drywall feasibility study 1

5/20/2018 Drywall Feasibility Study 1

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Date: 20 08 08

Gypsum Board (Drywall) ProductionFinancial Feasibility Study

Prepared by:

Ahmad TubeilehCorporate Finance SpecialistMobile: 00962 79 6899911


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Disclaimer

The information presented in this study has been obtained from related parties whichbelieved to be reliable. It makes no guarantee, representation or warranty as to its accuracyor completeness and accepts no responsibility or liability in respect thereof or for anyreliance placed by any person on such information.


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Index

Assumptions

Market Analysis

Capital Expenditures

Project Financing

Depreciation

Production & Revenues

Bill of Materials (BOM)

Manufacturing Expenses

General & Administrative Expenses

Employees

Profit & Loss Statement

Balance Sheet Statement

Cash Flow Statement

Cost of Capital

Financial Summary

Financial Ratios

Sensitivity Analysis

Scenarios Analysis

Break-Even Analysis


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Assum tions Index

1) All the values are presented in Jordanian Dinars (JOD)

2) All Inputs are in BLUE font.

3) Market Analysis Assumptions: Current Consumption (Tons) = 17,000, forecasted growth rates (2008 - 2010) = 15.0% and for the remaining years is 8.0%

4) The construction & preparation stage for the factory is assumed to be in Year 2008

5) Project initial investment = 3.98 Million JOD

6) The project will be financed through a Debt to Equity Ratio of (0/100)

7) Loan Information: Interest Rate = 8%, Debt Term = 5 yrs

8) The applied depreciation rates are according to the Jordanian Accounting Laws

9) The production capicity for the factory is 30,137 (Tons)

10) Two range of products were considered with different specifications (Product (1): 2.80m*1.20m*0.009m ,Product (2): 2.80m*1.20m*0.012m)

11) The production will be segmented 20%/80%, while the selling prices are assumed to be 5.25 JOD and 6.00 JOD for product 1 & 2 respectively.

12) All the production quantities is assumed to be sold

13) The production efficiency varies over the projection period to equal the targeted sold quantities

14) Selling and Distribution Expenses are assumed 0.4% as a percentage of Revenues.

15) The Financial Model disregard the export sales

16) Income Tax Rate: 15.0%

17) Woking Capital Assumptions: Accounts Receivable (30 Days), Raw Materials Inventory (30 Days) and Accounts Payable (45 Days)

18) Cost of Equity: calculated by using the CAPM model; assuming the Risk Free Rate (10Yrs US T.Bond) = 3.8%, Equity Risk Premium = 5.0% and the Country Risk Premium for Jo

19) Terminal growth rate is assumed @ 3.0%

20) Financial Summary: two methods are used to calculate the capital budgeting indicators ==> Un-levered Free Cash Flow and Free Cash Flow to Equity

21) Terminal Value is calculated by using the Gordon Model


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Market Analysis IndexAll Values in JOD IRR 28.90%

All Inputs in BLUE Font NPV 4,469,724

Avg Selling Prices for GB 5.625 JOD/GB

Estimated Current Market Consumption (Tons) 17,000 Weight KG/Sqm 10.05Selling Price (JOD)/ Ton 166.65

==> 1 GB Sqm 3.36 sqm 5.63 JODEstimated Growth Rates: 1.00 sqm 1.67 JOD

2008 15.0% 10.0 KG 1.67 JOD2011 8.0% 1,000 KG 166.65 JOD2014 5.0%

2008 2009 2010 2011 2012 2013 2014 2015

MKT Consumption (Tons) 19,550 22,483 25,855 27,923 30,157 32,570 34,198 35,908MKT Value (JOD) 3,257,995 3,746,694 4,308,698 4,653,394 5,025,665 5,427,719 5,699,105 5,984,060

New Factory Assumptions:First Operating Year 2009

2009 2010 2011 2012 2013 2014 2015

Estimated Market Share 35% 60% 75% 75% 75% 75% 75%

Estimated Sales (Tons) 7,869 15,513 20,942 22,618 24,427 25,649 26,931Estimated Sales (JOD) 1,311,343 2,585,219 3,490,045 3,769,249 4,070,789 4,274,328 4,488,045

Valuation Window


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75%2.8 * 1.2 * 0.009 7.00 5.25

2.8 * 1.2 * 0.012 8.00 6.00

2.98 8.903.36 10.05


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Capital Expenditures IndexAll Values in JOD IRR 28.90%


First: Capital Expenditures (Summary) JOD

Machines & Equipment 757,000Land 1,300,000Building 1,269,300Vehicles 90,000Office Equipment & Furniture 140,000Working Capital 172,841Contingencies 7.00% 248,941

Total Capital Expenditures 3,978,082

Second: Capital Expenditures (Details)

1) LandLand Area (Sqm) 20,000Land Cost (JOD/Sqm) 65

Total Land Cost 1,300,000

2) Building Unit Area JOD/Unit Total Cost

Hanger M 10,000 98 980,000

Offices M 300 300 90,000

Asphalt M 6,000 5 30,000

Concrete M 10,000 15 150,000

Hedge M 600 3 1,800

Gates # 5 500 2,500

Water, Electricity & Other Installations - - 15,000 15,000

Total Building Cost 1,269,300

3) Machines & EquipmentEquipment & Machines 500,000Supportive Equipment 207,000Pre-Operating Expenses 50,000

Total Machines & Equipment Cost 757,000

4) VehiclesTotal Vehicles Cost 90,000

Valuation Window


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5) Office Equipments & FurnitureFurniture 50,000Computer & Printers 50,000Phone System 5,000Conditions 10,000Miscellaneous 25,000

Total Office Equipments & Furniture 140,000

Third: Additional Capital ExpendituresDescription: 2009 2010 2011 2012 2013 2014 2015

Machines & Equipment 0 0 0 0 0 0 0Vehicles 0 0 30,000 0 30,000 0 0Office Equipment & Furniture 0 2,000 2,000 2,000 2,000 2,000 2,000

Total Additional CAPEX 0 2,000 32,000 2,000 32,000 2,000 2,000


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Project Financing IndexAll Values in JOD IRR 28.90%


