The Batch Production of New Generation of Thermal Metal Cutting Machines Setting-up

1. Initiator

"Kristal" Joint Stock Co.

Address: 41 Dekabristov Str., 327020, Nikolaev, Ukraine

Tel: (0512) 37-18-07.

Fax: (0512) 36-33-48.

Pattern of ownership: collective.

General Manager: Mr. Vyacheslav F. Dymov, Chairman of the Board.

Spheres of activity: The production of: thermal cutting machines; electric welding equipment; oxygen, plasma and laser machines with program management for location, spacing and cutting the blanks, made of metal and other materials; welding stations, semi-automatic and automatic welding machines, welding power sources; food processing and the consumer goods manufacturing equipment.

2. Project Contents

The thermal metal cutting machines stock updating, which was produced and sold by the “Kristal” company to the metal working enterprises of shipbuilding, machine building and other industries in CIS countries. The updating process should be based on modern technologies.

Project goals: Designing, producing and promotion to the market of new generation of thermal cutting machines on compatitive prices. The technical data of the new equipment to be in keeping with the equipment, produced by Western European companies. In the CIS countries there are no produces of such type of equipment.

Project tasks:

The new generation of thermal metal cutting machines is based on the “Kristal” machines, which are now in batch production. The design documentation worked out by high skilled personnel, the productive capacity, energy resources capacities, and successful operation in the market during more then 30 years are the guarantees of the Projects successful implementation.

3. Seller's market

Internal (Ukraine) - 40 %; external (CIS countries) - 40 %; South-Eastern Asia countries - 20%.

4. Forms of Co-operation

Any form of co-operation, which acceptable to investor and guarantees successful results and mutual profits.

5. Investments Amount and the Project Efficiency

Production launching period-12 months from the date of opening the demand (investment) line of credit. Annual volume of production and sales: not less than 30 units.

Seller’s price - US $ 110 000. Profitability - 20 % (planned).

Total Project Costs: US $ 3 000 000.

Kristal’s contribution: US $ 1 500 000; the Investor’s contribution: US $ 1 500 000.

Payback period - 4 years.

Returns: after the end of the 1st year- 10%; the 2nd year- 20%; the 3rd year - 30%; the 4th year - 40%, paying proportionally for all the obligations in accordance with the terms of investments receipt.