Stankovci, May, 05th. 2011.
SUBJECT: BUSINESS INVESTMENT POSSIBILITY
Dear Madame or Sir,
We would like to introduce you to a possibility of business investment or any
other way of cooperation with our firm. We will present our firm through its history,
current position and vision of our development.
1. FACTS
Full name: „PROMARINE“ llc trade and services, Business zone Novi Stankovci,
23422 Stankovci, OIB 92853903661, MBS 080414507. Company registration
Appendix 1.
Owner: Diana Rožanković , Sisak, J. Severa 4, 100% ownership
Manager: Jurica Fuchs, Vukšić, Vukšić 44
Founded: 2001
Registered at its current address since June 2008.
Full time employment: 5-8
Primary business: Motor vehicle wholesale and retail,vehicle and equipment rental.
Appendix 2.
2. BUSINESS IDEA - VISION
The idea for this business occurred to me during the stay at the graduate school in
the United States of America from 1999 to 2005.
It is common knowledge that the cost of boat maintenance is very high and that boat
parts are expensive and hard to obtain. During my stay at the USA, from where 90%
of boat technology and 80% of boat production comes from, we have realized that
the boat parts and boat equipment is as available and reachable as the parts in the
car industry. Furthermore, in many situations, the source for boat or car parts is
identical.
By thorough and detailed research and by visiting all the relevant boat shows and
exhibits in the USA and Europe, we have gathered information on suppliers,
distributors, on their organization, quality and market position and subsequently we
started to negotiate with them. Those are mainly the multinational companies that
produce the parts for the first placement into the new boats, so called OEM (original
engine manufacturer), and the parts for the subsequent placement, so called
AFTERMARKET. Aftermarket parts are mostly parts of the same quality as OEM, but
with different classification, different packaging and different distribution path. Their
price is about 50 to 80% of the OEM price. As we have picked the top suppliers, it
was asked from us to fulfill their criteria for the distribution, quantity, technical
support, warranty support, logistics and marketing.
Already in 2001 with the name choice of our compony, we have placed ourselves on
the market and defined the direction of our future moves. But, the company needs to
be built and financially strengthened. For that reason we have worked in motor
vehicle trade and vehicle and equipment rental since we were funded till 2009. We
have strengthened our bonitet and financial capacity of our company.
In 2004 we have started to develop our strategy and investigate the needs, habits
and laws in boat parts distribution.
At that time the business zones were being built in Croatia and as they have many
advantages, we began to look for the most suitable one. As 80% of nautical market in
Croatia is placed between Split and Zadar, we have decided that the best one is the
business zone Novi Stankovci. The reasons are:
A. Excellent road accessibility: 2 km from A1(exit Pirovac), on the state road ŠibenikBenkovac, 5 km from Adriatic coast highway. Delivery possibility on a targeted
market within an hour. Appendix 3.
B. Law taxes. The zone is the closest zone under the special state care to the sea.
Low income and asset taxes, low utilities and cheaper labor cost.
C. Extremely encouraging and cooperative local authorities. Always ready to help.
Full utility infrastructure. The zone was declared the best business zone in Croatia in
2009.
D. Placement in the zone is next to the companies in similar business as ours, that
are not direct competition, but added value to ours (MECHANIC NAUTIC, SCAM
MARINE).
Development chronology:
2005. 6774 m2 of land for business/corporative purposes is bought.
2006. Beginning of obtaining the necessary building permits
March 20, 2008. Building permit obtained. Appendix 4.
March 24, 2008. Land appraisal for the purpose of obtaining the loan. Appendix 5.
April 23, 2008. Loan contract with PBZ bank is signed. Appendix 6.
August 2008. Contract with HBOR (Croatian Bank for Reconstruction and
Development) on partial compensation of loan interest is signed.
December 2008. Contract with HAMAG (Croatian Agency for Small Enterprise) on
co-warranty of loan payment is signed.
February 25, 2009. First payment received.
We have obtained a loan with subsidized interest rate (4%) in the amount of
5.000.000,00 kn (approx. $1.000.000,00, EUR 700.000,00) to build a nautical centre
whose value according to the price list, appendix 7, is 7.545.753,85 kn without VAT.
