Organization of business on manufacturing carpets

1. Organization of business on manufacturing carpets

Esenkul Karashash

2. Business plan

Executive summary
Marketing research
Location
Organization, management and staff
Financial analysis
Opportunities to enter the world market
Socio-economic importance of the business

3. Executive summary

Create comfort technology become more widespread. Those interior
elements that were once considered luxuries in modern conditions of developed
technologies become available to a wide range of consumers. The last two
decades were a time of mass distribution of carpets and floor coverings. The
apartments and office facilities - creating comfort and functional amenities; wool
and polypropylene carpets can make a significant contribution to the formation of
high-grade living space. Rugs - nice and warm; they bring to our lives that is able to
do every day back home pleasant - homeliness. Heat and sound insulation, noise
absorption, as well as vibrocomfort - these are the basic properties of the carpets.
In this case, there are varieties of carpets, each designed for a specific intended
use (lounge, bedroom, home, kids room, hotel, office and so on).
The concept of the project provides for the organization of the enterprise on
the production of textile coverings, including carpets, rugs and mats, floor
coverings. According to the project they will be considered the following issues as
is it available to open the business on this industry, whether it is profitable, and
what economic and social impact it has.

4. Carpet manufacturing company “Tomiris”

The company has the legal form of a limited liability company and applies
generally established tax regime for small businesses.
Mission: Creating a better future: for our customers, for our people,
for our company and for our communities.
Vision: To be the top performing and most admired carpet
production company in Kazakhstan
Strategy
Competitively priced quality carpets
Realize the potential of our people
Meet our customer requirements
Maximize the benefits of our company
Deliver structural cost reductions

5.

6. Feasibility analysis

• Industry and market analysis
• Product and services analysis
• Financial analysis

7. Industry and market analysis

Rivalry among existing competitors is high within the industry our company operates in with
major competitors like Almaty-kilem, Aigul line, Oner and distributers.
Carpets customers possess average amount of bargaining power because there is not so high
level of switching cost of customers. People can consume other product instead of carpet,
but if we think deeper we recognized that every family or house have at least one carpet with
high quality.
The threat of substitute products and services for our production is substantial. Specifically,
substitutes for our company include carpets and pugs from other companies which also
produce these products. People also can consume synthetic carpets, etc. But in general
people cannot substitute carpet with another product, because depreciation of carpets are
lower that cheap substantial products.
Our suppliers have middle bargaining power due to the fact that the demand for carpet is
high in country level and carpets can be produced not only in certain geographical areas.
Moreover, in most areas of Kazakhstan people have ranches, which are the main resources
for carpet. But if we want to reduce our costs of goods, it is relevant to produce goods near
the material sources.
However, the threat of new entrants to the industry to compete with our future production is
not so high; because the market is highly saturated and substantial amount of financial
resources associated with buildings and properties, and resources are abound in order to
enter into the industry.

8. Product and service analysis

Knowledge of manufacturers of carpets (citizens of Kazakhstan)
Other marks
SP Moldabella
Atlantic
Gay Larosh
Chinese
Nobilis
Erdenet carpet
Erkaplan carpet
Rodjer vanden berg
Osta carpet
Premium hally
Solomon carpet
Mashad carpet
Floar carpet
Belka
Kartal carpets
"Bresta carpets"
Afganish
Egyptian
Turkmenish
Imperial
Kazakhstani
Indian
Arabian
Turkish
12%
1%
1%
1%
1%
2%
7%
7%
7%
7%
8%
8%
9%
12%
12%
12%
13%
13%
22%
25%
26%
34%
35%
35%
51%
0%
10%
20%
30%
40%
50%
60%

9. Decision criterion buying carpets

I buy the same marks because I believe them
40%
I buy that marks which easier to find
37%
I buy carpets which consultants advice
33%
I always carpets which have low price
32%
I buy always popular carpets
I buy only expensive marks
28%
16%

10. Financial analysis

Capital requirement
Owners Equity: 30654000 KZT
Bank Loan: 60856000 KZT
Total: 91510000 KZT
Return on investment:
Earnings – 90962956 KZT
Start up costs – 91510000 KZT
ROI=0.9

