Organization of shoe production

Инвестиционное предложение

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	4 years
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

Information about the initiator of the project

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

Information about the founders

Full name	Undefined
Date of birth	Undefined
Contact number	Undefined
E-mail	Undefined

Contact of the executor from the SCI

Full name	Oteuliyev Azamat
Position	Chief Specialist
Contact number	97-7030425
E-mail	A.Oteuliev@invest.gov.uz

General information

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.

Market analysis, product description (works, services) marketing research

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	70%
Export	30%
Cost of production	from 8 to 22 USD
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.

Production technology and main equipment parameters

Type of equipment	Production line (ZPK, press, fortune, sewing machines, dryer, tapes, laser and others)
Country of origin	China, Italy, Turkey
Productivity	1 thousand pairs per day
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.

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