In that amount of 7.545.753,85 kn, the price of the land, of obtaining the building
permit, the costs of the loan, utility connection, preparation for phase 2 etc. are not
included.
Two objects are supposed to be built on the land and we have received a building
permit for both. The final confirmation for the project is obtained for the object from
the phase 1, the one that is positioned on the south end of the land, net area of
2.514,35 m2. The object is going to be two stories object so that we can get the
storage for general purpose fully functioned. There is a possibility of splitting the
object to completely separated boxes of 200 m2 area that can be rented on demand.
For our own business we have estimated the need for the area of approx. 750 m2.
The object is completely equipped with infrastructure and the whole land s prepared
and set up with full utilities for the phase 2. That way the expenses for phase 2 will be
simplified and minimized. Object picture: Appendix 8.
The business area for our needs is projected to be in the upper floor (approx. 400 m2
in ground plan) where we will have a wholesale and retail center, storage of the
goods that have passed the customs inspection (daily storage), management,
professional services, administration, joined area, sanitary area and an area for the
boat exhibit, with and without a roof.
In the bottom floor there will be a service area, test area, small storage, customs
storage of type D (for boat parts and boats), closed dry marina, utility room. The
rooms are modular and there is a possibility of expansion as well as compactness of
needed area without big investment.
The whole object is built in the best quality way, with the solid made concrete
construction
(extreme heavy duty construction and extreme load capacity). It is
completely covered with high quality thermo sandwich panels of extraordinary termoisolation and resistance to atmospheric influenced and fire hazards.
3. BUSINESS FACTS
A. Business so far:
Balance 2007.
Appendix 9.
Balance 2008.
Appendix 10.
Projection balance 2009. Appendix 11.
Our business till 2010 was mainly based on the income from the vehicle sale and rent
and equipment and motor sale and rent. Payment of our services is continuous and
regular and so are our obligations towards the suppliers, distributors, the government
and other institutions. Apart from the current building loan, there is an older county
loan that is at its last phase of payment, there are four leasing contracts out of which
two are at their end stage. Product and equipment stocks are high, but are of general
purpose and as such are easily sold.
B. Future business:
B.1. Business organization:
Company Promarine llc, Stankovci does business and marketing under the name
"Automar group". For the last 5 years the companies Automar llc, Ptuj, Slovenia,
Automar Co, the USA, and soon Automar, Montenegro have been and still are
owned by Promarine.
Using the sister companies we achieve better flexibility in business. Automar llc, Ptuj
gives us more flexibility on EU market, Automar Co in the USA, in particular with the
American suppliers, and the future company in Montenegro will do the same on
Montenegro market. Joined with the business flexibility comes the marketing effect of
complexity. All companies have joined bookkeeping, but are legally and financially
independent. The bookkeeping headquarters are in Sisak, but will be moved to
Stankovci upon complete move of the compony into its new location.
B.2. Sales vision:
The strategical orientation of business in on distribution, i.e. we aim to be direct,
legitimate representatives of the supplying companies. This has its advantages, but
they also come with the obligations. The advantages are better financial conditions,
logistics and marketing support from the suppliers as well as legal protection
according to the contract. Our obligations are also not negligible as we need to
provide further technical support, warranty, marketing presentation and build a
market position for the supplier for professional users (wholesale) as well as the final
users (retail). We also need to fulfill the suppliers' selling quota. We as a distributor
are the ones in between the supplier and many wholesale users: dealers, service
companies, retail sales and rental industry (B2B) . We also have our own retail and
online sales for its end users. It is usual that out of the retail price 1/3 goes to a
supplier, 1/3 to a distributor and 1/3 to a retail sector. Our business study predicts
approx. 70% of sales for B2B segment and the rest for B2C segment. With further
development of retail sale networking, with starting up our own service shops and
online shops and with other sales and marketing moves it is possible to raise the B2C
segment. Of course we need to be very careful and create a healthy competition on
the market, i.e. B2C should not be a competition to the buyers from the B2B
segment.
The development of B2C segment is important so that the maximum profit per
product unit can be obtained while the retail profit remains at 20-40 % in average.
