Organization of shoe production

Project name

Organization of shoe production

Objective of the project

Organization of production of shoe for ensuring domestic needs of the population and the export of finished leather products

Shpere/Industry

Leather Industry

Project Implementation Schedule

Project implementation period: 24 months.

Stage 1. 3 months for:conclusion of an agreement, legal registration, allocation of a land plot, preparation of project documentation, coordination with a serving commercial bank.

Stage 2. 12 months for:construction of an industrial building, supply of engineering and communication networks, preparation of an industrial site, conclusion of a contract for the supply of equipment.

Stage 3. 6 months for:equipment supply, customs clearance of equipment and imported materials, installation of equipment.

Stage 4. 3 months for:commissioning, formation of the management and personnel of the enterprise, personnel training, organization of work on ensuring the initial financial and circulating assets of the enterprise.

Project location

Bukhara region

Information about project participants:

-Initiator

“Uzcharmsanoat” Association

– Co-executor (supervising sectoral body/ministry/agency)

“Uzcharmsanoat” Association, Bukhara region khokimiyat

– Creditor

Serving commercial bank, URDF line on preferential crediting of the industry in accordance with the Resolution of the President of the Republic of Uzbekistan No. PP-2718 of January 6, 2017

The total cost of the project

2 million USD

Expected sources of financing:

– Own funds

–

– Loans

–

– Required foreign direct investment

2 million USD

Composition of main costs

-Breakdown of main costs:

– construction and installation work – 502 thousand USD

– basic equipment (including installation supervision and component parts, and transportation) – 1 380 thousand USD

– raw materials for the launch period (3-6 months) – 38 thousand USD

– other – 80 thousand USD

Expected profitability

25%

Expected payback period

Cash flows

Cash flow after commissioning of 100% capacity – 1 400 thousand USD

Constant, periodic and other expenses – 900 thousand USD

Gross profit – 500 thousand USD

Characteristics planned for production

Quality and low prices for products

Design capacity/productivity

300 thousand pairs per year

Contribution to the project by the initiator

Building and facilities, other types of investment – in total not more than 50% of the project cost

Current project status

At the stage of development of project documentation

Full name of the company

“Uzcharmsanoat” Association

Details, address, contacts

100192, Tashkent, Mirzo Ulugbek district, Mustakillik street, 109

Date of the enterprise’s foundation

2000 год

Statutory fund

Undefined

Founders and distribution of shares

Undefined

Full name

Undefined

Date of birth

Undefined

Contact number

Undefined

E-mail

Undefined

Full name

Oteuliyev Azamat

Position

Chief Specialist

Contact number

97-7030425

E-mail

A.Oteuliev@invest.gov.uz

Number and types of created jobs

Total: 64 people, of which:
2 – AMS;
5 – qualified staff;
57 – employee with secondary vocational education.

Impact of the project on the environment (project EIS), including the expected types and volumes of waste, the place of their disposal

In accordance with the EIS, the project can be implemented only in the case of installing a purification plant for discharging process water.

Information about the land for construction of the enterprise

The required total area for the property is 1 ha.

Existing infrastructure

Undefined

Required infrastructure

-Technical water pipe;

Water supply and sewage;

Power supply with alternative power capacity of at least 1000 kVA.

Highway.

Upcoming construction works

Production building 1080 m2.
Auxiliary buildings 432 m2.
Industrial site – 200 m2.
Improvement of 3000 m2.
Fencing 400 pm.

Design-estimate documentation

A business plan of the project is available

Electricity demand (kWh), Integrated power (kWh/s or mW/h)

It is determined after the choice of technological equipment.

Water requirement (cubic meters per m)

It is determined after the choice of technological equipment.

Gas demand (cubic meters)

The technological process does not require technical gas supply.

Types of products

Women’s shoes, men’s shoes, children’s shoes, special shoes

Annual production

300 thousand pairs of shoes per year

Estimated sales markets and their shares:

Internal

Export

Cost of production

The need for raw materials (per year)

9,5 million square meters of leather

Provision with raw materials

100%

Market volume

100 million pairs of shoes, 1 billion USD

Expected market share

0,1%, 1,4 million USD

Main competitors

Over 100 local producers and exported products

Main competitive advantages

Quality and low cost of production

The main target groups of consumers

All categories (apart from military personnel)

Sales structure by target consumer groups

All categories of consumers

Pricing strategy

Market

The cost structure of the final product

Basic and auxiliary materials-55,8%;
Depreciation – 6,2%;
Other expenses – 2,9%;
Salary – 12,4%;
Extra charge – 22,7%.

Availability of patents, licenses, certificates in accordance with current legislation

Equipment certificate provided by the manufacturer

Availability of a formed base of potential customers with a confirmed willingness to purchase products

Not available

Availability of marketing research

Not available

Presentation component of the project

Is being developed

Additional Information

Manufacturers of leather products – members of the Association:

– Exempt from income tax and property tax, single tax payment – for micro firms and small enterprises, as well as mandatory contributions to state trust funds;

– Exempt from paying customs duties (except for customs clearance fees) for imported equipment, components, raw materials not produced in the republic, materials and fittings, used by organizations – members of the Association in production, according to the lists approved in the prescribed manner;

– have a delay in the payment of customs duties (except for customs clearance fees) for a period of up to 60 days from the date of acceptance of the customs declaration when importing equipment, components, raw materials, materials and accessories required for own production of goods not included in the above-mentioned approved lists.

Project risks

– – the risk of non-compliance with the established parameters of the feasibility study of the project and/or the Business Plan in terms of the planned revenue receipt;

– the risk of an increase in construction time when the project is not timely financed;

– the risk of unforeseen political and economic phenomena in the global economy, changes in world prices for raw materials, materials and components, as well as for finished products.

Type of equipment

Production line (ZPK, press, fortune, sewing machines, dryer, tapes, laser and others)

Country of origin

China, Italy, Turkey

Productivity

Cost

Undefined

Power usage

Undefined

Installed power

Undefined

Overall dimensions of the equipment

Undefined

Main equipment weight

Undefined

Main equipment units (lines)

Undefined

Working hours per year

About 5440 hours a year

Work cycle

2 shifts

The frequency of scheduled preventive maintenance (SPM)

Once a year, no more than 20 days a year

The number of people involved in production process and their functions

Total: 64 people, of which:
2 – AMS;
5 – qualified personnel;
57 – employee with secondary vocational education.