ROPSA GENERAL DEALERS

LIMITED

PLOT NO. 827, KALONGWEZI

P.O BOX 510815
CHIPATA
CELL: 0977284581

BUSINESS PLAN

Prepared by: Josephine Chirwa

Page 1
1.0 Executive Summary

Introduction

ROPSA General Dealers Limited is a Building and Road Construction business. It is a family
owned business, incorporated as a Private Limited Company. The shareholders include
Rosemary Shawa Samboko, Ashraf Victor Motala, John Samboko and Mark Chinungo. The
shareholders collectively bring together over 20 years of experience in construction
business.

Location

ROPSA General Dealers Limited] is headquartered in Chipata, Eastern Province

The Company

ROPSA General Dealers Limited began its operations in 2005. The Company has served
the Eastern Province and beyond since its inception and during this time has maintained a
reputation of quality work and a name that its clients have come to rely on.

Our Services

ROPSA General Dealers Limited offers quality and affordable Building and Road
Construction Works throughout the Eastern Province and beyond for the Government and
private clients. The Company primarily targets government contracts and secondly
commercial clients.

List of services

General Roads & Earthworks

 Bridges & Drainage Structures

 Off-carriageway Rehabilitation & Maintenance

 On-carriageway Rehabilitation & Maintenance

 Road Markings

General Civil Engineering Works

 Bridges & Structures

 Pre-cast & Pre-stressed Concrete

 Piling & Foundation Engineering

 Structural Steel Engineering

 Public Health Engineering Works (incl. Water, Drainage & Sewerage)

Block Making

 Concrete blocks

Page 2
  Pavers

Each project is customized to the wants and needs of the client. Prices are determined by
the scope of the project, materials needed, wear and tear on equipment and required profit
margin.

The Market

Over 4,000 construction businesses are registered with the National Council for Construction
(NCC). Majority of these contractors are small scale contractors, according to the NCC
register of July 2015, they account for 2182 and 1202 contractors in building and road
subsectors respectively. Most of the registered contractors are dependent on government
contracts, while some Micro Small and Medium Enterprises (MSMEs) contractors are
subcontracted by large-scale contractors from these government contracts. For these
contractors who are registered, the work usually involves major construction projects such
as transport infrastructure, hospitals, medical centres, schools, administrative buildings and
various housing development projects. Some local construction companies are awarded
government small- and medium- scale construction, maintenance and renovation projects.

For one-off residential construction, most private clients obtain services from informal/non-
registered contractors.

Financial Considerations

The marketing research and tailored marketing strategy described in this business plan will
result in sales revenue of K898, 841 in 2016, increasing to K2, 211,486 in 2019 respectively.

The cash flow for ROPSA General Dealers Limited shows adequate provisions for ongoing
expenses to meet the needs of the company as the business expands operations.

The purpose of this plan is to seek a loan facility in the amount of K350, 000 to purchase a
second hand grader and working capital.

The major focus for a loan facility is as follows:

 100% family owned company and headed by a woman

 Small scale construction company

 Hire employees; the company will look to hire youths and women

 Purchase a grader

 Move towards using "green" materials and applications for construction works for
environmental and energy efficiency

 Expand business - service more clients in Eastern Province and beyond

Page 3
 Chart Highlights

2 500 000

2 000 000

1 500 000

1 000 000

500 000

0
2016 2017 2018 2019

Sales Gross Profit Net Profit

1.2 Vision Statement

To be the preferred contractor providing quality building and road construction services to
the government and other private entities in Zambia at competitive prices

1.3 Mission

To accomplish highest level of quality construction services for our customers at fair and
market competitive prices and at the same time ensure the sustainability of our company
through repeat and referral business achieved by customer satisfaction in all spheres
including timeliness, attention to detail and service-minded attitudes

1.4 Keys to Success

ROPSA General Dealers Limited's keys to success include:

 Over 10 years of experience in the construction industry.

 An understanding of what must occur for the success of the project at time of
completion as well as long term.

 Have the well rounded knowledge and skill to successfully complete any project.

 Proper staffing to complete jobs on a timely basis and within budget.

2.0 Vision

To be the preferred contractor providing quality building and road construction services
to the government and other private entities in Zambia at competitive prices

Page 4
3.0 Mission

To accomplish highest level of quality construction services for our customers at fair and
market competitive prices and at the same time ensure the sustainability of our
company through repeat and referral business achieved by customer satisfaction in all
spheres including timeliness, attention to detail and service-minded attitudes

4.0 Business Model

ROPSA General Dealers Limited offers quality and affordable Building and Road
Construction Works throughout the Eastern Province and beyond for the Government
and private clients. The Company primarily targets government contracts and secondly
commercial clients.

The government is the principal client for ROPSA General Dealers Limited. As such, it
participates in Government tenders and over the years, ROPSA General Dealers Limited
has gained itself a reputation of quality, affordable and reliable service delivery.

As part of its growth strategy, ROPSA General Dealers Limited is planning on expanding
its business portfolio by venturing into production pavers and concrete blocks. This will
allow ROPSA General Dealers Limited greater access to finances to fuel its growth.

ROPSA General Dealers Limited will provide pavers and concrete blocks including
foundations (commercial and residential) and road construction. The company will also
create house slabs and driveways for residential areas, and other roadwork. Jobs will be
solicited through bids from both government, commercial and personal ventures. We will
provide services to both commercial and individual customers. Geographically, the
company offers its services to Eastern Province primarily and the rest of Zambia at large.

