The expansion of production

Project description

The necessary conditions

The money involved to Finance the increase in production capacity, as well as the organization of sales of finished products through retail showrooms of ceramic tiles. You want to invest 12 000 000. The payback period of two years.

Brief description of the project

"Prima Ceramics" runs from 2009 to 2016, the company began to produce handmade tiles custom made in the image and likeness of similar companies in the US market.

The project was originally designed for the development, production and testing of new products in the market of ceramic tiles are handmade in Russia with a view to further replication of the popular products.

Production "custom made" has its limitations because of the complexity of production processes because of the constantly changing parameters of the requested products. But it is this type of production is very important, as it gives a clear understanding of demand. We know exactly what collections and colors are in demand at the moment on the basis of received orders.

This information is very valuable and at this stage there is a need in the launch of popular products, short-run series for the purpose of sale through the trade network.

The idea is simple. Prima Ceramics (in the form as is, if the work "to order") is a test laboratory that develops products, launches and tests the demand. The most popular are then replicated and sold as finished product limited editions through retail chains and showrooms of ceramic tiles.

Issue limited series of ceramic tiles non-standard shapes in a limited colour scheme for sales through trading networks requires upgrading of the existing production with the aim of production in large quantities.

Investment scheme

Equity participation of 49%.

Market

In 2017 the volume of Russian market of ceramic tiles and porcelain tiles amounted to 193, 9 million sq m, up 8, 3% higher than in 2016. In 2018, the market increased to 209, 1 million square feet

In recent years, the market of Premium segment is growing despite the General economic situation in the country.

If you consider that the market share of the tiles is 45% of the total sales volume of all tiles, and the premium segment is 31% of total sales, the entire premium segment in which prima Ceramics is estimated to be approximately 30 million sq. m.

I would have divided more and Premium segment, but such statistics I found in the public domain. Nevertheless, even assuming a narrow segment in the niche of Premium in which we are located is near the top, then by analogy the ratio of sales of decorations to the background plate (which is 5% to 95%) we can assume that our narrow segment of the super expensive tiles (call it SUPER) is about 5% of the total volume of sales in the Premium segment. That is 1, 5 million sq. m.

Goal

The objective of this project to take a share in this market and go on sale 15 000 m2 per year, representing 0, 01% from total sales in the segment SUPER premium.

Trends

Production of ceramic tiles is very similar to publisher. Publishers print books, 80% of which are not sold, 20% pay for itself, and all the other failed projects, among which a few are bestsellers. In ceramics, too.

In 2009, the range of ceramic tiles Russian production looked very dim. Miserable decors was not allowed to go in the premium segment, the majority of Russian manufacturers. When I suggested to one of his friends to produce the decors to the existing unsaleable collections and have developed about 20 collections of decors one of which became a hit and sold so far. It began to copy many businesses including Uralkeramika (Ekaterinburg) and Birch Ceramic (Belarus)

http://plitka-78.ru/catalog/keramicheskaja-plitka/plitka-beryozakeramika/lazur-berezakeramika

It is without a doubt one of the most famous centenarians among the collections of tiles in the segment.Therefore, large companies follow trends in the production of tiles, to find your Grail.

The global trend on samovyrazheniya buyers can be traced in all industries. Ceramic tile is no exception. Trends appear at major international exhibitions where designers fall in love with a particular collection and embody modern trends in design. Furthermore, the Russian companies are starting to play sought after branded collection in one form or another for a lower price.

How to achieve goals

Prima Ceramics appeared in 2016 as a starter project which was supposed to check the correctness of the trends in design of expression buyers. Analogues of such companies were found in the U.S. market, where they are long and wide enough. During this time I was convinced that the demand for tiles of irregular shape and it is growing fast enough, which confirms the birth of competitors in the industry.

The order severely restricts the sales of such products by several factors:

1. 100% advance payment for the yet-produced goods.

2. Time. (1-2 months).

3. Fear to unexpected result

4. The fear of missed deadlines

A large proportion of customers who are interested in our products refuses to buy it for these reasons. According to our estimates and estimates for the direct sales of our dealers will not be returned about 80% of buyers. Therefore, organizing the sales warehouse limited top collections you can get loyal buyers who interfere with these factors to make a purchase.

Salons ceramic tile trading various brands in different price categories. Our premium product. We focus on individuality, manual work and do not hide that tile is expensive. In the mass sector, we have nothing to do there we can't compete on price with the big factories. Therefore, the task number in the sales — a very good exhibit. It is supposed to do the displays not only display the tiles, but also photographs of interiors pockets under the booklets that you can take with you, a link to the website. The site will do under a specific collection in the shops, it will publish the addresses of points of sale, video how to do installation, trim, grout tile, etc. the Task is to cover the most common issues that can arise when buying and using this tile.

Sales forecast.

Almost 95% of all sales of prima Ceramics is carried out through the social network Instagram. We are not represented in retail as it sellers do not know how to work with tiles on the order.

The average monthly sales of prima Ceramics is 70m2. In the best months we have sold 200m2 on revenue 1 825 000 p. Although could not cope with such volumes and terms of issue of the orders was for 2 months. The sales under these terms of issue fallen sharply.

It speaks to the elasticity of the market. Demand depends very much on the classic factors: Time, quality, price.

In our case, the bundle looks like this:

Quality.

The client likes the product. He sees pictures of what he likes in the interior. Then he sees the tile samples in the showroom. Most often it is the shape of the tile, but not the fact that in the color that the client expects. Then he/she sees a sample of the glaze, and then combines in the head of the former with the latter, imagining how it would be. Next is the factor of uncertainty. What will I get in the end? Would it fit to my expectations? What percentage is willing to take the risk we don't know. But on the data that we have, assume that it is about 80 — 85% of applicants.

Price.

Everything is simple. If satisfied, the customer is ready to order.

Time.

The client likes our product. It expects to see corresponding to their expectations and agree with the price. The normal term of manufacturing of the tile is 4-5 weeks, we inform our client. 70% off in this case because of the long-term. We have had many requests from the series: the Price is satisfied, it is necessary 20-30m2 of such forms, but within 5-7 days.

In addition to the Russian market are foreign. We often receive requests for cooperation in other countries. USA, Sweden, Norway, Finland, Turkey, India, Iran, etc. All depends on the time frame. Customers from abroad usually large companies selling wholesale. Price suits many. I agree to take 40 foot containers, but are not willing to wait for 4-5 months.

To sum it up. We can sell the 300% only through Instagram, subject to the following factors:

1. The price is satisfied

2. The deadline is now

3. Quality is what I see.

Well, if you add off online buyers, the numbers can be much higher.

You need to exhibit in 100 retail locations. The average order is 4, 2 m2. Provided at least one sale per month, this network of retail points can sell from 420 m2. With the constant expansion of sales network and increasing the range of products sold sales will rise as well.