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Seeking Investment in: Univertical International (Suzhou) Co. Ltd PRI Partnership with:
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Who are Univertical Corporation? Univertical Corporation (UC) is the 70% majority investor in Univertical International (Suzhou) Co. Ltd. Univertical Corporation (UC) is the 70% majority investor in Univertical International (Suzhou) Co. Ltd. Univertical Corporation is privately-held USA company Univertical Corp., started in 1938. Univertical currently has one factory based in northeast Indiana, and they are the worldwide market-share leader in the supply of specialty chemicals and copper anodes to the printed circuit board (PCB) and metal plating industries. Univertical Corporation is privately-held USA company Univertical Corp., started in 1938. Univertical currently has one factory based in northeast Indiana, and they are the worldwide market-share leader in the supply of specialty chemicals and copper anodes to the printed circuit board (PCB) and metal plating industries. The President of Univertical Corporation is Chuck Walker, son of founder, Charlie Walker. The President of Univertical Corporation is Chuck Walker, son of founder, Charlie Walker.
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Who is PRI? Privately held USA Company “ Pacific Resources International LLC ”. Privately held USA Company “ Pacific Resources International LLC ”. Headquartered in Beijing Headquartered in Beijing 12 China locations 12 China locations Manufacturing and Consulting Manufacturing and Consulting Primarily foreign high-tech companies.Primarily foreign high-tech companies.
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Formation of the New Venture Univertical International is a new company established in Suzhou, China, and owned offshore by Univertical International (Mauritius).Univertical International is a new company established in Suzhou, China, and owned offshore by Univertical International (Mauritius). It is a partnership between Univertical Corporation (70%) and Pacific Resources International LLC (30%).It is a partnership between Univertical Corporation (70%) and Pacific Resources International LLC (30%).
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What is the Business? Copper Anodes Copper Anodes Solder and Tin Balls Solder and Tin Balls Solder and Tin Bar & Balls Solder and Tin Bar & Balls Sold to: Plating Companies Plating Companies Printed Circuit Board Manufacturers Printed Circuit Board Manufacturers Distributors & End Users Distributors & End Users
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Milestones to June 04 November 2002 – Purchased land & completed design for new factory November 2002 – Purchased land & completed design for new factory December 2002 - Temporary office and sales team established in Suzhou December 2002 - Temporary office and sales team established in Suzhou January to September 2003 – Hired General Manager, management team and technical staff January to September 2003 – Hired General Manager, management team and technical staff September to November 2003 – Imported production equipment September to November 2003 – Imported production equipment November 2003 – Relocated to new custom- designed factory (60,000 sq. ft.) November 2003 – Relocated to new custom- designed factory (60,000 sq. ft.) December 2003 – Commenced production December 2003 – Commenced production June 2004 – Reached 60 tons per month in specialty chemical sales June 2004 – Reached 60 tons per month in specialty chemical sales
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Company Successes for 2003-2004 Commenced Production of 1 st product (nickel sulfamate). Generated a profit on first product line in May 2004. Increased customer base from 18 in 2003 to 39 in 2004. Initiated production of second product (tumbled rolled copper).
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Company Successes continued Initiated production of third product (copper sulfate). Calendar year 2004 estimated sales at 20 million RMB.
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Milestones Planned for Next Year Copper Casting by March 05 Copper Casting by March 05 Nickel Sulfate Production by March 05 Nickel Sulfate Production by March 05 Nickel Chloride Production by Sep 05 Nickel Chloride Production by Sep 05
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Key Learnings over Last Year Univertical branding gives us a key advantage over competition. Univertical branding gives us a key advantage over competition. We do not try to match competitor ’ s pricing, but position ourselves as the high- quality, high-priced market leader. Focus on positioning rather than just volume. We do not try to match competitor ’ s pricing, but position ourselves as the high- quality, high-priced market leader. Focus on positioning rather than just volume. To sell copper in China, we need to go direct to end-users, as well as distributors. To sell copper in China, we need to go direct to end-users, as well as distributors.