The pavers and concrete blocks can be adapted to almost any construction requirement
that calls for building and housing works, Civil Engineering works and Road and
Earthworks.

Owners, developers, construction managers, general contractors, and subcontractors

will realize substantial savings in labour and material costs by using our pavers and
concrete blocks. Applications include public, commercial and residential structures,
bridges, educational projects, health projects, recreational projects, civil projects, utility
projects, and virtually every other type of building and road construction.

ROPSA General Dealers Limited will offer major advances and complete adaptability,
high strength-to-weight ratio, and all at cost-effective prices. The company operates in
three market segments as described below.

4.1. Government

The government is the principal client in the Construction sector value chain. The
Government will be the major client for the pavers under PAVE Zambia 2000. The
benefits the Government will realise include:-

4.1.1. Durability. Good durability and long service life;

4.1.2. Versatility. The many colours and textures available for the pavers allows for
more versatility in looks and styles;

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 4.1.3. Better load distribution .The interlocking action of the blocks facilitates far
better load distribution than conventional methods;

4.1.4. Environmentally friendly. In the event of changes or innovations being

made in the paved area, any reclaimed blocks are not wasted, but may be used
elsewhere;

4.1.5. Adaptability. Add-ons are easily made in any size to match existing paving;

4.1.6. Cost-effective. The maintenance costs of pavers are a fraction of those for
conventional methods;

4.1.7. Resilient. Pavers are more resistant to chemical attacks or fire than burnt
bricks, particularly in case of petro-chemicals

4.2. Commercial

The Commercial entities are likely to need concrete blocks and pavers for various
purposes including:-

4.2.1. Car Parks. Pavers are the superior paving material for Car park projects.
Whether it is a new parking area, or one in need of reconstruction, pavers offers
the durability and beauty that is matchless. Pavers’ advantages include:

4.2.1.1. Durability. Pavers lasts longer than bricks. A concrete parking area
can serve for twenty or more years. The durability advantage means less
maintenance, fewer repairs, and an end to the expensive reconstruction
cycle.

4.2.1.2. Beauty. Pavers' durability means a surface free from ugly potholes,
ruts, and damage from petroleum products. Add some colours or a pattern,
and pavers turns a parking lot into the perfect showcase for your business.

4.2.1.3. Safety and lighting. Pavers offers a brighter, more reflective surface
than bricks. Better use of light means a safer and more inviting parking
area for customers and employees.

4.2.1.4. Load-carrying capacity. Trucks demand a structural pavement.

Conventional pavement is not long lasting for heavy duty vehicles. If
product distribution is critical for a business, then pavers is the best option.

4.2.2. Parking Garages. Pavers provides the same benefits for a garage as it does
for a driveway. A structure made with pavers is strong enough to hold up under
the pressure of many vehicles, and is also durable enough to last many years of
heavy pressure.

4.3. Residential

Residential applications goes beyond a solid foundation; long lasting and low
maintenance pavers increases the value and performance of a very important
investment: the home. Strong, durable, and safe, pavers will never burn or rot, and
provides the best shelter against any storm. Residential applications are as follows:

Page 6
.

4.3.1. Permanent finished look. Add a dramatic colour or texture for a permanent,
finished look.

4.3.2. Extra storage. Storage that frees up other, more expensive floor space in the
house.

4.3.3. Concrete block Homes. Concrete blocks are energy efficient, resistant to
strong winds, practically soundproof, and offer a broad range of design options.
Concrete blocks offer a variety of benefits over moulded bricks:

4.3.3.1. Fast and easy construction. Using concrete blocks results in a faster
and more efficient building cycle.

4.3.3.2. Environmentally responsible. Concrete blocks and pavers can be

recycled.

4.3.3.3. Security. Secure concrete block houses perform very well in violent
weather.

4.3.3.4. No Rot or Rust. Neither concrete blocks nor pavers rot, rust, or
corrode.

4.3.3.5. Peace and Quiet. A home built with blocks has much greater noise
reduction characteristics than burnt bricks.

4.3.4. Driveways and/or paving the entire residence. A paved driveways and/or
residence can have a dramatic effect on the first impression, value, and resale
potential for a home. Paver driveways are preferred over other paving materials
for a variety of reasons including:-

4.3.4.1. Durability. A key component to the longevity of driveways. Concrete

driveways stand up to traffic day in and day out, year after year, often for
over 30 years.

4.3.4.2. Maintenance. Little maintenance is required, making its maintenance

practically non-existent.

4.3.4.3. Environmentally friendly. Pavers and concrete blocks are static

materials and can be recycled.

4.3.4.4. Homeowner satisfaction. Homeowners owning a paved driveway,

are content with their homes.

4.3.4.5. Versatility. This is important, especially in today's upscale housing

market, pavers can be coloured, stamped, or stencilled to create a variety
of textures and decorative finishes.

4.3.4.6. Appearance. A critical component in selecting a driveway paving

material, pavers, with its smooth, bright surface, provides an important
safety feature by increasing the effectiveness of exterior lighting.

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 Geographically, the company will offer its services to Chipata and the rest of the Eastern
Province.

