BUSINESS PLAN FOR DREDGING BUSINESS

BUSINESS PLAN FOR DREDGING BUSINESS

EXECUTIVE SUMMARY
1.1
1.2
1.3

1.5

ESTIMATED PROJECT SUM: Project will cost N300 Million

COST OF EXECUTION: The Project Can Be Executed With A
Total sum of N194 million spread to 12 months of operations

DURATION: Estimated Period For The Successful Completion Of The Project

Is 12 Months
1.7

1.8

YEAR OF INCORPORATION: 2011

LOCATION OF THE PROJECT: Umuolu Community, Igbo Etchie, Etchie Local

Govt, Rivers State
1.4

1.6

NAME OF THE COMPANY: HOTSPUR INTEGRATED SERVICES

START UP CAPITAL REQUIRED: N20 Million For America Spec.

N4 Million For Chinese Spec.

REPAYMENT- The Start-Up Capital Can Be Liquidated Within 6 Months of the

Project.
1.9 MARKET:
The study confirms the existence of a vast market for the stockpiling and
sales of sand in the area. The demand is high and is growing everyday.
Presently, one can say the market is grossly under supplied and is not
saturated and the constructions company are demanding for especially fresh
water sand for construction purposes, because the sand type are very good
for industrial and social development, to meet the consumption needs of our
rapidly growing population.

1.10 FINANCIAL PROJECTIONS

PROFIT BEFORE INTEREST Charges
NET PROJECT After Interest Charges
Net Cash Flow

( N000 )
106000
96200
92200

1.11 REMARKS:
The project has been carefully analyzed by team of experts and is found
technically, feasible, commercially viable and financially profitable. The
liquidity is very good as clearly seen in the projected cash flow. The
promoters will be able to services and make repayment of the start-up
capital within the six month of the project.
The project is therefore recommended for the needed financial assistance.

BODY REPORT
2.1

INTRODUCTION

Dredging is simply digging of mud, sand, gravel, pebbles, rocks and other
deposit from the bottom of the creek, lagoon sand waterways using a vessel
equipped for such purpose called a DREDGER, such dug up materials
depending on the type could be used for reclamation of swampy terrain,
building and construction works.
Sharps sand and gravel can be mine using a dredger to reclaim vast
expanse of swampy land and stock piled for sales. Sand dredging is vital for
human habit and survival, industrial and social development, and for
meeting the consumption need of our rapidly growing population.
2.2
_
_

OBJECTIVES

The objective of this report includes but not limited to the following:
Background information of the company, its operations, directors and staff.
A brief overview of the Nigerian economy as it affect dredging and sand
Stock pilling
Determination of the technical feasibility, economic and financial
profitability of engaging in this dredging and land filling contract.
Obtain a term loan facility of N4 million for execution of the business.
2.3
THE COMPANY
This report was commissioned by HOTSPUR INTEGRATED SERVICES, a private
limited liability company, incorporated within the provision of CAMA 1990.
The company was incorporated in the year 2011.
Some of the objective clause amongst others for which the company was
established as spelt out in the memorandum and article of association
include the following;
_
To carry on the business of dredging
_
To engage in sand stock piling for commercial purposes.
_
To carry on the business of maritime services.

Some incorporation the company has been involved in its line of business as
spelt out in the memorandum and article of association which include sand
dredging and reclamation of land in different parts of the country. The
companys personnel are presently carrying out dredging activities at Port
Harcourt and Warri Delta state.
2.4

TECHNICAL ANALYSIS

This project is concern with sharp sand mining, for construction in Etchie.
Sand shall be dredged from the river and stockpiled at the company bund
wall of the waterfront of the proposed project site using a Chinese
HYDRAULIC DREDGER.
A dredger is simply a barge or other vessel equipped for digging sand and
other materials from the bottom of waterways. There are generally two types
of dredger
_
The intermittent
_
The continuous
The former alternatively digs and lift the load while the latter digs
continuously, raising and transporting the materials at the same time.
The hydraulic dredger belongs to the continuous class. It cuts and sucks up
the materials from the bottom of the river by means of a ladder mounted
cutter head and suction pipe connected to a powerful suction pump that
transport it through a floating pipeline to shore, where land pipes finally
transport the materials to the dumpsite or stockpiling areas.
2.5