11. Marketing research

According to this data my target audience will be:
Females
Age: 35-55
Income: high
Location: Bostandyk, Medeo districts
Hobby: restaurant, museum, exhibitions
20-25
years
old; 11%
55-64 years
old; 11%
45-54 years
old; 24%
26-35 years
old; 29%
36-44 years
old; 28%
1001-1500 $ 1501US; 5% 2000 $
US; 1%
501-1000
$ US;
20%
2001 and more
$ US; 1%
Didn't answer;
5%
Less than 500 $
US; 67%

12. My competitors

Last bought brand carpets
Other marks
12%
Erdenet carpet
1%
Nobilise
1%
Chinese
1%
Solomon carpet
2%
Mashad carpet
3%
Premium hally
3%
Osta carpet
Egyptian
4%
5%
Floar carpet
6%
"Brest carpets"
6%
Rodjer vanden berg
6%
Belka
6%
Turkmenish
6%
Indian
6%
Kartal carpets
Kazakhstani
8%
11%
Imperial
12%
Arabian
12%
Turkish
61%

13.

Advertising: We should advertise our product
through TV channels, journals, also at a place where
our customers spend most of their time (Esentay Mall,
Airport, etc). The main force goes to satisfaction of
client’s requirements, because people trust more to
their relatives and friends than other channels.
Sales: Locations of potential customers are districts
of Bostandyk and Medeu. It will be easy to sell at these
districts through boutiques, stores, shops. Location of
manufacture would be in Almaty.

14. E-commerce

Anytime Creative Library
Websites
Digital Media
Social Media
Public Relations

15. Location

• Manufacturing place – Almaty region
• Head-office – Almaty city
• Shopping-mall – Almaty city, Medeu district.

16. Financial analysis of the industry

• Pricing strategy
Variable costs
Name of materials
Blended yarn (wool + acrylic)
Latex
Paints
Electricity
Total
Total for 1 unit
Unit of
changes
kg
l
kg
kw*h
Cost
895
696
1 500
14
Direct Labor Cost = 1 720 000 tg
Per unit=68 800 tg
Variable cost per unit = 127 023 tg
Carpet
Cost of 1 m2 Sum of 1 m2
4,00
3 579
1,10
766
0,60
900
3,52
48
5 293
58 223tg

17.

Fixed costs
Expenses
Labor(table 3, except production personnel)
Utilities
Security Guard Company
Overalls, gloves, household goods
Maintenance and repair of the OS
POL
Advertising costs
Other unexpected costs
Total
For month, th. tg
580
150
50
50
20
49
100
100
1099
Break-even point price = [(127 023 x 25) + 1 099 000] / 25 = 170 983 tg

18. Project evaluation

19. Sources of financing

Financial resources
Thousand tg.
%
Fixed capital investment
60 856
67%
Working capital
30 654
33%
Total
91 510
100%
Crediting conditions:
Parameters
Meaning
Credit currency
tenge
Annual interest rate
8.0%
Maturity, year
7.0
Payments of interest and principal
monthly
Type of repayment of principal
annuity
* The program "Damu-Ondiris [JSC "Halyk Bank of Kazakhstan"]

20. Opportunities to enter the world market

Kazakhstan is located in the center of intensive
markets of the CIS and Eastern Europe.
Exporting
• Customs Union
• CIS

21. Intellectual property

• The World intellectual property organization
“The Eurasian Patent Organization”
• BMF Group LLP
The object of the protection:
- Trademark
- Designs and Models

22. Socio-economic importance of the business

With project implementation is provided the following objectives:
Creation of a new venture for the production of carpets;
An increase in the gross regional product;
Import substitution products;
Entry in the budget of Almaty oblast taxes and other deductions.
Among the social impacts can be identified:
To meet the demand of the population and corporate sector in
high-quality products;
Contribution to the development of the textile industry in
Kazakhstan;
Creation of new jobs that will allow workers to receive a stable
income.

23. Thank you for your attention!