5.0 Income Sources

ROPSA General Dealers Limited was established with the aim of maximising profits
through delivering quality and standard construction works for our highly esteemed
clients. We will ensure that we generate income from available means within the
construction value chain. Below are the sources we intend exploring to generate income
for ROPSA General Dealers Limited

5.1. Bridges & Drainage Structures

5.2. Off-carriageway Rehabilitation & Maintenance

5.3. On-carriageway Rehabilitation & Maintenance

5.4. Bridges & Structures

5.5. Pre-cast & Pre-stressed Concrete

5.6. Piling & Foundation Engineering

5.7. Structural Steel Engineering

5.8. Public Health Engineering Works (incl. Water, Drainage & Sewerage)

5.9. Manufacturing of pavers and concrete blocks

6.0 Key Success Factors

ROPSA General Dealers’ keys to success include:

6.1. Over 10 years of experience in the construction industry.

6.2. Maintaining a reputable and untarnished reputation in the industry.

6.3. Competitive pricing by defining a pricing method so that each unit produced can be
properly measured whilst maintaining high quality standards

6.4. Maximum production of pavers and concrete blocks as per the capacity of the
machine

6.5. Effective marketing of the pavers and concrete blocks, and also availability of
markets, particularly through the procurement systems of Government.

Page 8
7.0 Market

7.1. Market Overview

7.1.1. Trends in demand for your line of business

ROPSA General Dealers Limited operates within the construction sector. The World
Bank estimated annual construction growth in Zambia of between 11 and 12 per cent
from 2013 through 2015 as a result of planned investments. Considering that the
projected national economic growth rate in the near future is about five per cent per
annum, the sector will continue to be a large and growing element of the national
economy.

The construction sector, has been identified as one of the main enablers of economic
growth by the Government of Zambia. According to Zambia’s Vision 2030, the total
housing unit backlog is about one million and that 110,000 dwelling units are required
annually to clear the backlog for the next ten years. To satisfy new demand for
houses all over the country, a similar number is required to be constructed annually.
At the same time, the Zambian Government has embarked on a project for paving
the roads, the PAVE ZAMBIA 2000 project. The PAVE ZAMBIA 2000 is intended to
use concrete blocks paving and cobblestone technology to rehabilitate urban and
township roads in Zambia. Under the project, 2,000 kilometres of urban and
township roads will be paved.

The cost of constructing roads using pavers will range between K760.000-K1.5
Million per Kilometre. The project cost is estimated at K1.6 Billion. 15 locations have
been selected in 10 provinces of Zambia

7.1.2. Trends in supply of pavers and concrete blocks

7.1.2.1. Trends in supply of pavers

There currently no manufacturers and suppliers of pavers in Eastern Province.

However, following the PAVE 2 000 Zambia, new players are likely to enter the
market.

7.1.2.2. Trends in supply of concrete blocks

Blocks are made by informal operators on the roadsides, using simple machines, but
there is also a formal-sector supply through factories.

About 30 per cent of cement produced in Zambia goes into blocks. The required raw
materials such as cement, sand/quarry dust and crushed metal are readily available.
Micro-and-small-scale businesses often operate with around five workers and one
small block making machine and target the low-quality, low-price market segment
associated with low and middle-income residential construction. The medium-scale
cement block producers target the quality-conscious market segments like high-
income private residential and commercial construction as well as government
construction projects

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 7.1.3. Proposed Main Buyers and suppliers

7.1.3.1. Proposed Main Buyers

7.1.3.1.1. Government.

The government acts as the principal client to the majority of Construction jobs.
The potential jobs from the Government includes major construction projects
such as transport infrastructure, hospitals, medical centres, schools,
administrative buildings and various housing development projects. The current
PAVE ZAMBIA 2000 project will render the government, the major buyer for
concrete pavers.

7.1.3.1.2. Commercial entities.

The private sector developing large-scale commercial or industrial facilities also

finance large-scale projects and need concrete blocks.

7.1.3.1.3. Private individuals.

Increasingly private individuals are making use of blocks for residential

construction. The use of pavers by private individuals is on the rise as well, their
use includes, paving residences, driveways.

7.1.3.2. Proposed suppliers

The required raw materials are cement, water and quarry dust, There is ample supply
of these materials within Chipata, the proposed location for operations.

7.1.3.2.1. Cement:

Cement is ready available on the market. There are two major suppliers of cement
the local market i.e. Lafarge Cement Plc and Dangote Cement Plc.

7.1.3.2.2. Water:

Water will be sourced from a borehole at the ROPSA premises in Kalongwezi,

Chipata.

7.1.3.2.3. Quarry dust:

Quarry dust is readily available on the market. It will be sourced from Sable
Contractors, the major supplier of quarry dust in Eastern Province. Furthermore,
apart from Sable Contractors, there are other suppliers of quarry dust.

7.2. Current and proposed market share

There are currently less than 10 suppliers of blocks in Chipata and these are at a
micro level with little or no machinery at all. There isn’t any manufacturer of pavers in
Chipata nor anywhere else in Eastern Province.

There other suppliers of concrete blocks in Chipata which includes

Page 10
 7.2.1. Ziah Construction

7.2.2. GK Construction

Currently we have the two major competitors within Chipata. Each of these
companies targets the same clients as ROPSA General Dealers Limited. However
the concrete blocks market is relatively new in Chipata and none of the current
competitors well established yet. Furthermore, the market in Chipata is growing so
fast. This is an excellent opportunity to gain market share and a defensible position in
the industry

Regarding concrete pavers, there are no suppliers in Chipata. With the PAVE
Zambia 2000 project in the offing, this presents another excellent opportunity to have
the first mover advantage

Going by the operational capacity of the block making machine we intend to procure
and quality standards, it is estimated that the company will initially capture about 50%
of the total market share. Based on its unique offering of high quality conventional
blocks and pavers, the figure is expected to increase as the business penetrates the
market.

