Business Plan

“Eastern Rubber Recyclers”

Tables of Content
I. Executive Summary

II. Company Description

III. Product Description

IV. Market Analysis

V. Marketing and Sales

 VI. Management and operations

VII. Financials

VIII. Appendix

IX. References

Executive Summary

With the multiple environmental crises, “ Eastern Rubber Recyclers” reflects what our Lebanese society needs nowadays. It is
a rubber recycling plant particularly tires recycling, aiming at reducing any kind of pollution and promoting healthy environment. This
business will be developed and launched in 2015 in Tripoli, north Lebanon most specifically in an industrialized area in Mina region.
Our project focuses on using rubber-recycled powder in the production of rubber containing products. We will be producing both
recycled raw materials and rubber based products that are then sold to other businesses and customers needing these merchandises.
The deals concerning tire collection will mainly occur between the municipalities, Lavaget, Sukleen and the environmental NGOs. As
for the equipment, we will import the machines from china with great prices. Before the process of recycling take place, we will be
launching awareness campaigns all over Lebanon to encourage people to start using environmentally friendly products while shedding
the light on the harmful effects of burning tires on both ecosystem and human health. Our main competitor in this field is The
Lebanese Polymer Industries SARL, a rubber production industry having rubber recycling service as an extra activity. The estimated
price covering all the expenses and including a percentage of profit will be 52$ per product. Our loyal customers will have discounts
and beneficial premiums reaching 25%. This price will put our company in a competitive advantage in comparison with this major
player in the recycling field. In order to begin this eco-friendly business we need $418,000 from our investor, which is a loan from
Bank Audi and from minor investors too. We assume that we will return them back within 6 to 7 years as a maximum. This business
will begin with only 22 employees: managers, technician, secretary, drivers, labors and security guards. In addition, we will be
responsible for the transportation of the ordered products to our industries and customers across Lebanon. In the future, we are aiming
to expand to the MENA region and why not in the western foreign markets.

Company Description
“Eastern Rubber Recyclers” is a recycling facility located in Tripoli north Lebanon. To be more exact, it is in an industrialized
area away from inhibited buildings, in Mina. This plant will occupy 2800 cubic meters, a land ready for construction. According to the
Ministry of Environment (1998), almost 15,000 tons of car tires are discharged annually. It is mainly due to its irreparable damage. In
fact, tires constitute one of the largest problematic sources of waste worldwide. They cause massive harm to the ecology, especially
when they are burned. They release toxic air pollutants and thus cause negative health effects to the humans. They will remain
destructive even when simply dumped; their huge volumes will occupy a lot of space in landfills. As a result to their durability, cheap
availability and hard disposal, establishing a rubber recycling company will surely be a success, since it is unique and a beneficial as
well as a friendly business to our environment. Recycled rubber constitutes an attractive target for many customers seeking cost
effective rubber for their production line, since its first production from the latex extracted from specific plants is very expensive and
requires huge consumption of resources and energy. Rubber powder, which is the end product from the recycling process, can be used
in shoe production, in basketball and mini football courts, in cars accessories, roads and many other products and services that are
highly consumed. We consider “Eastern Rubber Recyclers” in a competitive advantage due the minimal presence of such facilities
especially in north Lebanon. Moreover, our selling prices will be very reasonable and affordable for almost all the production
industries. As a legal form, we will be registered as a limited liability company. This business will offer almost 15 different job
opportunities. So, besides possessing the goal of preserving nature, this project will boost the economical sector. As for the human
capital, we will be hiring at the beginning 22 employees executing multiple roles: 3 managers (CEO, financial and marketer: all
having a public health scientific background), 6 labors on site, 2 drivers and 2 helpers for tire collection process, 1 secretary, 5
salesmen, 1 technician and 2 security men. As for the shareholders: The Rim Mikati, second year Public Health and Development
Sciences in University of Balamand, having 60% shares. The second shareholder is Lea elSacca also Public Health and Development
Sciences first year, with also 30% shares. Finally, Noah Saiidi the marketer manager with 10% shares, possessing a Ph.D. in
marketing in London University. Our future vision is to extend and reach all the Arabic countries and having different franchise in the
MENA region. Nevertheless, we will be using solar energy instead of fossil fuel in our production, an additional reason for
encouraging our productive business.

