills,
- doors and etc.
Advantages of the wooden board over any other materials used in furniture production are these:
- Due to several specialties of production process solid wooden boards become resistant to
deformation, cracking and drying shrinkage;
- Solid wooden boards preserve natural texture of wood surface;
- Wooden boards are ecologically clean which enables their use in furniture and interior
elements production;
- The level of quality of the wooden boards is excepted in the EU;
- Overall size of wooden board can be varied easily depending on customers requirements;
- Furniture made of wooden boards can regulate air humidity indoors; it is safer and more
durable than furniture made of chipboard.
Owing to described features demand for solid wooden board tends to be high both on
Russian and international market
4. Business model
At present delivey agreements are concluded with companies from following regions:
EXECUTIVE SUMMARY
2009
- Tyumen
- Moscow
- Ivanovo
- Murom
- Barnaul
The average delivery price of 1 m3 is $755. Thus when month output is 350 m3 EBIT is $68 460
per month.
5. Team
Management of the company has seccessful experience in doing business in timber industry.
Senior managers are people of many accomplishments. The company also employs the most
qualified workers in the city.
6. Transaction conditions
Estimated price of the company is $5 800 000. It is also possible to join the company with some
timber enterprise which owns recourses of round wood. As a result of this consolidation the
following synergy effects would arise:
- Decrease in production cost owing to vertical integration of business;
- Scale economy effect;
- Strengthening of market position
- Decrease in borrowed capital cost.
At present we observe a tendency for consolidation of assets in wood industry. In the future this
trend may provide an investor with a possibility to advantageously sell the company to a
competitor, or expand the market share by acquisition of other prospective enterprises.