Equity Financing 100% 3,978,082Debt Financing 0% 0Total 100% 3,978,082

Debt Schedule

Debt Amount 0Debt Terms (Yrs) 5.00Interest Rate 8.00%

2008 2009 2010 2011 2012 2013 2014 2015

Beg, Balance 0 0 0 0 0 0 0 0Less: Repayment 0 0 0 0 0 0 0 0End, Balance 0 0 0 0 0 0 0 0

Interest Expense 0 0 0 0 0 0 0 0

Bank Overdraft

Net Income 0 34,735 507,540 809,677 873,380 936,709 952,810 971,819Add: Depreciation 0 173,173 173,398 177,073 178,498 182,173 183,598 172,398Less: Additions to Working Capital 172,841 19,994 106,105 60,984 28,876 26,152 21,894 23,131Less: Capital Expenditures 3,805,241 0 2,000 32,000 2,000 32,000 2,000 2,000Less: Loan Installments 0 0 0 0 0 0 0 0Add: Financing 3,978,082

Cash Surplus (Deficit) 0 187,915 572,833 893,766 1,021,003 1,060,730 1,112,514 1,119,086

Beg, Balance 0 0 0 0 0 0 0 0Add: Cash Deficit 0 0 0 0 0 0 0 0Less: Repayment 0 0 0 0 0 0 0 0End, Balance 0 0 0 0 0 0 0 0

Interest Expense 0 0 0 0 0 0 0 0

Total Interest Expense 0 0 0 0 0 0 0 0

Valuation Window


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Depreciation IndexAll Values in JODAll Inputs in BLUE Font

==> Before Operations

Description Amount Rate 2009 2010 2011 2012 2013 2014 2015 Total NBVMachines & Equipment 757,000 10% 75,700 75,700 75,700 75,700 75,700 75,700 75,700 529,900 227,100Building 1,269,300 3% 38,079 38,079 38,079 38,079 38,079 38,079 38,079 266,553 1,002,747Vehicles 90,000 15% 13,500 13,500 13,500 13,500 13,500 13,500 9,000 90,000 0Office Equipment & Furniture 140,000 15% 21,000 21,000 21,000 21,000 21,000 21,000 14,000 140,000 0Contingencies 248,941 10% 24,894 24,894 24,894 24,894 24,894 24,894 24,894 174,259 74,682

Total Depreciation 2,505,241 173,173 173,173 173,173 173,173 173,173 173,173 161,673 1,200,712 1,304,529

==> After Operations2009 2010 2011 2012 2013 2014 2015 Total NBV

2009 0 0 0 0 0 0 0 0 0 02010 0 0 0 0 0 0 0 0 02011 0 0 0 0 0 0 0 02012 0 0 0 0 0 0 02013 0 0 0 0 0 02014 0 0 0 0 02015 0 0 0 0

Total Depreciation 0 0 0 0 0 0 0 0 0

2009 2010 2011 2012 2013 2014 2015 Total NBV

2009 0 0 0 0 0 0 0 0 0 0

2010 0 0 0 0 0 0 0 0 02011 30,000 3,375 4,500 4,500 4,500 4,500 21,375 8,6252012 0 0 0 0 0 0 02013 30,000 3,375 4,500 4,500 12,375 17,6252014 0 0 0 0 02015 0 0 0 0

Total Depreciation 0 0 3,375 4,500 7,875 9,000 9,000 33,750 26,250

2009 2010 2011 2012 2013 2014 2015 Total NBV

2009 0 0 0 0 0 0 0 0 0 02010 2,000 225 300 300 300 300 300 1,725 275

2011 2,000 225 300 300 300 300 1,425 5752012 2,000 225 300 300 300 1,125 8752013 2,000 225 300 300 825 1,1752014 2,000 225 300 525 1,4752015 2,000 225 225 1,775

Total Depreciation 0 225 525 825 1,125 1,425 1,725 5,850 6,150

Machines & Equipment

Vehicles

Office Equipment & Furniture


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Production & Revenues IndexAll Values in JOD IRR 28.90%


Production Capacity: 3,000,000 Sq m==> in Tons 30,137

2009 2010 2011 2012 2013 2014 2015

Expected Sales from MKT Analysis Sheet (Tons) 7,869 15,513 20,942 22,618 24,427 25,649 26,931Waste 7.0% 551 1,086 1,466 1,583 1,710 1,795 1,885

Total Production 8,420 16,599 22,408 24,201 26,137 27,444 28,816

% of Capacity 27.9% 55.1% 74.4% 80.3% 86.7% 91.1% 95.6%No. of shifts 1.00 2.00 3.00 3.00 3.00 3.00 3.00

Range of Products:Product (1): 2.80m*1.20m*0.009m 20% 20% 20% 20% 20% 20% 20%Product (2): 2.80m*1.20m*0.012m 80% 80% 80% 80% 80% 80% 80%

==> in Quantity:Product (1): 2.80m*1.20m*0.009m 46,626 91,919 124,091 134,018 144,739 151,976 159,575Product (2): 2.80m*1.20m*0.012m 186,502 367,676 496,362 536,071 578,957 607,904 638,300

Selling Prices/GB:Product (1): 2.80m*1.20m*0.009m 5.25 5.25 5.25 5.25 5.25 5.25 5.25Product (2): 2.80m*1.20m*0.012m 6.00 6.00 6.00 6.00 6.00 6.00 6.00

Total Revenues 1,363,797 2,688,628 3,629,647 3,920,019 4,233,621 4,445,302 4,667,567 0%

0%

Production Equation: 2009 2010 2011 2012 2013 2014 2015

Production (KG)/Hr 4,186 4,186 4,186 4,186 4,186 4,186 4,186 Hrs/Day 24 24 24 24 24 24 24 Efficiency 27.9% 55.1% 74.4% 80.3% 86.7% 91.1% 95.6% Daily Production (KG) 28,066 55,329 74,695 80,670 87,124 91,480 96,054 Days/Year 300 300 300 300 300 300 300 Annual Production (KG) 8,419,696 16,598,830 22,408,420 24,201,094 26,137,181 27,444,040 28,816,242

Annual Production (Ton) 8,420 16,599 22,408 24,201 26,137 27,444 28,816 No. of Shifts Required 1.0 2.0 3.0 3.0 3.0 3.0 3.0