Product Description
The first step in any startup business is the introduction phase. In year one, this latter includes just like the other businesses
renting the land, building the plant after finishing the design with local civil engineers and recruiting the employees based on their
experience and degrees. Training sessions will be provided for the employees, especially for the labors working on site with the
supervision of our experts. Moreover, we will import the machines from China, known for their availability and good price. There are
5 different machines involved in the rubber recycling process. Our start point in this business is making deals regarding the tires
collection. We are planning to work first with the NGOs mainly like GREENPEACE, APET (Association for protecting the
Environment), EPC (Environment protection committee) and second with the municipalities, Lebanese Army and with multiple
garages in north Lebanon (UNDP, 2004). Therefore, we will be ready to test the production to make sure that everything is on the
right track. In year 2, the real production will be in progress. Finally, we will be launching awareness campaigns through media about
the importance of recycling displaying by that its beneficial aspects and the hindering the destructive effects of burning tire on both
human health and environment. The rubber recycling process consists of 4 major phases: steal bead heel extraction, tire shredding,
granulation and recycling and thus re-selling (Granutech station systems, 2011). These will transform a non suitable for use tire to a
well-refined rubber powder ready to be used in industries and commercial products. The end product will be sold to multiple
costumers all over Lebanon with a competitive price. From the beginning of the production, profits will be generated and hopefully
will be covering 70% of the Lebanese market by the end of year 5. Before reaching market saturation phase, a new marketing strategy
will be developed to boost the demand on our product. The factors that can alter the product’s life cycle can be multi-faced: positive
and negative. The lack of awareness concerning the concept of recycling can be an obstacle; sometimes customers neither trust nor
believe in new things and thus they prefer to stick to the traditional production of rubber. In addition, the following step is extending
to other Arabic countries as a goal of searching for new markets and customers. Since the idea of rubber recycling already exists
previously in Lebanon, our marketing strategy and our low prices will put “Eastern Rubber Recyclers” in a competitive advantage. We
are the only plant in north Lebanon that focuses on rubber recycling and not on its production. (See graph in the appendix).

Market Analysis
Industry Description

“ Eastern Rubber Recyclers” is a plant, which focuses in producing both rubber powder and rubber recycled end products. It is the
only rubber industry located in Mina-Tripoli. Since Tripoli is considered the capital of the north which is highly populated, this will
urgent the need to promote a healthy environment away from illegal dumping and pollution .Our goal is to provide all the industries
will rubber-recycled products and push people to use eco-friendly materials. As for our mission, we aim to protect the environment
before it is too late.

Target market

Many products can be made from recycled rubber:

1- Dock Bumpers
2- Muffler Hanger Straps
3- Spacers and Washers
4- Blasting Mats
5- Modular rubber Mats (Molded)
6- Rubber Mats (Molded)
7- Rubber Mats (Tire Strip)
8- Stamped Rubber Products
9- Crumb Rubber Derived Products
10- Equestrian Arena Surfacing
11- Track and Field Footing
12- Playground Surfaces

So, basically our target market is very large including all the industries, facilities and stores involved in the production, the selling and
the purchasing of these products. For example, in case of the industries like Doculand, they will need rubber-recycled powder.
Carpenters will need half of these products. Finally, as a consumer, a day care center for instance, it will mostly need rubber for the
playground surfaces.

Market Needs

Recently, Lebanon experiences a huge demand on advanced engineering materials including rubber. However, the majority of the
industries are exporting rubber from Western Europe and North America due to the insufficiency of the local supply (A-Build
Lebanon, 2013). That’s why our company will cover the demands of the industries locally and without harming the ecosystem. In
addition to that, we have an urgent environmental need, which are reducing pollution and the use of raw materials.

Market Segmentation

Our clients, spread all over Lebanon, are searching for clean, eco-friendly, recycled products. That’s why our market is segmented into
geographical and psychological one. Our market strategy via media and awareness campaigns, will touch the majority of people and
encourage them to start thinking about our environment and that they can start from small things like buying recycled products.
Moreover, the transportation that our company provides will ensure them that we can reach the entire target easily.

Market trends

“ Today’s resources are for our future generations”. Therefore, each one of us should get involved in protecting the environment that
he or she lives in. In fact, many NGOs have started to work on this issue by promoting the idea of recycling. This process saves
energy, mitigates the environmental crisis and preserves, as possible as it can, the raw materials and resources from depletion.
Nowadays, the majority of the industries are moving towards creating eco-friendly products by using fewer resources, less energy and
thus producing less waste. Eco-friendly, Green living, recycled products are signs that attract the consumers to buy everything related
to them. So, recycling is becoming a trend in the Lebanese market.

Market Growth

First of all, the industrial sector is relying more on recycled materials as for its cheapest cost or for the reputation and the image of the
industry. Moreover, due to the media, our society is becoming more aware about the dangerous effects of burning or dumping tires
and other rubber products in landfills. Nevertheless, the possession of a car for each member of the family is becoming a necessity for
many. In fact, Bankmed (2014) stated, “ during the first half of 2014, 18,388 new passenger vehicles were sold in Lebanon” (p.6). As
a result to that increase, the number of discharged tires will increase too. So, “ Eastern Rubber Recyclers” will surely then experience
a huge growth in the market, estimated to reach market saturation by the end of our third year.