7.3. Competitiveness Analysis

7.3.1. Location of the business operations

The block making factory will be located on Plot 827, Kalongwezi, which is within the
Central Business District of Chipata.

The project site has two houses within the premises. The premises belongs Mrs
Rosemary Samboko, the major shareholder of ROPSA General Dealers Limited. The
premises being in a wall fence and it being a residence, provides adequate security. The
premises has piped running water and electricity. There is also a borehole which shall be
the major source of water for production of pavers and concrete blocks. The location is
spacious enough for the business venture. The premises has two offices, a storage room
and a sales office all of which are adequately suitable for the proposed production of
pavers and concrete block and administrative activities. The location can be accessed by
all-weather road for purposes of delivery of raw materials as well as customers buying
the concrete blocks and pavers.

7.3.2. Technology used in production and marketing of goods/services

In order to ensure high quality pavers and concrete blocks, a training to the members
of staff will be provided and this training must be supported by necessary material
conditions (e.g. good technology) to enhance the quality and quantity of products.

The loan facility will facilitate acquisition of appropriate machinery and technology
necessary to achieve the desired production in quality and quantity of pavers and
concrete blocks. It is proposed that a block making machine is procured with the
following specifications:

1. Hydraulic operated cement block making machine

o Hallow mould 4” ( 9 bricks per punch)

Page 11
 o Hallow mould 6” ( 6 bricks per punch)
o Hallow mould 8” ( 4 bricks per punch)

o Paving tile mould

2. 300 litres cap0acity cast iron drum model concrete mixer with
3 HP 960 RPM Motor fixed type

The above stated block making machine will provide a technological capacity
required to undertake the production processes. The processes must be complied
with, as this will ensure better capacity for the project to supply the required quantity
and also quality of pavers and concrete blocks for the Government and other
markets. It is on this basis that the mode of production for this project will be both
capital and labour intensive.

ROPSA General Dealers Limited is committed to an extensive promotional

campaign. This will be done aggressively and on a broad scale. To accomplish initial
sales goals, the company will implement an effective promotional campaign to
accomplish two primary objectives:

7.3.2.1.1. Attract a skilled work force that has a desire to be successful.

7.3.2.1.2. Attract customers who will constantly look to ROPSA General

Dealers Limited for their pavers and concrete blocks.

7.3.2.1.3. In addition, ROPSA General Dealers Limited will advertise on

Community radio stations, fliers and on billboards throughout
Eastern Province.

7.3.3. Volume of production

Based on the block making machine to be procured, the factory will have an installed
capacity of:-

7.3.3.1. Pcs/mould: 4 *8”Output: 3 200pcs/9 hours shift

7.3.3.2. Pcs/mould:5*6” Output: 2 800psc/9 hour shift

7.3.3.3. Pcs/mould: 6*4”Output : 2 600psc/9 hour shift

7.3.3.4. Paving Mould 3 200pcs/9 hours shift

The enterprise will have 48 hours of work per month. Assuming that pavers and
concrete blocks are produced in the ratio of 3:2 and that the three sizes of concrete
blocks are produced in equal proportion, the production volume for the first year will
be:-

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 Capacity Volume of Production
Month
Utilisation

6 8
4 inches Pavers Total
inches inches
1 20% 2 464 2 154 2 001 7 216 13 835
2 25% 3 080 2 693 2 502 9 020 17 293
3 30% 3 695 3 231 3 002 10 823 20 752
4 35% 4 311 3 770 3 502 12 627 24 211
5 40% 4 927 4 308 4 003 14 431 27 669
6 45% 5 543 4 847 4 503 16 235 31 128
7 50% 6 159 5 385 5 004 18 039 34 587
8 55% 6 775 5 924 5 504 19 843 38 045
9 60% 7 391 6 462 6 004 21 647 41 504
10 65% 8 007 7 001 6 505 23 451 44 962
11 70% 8 623 7 539 7 005 25 255 48 421
12 75% 9 239 8 078 7 505 27 059 51 880
TOTAL
394
YEAR 70 213 61 389 57 040 205 645
286
1

It is projected that the plant will operate at an initially 20% of capacity and will reach 75% by
the end of 12 months.

7.3.4. Quality of goods/services

The company seeks to acquire state of the art block making machine in order to ensure
continuous production of high quality pavers and concrete blocks. Management will always
seek to ensure that all raw materials and stocks are adequately available at all times to
maintain an uninterrupted flow of business.

7.3.5. Cost of production

The table below shows production cost per month at 50% production capacity. Using the
K4.50 the average selling price of a concrete block. The enterprise will be able break even
within the fourth month after commencing operations.

Page 13
 Cost Per
Month in
Item
Zambian
Kwacha
Raw Materials 38 368
Direct Labour 7 440
TOTAL DIRECT COSTS 45 808

Indirect Labour 1 440

Water 50
Electricity 300
Fuel 750
Telephone 100
Marketing 600
Office expenses 250
Depreciation 5,555
Transport 1 000
TOTAL OPERATING
55 853
EXPENSES

7.3.6. Price of products

As mentioned earlier, the machine to be acquired, will be of high quality, this will enable
ROPSA General Dealers to produce high quality concrete blocks at very competitive
price namely K4, K4.50 and K5 each for 4” inches, 6” inches and 8” concrete blocks
respectively. The selling price of pavers will be K175 per square metre. A square will
contain 15 pavers.

7.3.7. Financing Sources

ITEM AMOUNT
Cash equity 150, 000
Owners’ fixed Asset Contribution 85, 000
Loan 220, 000
TOTAL 455, 000

8.0 Management Strategy

8.1. Personnel

The company's management philosophy is based on responsibility and mutual respect.

