THE PROPOSAL FOR a BANK LOAN FROM AGRIBANK TO DEVELOP PHUCSINH’S BUSINESS IN THE UNITED STATES

THE PROPOSAL FOR A BANK LOAN FROM AGRIBANK TO DEVELOP PHUCSINH’S BUSINESS IN THE UNITED STATES Exported commodity: Robusta coffee bean Exporting Country: Vietnam FULL NAME STUDENT ID AGENDA PART A: AN ANALYSIS OF THE UNITED STATES A.1 a short introduction A.2 PESTLE analysis PART B: PROPOSAL FOR A BANK LOAN B.1 profile of PhucSinh company B.2 demand analysis B.3 competitors analysis B.4 Business partners of PhucSinh B.3 SWOT analysis B.4 feasibility analysis (HR factors, operating capital management) B.6 payback schedule A.1 A BRIEF INTRODUCTION History Columbus discovers America in 1492 In 1776, Americans declare independence from England The Revolutionary War begins The Revolutionary War lasts years, and America is free from England 1914—1918 World War I tipped off 1939—1945 World War II took place FLAG SYMBOL OF AMERICA Statue of Liberty = Freedom, Hope, and Friendship between Countries Location & infrastructure The 48 states that make up the continental United States, which are located between Mexico and Canada America spent about $400 billion annually on infrastructure Transportation - for only about one quarter of this total Water, energy, telecommunications, pollution control, other public facilities and, most importantly, schools make up almost 75% of all U.S Social and culture of Americans Diversity: the most diverse country in the world Folks from all over the world have immigrated to the USA To most Americans, the USA is the world Americans value their privacy a lot, not try to be too friendly with them too soon They are restless, yet disciplined Most folks who are just passing by will smile at you or say hello And last but not least: NEVER make any racial comments about anyone E.g blacks are called “African Americans” NOT “ nigga or nigger” Fluctuation in economy Every four to six years, the U.S experiences an economic slowdown It started from 2008 And now, full years after a devastating recession officially ended, the economy is finally showing the result that Americans have long awaited The USA is now one of the most technologically advanced countries in the world: Broadband access: reduction in communications cost and increase in remote working Develop nuclear weapons Spent 2.6% GDP for R&D activities Hence the USA is always a national leader in technology so far Pesticides: 2.000.000/ha 120.000.000 Employment: 100.000.000 80.000.000 2.000.000/employee/month -Weeding employees /1ha -Watering -Security -Spraying pesticide 480.000.000 (150 ha) -Collect coffee beans 120.000.000 120.000.000 120.000.000 120.000.000 Rent the land from 71.000.000/ha/year farmers: The average income of farmers formerly: 90,000,000/ha/year This contract will bring 10.650.000.000 similar income for farmers 2.662.500.000 Total cost Payments 2.662.500.000 2.662.500.000 2.662.500.000 20.400.000.000 4.687.500.000 will 5.237.500.000 will 5.907.500.000 will 4.567.500.000 will be be paid on Jan 1st be paid on Apr 1st be paid on Jul 1st paid on Oct 1st TOTAL CURRENT CAPITAL DEMAND FOR SAVING-AUTOMATIC WATER SYSTEM (UNIT: VND) Motors PVC Pipes Pentax CH 300 Tien Phong HP: Ø63 Origin: Italy Origin: Vietnam Quantity 120 motors 150.000 m Cost 417.000.000 290.000.000 Information Total 707.000.000 TOTAL CURRENT CAPITAL DEMAND FOR UPGRADING FACILITIES (UNIT: VND) Drum dryers Coffee roasters DD3K Probat tons/batch 70kgs/batch 16 hours/batch 1hours/batch Origin: Holland Original: German Quantity dryers machines roaster machines Cost 465.000.000 300.000.000 Information Total 765.000.000 DEPRECIATION OF WATER SYSTEM AND UPGRADING FACILITIES (UNIT: VND) Asset catalog Value Number of years The rate of depreciation Motors 417.000.000 10 41.700.000 Drum dryers 465.000.000 10 46.500.000 Coffee roasters 300.000.000 10 30.000.000 Cost of depreciation: 118.200.000 THE DISBURSEMENTS PLAN (UNIT: VND) Month 1/2015 4/2015 7/2015 10/2015 Total Debt 6.159.500.000 5.237.500.000 5.907.500.000 4.567.500.000 21.872.000.000 -Water system: Raw material Raw material Raw material 707.000.000 purchasing paid purchasing paid purchasing on - Raw material on Apr 1st on Jul 1st Oct 1st -Upgrading facilities : 765.000.000 Subject purchasing paid on Jan 1st: 4.687.500.000 BOARD OF EXPECTED PROFIT: Production Percent change 2014 - 2014 2015 1200 tons 2100 tons +75% 1000 tons 1700 tons +70% 2015 Fixed quantity of exportation with signed contracts 400 tons Storage 200 tons Total cost 31.824.000.000 53.814.200.000 +69,09% Total revenue 40.090.000.000 69.530.000.000 +73,43% Total Profit 9.856.000.000 