SITE STATUS

4 plots of waterfront situated at Umuolu, Igbo-Etchie a village in Etchie Local

Government area of Rivers state Nigeria. The land is a private property
owned by the community and the community head and the chiefs had
consent to the use of the waterfront.
2.6

SAND SEARCH REPORT

The need for proper hydrological survey sand search report for this project
cannot be over-emphasized. This is because figures obtained from guess
work or unreliable sources rather than proven scientific investigations will
lead to losses of the investors. To avoid this pitfall, the services of value
investigation, sand search experts were contacted to undertake the search.
Result of the sand search conducted at the proposed river reveals that the
quantity of sharp sand, available at the project site is more than adequate
for successful completion of the project and the quality is also certified good.
Thus, it makes business sense to venture into this project.

2.7 THE MARKET

The market for stockpiling for commercial purpose is high and very lucrative.
This is especially in high populated and fast growing state like Rivers state,
where massive housing estates and good road networks requiring land and
sharp sand, dots every nook and cranny. The consequence is high demand
and subsequent high price, since limited numbers of dredging companies
currently operating in the country are;
GM and Fu Ross
C. B. Dredging
Westminster dredging company
Shoreline Maritime
Japaul Oil & Maritime Services Ltd.
These are the major providers of dredging services in the country. Although,
the major providers of dredging activities of these companies are targeted
for commercial purposes, they are not geared purpose; they are geared
towards stockpiling for sale. Only very few sand suppliers use manual
method to scoop sand from the creek. The result is that only a small
percentage of demand for sharp sand is met while large abound for the
future entrants.
ECONOMIC BENEFITS THE PROJECT
The following are the benefits associated with this project;
Employment opportunity; About 21 persons will be directly employed by
the project. More jobs shall be created through is spillover effect on the
neighborhood
Income potentials; the project shall produce income for the government by
way of tax e.t.c. the host community shall also benefit from the project
through payment of royalties
The financiers shall also benefit from the project as they receive interest
and prompt repayment of the amount invested.
Availability of reclaimed land and high quality sharp sand; society will gain
from available land; also the construction industry will benefit immensely
from this project that will result in a new source of quality sharp sand.

EXECUTION COST
3.1
EXECUTION COST
Execution of the sand dredging and stockpiling of 300,000 m3 for
commercial purpose will require investment in the followings:
- Advance deposit payment for the hire Dredger
- Payment for pay loader
- Royalties for the host community
- Working capital

The total sum required (START-UP CAPITAL) to meet the above obligations
using Chinese spec; 8 by 8 for the project is estimated at N4 Million.
The total cost of execution is N194 Million
3.2

FINANCING PLAN

( N000 )

Promoters contribution
Investor/Equity partner

400
4,000

Promoters contribution is 10% of the start-up capital

3.3

REPAYMENT PLAN
Amount of the start-up capital

( N000 )
4,000

*Monthly repayment/reward @ 30%

for 12 months period will be N800,000 x 12 = 14,400,000
other charges @ 5% Flat
Total charges

200,000
14,600

3.4
REVENUES
Revenues for payments of the accrued interest and liquidation of the start-up
capital is expected from the turnover received from the sum of N300 million.
3.5

PROJECT OPERATION PROFIT AND LOSS ACCOUNT

Turnover (Total project sum)

300000

Cost of execution

194000

Gross profit

106000

Repayment on start-up capital

Net profit
3.6

( N000 )

PROJECT OPERATIONS CASHFLOW

14600
91400
( N000 )

Periods

0 (month)

12 (months)

INFLOWS
Start-up capital

4000

Net profit

91400

OUTFLOWS
Investment Cost

4000

Investment payment
Net cash flow
Corporation Tax payable @30%
3.6

4000
87400
26220
61180

SUMMARY
From the projected profit & loss accounts and the cash flow statement, the
project is considered financially profitable and economically viable. The
financial profitability is confirmed by the positive Net cash flow at the end of
the 12 months period after servicing and repayment of the start-up capital.
The project is therefore considered viable and recommended for financial
assistance
CONTACTS
FOR CONCTACTS AND INVESTMENT ON THE PROJECT AS PARTNERS, PLEASE
CONTACT THE PRINCIPAL PARTNER AS
NAME: AMOKO ALEXANDER
ADDRESS: 11 ADENIYI STREET, LEO AKURE ONDO STATE.
PHONE NO: +2348136284518