ROPSA General Dealers Limited maintains an environment and structure that encourages
productivity and respect for customers and fellow employees. ROPSA General Dealers
Limited’s employees and management are committed to:

8.1.1. Providing a safe work environment to protect employees, the employees of

customers and the public.

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 8.1.2. Supplying safe products for customers.

8.1.3. Continuously improving the company's safety program to reduce the risk of
accidents and occupational illness in a changing work environment.

8.1.4. Encouraging employees to participate in accident prevention programs, and

take personal responsibility for their, and their co-workers', health and safety.

8.1.5. Employing properly trained personnel, equipment, and procedures necessary

to enable regulatory compliance, and contribute to the high safety standards for
our industry.

8.1.6. Monitoring workplaces, enforcing safe work practices, and communicating the
company's safety performance to employees and other stakeholders.

8.1.7. Making safety a value-added service that the company provides to its
customers.

Management Team

ROPSA General Dealers Limited’s management is highly experienced and qualified.

Its key management team includes Mrs Rosemary Samboko, Mr. Ashraf Motala, Mr.
John Samboko and Mr. Mark Chinungo. Mrs. Smboko is the Managing Director, Mr.
Motala the Deputy Managing Director and Mr. Chinungo is the Finance &
Administration Manager Mr. Samboko acts as the primary on-site supervisor.

The following table shows the Personnel Plan, with salaries, raises and additional
employees. The Personnel comprises of employees who are employed under block making
project only.

Page 15
Table: Personnel & Payroll in Zambian Kwacha

Personnel Year1 Year 2 Year 3

Administrator 17 280 20 736 24 883
Machine Operator 14 400 17 280 20 736
Machine Operator 14 400 17 280 20 736
Machine Operator 14 400 17 280 20 736
General Worker
(Wheelbarrow) 11 520 13 824 16 588
General Worker
(Wheelbarrow) 11 520 13 824 16 588
General Worker
(Wheelbarrow) 13 824 16 588
General Worker
(Wheelbarrow) 16 588

General Worker (Sand) 11 520 13 824 16 588

General Worker (Sand) 11 520 13 824 16 588

General Worker (Sand) 13 824 16 588

General Worker (Sand) 16 588

Total People 8 10 12

Total Payroll 106 560 155 520 219 795

8.2. Phasing of investments and business operations

ROPSA General Dealers expects that the business will aggressively expand during the first
five years of operations.

ROPSA General Dealers Limited intends to implement marketing campaigns that will
effectively target government ministries, departments and agencies, individual homeowners,
real estate investors, and real estate developers within the target market.

Page 16
ROPSA General Dealers Limited will grow the business by reinvesting its earnings. It intends
to increase its equipment and machinery capacity each consecutive year whilst increasing its
market share as well as developing new markets. Below is the investment plan.

Three Year Investment Plan

Year 1 Year 2 Year 3

FOR ONE OFF

INVESTMENTS
Operations 215 900 145 000 290 000
Marketing 5 000 3 500 7 000
Human Resource 5 000 3 500 7 000
Other Investments 85 000

2. TOTAL
INVESTMENT 310 900 152 000 304 000
REQUIRED BY YEAR

3. FOR WORKING
CAPITAL

Operations 89 000 60 000 120 000

Marketing 15 000 10 000 20 000
Human Resource 24 000 16 000 32 000
Other Investments 12 000 8 000 16 000

TOTAL WORING
140 000 94 000 188 000
CAPITAL

TOTAL CAPITAL
450 900 246 000 492 000
REQUIRED BY YEAR

Regarding its business operation, its start operations at 20%of capacity utilisation and will
reach 75% by the end of 12 months.

Month 1 2 3 4 5 6 7 8 9 10 11 12
Capacity 20 25 30 35 40 45 50 55 60 65 70 75
Utilisation % % % % % % % % % % % %

Year 1 2 3
Capacity 75 80 85
Utilisation % % %

Page 17
9.0 PROJECT BUDGET

ESTIMATED COST
ITEM IN ZAMBIAN
KWACHA
FIXED ASSETS
REQUIREMENTS
Proposed machinery &
Equipment (Block Making
Machine) 196 272
Proposed machinery &
Equipment (Water Pump) 20 000

INITIAL WORING CAPITAL FOR

FIRST FOUTH MONTHS
INCLUDING:- 150 122
Raw materials (Monthly)
Direct Labour Costs (Monthly)
Indirect Labour Costs Monthly
Overhead Cost

Pre operating expenses

Cost of Staff training 3 000

TOTAL Project costs 369 394

220 000
loan amount required

10.0 Work Plan Year 1

Attached

Page 18
11.0 Requested Loan Facility

11.1. Purpose, Amount and Tenure

No. Purpose Tenure Amount (Zambian
Kwacha)
1 Procurement of block making 3 year 216 272
machine, concrete mixer, water
tank, water pump

2 ROUND OFF LOAN AMOUNT 220,000

REQUIRED

11.2. Drawdown Plan

No. Instalment Month Description Amount

Procurement of block
Initial First machinery, concrete mixer
1 instalment Month and water pump 220,000