15.715.800.000 +60,65% Profit after tax 7.884.800.000 12.572.640.000 +60.65% 100% BREAK-EVEN POINT 2014 2015 2016 2017 Export Amount 1.000 1.700 1.700 1.700 Total Revenue 40.900.000.000 69.530.000.000 69.530.000.000 69.530.000.000 Total Cost 31.824.000.000 53.814.200.000 53.814.200.000 53.814.200.000 Breakeven point 77.70% 77.33% 77.33% 77.33% Breakeven Amount 776.9 1314.6 1314.6 1314.6 Variable cost 31.778.274.000 53.765.274.000 53.765.274.000 53.765.274.000 Fixed cost 45.926.000 45.926.000 45.926.000 45.926.000 Based on the concept of break-even point, the point at which revenues equal costs, we get: P Y = FC + VC P : the price Y : the number of the product FC : the fixed cost VC : the variable cost Because the variable cost is affected by volume VC = V.Y, where V is the variable cost per unit product, so the equality is equivalent to the following equation: P Y = FC + V Y Y = FC/(P-V) Break-even point on the output equal the ratio of fixed costs with the difference between the selling price and variable costs per unit product Breakeven point stay at a stable range (around 77-78%).These are positive values which show the profitability of our operation and stand as a warranty for payback ability 2014 Labor payment Position Amount Total payment/month Total payment/year Director board 49.000.000 588.000.000 Security 32.000.000 384.000.000 HR Department 48.000.000 576.000.000 Sale department 42.000.000 504.000.000 Accounting Department 28.000.000 336.000.000 Technical engineer 42.000.000 504.000.000 R&D Department 40.000.000 480.000.000 Controlling employee 30 78.330.000 940.000.000 Packing employee 20 60.000.000 720.000.000 Material storekeeper 20 60.000.000 720.000.000 Product storekeeper 10 60.000.000 720.000.000 Maintanance 45.000.000 540.000.000 Total 133 626.000.000 7.012.000.000 PRODUCTION COST OF EACH YEAR Kind of cost 2014 2015 2016 2017 Main material 21.450.000.000 36.465.000.000 36.465.000.000 36.465.000.000 Supporting material 1.572.500.000 4.207.474.500 4.207.474.500 4.207.474.500 Gasoline and energy 115.000.000 1.395.700.000 1.395.700.000 1.395.700.000 Staff 's payment 7.012.000.000 8.542.000.000 8.542.000.000 8.542.000.000 Staff 's wellfair 594.694.000 615.694.700 615.694.700 615.694.700 Maintanance fee 58.400.000 70.080.000 70.080.000 70.080.000 Management fee 26.400.000 26.400.000 26.400.000 26.400.000 Depreciation 19.526.000 19.526.000 19.526.000 19.526.000 Operating fees 40.900.000 135.900.000 135.900.000 135.900.000 Exporting fee 40.980.000 69.666.100 69.666.100 69.666.100 Transportation 865.400.000 2.218.818.700 2.218.818.700 2.218.818.700 Handing fee 28.200.000 47.940.000 47.940.000 47.940.000 Total 31.824.000.000 53.814.200.000 53.814.200.000 53.814.200.000 B.6 PAYBACK SCHEDULE The expected payback schedule: Loan amount: 21.872.000.000 VND Time loan: years Interest rate: 11%/year Form of payment: Pays according to the diminishing balance The total amount to pay: 27.987.046.667 VND Tenor Total repay Principal debt Interest 2015 6,559,777,334 4,374,399,996 2,185,377,333 2016 6,078,593,333 4,374,399,996 1,704,193,334 2017 5,597,409,333 4,374,399,996 1,223,009,333 2018 5,116,225,334 4,374,399,996 741,825,333 2019 4,635,041,333 4,374,399,996 260,641,334 27,987,046,667 21.872.000.000 6,115,046,667 SINKING FUND Total repay Fixed profit after tax Sinking fund (75% Profit) 9.429.597.943 2015 6,559,777,334 12.572.640.000 Interest in 2017: 1.366.348.737 9.429.597.943 2016 6,078,593,333 12.572.640.000 Interest in 2017: 660.071.857 9.429.597.943 2017 5,597,409,333 12.572.640.000 Total saving in 2017: 30.315.214.442 2018 5,116,225,334 2019 4,635,041,333 Total: 27,987,046,667 COLLATERAL: Beside the Sinking fund, we have secured property as collateral is: Coffee-pepper Mill in Binh Duong which is priced 44.579.000.000 by Hoang Quan Valuation Company Phucsinh’s Coffee-pepper Mill: - Area 5, My Phuoc commune, Ben cat district, Binh Duong city - 1.5 and employs 150 local workers - Investment capital: 28.423.000.000 - Production: 65 tons/day ... commodities On annual average, a Vietnamese consume 1.15 kilo of coffee PhucSinh’s demand for a bank loan Demand for raw material purchasing and input warranty Demand for expanding business and product’s...FULL NAME STUDENT ID AGENDA PART A: AN ANALYSIS OF THE UNITED STATES A. 1 a short introduction A. 2 PESTLE analysis PART B: PROPOSAL FOR A BANK LOAN B.1 profile of PhucSinh company B.2 demand analysis... political and financial system risk External interrelations with neighboring countries TPP (Australia, Canada, Japan, Malaysia, Mexico, Singapore, United States, Vietnam, etc.) APEC (Australia, Canada,