The creation of a logistics complex in the Republic of Crimea

Project description

"Creating logisticsadvanced "Warehouse Crimea""

Brief description of the project.

The result of the present project is the construction of a new logistics complex and providing its logistics services.

The project envisages construction of 1 warehouse building class "A" with an area of 10 000 square meters (15000 pallet positions) with different temperature modes "+ 18" and the possibility of a further arrangement under any temperature conditions, for example, "0 + 2" or "-18". The warehouse complex is equipped with leveling pads that allow material handling with different types of vehicles, without the dusty floors and shelving systems.

The complex provides accommodation for staff and maintenance personnel in office premises (up to 3,000 sq. m.) arranged over the area of the expedition.

The initiators of the project.

The project was initiated by a group of top managers specializing in the construction of logistics centers and the establishment of logistics systems.

The portfolio of the initiators is the construction of several logistics centers in different regions of the southern Federal district with different levels of class and temperature regimes and for different purposes.

Under our leadership, was established logistic system one of the largest distribution companies in the southern Federal district. When you create a system on different platforms (Rostov-on-don, Krasnodar, Volgograd, Sochi, Stavropol, Astrakhan) had to solve various problems of economic, social and legal nature inherent to particular regions. But as a result of logistic system was recognized as one of the best in Russia.

We have worked with major clients like PepsiCO, Wrigley, Nestle, Mars,

Philip Morris International.

Analysis of the potential market and benefits of the project.

Crimea has a population of 2, 3 million people which is comparable in population with such closest regions as Voronezh, Volgograd region and Stavropol Krai. And during the summer season the number of tourists increases, which is variously estimated from 2, 5 million to 5 million people a year. With 2014 in the Crimea considerably increased the purchasing power among the population. Experts note that this year showed a sharp jump of retail on the Peninsula – an increase of 60%. On will only increase this figure. This is mainly due to the growing prosperity of the population.

On the territory of Crimea free economic zone was established which allows to obtain significant tax benefits for the main taxes such as income tax, property tax organizations, the use of accelerated depreciation, exemption from land tax and reduced rates of insurance contributions over a long period until 2040.

Crimea can become a logistical staging base for the black sea countries, and as a consequence –to redistribute part of the cargo flow between St. Petersburg, Novorossiysk and Sevastopol.

Another important factor is the problem of transport communications between mainland Russia and Crimea, which affects the deficit of the production, and consequently on the growth of consumer demand for the products of those companies that keep their effluents directly on the Peninsula and can meet its obligations to customers regardless of the situation on the ferry crossing.

All of the above leads to the fact that there is a shortage of quality warehouse space. Besides, at this point, the Crimean market of warehouse logistics similar to a blank sheet on which you can write anything you want, as high-quality warehouse space practical do not exist in the Republic, which gives a very big competitive advantage to our project.

Now the most favorable situation for the implementation of this project due to the influence of the above factors. The new logistics complex will replace and exceed the existing storage facilities and logistics operators presented in the Republic, the technical condition does not meet the demand of international and Russian distribution and industrial companies requiring high quality services. The period of construction and commissioning of the complex is 2 years.

The construction will be carried out its own construction division.

The cost of the project

The total value of the investment costs is 333 928 thousand rubles and includes the development of a technical project, construction of facility, acquisition and commissioning of equipment and provision of activity of the enterprise prior to running a logistic complex.

Sources of funding

The project will be financed with own funds of the initiator of the project and the involvement of the investor:

· The investor's funds – 333 928 thousand RUB

Investment conditions:

· Investment amount – 333 928 thousand RUB

· The use of funds in tranches within 2 years

· The investor's share in the company 60-70%

· The compounding frequency and the payment of dividends -1 quarter

· Return of investment within 6 years from the beginning of investment.

Evaluation of economic efficiency and financial viability of the project:

When incorporated in the calculation of income, current and investment costs of the project of construction of logistics complex can be recognized as an effective, financially sustainable and increasing revenues.

The horizon of consideration of the project is 10 years. Within the considered horizon project is as follows:

· Cash income at exit is 80% of the capacity of 156 million rubles per year or 13 million rubles a month.

· Net profit of 97 million rubles per year or 8 million rubles per month.

· The capitalization of the company after the launch of the project will be 466 million rubles;

· Simple payback period the investment cost of the project is 6 years from the beginning of the project;

· Discounted payback period (at a discount rate of 18, 9 %) – 9 years;

· Internal rate of return (IRR) — 16%;

· Profitability index (PI) – 5, 63 %;

· Breakeven is achieved when you download a 42% power storage;

· Level without loss is achieved at a minimal price 466 RUB over balletomane a month, in the calculation of the price is not a part of the additional revenues from leasing office space.

Investments in the amount of 333 928 thousand RUB., due to the other income of the company, fully cover the needs of the project funding.

The benefits of the project

The implementation of the project will allow:

· Replace outdated storage capacity of existing logistics providers,

· Allow major Russian and foreign companies decide to do business in the territory of the Republic is not opasayas of supply disruptions due to transport,

· Ensure the business of the Republic of Crimea is a quality warehouse services

· Increase the range of products on the territory of the Republic.

· To satisfy the consumer demand of population and enterprises in food,

· The project will allow the company to make a profit,

· The project implementation will allow to increase receipts in the budget,

· The project contributes to the preservation and creation of additional jobs.