Total 220 000

11.3. Repayment Plan

PMT Beginning Scheduled Total Ending Cumulative

Principal Interest
No. Balance Payment Payment Balance Interest

1 220 000,00 22 101,66 22 101,66 15 501,66 6 600,00 204 498,34 6 600,00

2 204 498,34 22 101,66 22 101,66 15 966,71 6 134,95 188 531,63 12 734,95
3 188 531,63 22 101,66 22 101,66 16 445,71 5 655,95 172 085,92 18 390,90
4 172 085,92 22 101,63 22 101,63 16 939,08 5 162,55 155 146,84 23 553,45
5 155 146,84 22 101,66 22 101,66 17 447,25 4 654,41 137 699,59 28 207,86
6 137 699,59 22 101,66 22 101,66 17 970,67 4 130,99 119 728,92 32 338,85
7 119 728,92 22 101,66 22 101,66 18 509,79 3 591,87 101 219,13 35 930,72
8 101 219,13 22 101,66 22 101,66 19 065,09 3 036,57 82 154,04 38 967,29
9 82 154,04 22 101,66 22 101,66 19 637,04 2 464,62 62 517,00 41 431,91
10 62 517,00 22 101,66 22 101,66 20 226,15 1 875,51 42 290,85 43 307,42
11 42 290,85 22 101,66 22 101,66 20 832,93 1 268,73 21 457,92 44 576,15
12 21 457,92 22 101,66 22 101,66 21 457,92 643,73 0,00 45 219,88

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 11.4. Results

11.4.1. Profitability

According to the projected income statement, the project will start generating profit in the first
year of operation. Important ratios such as profit to total sales, net profit to equity (Return
on equity) and net profit plus interest on total investment (return on total investment) show
an increasing trend during the life-time of the project.
The projected income statement, statements of financial position and the other indicators of
profitability show that the project is viable.

PROTABILITY RATIOS

Year 1 Year 2 Year 3

Revenue
(Zambian 3 039 945 3 647 934 4 195 124
Kwacha)
Gross Profit
(Zambian 1 063 981 1 276 777 1 468293
Kwacha)
Gross Profit
35% 35% 35 %
Margin
Operating Profit
77% 77% 79%
Margin
Net Profit
49% 49% 51%
Margin
Return on
41% 36% 30%
Assets

11.4.2. Sustainability

ROPSA General Dealers Limited has maintained financial stability while growing rapidly in
the past three years. Significant steps have been taken to lay a foundation for long-term
sustainability, including:

11.4.2.1. Incorporating ROPSA General Dealers Limited into a Private Limited

company. The incorporation has made the business a separate entity and
allows for the business to stay intact regardless of the owners involved

11.4.2.2. Securing a plot and constructing offices for ROPSA General Dealers
Limited. This will in future reduce rental expenses. ;

11.4.2.3. Expanding operations, ROPSA General Dealers Limited is expanding

its business by venturing into Concrete Blocking making business whilst
returning its market in the construction sector

11.4.2.4. Seeking funding for procurement of block making machine, this is vital
in making concrete blocks venture a reality.

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 11.4.2.5. Initiating contractual relationships with Large Scale Contractors
including Motangel and Build Trust. Such relationships enables ROPSA
General Dealers to be a subcontractor and consequently increase sales.

11.4.3. Socio-economic impact

11.4.3.1. Employment Creation

The proposed project will create an initial twelve (12) direct jobs for the local community and
the number is expected to increase as the project grows.

11.4.3.2. Contributing to economic development

Creating indirect jobs thereby impacting on a reduction in Poverty. Spurring of Economic
Activities such as;
11.4.3.2.1. Supply of Aggregates for construction
11.4.3.2.2. Supply of Cement
11.4.3.2.3. Supply of River Sand and
11.4.3.2.4. Transportation of materials to work sites

As these business activities as they take place, will facilitate economic development and
Improvement of mobility in communities in urban areas

11.4.3.3. Technology Transfer

The project’s proposed block making machine some transfer of new technology in Chipata,
which hitherto does not have manufacturers of concrete pavers

11.4.3.4. Transfer of Knowledge and skills

The production staff in the proposed manufacturing plant will be required to undergo various
orientation and technical skills training, to be able to efficiently and effectively run the
production process. Such an orientation technical skills training will constitute transfer of new
technology and skills within the proposed project area.

11.4.3.5. Contribution to the national treasury

The proposed operations of the manufacturing plant will inevitably result in business
transactions that will lead to payment of various forms of taxes, levies, fees and other
statutory requirements, all of which are expected to contribute to the national treasury

11.4.3.6. Provision of an essential construction sector input

The products of the proposed factory are essential inputs in the construction sector including
concrete pavers. Concrete pavers currently are only obtainable from Lusaka manufacturers.
The establishment of the plant will therefore, go a long in providing Chipata and the rest of
Eastern Province with pavers coupled with high quality conventional block.

11.4.3.7. Inculcating a Culture of Entrepreneurship

The establishment of the proposed factory is expected to inculcate a culture of

entrepreneurship and Citizens’ Economic Empowerment. It is envisaged that the
establishment of the factory will have positive multiplier effects for instance the
materialisation of the project will result in creation of market demand for inputs including
cement, quarry dust and water. This presents an opportunity for business to be suppliers for

Page 21
these inputs. Other business opportunities will be created as well including transportation of
materials as well as blocks pavers.

11.4.3.8. Contribute to Improvement of mobility in communities in urban

areas
Currently the Government through the Road Development Agency, in its quest for alternative
and cheaper, yet durable road construction technologies, has embarked on the Pave Zambia
2000 Project which will be executed through the utilization of concrete block paving and
cobblestone technology to repair the existing urban and township roads as a suitable
solution on our urban roads. This project will improve mobility of urban communities. ROPSA
General Dealers Limited intends to be a supplier for the PAVE Zambia 2000 project.