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What will it take to Win/ What are the Risks Winning Factors Winning Factors Maintain Univertical Reputation for High QualityMaintain Univertical Reputation for High Quality Start Production of new products on timeStart Production of new products on time Do not enter price warsDo not enter price wars Risks Risks Not achieving sales targetsNot achieving sales targets New players entering the market affecting short term sales growth.New players entering the market affecting short term sales growth.
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Sales & Marketing
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Invoiced Sales by Product Products year 2003to Aug 2004 KgRMBKgRMB Nickel Sulfamate105,671.042,295,303.94427,69010,237,882.27 Rolled Copper Ball18,800495,54544,3001,671,538 Electroless Nickel Sulfate 0.00 2,311.4045,135.80 Nickel Chloride0.00 50.801,181.10 Copper Sulfate0.00 16.7096.86 Total 124,561.042,790,848.94474,368.911,955,834.03
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Invoiced Sales by Product By RMB: to Aug 2004
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Invoiced Sales by Sales Person Sales Person year 2003to Aug 2004 KgRMBKgRMB John Li34,945.3826,,776.43159,598.94,385,897.17 Michael Deng17,042.542,7693.2756,643.61,688,993.34 Joseph Seah72,573.241,536,379.24258,126.405,880,943.52 Total124,561.042,790,848.94474,368.911,955,834.03 to Aug 2004 By Kg: to Aug 2004 By RMB:
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Number of Customers by Classification G 1G 2G 3G 3 (Copper only) G1:big distributor G2:small dealer G3:end user
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Customer Categories G1:big distributor = Large Multinational or Chinese Distributors. G2:small distributor = Small Chinese Distributor G3:end user
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Investment Terms Univertical International is currently valued at $13.2 million. This is worked out on: Discounted Cashflow 17% over 7 years Discounted Cashflow 17% over 7 yearsOr 2.5 mulitiplier of 2006 forecast after-tax cashflow. 2.5 mulitiplier of 2006 forecast after-tax cashflow. PRI owns 30% of UI. PRI will sell you all dividend and related equity-associated rights at a rate of $130,000 for each 1% of Univertical International.
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Use of Proceeds Working Capital ($2.465 million) Purchase of inventory to support forecast sales of $5 million per month by 2007. Inventory (mainly copper) retains full value if not sold. Capital Projects ($735,000) _______________________________________ PRI portion of this is: 30% of 3.2 million = $960,000 To be raised by Aug 05 ($145,000 paid in since July)
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PRI and PRI’s Management has personally invested PRI has two seats on the Univertical International Board of Directors. PRI has two seats on the Univertical International Board of Directors. Both of PRI ’ s assigned directors have invested personal funds into UI. Both of PRI ’ s assigned directors have invested personal funds into UI. PRI ’ s Assigned Managers: PRI ’ s Assigned Managers: Dwight Nordstrom & Graeme Winthrop Dwight Nordstrom & Graeme Winthrop
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Estimated Costs for 2004-2005 Capital Projects Project DescriptionEstimated CostProduction Start Date Casting Machine $ 185,000.001/3/2005 Spectrometer $ 75,000.0011/1/2004 Heading Machine $ 90,000.0012/1/2004 Large shear $ 60,000.002/1/2005 Small shear $ 50,000.003/1/2005 Nickel sulfate $ 60,000.007/1/2005 Nickel chloride $ 50,000.009/1/2005 Forklifts (2) $ 40,000.0012/1/04 and 4/1/05 Wastewater $ 10,000.00ASAP ISO implementation $ 5,000.001/1/2005 Generator $ 110,000.001/1/2005 Total Expenditures $ 735,000.00
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Headcount Note that this company has a lean head- count for a high sales volume.
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Manufacturing Staff
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Sales, Engineering, Mgmt Staff
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Sales and Marketing Goals Expand sales beyond China. Continue to upgrade sales team’s ability Increase customer base to 50 - 60.
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Questions
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