Tusker Exporters

Prin. L. N. Welingkar Institute of

Management Development & Research,

International Marketing

Report by Group A-12 (MMM, Batch: 2013-2016)

Sr. No. Name Roll No.

1. Devendra Chavan 172. Rajkumar Gavas 193. Reshma Kamat 374. Sandeep Surve 985. Pankesh Thorat 1046. Abhishek Tonpe 106

1.0 Executive summary:1.1 Key Elements of the plan:

Tusker Exports is an exporting firm engaged in disseminating Non-hazardous Chemicals to Malaysia. The company has started its business with the purpose of acquiring market of 15 Mio INR in the first year with a CAGR of around 20% YoY for the next 5 years.

1.2 Description of Business and Target markets:This exports firm will mainly focus on specialty chemicals mainly defoamers for industries like paint, coatings, and emulsions in the Malaysian market.

1.3 Brief description of management team:The Tusker exports is promoted by Mr. Raj Gavas and Mr. Abhishek Tonpe. Mr. Raj Gavas with his initial capital of INR 75 lacs has major stakes in the firm and is the chairman and managing director. Mr. Abhishek with its capital of INR 50 lacs is working as a Marketing and/or Business Development chief.

1.4 Summary of financial projections: The financial projection shows that Tusker exports show the

high potential for success and growth with the exports of

specialty chemicals to the Middle East countries. It shall be

profitable by the end of the first year but shall have a

negative cash flow of INR 20 lacs as seen in table 1 below.

From the second through the fifth year Tusker Exports shall

make both profit and positive cash flows in an increasing

manner. Tusker Exports shall also pay off the loan

completely together with interest by the end of the fourth

year and also pay dividends to its shareholders.

Year Year 1 Year 2 Year 3 Year 4 Year 5

FCFA FCFA FCFA FCFA FCFA

Sales/Turnover 100000000 110000000 121000000 133100000 146410000

COGS 70 000 000 77 000 000 84 700 000 93 170 000 102 487 000

GROSS PROFIT 30 000 000 33 000 000 36 300 000 39 930 000 43 923 000

Earnings Before Tax

7 500 000 9 665 000 12 088 250 14 797 663 18 824 046

Taxes 3 450 000 4 445 900 5 560 595 6 806 925 8 659 061

Earnings After Tax

4 050 000 5 219 100 6 527 655 7 990 738 10 164 985

Loan Refund 5 000 000 5 000 000 5 000 000 5 000 000 0

Surplus( )/ Deficit(-)

-950 000 219 100 1 527 655 2 990 738 10 164 985

2.0 Business History2.1 History of Company:

Tusker Trading Company Pvt. Ltd. has been established in 2005 by Mr. Raj Gavas in Mumbai. This company catered the supplies of specialty chemicals mainly for the Coatings, Paints, Emulsions and Leather industries. Our major clients are Asian paints, Nippon paints etc. We deal directly for captive sales. Our current domestic business is worth 20 Cr INR. We have our head office in Thane and warehouse in Bhiwandi.

Office address:Tusker Exports HouseA-12, Road No. 17, Wagle Industrial Estate,Thane (West), Pin: 400601, Maharashtra, IndiaPhone: 91-22-23445555Fax: 91-22-23453434Website: www.tuskerexports.com

Warehousing facility: Clarity Ware Housing FacilitiesPlot No. 12, Sonale, Bhadwad Gaon, Bhiwandi, Thane 421302, Maharashtra

2.2 Product services offered and their unique advantages:Tusker Trading Company offers variety of product range in the specialty chemicals with an excellent technical inputs and after sales support. We have application and QC lab for specific testing parameters required by the customers. We also provide test reports if required from the accredited labs like SGS, Texan Labs etc. We have technical support personnel with high technical competence who have been hired from the reputed institutions like IIT, UICT and UDC etc. We offer products which have been manufactured under GMP from companies with various compliances required under ISO certification and Oekotex certification.

2.3 Domestic Market Experience: As a startup firm, we do not have any prior experience in any domestic market. But we have personnel who have worked in domestic market for more than 5-8 years.

2.4 Foreign Market Experience:Although our company has no prior experience in export business, it’s important to venture into this market as domestic market is getting stagnated due to high competition and reduced margins.

2.5 Production facilities:

As a Chemical trading company, we have exclusive tie ups with toll manufacturers of high repute which comply to high manufacturing standards and comply to various quality and/or environmental certifications.

2.6 Personnel- International experience and expertise: Our company has hired 2 technical experts who have their basic degrees in Chemical technology and with the post graduate qualifications MMS, in Marketing. One of these persons have been part of the exports business in his earlier experience.

3.0 Market Research

A) Target Countries:

Primary : Malaysia

Secondary : Indonesia

Tertiary : Singapore

B) Market Conditions in Target Countries:

Country : Malaysia

By Application Segment :

1.6

0.8

2.8

1.6

1.2

Volume (8 K MT) Pulp and paper

water treatment

Paints and Coatings

Food and beverages

Other

By Sales:

700

350

1225

700

525

Sales 3500 Mio INRPulp and paper

water treatment

Paints and Coatings

Food and beverages

Other

By Product Segment:

44802080

1040400

Volume

oil based defoamer

water based defoamer

Silicone based defoamer

other

By Sales Product Segment wise :

1225

1015

840

420

Saleswater based defoamer

Oil based defoamer

Silicone based de-foamer

other

2. Competitions:

Top Players:

Elementis

Evonik Industries

Air Products and Chemicals

BASF SE

Wacker Chemie

Others:

Clariant

Ashland

Dow Corning corp.