Competitive Analysis

Lebanese Polymer Industries SARL, located in Anfeh El Koura, Lebanon. This company is established in 2009. Its main activities are:

 Manufacturers of rubber and plastic products.

 Rubber exhaust hangers for cars.
 Speed bumps for roads & parking lots.
 Corner guards for parking lots.
 Rubber recycling
Its structure consists of 3 managers: Quality control, Production and a general manager. So, it is our main competitor in the Lebanese
market. However, we still consider ourselves in a competitive advantage concerning the pricing structure. The approximate price of
each product is almost 64$, much more higher than ours almost 52$. Plus, this company does not sell rubber-recycled powder; they
focus only on rubber materials. Moreover, we will be covering the demands of the Lebanese market which witnesses a shortage of
rubber that pushes it to import from the foreign markets. The marketing strategy that we are planning to do, including the media and
the awareness campaigns will help us to gain much more quickly loyal customers that believe in the cause of environment.

Pricing and gross margin targets 

Since the fixed cost is $40,570, while the variable cost is $67.33, the average price for one recycled material will be $52.

The estimated gross margin: Revenues-cost of goods sold = $28,750

Revenues

Barriers to entry

Unfortunately, in Lebanon there is no law or legislation that actually bans burning tires. This phenomenon is frequently seen when
citizens express their anger and refute a current situation; they cut the roads off with burning tires. And as for the authoritative power,
they mainly focus on the problem itself and forgetting the harmful effects of burning tires. So, there is no punishment or penalty that
will make anyone stop polluting the environment. Moreover, the bureaucracy and the political corruption that stress on the different
departments and individuals can impact the cooperation and the deals that we should make. In addition, the economic instability of the
country will threat the success of any new investment and thus this will not attract the interests of the investors in such businesses.

Market share

Since all our competitors’ main activity is rubber production and not pure recycling. This will be put “ Eastern Rubber Recyclers “ in a
privilege position in the market and thus we can easily share 60% of the Lebanese market.
Regulatory Restrictions

The customer has been for several years ordering rubber products from specific manufacturer and retailers. So, It might be hard for
him to change his consumption behavior easily.

Sales and Marketing

Our rubber recycling industry aims to fight all factors that destroy the environment, especially against air pollution, which is
favored by the production or the burning of rubber, processes that may release dangerous pollutants. Our product (recycled rubber)
will be sold in the northern region of Lebanon but in an area isolated from inhibited neighborhoods for public safety. Target customers
are represented by owners of factories whose products require rubber, owners of garages for fixing cars and repairing various kinds of
vehicles, in addition to football stadiums and all kinds of facilities that demand this need. Product differentiation is surely satisfied in
our unique industry since recycling is kind of weak in an underdeveloped country such as Lebanon who is in a constant economic
crisis struggle. Our industry is in a competitive advantage since few recycling industries are located in the north of Lebanon. One of
the main competitors to “Eastern Rubber Recyclers” is the Lebanese Polymer Industries SARL that is situated in Anfeh. The pricing
process was relatively based on the operating, administrative, research, and marketing costs. Since we are newly opening our
company, the strategy that will most likely increase our benefits and profit on the long run is adapting a low-price strategy in order to
attract customers and to build a trusting relationship that will later on evolve into consumer loyalty. After meeting our financial goal to
cover up the costs, higher yet affordable prices can be set to target a higher profit (Ebert & Griffin, 2014). The place of the company is
tricky and requires carefulness and attention. Since the North region of Lebanon has only a single recycling industry concerned with
rubber compared to other cities, our company will be build in Tripoli for the products to be reachable and available to customers in
question. Transportation options are related to marketing segmentation; industries located in Beirut and the southern regions can
obtain products twice a week from our own qualified transportation whereas cities in Mount Lebanon, Bekaa, and northern cities can
receive transported products four times a week. As for channels, we distribute our products to other companies that will sell them to
retailers that in turn will distribute them to final customers (Ebert & Griffin, 2014). However, our main concern is the promotional
tools that are going to be adapted since they constitute the key to our product’s success. In the advertising section, we will be focusing
on providing attractive banners along the highways, publicities in famous local newspapers and magazines, in addition to animated
publicities on Lebanese channels, the radio, and frequently used websites for people interested in this field. As for personal selling, we
rely on this category in a significant manner because the majority of our target market can be reached here. The chosen representatives
were elected based on their social, intellectual, and most importantly their persuading skills. Purchasing agents of other companies
who request additional technical and detailed information are often referred to our professional spokespersons. Furthermore, it is well
known that sales promotions and offers tend to tempt consumers to buy products at a higher rate. Therefore, our industry decided to
offer price reductions on a great quantity purchased of the recycled rubber product with promotions ranging from 10% to 25% from
the reduced price. What is surprising is that we offer premiums too such as packages of recycled paper, eco-friendly bags, and
coupons from organic food stores. Finally, we aim to establish and ameliorate the public relations field in well-known events such as
charities or dinners for associations, in order to build favorable attitudes in the minds of the public and fellow industries toward the
organization and our products. Our products’ simplicity yields higher quality, lower production costs, and shorter delivery times which
increases our success. As for growth, we predict a peak the first year of launching, and then a stable growth with few fluctuations if
the plan was properly achieved. Moving on to our sales force strategy, we decided that the use of independent representatives would
be more beneficial for the sake of our company in order to develop a steady and powerful internal workforce that has a goal of
achieving the prosperity of the company. The number of Salespeople in the beginning is 5 as mentioned before. As for recruitment
strategies, we would be offering new jobs with good salaries especially for students in universities who are majoring in the public
health field. Knowing that training a company’s sales force is at the core of customer success, our lovely company will be committed
to organizing training sessions held by certified instructors including both online courses and public courses. Our compensation
systems will consist of a mixture of both incentives and bonus plans with higher salaries in order to attract and establish a professional
work force.