11.4.3.9. Contributing to remodelling of cities and towns

As government as well the private entities pave road and homes respectively that beatifies
the towns and cities

11.4.3.10. Value addition.

As home owner and property developers pave their residential and commercial properties,
the value of the properties will go up.

11.4.3.11. Reduction in cost of acquiring pavers.

The fact the customers will able to access pavers within Chipata, transport costs will be cut
off

12.0 Proposed Security for the Loan

The promoter proposes to use all the fixed assets that will be acquired for the project (the
brick making machine) as part of the collateral for the loan. The total value of all fixed assets
represents more than 100 % of the required loan amount.

13.0 Risk Assessment

No business is without risks that includes the construction sector value chain. In ten years of
operations ROPSA General Dealers Limited, has created an innovative and successful
model that others among the Small Scale Contractors wish to replicate. Moreover, the
model and systems have been developed in conjunction with all Directors. The following
table summarizes the important challenges and our mitigation approaches.

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 RISK MITIGATING FACTORS
The major clients is Expand the clientele base by capturing the consumer and
the Government commercial markets
and it is difficult to Diversified product mix
secure contracts Proven demand for products
from them Diversity of markets
continuously Networking is going to be an essential part of our company. That is
how we are planning to get as much customers as possible
The major clients is Expand the clientele base by capturing the consumer and
the Government commercial markets
and sometimes Diversity of markets
delays to make
payments.
There is a trend of Inherent to ROPSA General Dealers Limited is the training,
low staff retention empowerment and employment of youth, new leaders constantly
and high staff being developed
absenteeism ROPSA General Dealers Limited Board will create a succession
plan
High operating Diversity of markets increase direct sales and improve margins
costs, low margins Source lower cost local supplies
Difficulty in Grow employees especially youths from within the ROPSA General
attracting suitable Dealers Limited ‘s system and expose early to other benefits – trips
staff to site visits

Construction sector Put in place a prudent financial management system including

is seasonal maintaining construction sector effective cash flow
business

14.0 Business Background

14.1. Dates of registration and commencement of operations

ROPSA General Dealers Limited was registered and started operating in 2005

14.2. Affiliated Companies

None

14.3. Core Business Activities

ROPSA General Dealers Limited is a Building and Road Construction company. The
Company primarily provides services for government contracts and to the commercial
sector of the industry

The Company currently provides equipment, labour, and expertise for construction
services such as Building and Housing construction, Bridges & Drainage Structures, Off-
carriageway Rehabilitation & Maintenance, On-carriageway Rehabilitation &
Maintenance, Road Markings. Bridges & Structures, Pre-cast & Pre-stressed Concrete,
Piling & Foundation Engineering, Structural Steel Engineering and Public Health
Engineering Works (incl. Water, Drainage & Sewerage)

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The Company has been awarded several government contracts over the years. The
success of the Company is proven each time a government contract is awarded, with a few
listed below:

 2007-2008: Champhyo road; periodic maintenance, vegetation control, distilling of

culverts and road signage

 2011: Construction of Nyimba Forestry District Office

 2013: Gombe Basic School in Chama District, construction of staff house and pit
latrines using labour based method

 2014 to-date: 20% subcontract on the Mumbwa-Itezhi Tezhi road covering 100 kilo
metres, construction of culverts ( The main contractor being Build Trust Co. Ltd)

 2015 to-date; 20 subcontract on the Great East Road, covering 50 Kilo metres,
construction of the drainages (the main contractor being Motor Angel)

As part of its growth strategy, ROPSA General Dealers Limited plans to expand its business
by venturing into making concrete pavers and blocks.

15.0 Ownership

15.1. Shareholding

ROPSA General Dealer Limited is a family business, registered as a privately owned limited
company. The company ownership is shared by Rosemary S Samboko, Ashraf Victor
Motala, John Samboko and Mark Chinungo in the following percentage amounts:

 Rosemary Samboko = 50%

 Ashraf Victor Motala = 20%

 John Samboko = 20%

 Mark chinungo = 10%

15.2. Board of Directors

The following are Board of Directors for ROPSA General Dealers Limited:-

No Names Position
1 Rosemary Shawa Samboko Chairperson
2 Mark Chinungo Secretary
3 Ashraf Victor Motala Member
4 John Samboko Member
5 Rosemary Shawa Member

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 15.3. Senior Management Profiles

 Rosemary S Samboko has over 20 years of work and business experience and over
10 years of business experience in the construction industry including, road
construction, building and housing construction, bridge construction and road
maintenance works.
 Ashraf V. Motala also has over 20 years of business experience and over 10 years of
business experience in the construction industry including, road construction, building
and housing construction, bridge construction and road maintenance works

 Mark Chinungo brings a wealth of knowledge and experience of over 30 years in the
field of accountancy. Mr. Chinungo has been the Finance & Administration Manager
for ROPSA General Dealers Limited for the past 2 years.

 John Samboko is a young man who is on job on training as part of succession plan
for ROPSA General Dealers Limited. He has about 2 years work experience as
Supervisor for ROPSA General Dealers Limited.

16.0 Country Factors

16.1. Legal and Regulatory Framework governing your industry

16.1.1. Registration, Licences & Permits

16.1.1.1. PACRA

Patents and Company Registration Agency (PACRA), the agency run under the umbrella of
the Zambian Ministry of Commerce, Trade and Industry, is responsible for registering
businesses. PACRA registration is required for all businesses and is the first step toward
becoming a formal business and registering for tax responsibility.