21%

28%17%

13%

9%12%

Market share (% Value )

ElemetisEvonik IndAir Products and ChemicalsWacker chemieOthersBASF SE

3. Strengths and weakness of the country – barriers to entry:

It’s a non –hazardous chemical so there is no entry barrier.

Strength:

a) The CECA is the addition to the existing India ASEAN agreement on Trade in goods.

b) Malaysia is a member of the ASEAN Free Trade Area (AFTA), which aims to reduce trade barriers among the member countries over a 15-year period.

4.0 Marketing Decisions

A) Direct Exporting :Products will be sold directly to the end consumer in Malaysia against Advance Payment by raising of a purchase order.

Documentations:

• Invoice

• Packing list

• Delivery letter

• Leaflet, catalogue or other related documents

• Insurance certificate, if insured

• Bill of lading / airway bill

• Letter of credit (if used)

• Permit, licenses/ certificates

• Proof of fare payment

• A declaration form (Customs Form No. 1) that indicates the number, description of packages/ crates, value, weight, quantity and type of goods and country of origin

• Completed Custom forms should be submitted to Customs offices at the place where the goods are imported or exported.

• All duties/ custom taxes imposed on imported goods will need to be paid in advance before the goods can be released. Taxes to be paid include import tax and sales tax.

B ) Pricing Strategy :

Product name Packing size

FCL USD/KG

LCL USD/KG

MOQ USD/KG

Stratafoam OB 2755 200KG 7.8 8.3 8.8

Startafoam OB 0253 200KG 2.3 2.8 3.3

Stratafoam WB 1865 200 KG 1.7 2.2 2.7

Stratafoam WB 1904 200 KG 2.1 2.6 3.1

Stratafoam SB 3850 200 7.5 8.0 8.5

C ) Promotion strategy

• Chemical Industry Magazines like Paint India, Chemical Weekly etc.

• International Trade fair Like China COAT, PAINT INDIA etc

• Google related ads (Ad word)

D) Product Strategy

• Oil based Defoamer

• Stratfoam OB 2905

• Strata foam OB 1650

• Stratafoam OB 0705

• Stratafoam OB 2755

• Startafoam OB 0253

• Water based defoamer

• Stratafoam WB 1865

• Stratafoam WB 1904

• Stratafoam WB 4900

• Silicone Based defoamer

• Stratafoam SB 3850

• Stratafoam SB 1652

Oil based Water Based Silicone Based

Premium OB 2905 WB 4900 SB 3850

Medium OB 0705 WB 1904

WB 1865

SB 1652

Economical 0253 WB 1865 NA

5.0 Legal Decisions: A. Agent/Distriutor agreementB. Patent,Trademark,copyright protectionC. Export/Import regulationD. ISO 9000E. Dispute Resolution

Under the Chapter of Dispute Settlement Mechanism, the Parties shall resolve the disputes, if any, through consultations and negotiations, failing which, they may resort to an arbitral tribunal, consisting of three members. Each Party to the dispute shall appoint a member and the third member, who would be the Chair of the panel, shall be appointed by mutual agreement. The CECA provides for (i) reviewing the implementation and operation of the Agreement;(ii) consider any matters relating to the implementation of the Agreement; (iii) supervise and coordinate the work of all Sub-

Committees established under this Agreement; and (iv) adopt any decisions and recommendations of the Sub-Committees.

6.0 Manufacturing and operations: 6.1 Location of Production facility for exports

As mentioned earlier in this report, we have an exclusive manufacturing tie up with one of the toll manufacturer based out of Vapi, Gujrat.

6.2 Capacity of existing facilities: The existing plant has a capacity of 1tonn of product per month.

6.3 Plans for Expansion: The production facility will be expanded further with the increase in demand from the foreign markets.

6.4 Product modifications necessary to adapt to local environment: The products will be exported to the region with very high temperature and highly dry weather. In these conditions the product will be accordingly modified to adapt to the weather. The processes will be optimized to make this change.

7.0 Personnel strategies: 7.1 Personnel needed to manage exports:

Exports manager:

Export managers serve as intermediaries between foreign buyers and domestic sellers. Unlike export traders, who buy the products before selling directly to foreign buyers, export managers find buyers internationally for domestic product manufacturers. A

college graduate is the minimum educational requirement for this position, with relevant work experience.

Experience and expertise: As middlemen, export manager will plan and coordinate the international shipment of goods. During the course of the day, he will negotiate with a variety of people, such as shippers, agents and vendors, and are expected to have excellent customer service skills in dealing with customers. He will often be responsible for personnel management, which often includes the hiring, training and supervision of staff.

In his accounting function, export manager may keep track of invoices and prepare reports to expedite the billing process. He may also have to ensure that shipments are in compliance with the laws and regulations governing the export industry.

7.2 Training strategy: The personnel will be trained on various aspects of exporting including the material/product knowhow along with the details of the country’s regulations for exporting the specific items. A periodic and regular refresher training will act as booster for the personnel. This includes in house training

7.3 Hiring needs in short term and long term

For short term, the company shall hire a trainee for managing the documentation

Organogram:

8.0 Financial Decisions

8.1 Pro Forma financial statements and projected cash flows assuming exports activity

8.2 Identification of Key Assumptions

8.3 Current sources of funding private and bank funding

8.4 Financial needs and future sources of funding

8.5 Tax consequences of Export Activity

8.6 Potential Risk and sources of protection

Admin/Finance

Quality Control/Manager

Trainee

Bill Desk Executive

Marketing/Business Development

Purchase Manager Asst. Manager Technical

Overseas Marketing Manager

9.0 Implementation schedule