Valuation Window


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Bill Of Materials (BOM) IndexAll Values in JOD IRR 28.90%


BOM Summary:Description: UNIT Q JOD Q JOD Q JOD

GB Liner KG 385,734 3,086 760,447 6,084 1,026,603 8,213

Gypsum Plaster KG 7,133,541 428,012 14,063,267 843,796 18,985,411 1,139,125

Water KG 4,148,469 1,245 8,178,409 2,454 11,040,853 3,312

Modified Starch KG 45,218 2,713 89,144 5,349 120,345 7,221

Foaming Agent KG 10,699 642 21,093 1,266 28,475 1,709

White Latex KG 5,913 3,548 11,656 6,994 15,736 9,442

Electricity KW/Hr 320,976 128,390 632,780 253,112 854,254 341,701

Diesel Liter 230,877 133,332 455,158 262,854 614,463 354,852

700,967 1,381,907 1,865,575

Product (1): 2.80m*1.20m*0.009m

Raw Material Consumption Unit Cost Total Cost Q JOD Q JOD Q JOD

GB Liner 1.546 KG 0.0080 0.0124 77,147 617 152,089 1,217 205,321 1,643Gypsum Plaster 22.575 KG 0.0600 1.3545 1,126,230 67,574 2,220,282 133,217 2,997,381 179,843Water 13.127 KG 0.0003 0.0039 654,903 196 1,291,094 387 1,742,977 523Modified Starch 0.143 KG 0.0600 0.0086 7,152 429 14,099 846 19,033 1,142Foaming Agent 0.034 KG 0.0600 0.0020 1,689 101 3,330 200 4,496 270White Latex 0.024 KG 0.6000 0.0142 1,183 710 2,331 1,399 3,147 1,888Electricity 1.016 KW/Hr 0.4000 0.4063 50,680 20,272 99,913 39,965 134,882 53,953Diesel 0.880 Liter 0.5775 0.5084 43,923 25,366 86,591 50,006 116,898 67,509

Total RM Cost 2.3104 115,265 227,237 306,770

Product (2): 2.80m*1.20m*0.012m

Raw Material Consumption Unit Cost Total Cost Q JOD Q JOD Q JOD

GB Liner 1.546 KG 0.0080 0.0124 308,587 2,469 608,357 4,867 821,282 6,570

Gypsum Plaster 30.103 KG 0.0600 1.8062 6,007,311 360,439 11,842,985 710,579 15,988,030 959,282Water 17.507 KG 0.0003 0.0053 3,493,566 1,048 6,887,315 2,066 9,297,876 2,789Modified Starch 0.191 KG 0.0600 0.0114 38,067 2,284 75,046 4,503 101,311 6,079Foaming Agent 0.045 KG 0.0600 0.0027 9,010 541 17,762 1,066 23,979 1,439White Latex 0.024 KG 0.6000 0.0142 4,730 2,838 9,325 5,595 12,589 7,553Electricity 1.354 KW/Hr 0.4000 0.5418 270,295 108,118 532,868 213,147 719,371 287,749Diesel 0.937 Liter 0.5775 0.5410 186,954 107,966 368,567 212,847 497,565 287,344

Total RM Cost 2.9350 585,702 1,154,670 1,558,805

2009 2010 2011

2009 2010 2011

Valuation Window

2009 2010 2011


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Bill Of Materials (BOM)All Values in JOD IRR 28.90%


BOM Summary:Description: UNIT

GB Liner KG

Gypsum Plaster KG

Water KG

Modified Starch KG

Foaming Agent KG

White Latex KG

Electricity KW/Hr

Diesel Liter

Product (1): 2.80m*1.20m*0.009m

Raw Material Consumption Unit Cost Total Cost

GB Liner 1.546 KG 0.0080 0.0124Gypsum Plaster 22.575 KG 0.0600 1.3545Water 13.127 KG 0.0003 0.0039Modified Starch 0.143 KG 0.0600 0.0086

Foaming Agent 0.034 KG 0.0600 0.0020White Latex 0.024 KG 0.6000 0.0142Electricity 1.016 KW/Hr 0.4000 0.4063Diesel 0.880 Liter 0.5775 0.5084

Total RM Cost 2.3104

Product (2): 2.80m*1.20m*0.012m

Raw Material Consumption Unit Cost Total Cost

GB Liner 1.546 KG 0.0080 0.0124

Gypsum Plaster 30.103 KG 0.0600 1.8062Water 17.507 KG 0.0003 0.0053Modified Starch 0.191 KG 0.0600 0.0114Foaming Agent 0.045 KG 0.0600 0.0027White Latex 0.024 KG 0.6000 0.0142Electricity 1.354 KW/Hr 0.4000 0.5418Diesel 0.937 Liter 0.5775 0.5410

Total RM Cost 2.9350

Valuation Window

Q JOD Q JOD Q JOD

1,108,731 8,870 1,197,430 9,579 1,257,301 10,058 1

20,504,244 1,230,255 22,144,583 1,328,675 23,251,813 1,395,109 24

11,924,121 3,577 12,878,051 3,863 13,521,953 4,057 14

129,972 7,798 140,370 8,422 147,389 8,843

30,753 1,845 33,213 1,993 34,874 2,092

16,995 10,197 18,355 11,013 19,273 11,564

922,594 369,038 996,401 398,561 1,046,221 418,489 1

663,620 383,241 716,710 413,900 752,545 434,595

2,014,821 2,176,006 2,284,806

Q JOD Q JOD Q JOD

221,746 1,774 239,486 1,916 251,460 2,0123,237,171 194,230 3,496,145 209,769 3,670,952 220,257 31,882,415 565 2,033,008 610 2,134,659 640 2

20,556 1,233 22,201 1,332 23,311 1,399

4,856 291 5,244 315 5,506 3303,399 2,039 3,671 2,203 3,855 2,313145,673 58,269 157,327 62,931 165,193 66,077126,250 72,909 136,350 78,742 143,167 82,679

331,311 357,816 375,707

Q JOD Q JOD Q JOD

886,985 7,096 957,944 7,664 1,005,841 8,047 1

17,267,073 1,036,024 18,648,438 1,118,906 19,580,860 1,174,852 2010,041,706 3,013 10,845,042 3,254 11,387,294 3,416 11

