Executive Summary
AIREX1 is an enterprise which brings to the market the core business of industrial residues management in the form of a business to business approach. AIREXwill pursue a distinctive strategy in this market by providing a TOTAL SOLUTION®2 for our clients so that, from start to finish, they will no longer have to manage their industrial residues. The TOTAL SOLUTI0N® is the innovative approach of our venture. From scraps to toxic residues, we will always follow controlling agency standards and we will always act in accordance with ISO 14000 standards, a certification we will strive to attain by the end of the second year. In addition, it has become apparent that the market is anxiously looking for, but has not yet found, a company they can really trust. This is a major concern for our clients and prospects as the responsibility for the final destination of the residue remains with the waste generator and cannot be transferred to the waste transporter or processor. The five founders of the enterprise have acquired personal expertise in their professional careers ranging from industrial and project management to information technology. This experience gives management an acute insight into the industrial environment which is required for the success of the new enterprise. AIREX will require an initial capital investment of US$300,000 invested by the founders. It is important to mention that all the expenses and investments in the first year of operation will be absorbed by the shareholders' capital and by positive cash flow. In addition, AIREX will pay dividends of 20% of the net income (after taxes) every year, starting in the second year. Management's goal is to have 10 clients by the end of the first year of operations. The client base will increase to 20, 30, 45 and 80 clients in the subsequent years. Consulting revenues will start in the second year and will represent approximately 11% of the total sales by the fifth year. A summary of the main financial results for the first 5 years of operations is given in the following table:
Year 1 Net Income* [US$] -40,313 Net Cash Balance [US$] Operating Profit Margin 38,432 -6.2% Year 2 219,016 45,617 17.4% 51.3% Year 3 276,290 234,836 14.6% 41.9% Year 4 472,900 16.6% 43.9% Year 5 979,358 19.3% 49.9%
Airex
Total Sales [US$] 649,380 2,424,600 3,646,900 5,470,350 9,758,400 600,445 1,204,461
ROE -15.5%
*=Net Income after dividends In support of the numbers above, interviews with large multinational companies have indicated the acceptance of the enterprise. Endorsement letters with their opinions can be found in the Annex 1.
1 AIREX = Advanced Industrial Residues Experts. 2 TOTAL SOLUTION® registered trademark.