B.3. Presentation and marketing
Marketing and presentation are the best tool in 21st century sale business. There is a
saying: "Production is an extended hand of the marketing" for a reason. As our
business is actually a start-up business, the choice of marketing approach is vital. We
are tied into very specific part of the market and thus the general marketing would not
be adequate, i.e. it would not give the desired results if compared to the funds
invested in it. We have decided to go with targeted marketing, the one that includes
the individual approach to our potential buyers, in particular the capital ones. We will
reach them through their representatives, through the catalogues, promotion
materials and then through direct contact. The second part of marketing will include a
direct approach to the end users by lobbying at the places where they spend time at,
for example marinas or gas stations next to the sea. This would include the so-called
gorilla marketing. The third approach of our marketing will be publishing in the
professional magazines. Each approach or segment of marketing will be adjusted to
a targeted group of buyers so that a direct, correct and simple message comes to
each buyer in the best way possible.
B.4. WEB and online sale
There is no serious business today without its presentation on the web pages or
through online shopping. www.promarine.hr is the main web page of our compony in
Croatia. It was created in 2006. It was just refreshed and improved using the most
advanced IT and marketing technology for the start-up of the sales business in spring
2010. It shows the company business, products, services, technical support and
possibility of online shopping in a very simple and user friendly way whether a user is
a registered business client or a retail buyer.
Full information on possibilities of delivery, return policy, directions of how to reach us
etc. will be on our web page. Through FAQ and forums we will post many useful
advices as well as the questions and answers that concern the boat technology in
order to attract more visitors to the page and by that to attract more potential buyers.
Modern programs that follow the habits of our visitors will be posted on our web page
so that we can improve it continuasly.
Our
web
pages
are
also:
www.automar.eu,
www.marinepartsonline.eu,
www.mallorymarine.eu , www.mercruiser-europe.eu, www.volvopenta.eu
Those pages will be connected to our main web page www.promarine.hr, the only
difference is that they will be used for our business on EU market.
B.5. Suppliers
As we have mentioned in the beginning of this letter, we have chosen top suppliers in
our
business:
www.mallorymarine.com,
www.firstmateengine.net,
www.federalmogul.com,
www.colehersee.com,
www.palby.dk,
www.orbitrademarine.se,
www.finnord.it,
www.tridentmarine.com,
www.cdielectronics.com,
www.martyr.com,
www.normagroup.com,
www.turningpointpropellers.com, etc.
B.6. Mission
We aim to make our product offer the easiest and the simplest to reach for all the
professionals in boat industry. We aim to simplify and accelerate supply of the boat
parts, equipment and consumables. We aim to become the first and the most
competent address for their needs. Without a doubt we will achieve this goal. We will
also help the end users to find direct answers from us, to get the needed product as
quick as possible and always in a manner that we have agreed upon.
Besides the core business that involves the parts distribution, we will develop our
own service network, stationary and mobile, equipped in the most modern and the
best way possible. We will be the first in Croatia to introduce new engine and drive
testing techniques in the dry area using the ECU testers, testing under full load
situation using the torque converter, as well as the dyno test in the test-pool. We also
have our own truck to transport the boats, we have the trailers, the special forklifts for
boat manipulation, dry marina of the opened and closed type (with or without
customs supervision), rent business, charter etc. We will be one of the most complete
nautical centers in the area, wether we talk about the quantity or the quality of our
products.
B.7. Market
Except from supplying the professional and private buyers/users in Croatia, we will
put a strong accent on marketing and expanding onto Slovenia, Hungary, Slovakia,
Czech Republic and Poland. From those countries we have most guests on the
Croatian coast in the last decade. This is a big market that has been neglected in
Croatia. The guests from those countries are numerous, less demanding and very
good consumers. All our web sites will be translated to their languages, we will even
have a web page in Russian. The closeness to two international airports (Zadar and
Split) together with completeness and quality of our product offer, puts us in a very
good position to become their nautical partners in Croatia. They will be able to get all
the services together at one place, from the transportation from the airport to the port
to boat preparation, pre-seasonal and post-seasonal services, equipment, cleaning,
detailed finishing, storage, lifting the boats from and into the waters etc. „Automar“ llc,
Slovenia will come in here very handy as most of the users from EU (as in Croatia)
have boats registered on the companies and will need the invoices from EU to make
the bookkeeping of the expanses legal.