16.1.1.2. ZRA

The Zambian Revenue Authority (ZRA) is the tax authority within Zambia. For businesses
with a turnover of below K800, 000 per year, the business is expected to pay three per cent
on earned turnover. Whilst Businesses with above K800, 000 annual turnover pay corporate
tax which is a percentage of profit. The percentage charge for corporate varies depending on
the nature of business.
.
16.1.2. Labour Laws

16.1.2.1. PPE Utilisation

The necessity for worker protective clothing (PPE) utilisation is identified in contract
agreements as part of Occupation Safety and Health (OSH) practices

16.1.2.2. Wages And Social Security

Minimum wage is gazetted by the government after annual negotiation with labour unions..
.
The Workers’ Compensation Fund and the National Pension Scheme Authority
(NAPSA) are the main social protection schemes in the country. Contributions to the
Workers’ Compensation Fund are mandatory and based on employer contributions.
Businesses register the employees that will be covered by the scheme, which should include

Page 25
temporary employees. The benefits of this scheme include compensation for occupational
accidents and diseases.

NAPSA is also mandatory and is based on employee and employer contributions, each
paying five per cent of the employee wage. The scheme is designed to provide a pension
fund to those that retire, or an insurance coverage in case of loss of life or a severely
debilitating injury. The scheme is available for all employees, which includes those in the
formal and informal sector and permanent and temporary employees.

16.1.3. Enforcement

The Ministry of Labour and Social Security has a separate unit for managing labour issues in
the construction/civil engineering sector. The ministry mandates regulation for OSH
standards in the construction sector

The ministry is also in charge of undertaking site inspections to ensure that regulations with
respect to OSH are implemented appropriately by a business. These inspections occur on
business premises in the construction/civil engineering sector, as long as they are PACRA
registered. If businesses are found not to be complying with regulations and there is
imminent danger in the way they are conducting works, works on site will be suspended
immediately. In most cases of incompliance, the inspector gives the business a warning and
will revisit the site to ensure the business complies with the regulations.

16.1.4. Procurement

The Ministry of Works and Supply is responsible for the design, construction and
maintenance of any public buildings and the Roads Development Agency (RDA) is
responsible for the construction and maintenance of public roads. Contracts for both public
buildings and roads are awarded by the Zambian Public Procurement Authority and in
accordance with the Public Procurement Act.

The tender evaluation methodology, as stated in the Public Procurement Act, is dependent
on the “contract type, value and complexity.” The act also states that the evaluation
methodology and criteria should be clearly stated in the bidding document or request for
proposal. Although contract evaluation methodology is dependent on the contract, the
evaluations of most tenders are heavily weighted on price.

The government ‘s policy stipulates that at least 20 per cent of large scale contract in public
road construction works should be subcontracted to a construction company that has
majority local ownership

17.0 Major Stakeholders of block making industry

17.1. Clients

17.1.1. Government

The government acts as the principal client because it is massive infrastructure development
projects. For a business to do business with Government, they need to be registered with
PACRA, ZRA, ZPPA and Citizen Economic Empowerment Commission (CEEC)

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 17.1.2. Private Clients

Private clients developing large-scale industrial or extraction facilities also finance large-
scale projects.

The second category of private clients are one-off residential construction, most private
clients obtain services from informal/non-registered contractors. This type of construction is
an owner-driven process whereby the client purchases all supplies and necessary materials
and only the technical services and labour is contracted.

Residential property developers and private commercial developers use well-established

and reputable contractors which the developers contract a full service which includes both
labour and supply of the required materials.

17.1.3. Architects / Designers

Some architects are permanently employed by large-scale construction companies while a

few others work in various government departments. The majority of architects operate as
private businesses or work as freelancers. Normally, clients look to contract architectural
services, but some architects engage in promotional activities as well.

17.1.4. Contractors

Approximately 4,000 construction businesses are registered with the NCC and majority are
housing and housing category, which includes large-scale international construction
companies.

17.2. Input Suppliers and Allied Service Provider

17.2.1. Building Materials Producers

These are mostly Micro Small and Medium (MSMEs) which largely operates in urban
locations. These include door/window frames, doors and windows, grills/ gates producers.
Sand, metal and crushed stone suppliers, timber input suppliers

17.3. Building materials importers

These include cement/steel producers, building material traders (hardware shops),

construction machinery and equipment suppliers

17.4. Allied Service Providers

These include borehole / drilling service providers, electrical installation, plumbing and air-
conditioning service providers and masons

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18.0 Your creditors and Debtors

18.1. Creditors

No Description Amount

1 Unpaid salaries K18,300

TOTAL K18,300

18.2. Debtors

No Description Amount

1 Accounts Receivable K156,000

TOTAL K156,000

19.0 Disclosure of on-going Claims and Litigations against your Company

Not Applicable

20.0 Annexes

20.1. Financial Statements Past Three Years

20.2.
20.2.1. Statement of Financial Position for 2013-2015
20.2.2. Income Statement for 2013-2015

20.3. Projected Financial Statements for Duration of the Loan

20.3.1. Statement of Financial Position for three years
20.3.2. Income Statement for three years

20.4. Performance Management Plan

20.5. References

20.5.1. Testimonials
20.5.2. Personal Sureties
20.5.3. Past and Present Bankers

20.5.4. Latest Tax Clearance Certificate

20.5.5. Insurance Information

20.6. Asset Valuation Report

20.6.1. Not applicable

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