109,416 6,565 118,170 7,090 124,078 7,44525,897 1,554 27,969 1,678 29,368 1,76213,596 8,158 14,684 8,810 15,418 9,251

776,921 310,768 839,075 335,630 881,029 352,411537,370 310,331 580,360 335,158 609,378 351,916

1,683,509 1,818,190 1,909,099

2012 2013 2014

2012 2013 2014

2013 20142012


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Manufacturing Expenses IndexAll Values in JOD IRR 28.90%


Annual Increase 10%

Increase @ 2 shifts 15%Increase @ 3 shifts 25%Note: Please check the affected items by the number of shifts/day

2009 2010 2011 2012 2013 2014 2015

Maintenance & repair 2.00% 10,582 14,814 19,047 23,279 29,628 38,093 50,791

Hospitality 1,500 1,650 1,815 1,997 2,196 2,416 2,657 FALSE

Cleaning material 6,000 6,900 8,625 10,781 13,477 16,846 21,057 TRUE

Transportation 0 0 0 0 0 0 0 FALSE

Fuel 9,000 10,350 12,938 16,172 20,215 25,269 31,586 TRUE

Clothing 2,000 2,200 2,420 2,662 2,928 3,221 3,543 FALSE

Car expenses 9,000 10,350 12,938 16,172 20,215 25,269 31,586 TRUE

Stationary 1,500 1,650 1,815 1,997 2,196 2,416 2,657 FALSE

Insurance policy 5,000 6,000 7,000 8,500 10,000 10,000 10,000

Bus rent expense 12,000 13,800 17,250 21,563 26,953 33,691 42,114 TRUE

Others 10,000 11,000 12,100 13,310 14,641 16,105 17,716 FALSE

Total Manufacturing Expenses 66,582 78,714 95,947 116,432 142,449 173,325 213,707

Valuation Window


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General & Administrative Expenses IndexAll Values in JOD IRR 28.90%


Annual Increase 10%

==> Description: 2009 2010 2011 2012 2013 2014 2015

Maintenance Expenses 1,945 2,723 3,500 4,278 5,445 7,001 9,335

Printing & Stationery Expenses 3,500 3,850 4,235 4,659 5,124 5,637 6,200

Postage,Tel. , & Fax Expenses 3,000 3,300 3,630 3,993 4,392 4,832 5,315

Electricity Expenses 5,000 5,500 6,050 6,655 7,321 8,053 8,858

Traveling Expenses 6,000 6,600 7,260 7,986 8,785 9,663 10,629

Cleaning Expenses 1,500 1,650 1,815 1,997 2,196 2,416 2,657

Bad Debts 0.30% 4,091 8,066 10,889 11,760 12,701 13,336 14,003

Transportation Expenses 1,500 1,650 1,815 1,997 2,196 2,416 2,657Legal & Professional Consultancy 2,000 2,200 2,420 2,662 2,928 3,221 3,543

Computer Expenses 2,400 2,640 2,904 3,194 3,514 3,865 4,252

Hospitality Expenses 1,200 1,320 1,452 1,597 1,757 1,933 2,126

Training Expenses 1,500 1,650 1,815 1,997 2,196 2,416 2,657

Audit Fees 1,500 1,500 1,500 1,500 1,500 1,500 1,500

Government Expenses 1,000 1,100 1,210 1,331 1,464 1,611 1,772

Miscellaneous 5,000 5,500 6,050 6,655 7,321 8,053 8,858

Total General & Administrative Expenses 41,136 49,248 56,545 62,260 68,840 75,950 84,362

Valuation Window


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Employees IndexAll Values in JOD IRR 28.90%


Annual Increase 8.0%

Benefits 25.0%

1) Direct Employees

Title No.

Monthly

Salary Benefits Total

Total

Annual

General Labor 10 220 55 275 33,000

2009 2010 2011 2012 2013 2014 2015

==> No of Shifts 1.00 2.00 3.00 3.00 3.00 3.00 3.00Annual Salary 33,000 35,640 38,491 41,570 44,896 48,488 52,367

Total Direct Labor Cost 33,000 71,280 115,474 124,711 134,688 145,463 157,101

2) Administrative Employees

Title No.

Monthly

Salary Benefits Total

Total

Annual

General Manger 1 3,000 750 3,750 45,000Production Manager 1 1,400 350 1,750 21,000Sales & Marketing Manager 1 1,200 300 1,500 18,000Financial Manager 1 1,300 325 1,625 19,500Maintenance Manager 1 1,200 300 1,500 18,000Accounting Manager 1 1,300 325 1,625 19,500

IT Manager 1 1,000 250 1,250 15,000Human Recourses Manager 1 950 238 1,188 14,250Quality Control Manager 1 1,000 250 1,250 15,000Quality Control & IT Engineer 2 800 200 1,000 24,000Export Sales Executives 1 1,000 250 1,250 15,000Local Sales Executives 2 650 163 813 19,500Public Relation Manager 1 500 125 625 7,500Accountants 2 400 100 500 12,000Administrators 2 350 88 438 10,500Secretary 2 250 63 313 7,500Driver 3 220 55 275 9,900

Janitor 3 150 38 188 6,750Guards 2 180 45 225 5,400

Total 29 303,300

2009 2010 2011 2012 2013 2014 2015

Administrative Employees 303,300 327,564 353,769 382,071 412,636 445,647 481,299

Valuation Window


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Profit & Loss Statement IndexAll Values in JOD IRR 28.90%


2008 2009 2010 2011 2012 2013 2014 2015

Total Revenues 0 1,363,797 2,688,628 3,629,647 3,920,019 4,233,621 4,445,302 4,667,567

Less:Raw Materials Used in Production 0 700,967 1,381,907 1,865,575 2,014,821 2,176,006 2,284,806 2,399,047Depreciation 0 152,173 152,173 155,548 156,673 160,048 161,173 156,673Manufacturing Expenses 0 66,582 78,714 95,947 116,432 142,449 173,325 213,707Employees Expenses 0 33,000 71,280 115,474 124,711 134,688 145,463 157,101

Cost of Goods Sold 0 952,722 1,684,074 2,232,543 2,412,637 2,613,192 2,764,768 2,926,528