Until the center is opened in Montenegro, the Montenegro market will be covered by
a representative in Dubrovnik while the other countries in the area will be covered on
the individual base as needed.
B.8. Competition
Even though there is a huge need for boat parts and equipment in Croatia, from Italy
to Germany there is no distributor of our potential and product offer. There are few
companies in Croatia that sell boat parts of certain suppliers, but neither one has
come even close to the potential of our product offer, technical support, logistics and
marketing possibility. Neither one has a synergy of our multi-services that we offer.
B.9. Human resources
As with any start up business it is hard to fully predict human resources needed for
the successful business operation.
The business will be run by Mr. Jurica Fuchs who as a manager is fully skilled in all
the business operations, product offer and suppliers. Mr. Fuchs is fluent in English
and German.
Administration, cash office, web support, custom storage and other work related to
the accounting and correspondation will be done by Lucija Horvat. Mrs. Horvat is
fluent in English and skilled in accounting and business softwares.
Two employees are estimated to work in wholesale and retail and in technical and
warranty support.
One employee will run the storage and dispatch operation.
One assistant employee will work on emergency deliveries and other work that goes
by demand.
Service activity business will start upon the sales reaching the predicted peak and
upon settling into a high quality as well as routine business operation. Further
employment will depend on the amount of work and its potential growth.
B.10. IT & telecommunication
Complete business managing, wholesale, retail, online sale, servicing, storage and
logistics for both companies (Promarine&Automar) will be run from the business
headquarters in Stankovci. The system that we chose, PANTHEON ME, is the
modular system on which multiple user requests can be connected, such as
bookkeeping software, storage software, web sale, supply and stock analysis,
dislocated sales locations, POS, CMS, connection to logistics etc. Our bookkeeping
services in Croatia and Slovenia use the same program and thus all the bookkeeping
data will be processed simultaneously as soon as they are processed. All the
systems are at the test stage and they have been done to satisfy the strict ISO 9001
standards.
Because of the many requests for the fast data access we have installed the optical
telecommunication cable. The technical possibilities will therefore be able to follow
the business development. A modern telephone central has been implemented in
order to enable unlimited possibilities of the communication with the minimal
expenses. The main numbers will be: 023/380 555, 380 444, fax 380 515. We will
also have local numbers for every foreign country from where our users come from.
That way they will be able to call us almost for free. The web server will be dislocated
(rented) while the local server will store data and back-up data.
B.11. Logistics
Supply and delivery logistics of the boat parts will be handled by the specialized
companies in logistics till out business is in full operation. We will use Lagermax-AED
Croatia for overseas and palette transport and storage and DPD Croatia for package
distribution.
The chosen partners offer the highest service quality, the most acceptable deadlines,
the best prices, door-to-door service, shipment tracking and IT business systems
networking to reduce the costs and errors.
Our own delivery will for now cover only the emergency situations on the direction of
Split - Zadar.
4. POSSIBILITY OF MERGING OR ADDED CAPITALIZATION
Putting aside our current financial possibilities, i.e. the ability to start this project on
our own and expand on our own, the idea of connecting to a company of a similar
business orientation or receiving an added capitalization from the foreign institution or
the individuals is acceptable for more than one reason:
Mostly it makes a fresh capital that enables easier every-day business, increases the
bonitet with the suppliers, enables growth in the product list and stock, increases the
marketing investment etc.
Synergy effect, i.e. more effective joined presentation towards the suppliers, buyers,
partners, banks etc, as well as more effective use of joined resources to decrease the
expanses of business, representations, marketing, logistics and many other costs.
It is also extremely important to exchange knowledge, experience, business contacts,
have a multiple control over the business processes, be able to add to each other
business operations,
have financial and legal consolidation, achievement and
strengthening of the corporative culture.
In that sense we are opened to the meaningful questions and suggestions and all the
necessary documents needed for detailed analysis of our compony are at your
disposal if needed.
For all further information please do not hesitate to contact us!
Sincerely!
Jurica Fuchs
info@promarine.hr
GSM +385 98 261 000