H-1
Investment Cost and Financing
|
Investment |
Value - EUR |
Financing |
|
Licences and Land |
1,200,000 |
by Equity |
|
Feasibility Study and Due Diligence |
265,000 |
by Equity |
|
Project CAPEX |
586,000,000 |
by Fund |
|
Opening Balance Liquidity upfront direct costs |
12,000,000 |
by Fund |
On condition that the Cement Plant project will be financed by CASTLEPINES
Pension Fund, financing shall be agreed to duration of 10 Years by a fixed
annual repayment of 53,775,000 EUR + CPI, at repayment rate of 9% p.a.
(Coupon). We recommend applying for a grace period of three (3) Years during
set-up of 24 Months for first production line plus 12 Months for second
production line up to reaching full capacity of 12000 TPD.
H-2 Expected Revenue H-2.1 Project Capacity
The cement Plant is designed to provide two separate
production lines each with a capacity of 6,000 TPD (tons per day). The first
line will start production in the 25th month after project
start. Due to the necessity of optimizing process of settings, 70% production
performance is expected for the first year. In the second operating year the
second production line will be completed. The expected revenue also is calculated
on 70% performance. In the meanwhile the first line has achieved 90% on annual
basis. Second line will follow one year later to reach the 90% level. The
expected revenue is carefully set with 90% to assure a calculation granting a
contemplation of possible operational downtime due to maintenance. Furthermore
all following calculations including an usable runtime for one year of 330 days
at 90%, instead of 360 days at 100%.
|
Cement Plant |
Year 1 |
Year 2 |
Year 3 |
Year 4 |
Year 5 |
Year 6 |
Year 7 |
Year 8 |
Year 9 |
Year 10 |
|
Line – 1 (TPD) |
- |
- |
2,800 (70%) |
5,600 (90%) |
5,600 (90%) |
6,000 (100%) |
6,000 (100%) |
6,000 (100%) |
6,000 (100%) |
6,000 (100%) |
|
Line – 2 (TPD) |
- |
- |
- |
2,800 (70%) |
5,600 (90%) |
5,600 (90%) |
6,000 (100%) |
6,000 (100%) |
6,000 (100%) |
6,000 (100%) |
That correlates with the following table by the expected yearly
capacity, also notifying the fact of 70% performance during first 12 months and
from beginning of 13th month 90% of it, based on 330 days per year:
|
Cement Plant |
Year 1 |
Year 2 |
Year 3 |
Year 4 |
Year 5 |
Year 6 |
Year 7 |
Year 8 |
Year 9 |
Year 10 |
|
Line – 1 (TPA) |
- |
- |
924,000 |
1,188,000 |
1,188,000 |
1,320,000 |
1,320,000 |
1,320,000 |
1,320,000 |
1,320,000 |
|
Line – 2 (TPA) |
- |
- |
- |
924,000 |
1,188,000 |
1,188,000 |
1,320,000 |
1,320,000 |
1,320,000 |
1,320,000 |
H-2.2 Expected
Sales Price
The expected sales price for OPC 42.5 (EN 197-1) within
Libya is calculated on about 60 EUR/to.
Export prices are estimated with 60-65 EUR/to. For up to 5-10% of
production could be a demand on Sulfate Resistant Portland, (SPPC 42.5 EN
197-1) with an expected price of 150 EUR/to.
Cement prices in general are expected to rise starting
January 2020, because CO2 costs have then to be made. A
significant influence on sales price negotiations with cement agencies
depending on quality of cement and its certified characteristics. There are
only a few competitors with a chemical composition and quality management to
find in Africa like the European plants have. So, good market prices are
attainable for ALHEDAB.
Getting an overview about the daily changing prices, please
have a look at page 10 in content part “C” of this study!
H-2.3 Expected Sales Revenue
Based on 330 days of an operative production year at 90%
utilization of maximum capacity, 2.400.000 tons/a of cement will be produced,
whereof
2.280.000 tons/a of OPC Standard Portland Cement can be sold
for 60 EUR/to, being exported even 65 EUR/to, plus 120,000 tons/a can be sold
for 150 EUR/to of SRPC standard. So, the expected sales revenue ranges between:
|
Approach |
Production Lots |
Revenue per Year |
|
Worst Case |
100% OPC (of 90%); - Libya and export sale – at EUR
50.00/to |
120,000,000 EUR |
|
Normal Case |
95% OPC (of 90%); 5% SRPC (of 90%) - Libya and
export sale – at EUR 60.00/to + EUR 150.00/to |
154,500,000 EUR |
|
Best Case |
90% OPC (of 100%); 10% SRPC (of 100%) - Libya
and export sale – at EUR 60.00/to + EUR 150.00/to |
182,160,000 EUR |
H-2.4 Affecting Market Mechanism
The expected Revenue in general depends on quality, quantity
and price. In this investment case due to the contract structure there is an
additional currency risk. With the following consideration shall be shown both
market price risk and currency risk explaining their correlation and effect on
the net revenue.
Decreasing exchange rates (LYD value falls towards EUR and
USD) will lead to increasing of foreign demand on inexpensive cement. This will
raise the international sales and export until the excess demand will regulate
the market price automatically. On the other hand, an increasing exchange rate
of LYD towards EUR and USD could most likely to be a result of positive growth
of the Libyan economy (rather than shrinking US-economy). That is why further
economic growth will lead to investment and construction activity within Libya,
affecting possible price increases for cement on the National and local market.
Both scenarios will infect the currency risk for repayment
of the loan. This circumstance has been taken into calculation by computing
sales revenue with 90% of capacity but full costing for 100% of capacity. The
expected revenue is also calculated on a 330 working-day-basis. Due to this
double safety the calculations within this study will not be affected by
further currency risks which have been considered. Note: concerns Libyan sale only!