Gross Profit 0 411,075 1,004,553 1,397,104 1,507,382 1,620,429 1,680,533 1,741,039% of Revenues 30.1% 37.4% 38.5% 38.5% 38.3% 37.8% 37.3%

Less:General & Administrative Expenses 0 41,136 49,248 56,545 62,260 68,840 75,950 84,362Selling & Distribution Expenses 0.35% 0 4,773 9,410 12,704 13,720 14,818 15,559 16,336Depreciation 0 21,000 21,225 21,525 21,825 22,125 22,425 15,725Employees Expenses 0 303,300 327,564 353,769 382,071 412,636 445,647 481,299

Total Overheads 0 370,209 407,448 444,543 479,876 518,419 559,581 597,722

Earnings Before Interest & Tax (EBIT) 0 40,865 597,106 952,561 1,027,506 1,102,010 1,120,953 1,143,317% of Revenues 3.0% 22.2% 26.2% 26.2% 26.0% 25.2% 24.5%

Less: Interest Expense 0 0 0 0 0 0 0 0Earnings Before Tax (EBT) 0 40,865 597,106 952,561 1,027,506 1,102,010 1,120,953 1,143,317

Less: Income Tax 15.0% 0 6,130 89,566 142,884 154,126 165,302 168,143 171,497

Net Income 0 34,735 507,540 809,677 873,380 936,709 952,810 971,819

% of Revenues 2.5% 18.9% 22.3% 22.3% 22.1% 21.4% 20.8%

Retained Earnings 0 34,735 542,275 1,351,952 2,225,333 3,162,041 4,114,851 5,086,670

Valuation Window


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Balance Sheet Statement IndexAll Values in JOD IRR 28.90%


Assets 2008 2009 2010 2011 2012 2013 2014 2015Current Assets:

Cash 0 187,915 760,748 1,654,514 2,675,517 3,736,246 4,848,760 5,967,847Accounts Receivable 0 112,093 220,983 298,327 322,193 347,969 365,367 383,636Inventory 172,841 165,785 245,613 287,933 311,049 330,981 348,676 367,399Other Current Assets 0 2,242 4,420 5,967 6,444 6,959 7,307 7,673

Total Current Assets 172,841 468,035 1,231,764 2,246,740 3,315,203 4,422,155 5,570,111 6,726,554

Non-Current Assets:Fixed Assets 3,805,241 3,805,241 3,807,241 3,839,241 3,841,241 3,873,241 3,875,241 3,877,241Less: Accum. Depreciation 0 173,173 346,571 523,644 702,142 884,316 1,067,914 1,240,312Fixed Assets (NBV) 3,805,241 3,632,068 3,460,670 3,315,597 3,139,099 2,988,926 2,807,327 2,636,929

Total Non-Current Assets 3,805,241 3,632,068 3,460,670 3,315,597 3,139,099 2,988,926 2,807,327 2,636,929

Total Assets 3,978,082 4,100,103 4,692,433 5,562,337 6,454,301 7,411,081 8,377,438 9,363,483

Liabilities & Owners EquityCurrent Liabilities:

Bank Overdraft 0 0 0 0 0 0 0 0Accounts Payable 0 86,421 170,372 230,002 248,403 268,275 281,688 295,773Other Current Liabilities 0 864 1,704 2,300 2,484 2,683 2,817 2,958Current Portion of LTD 0 0 0 0 0 0 0 0

Total Current Liabilities 0 87,285 172,076 232,302 250,887 270,957 284,505 298,731

Non-Current Liabilities:Long Term Debt 0 0 0 0 0 0 0 0Less: Current Portion of LTD 0 0 0 0 0 0 0 0Ending Balance 0 0 0 0 0 0 0 0

Owners Equity:Paid in Capital 3,978,082 3,978,082 3,978,082 3,978,082 3,978,082 3,978,082 3,978,082 3,978,082Retained Earnings 0 34,735 542,275 1,351,952 2,225,333 3,162,041 4,114,851 5,086,670

Total Owners Equity 3,978,082 4,012,818 4,520,358 5,330,034 6,203,415 7,140,123 8,092,933 9,064,752

Total Liabilities & Owners Equity 3,978,082 4,100,103 4,692,433 5,562,337 6,454,301 7,411,081 8,377,438 9,363,483Diff. 0 0 0 0 0 0 0 0

Valuation Window


19/31

Working Capital Calculation: Unit 365 2008 2009 2010 2011 2012 2013 2014 2015

Accounts Receivable Sales 30 0 112,093 220,983 298,327 322,193 347,969 365,367 383,636Raw Materials RM 30 172,841 113,581 153,335 165,602 178,850 187,792 197,182 207,041Finished Goods COGS 20 0 52,204 92,278 122,331 132,199 143,189 151,494 160,358Other Current Asset A/R 2.0% 0 2,242 4,420 5,967 6,444 6,959 7,307 7,673Accounts Payable RM 45 0 86,421 170,372 230,002 248,403 268,275 281,688 295,773

Other Current Liabilities A/P 1.0% 0 864 1,704 2,300 2,484 2,683 2,817 2,958Working Capital 172,841 192,835 298,940 359,924 388,800 414,952 436,845 459,976

Additions 172,841 19,994 106,105 60,984 28,876 26,152 21,894 23,131


20/31

Cash Flow Statement IndexAll Values in JOD

2008 2009 2010 2011 2012 2013 2014 2015

Net Income 0 34,735 507,540 809,677 873,380 936,709 952,810 971,819

Add: Depreciation 0 173,173 173,398 177,073 178,498 182,173 183,598 172,398

Changes in:Accounts Receivable 0 (112,093) (108,890) (77,344) (23,866) (25,775) (17,398) (18,268)Inventory (172,841) 7,056 (79,828) (42,320) (23,116) (19,932) (17,695) (18,723)Other Current Assets 0 (2,242) (2,178) (1,547) (477) (516) (348) (365)Accounts Payable 0 86,421 83,951 59,630 18,400 19,872 13,414 14,084Other Current Liabilities 0 864 840 596 184 199 134 141

Cash Flow from Operating Activities (172,841) 187,915 574,833 925,766 1,023,003 1,092,730 1,114,514 1,121,086

Capital Expenditures (3,805,241) 0 (2,000) (32,000) (2,000) (32,000) (2,000) (2,000)

Cash Flow from Investing Activities (3,805,241) 0 (2,000) (32,000) (2,000) (32,000) (2,000) (2,000)

Bank Overdraft 0 0 0 0 0 0 0 0Loan 0 0 0 0 0 0 0 0Paid in Capital 3,978,082 0 0 0 0 0 0 0

Cash Flow from Financing Activities 3,978,082 0 0 0 0 0 0 0

Net Cash Flow 0 187,915 572,833 893,766 1,021,003 1,060,730 1,112,514 1,119,086

Add: Beg, Cash 0 0 187,915 760,748 1,654,514 2,675,517 3,736,246 4,848,760End, Cash 0 187,915 760,748 1,654,514 2,675,517 3,736,246 4,848,760 5,967,847


21/31

Cost of Capital IndexAll Inputs in BLUE Font IRR 28.90%

NPV 4,469,724Weight of Equity 100%Weight of Debt 0%

1) Cost of Debt:Interest Rate 8.00%Tax Rate 15.00%

==> Cost of Debt 6.80%

2) Cost of Equity:US 10Yrs T.Bonds Rate 3.76%Un-Levered Beta 1.19==> Levered Beta 1.19Equity Risk Premium 5.00%

Country Risk Premium (Jordan) 3.18%==> Cost of Equity 12.89%

Weighted Average Cost of Capital (WACC) 12.89%

Terminal Growth Rate 3.00%

Valuation Window


22/31

Financial Summary IndexAll Values in JOD

Free Cash Flow to Firm 2008 2009 2010 2011 2012 2013 2014 2015EBITDA 0 214,038 770,504 1,129,634 1,206,005 1,284,183 1,304,551 1,315,715

Less: Taxes on EBIT 0 6,130 89,566 142,884 154,126 165,302 168,143 171,497Less: Additions to Working Capital 172,841 19,994 106,105 60,984 28,876 26,152 21,894 23,131Less: Capital Expenditures 3,805,241 0 2,000 32,000 2,000 32,000 2,000 2,000Add: Terminal Value 0 0 0 0 0 0 0 11,653,717

FCFF (3,978,082) 187,915 572,833 893,766 1,021,003 1,060,730 1,112,514 12,772,804

PV of FCFF (3,978,082) 166,457 449,480 621,222 628,624 578,509 537,467 5,466,048

Project NPV 4,469,724

Project IRR 28.90%

Discounted Payback Period (Yrs) 6.18

Free Cash Flow to Equity 2008 2009 2010 2011 2012 2013 2014 2015Net Cash Flow 0 187,915 572,833 893,766 1,021,003 1,060,730 1,112,514 1,119,086Less: Equity Investment 3,978,082 0 0 0 0 0 0 0Add: Terminal Value 0 0 0 0 0 0 0 17,621,564

FCFE (3,978,082) 187,915 572,833 893,766 1,021,003 1,060,730 1,112,514 18,740,650

PV of FCFE (3,978,082) 166,457 449,480 621,222 628,624 578,509 537,467 8,019,953

Equity NPV 7,023,629

Equity IRR 34.14%


23/31

Financial Ratios Index

UNIT 2009 2010 2011 2012 2013 2014 2015

1) Liquidity Ratios:Current Ratio Times 5.36 7.16 9.67 13.21 16.32 19.58 22.52

Working Capital (Excluding Cash) JOD 192,835 298,940 359,924 388,800 414,952 436,845 459,976WC/Sales % 14.1% 11.1% 9.9% 9.9% 9.8% 9.8% 9.9%

2) Activity Ratios:Accounts Receivable Turnover Times 12.17 12.17 12.17 12.17 12.17 12.17 12.17Days Sales Outstanding (DSO) Days 30 30 30 30 30 30 30Finished Goods Turnover Times 18.25 18.25 18.25 18.25 18.25 18.25 18.25Finished Goods Cycle Days 20 20 20 20 20 20 20Operating Cycle Days 50 50 50 50 50 50 50Accounts Payable Turnover Times 8.11 8.11 8.11 8.11 8.11 8.11 8.11Payables Payment Days 45 45 45 45 45 45 45

Cash Cycle Days 5 5 5 5 5 5 5Total Assets Turnover Times 0.33 0.57 0.65 0.61 0.57 0.53 0.50

3) Leverage Ratios:Debt to Assets % 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%Debt to Equity % 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

4) Profitability Ratios:Growth Rate in Sales % na 97% 35% 8% 8% 5% 5%Gross Profit Margin % 30.1% 37.4% 38.5% 38.5% 38.3% 37.8% 37.3%EBIT Margin % 3.0% 22.2% 26.2% 26.2% 26.0% 25.2% 24.5%

EBITDA Margin % 15.7% 28.7% 31.1% 30.8% 30.3% 29.3% 28.2%Net Income Margin % 2.5% 18.9% 22.3% 22.3% 22.1% 21.4% 20.8%Return on Assets (ROA) % 1.0% 12.7% 17.1% 15.9% 14.9% 13.4% 12.2%Return on Equity (ROE) % 0.9% 11.2% 15.2% 14.1% 13.1% 11.8% 10.7%


24/31

Sensitivity Analysis IndexAll Values in JOD

==> Performance Measure: Project NPV

Base CaseNegative NPV

* Market Consumption (Tons)4,469,724

10,000 (777,239)

11,000 7,958

12,000 575,180

13,000 1,361,76214,000 2,129,923

15,000 2,891,013

16,000 3,644,185

17,000 4,469,724

18,000 5,130,837

19,000 6,009,176

20,000 6,871,976

* Expected market growth rates

4,469,724 3% 6% 9% 12% 15% 18% 21% 24% 27% 30%

4% 157,642 715,867 1,540,529 2,324,639 3,209,820 4,223,051 5,288,484 6,221,603 7,450,895 8,714,836

5% 377,928 955,967 1,739,107 2,530,702 3,516,416 4,554,273 5,481,191 6,605,964 7,863,833 9,157,734

6% 602,202 1,156,347 2,004,902 2,819,054 3,828,565 4,891,494 5,897,592 7,039,609 8,284,249 9,608,653

7% 567,074 1,405,182 2,205,908 3,112,581 4,146,317 5,070,342 6,267,719 7,437,954 8,712,212 9,836,237

8% 799,437 1,595,956 2,481,290 3,411,332 4,469,724 5,419,725 6,681,693 7,881,616 9,181,826 10,303,419

9% 991,832 1,853,688 2,761,530 3,715,354 4,798,836 5,828,072 7,065,053 8,294,204 9,625,090 10,770,625

10% 1,232,431 2,115,929 3,046,673 4,024,694 4,969,280 6,189,839 7,455,120 8,714,009 9,844,679 11,254,366

11% 1,414,714 2,382,718 3,336,761 4,339,401 5,309,959 6,595,141 7,851,952 9,141,095 10,303,520 11,725,531

12% 1,663,697 2,584,536 3,631,839 4,659,520 5,709,297 6,969,513 8,289,027 9,344,100 10,762,036 12,226,127

13% 1,916,927 2,860,544 3,931,951 4,820,674 6,061,747 7,350,272 8,699,571 9,785,944 11,215,765 12,735,263

Current MKT

Consumption (Tons)

Growth Rates from 2008 - 2010

Growth Rates from

2011 - 2013


25/31

* Market Shares

4,469,724 10% 15% 20% 25% 30% 35% 40% 45% 50%

30% 3,715,243 3,794,234 3,873,224 3,952,214 4,031,204 4,104,764 4,171,341 4,212,888 4,279,46535% 3,786,165 3,865,155 3,944,145 4,023,135 4,102,126 4,175,686 4,242,263 4,283,810 4,350,386

40% 3,801,261 3,880,251 3,959,241 4,038,231 4,117,221 4,190,782 4,257,359 4,298,906 4,365,482

45% 3,870,996 3,949,986 4,028,977 4,107,967 4,186,957 4,260,517 4,327,094 4,368,641 4,435,218

50% 3,940,732 4,019,722 4,098,712 4,177,702 4,256,692 4,330,253 4,396,830 4,438,376 4,504,953

55% 4,010,467 4,089,457 4,168,447 4,247,438 4,326,428 4,399,988 4,466,565 4,508,112 4,574,689

60% 4,080,203 4,159,193 4,238,183 4,317,173 4,396,163 4,469,724 4,536,300 4,577,847 4,644,424

65% 4,149,938 4,228,928 4,307,918 4,386,909 4,465,899 4,539,459 4,606,036 4,647,583 4,714,160

70% 4,219,673 4,298,664 4,377,654 4,456,644 4,535,634 4,609,195 4,675,771 4,717,318 4,783,895

* Capital Expenditures4,469,724

5.0% 4,541,168

6.0% 4,505,446

7.0% 4,469,724

8.0% 4,434,002

9.0% 4,398,279

10.0% 4,362,557

11.0% 4,326,835

* Waste percentage4,469,724

5.0% 4,760,938

6.0% 4,615,331

7.0% 4,469,724

8.0% 4,324,117

9.0% 4,178,509

10.0% 4,032,902

11.0% 3,887,29512.0% 3,577,262

13.0% 3,431,655

14.0% 3,285,385

15.0% 3,138,907

16.0% 2,992,430

17.0% 2,845,952

18.0% 2,752,275

19 0% 2 605 797

Waste %

First Year MKT Share

Second Year MKT

Share

Contingency Rate


26/31

* Product Segmentation

4,469,724 20% 30% 40% 50% 60% 70% 80%

20% 4,269,467

30% 4,302,843

40% 4,336,219

50% 4,369,595

60% 4,402,971

70% 4,436,348

80% 4,469,724

* Selling Prices vs. RM Prices

4,469,724 -10% -5% 0% 5% 10%

-10% 3,063,048 4,547,013 6,027,720 7,508,426 8,989,132

-5% 2,279,393 3,768,015 5,248,722 6,729,428 8,210,134

0% 1,495,738 2,985,446 4,469,724 5,950,430 7,431,136

5% 712,083 2,201,791 3,690,726 5,171,432 6,652,138

10% (71,572) 1,418,136 2,907,844 4,392,434 5,873,140

* Selling & Distribution Expenses (% of Revenues)4,469,7240.32% 4,480,287

0.35% 4,469,724

0.40% 4,453,878

0.48% 4,429,581

0.65% 4,378,557

Product (1): 2.80m*1.20m*0.009m

Increase (Decrease) in Selling Prices

Increase (Decrease)

in RM Prices

Selling &

Distribution

Expenses (% of

Revenues)

Product (2):

2.80m*1.20m*0.012m


27/31

* Working Capital

4,469,724 20 30 40 50 60 70 80 90

30 4,593,783 4,469,724 4,345,664 4,221,605 4,097,545 3,973,486 3,849,426 3,725,36740 4,518,519 4,394,459 4,270,400 4,146,340 4,022,281 3,898,221 3,774,162 3,650,102

50 4,443,254 4,319,195 4,195,135 4,071,076 3,947,016 3,822,957 3,698,897 3,574,838

60 4,367,990 4,243,930 4,119,871 3,995,812 3,871,752 3,747,693 3,623,633 3,499,574

70 4,292,726 4,168,666 4,044,607 3,920,547 3,796,488 3,672,428 3,548,369 3,424,309

80 4,217,461 4,093,402 3,969,342 3,845,283 3,721,223 3,597,164 3,473,104 3,349,045

90 4,142,197 4,018,137 3,894,078 3,770,018 3,645,959 3,521,899 3,397,840 3,273,780

100 4,066,932 3,942,873 3,818,813 3,694,754 3,570,694 3,446,635 3,322,576 3,198,516

* Cost of Capital

4,469,724 10.89% 11.89% 12.89% 13.89% 14.89% 15.89%

1% 5,303,660 4,344,977 3,550,358 2,881,515 2,311,191 1,819,456

2% 5,988,052 4,874,390 3,967,833 3,216,041 2,582,919 2,042,770

3% 6,845,909 5,522,893 4,469,724 3,612,000 2,900,351 2,300,730

4% 7,952,747 6,335,764 5,084,514 4,088,023 3,276,076 2,602,078

5% 9,435,363 7,384,560 5,855,127 4,671,128 3,727,775 2,958,766

Accounts Receivable Days

Raw Materials Days

Cost of Capital

Growth Rate


28/31

Scenarios Analysis IndexAll Values in JODAll Inputs in BLUE Font

Note: Please click on the deactivate button after finishing from the analysis and before moving to other sheets

1

MKT

Consumption

(Tons)

MKT G.R 2008

- 2010

MKT G.R

2011 - 2013

1st Yr MKT

Share

2nd Yr Market

Share Waste

Product (1) %

of Total

Inc (Dec) in

S.P

Inc (Dec) in

RM Prices

Base Case 17,000 15.0% 8.0% 35.0% 60.0% 7.0% 20.0% 0.0% 0.0%

Best Case 17,000 15.0% 10.0% 50.0% 75.0% 5.0% 15.0% 5.0% 0.0%Worst Case 15,000 12.0% 7.0% 35.0% 60.0% 8.0% 20.0% -3.0% 3.0%

17,000 15.0% 8.0% 35.0% 60.0% 7.0% 20.0% 0.0% 0.0%

Performance Measures: 2009 2010 2011 2012 2013 2014 2015

Revenues 1,363,797 2,688,628 3,629,647 3,920,019 4,233,621 4,445,302 4,667,567 Net Profit 34,735 507,540 809,677 873,380 936,709 952,810 971,819 Project NPV 4,469,724 Project IRR 28.90%


29/31

WACC

12.89%

11.89%13.89%

12.89%


30/31

Break-Even Analysis IndexAll Values in JOD

2009 2010 2011 2012 2013 2014 2015Expected Production (Tons) 7,869 15,513 20,942 22,618 24,427 25,649 26,931

Total Revenues 1,363,797 2,688,628 3,629,647 3,920,019 4,233,621 4,445,302 4,667,567

Variable Costs: RM Purchases 700,967 1,381,907 1,865,575 2,014,821 2,176,006 2,284,806 2,399,047 Variable Manufacturing Expenses 36,000 41,400 51,750 64,688 80,859 101,074 126,343 Direct Employees Expenses 33,000 71,280 115,474 124,711 134,688 145,463 157,101 Selling & Distribution Expenses 4,773 9,410 12,704 13,720 14,818 15,559 16,336 Bad Debts 4,091 8,066 10,889 11,760 12,701 13,336 14,003 Overdraft Interest Expense 0 0 0 0 0 0 0 Income Tax 6,130 89,566 142,884 154,126 165,302 168,143 171,497

Total Variable Costs 784,962 1,601,629 2,199,275 2,383,826 2,584,374 2,728,382 2,884,327==> Total Fixed Costs 544,099 579,459 620,695 662,813 712,538 764,110 811,421

Break-Even Point (Tons) 7,451 8,977 10,737 11,609 12,616 13,600 14,607

Waste @ 7% 522 628 752 813 883 952 1,023

Total Production (Tons) 7,972 9,605 11,488 12,421 13,499 14,552 15,630% Of Capacity 26.5% 31.9% 38.1% 41.2% 44.8% 48.3% 51.9%

In Quantities:Product (1): 2.44m*1.22m*0.009m 44,149 53,192 63,619 68,785 74,754 80,587 86,554Product (2) : 2.44m*1.22m*0.012m 176,596 212,768 254,476 275,139 299,016 322,348 346,215

7,9729,605

11,48812,421

13,49914,552

15,630

-

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

2009 2010 2011 2012 2013 2014 2015

To

ns

Year

Break Even Analysis


31/31

Cost Analysis IndexAll Values in JOD

Product (1): 2.80m*1.20m*0.009m 2009 2010 2011 2012 2013 2014 2015

Selling Price for Each Gypsum Board 5.25 5.25 5.25 5.25 5.25 5.25 5.25

RM Costs & Overheads for Each Gypsum BoardDirect Raw Material 2.47 2.47 2.47 2.47 2.47 2.47 2.47Manufacturing Expenses 0.23 0.14 0.13 0.14 0.16 0.19 0.22Depreciation 0.61 0.31 0.23 0.22 0.21 0.20 0.18Employees 1.19 0.71 0.62 0.62 0.62 0.64 0.66General & Administrative Expenses 0.15 0.09 0.07 0.08 0.08 0.08 0.09Selling & Distribution Expenses 0.02 0.02 0.02 0.02 0.02 0.02 0.02Interest Expenses 0.00 0.00 0.00 0.00 0.00 0.00 0.00Income Taxes 0.02 0.16 0.19 0.19 0.19 0.18 0.18Total Expenses 4.69 3.90 3.74 3.74 3.75 3.78 3.81

Net Profit for Each Gypsum Board 0.56 1.35 1.51 1.51 1.50 1.47 1.44

% of Selling Prices 10.7% 25.7% 28.8% 28.8% 28.7% 28.0% 27.5%

Product (2): 2.80m*1.20m*0.012m 2009 2010 2011 2012 2013 2014 2015

Selling Price for Each Gypsum Board 6.00 6.00 6.00 6.00 6.00 6.00 6.00

RM Costs & Overheads for Each Gypsum Board

Direct Raw Material 3.14 3.14 3.14 3.14 3.14 3.14 3.14Manufacturing Expenses 0.30 0.18 0.16 0.18 0.21 0.24 0.28Depreciation 0.78 0.39 0.30 0.28 0.26 0.25 0.23Employees 1.51 0.91 0.79 0.79 0.79 0.81 0.84General & Administrative Expenses 0.18 0.11 0.10 0.10 0.10 0.10 0.11Selling & Distribution Expenses 0.02 0.02 0.02 0.02 0.02 0.02 0.02Interest Expenses 0.00 0.00 0.00 0.00 0.00 0.00 0.00Income Taxes 0.03 0.20 0.24 0.24 0.24 0.23 0.22Total Expenses 5.95 4.96 4.75 4.75 4.76 4.80 4.84

Net Profit for Each Gypsum Board 0.05 1.04 1.25 1.25 1.24 1.20 1.16

% of Selling Prices 0.8% 17.4% 20.9% 20.9% 20.7% 20.0% 19.4%

drywall feasibility study 1

Documents

risk free rate

selling prices

current consumption

equity risk premium

jo19 terminal growth

gb sqm

jod irr

production capicity