Operations
Our industry revolves around recycling rubber for several uses including rubber-containing products; rubber of car tires and
rubber exhaust hangers for cars. The production of rubber involves a sophisticated series of processes such as mastication, mixing,
shaping, molding, and vulcanization. Polymers, Plasticizers, and various additives are added during the mixing process to give desired
characteristics to the finished product (Tire recycling equipment-Crum rubber system. 2011). However, when recycling such an
element, the process becomes much simpler. “The rubber used in tires is relatively easy material to reform by hand. The tools required
for making products directly from tire rubber are not expensive and are few in number. Shears, knives, tongs, and hammers are
common tools found in the recyclers’ workshop, along with a wide range of improvised tools for specialized applications. Shoes,
sandals, buckets, motor vehicle parts, doormats, water containers, pots, plant pots dustbins, and bicycles pedals are among the
products manufactured. A high-density tire compactor will be used as the main machine to recycle the rubber. This equipment will
compact waste tires and rubber material that are usually degraded in landfills to a copy of their original source or to another useful
product such as a fuel or energy substitute, in civil engineering applications, and in the manufacture of commercial rubber products.
The advanced technologies we use minimize product loss, increase productivity, and maintain a clean operating environment. Our
crumb rubber systems diverse sizes in the recycling process to satisfy the various needs of customers whether it is coarse rubber for
playgrounds or rubber for artificial turfs. Bottle caps, shredded passenger car tires and their constituents, car carpets, child safe
products, crumb rubber, gym mattresses, damaged rubber phone covers, speed bumps, speed humps, gloves from hospitals, surgery
malfunctioning or outdated equipment, garden hoses, and doormats are only few of the items that can be collected from our various
suppliers that are then going to be recycled. The specialization process includes the breakdown of the overall job by our top and
middle managers into several smaller jobs. Thus, some workers transport the shredded tires and the waste rubber material to the
company’s workshop. Others operate the shredding apparatus before turning the raw materials over to the workers who then melt them
into liquid form. Other specialists are in charge of the transformation process where the liquid substance of the recycled material will
be used to manufacture the new products. Our organizational structure is a matrix structure, a combination of both functional and
divisional structure. The coordination of the three departments (marketing, operations, and finance) along with the heads of each
division will lead to a smoother coordination which will result in a successful targeting of all product groups (Ebert & Griffin, 2014).
This recycling industry is a limited liability company shared between Lea Sacca, Rim Mikati, and Noah Saiidi, including minor
investors and contributors including Bank Audi, Mr. Sacca, and Mr. Mikati. The shareholders are inspired and motivated to change
their country into a healthier and more suitable place to live, work, and study. The majority of the employees hired are university and
college students to benefit from the profit obtained from low salaries and to give students the opportunity to experience the work field
related to their majors especially those who are majoring in public health, health promotion, environmental sciences, business
management… As mentioned before our source of suppliers is vast including garages, hospitals, shopping centers, Lavaget, Sukleen,
organizations, hotels, universities, schools… However, our main focus is on grand industrial factories, which manufacture products in
huge quantities and get rid of the waste material even though they can be recycled. Therefore, our main goal is to have Lavaget,
Sukleen and environment NGOS along with huge factories as the main suppliers for our company.

Eastern Rubber Recyclers

Balance Sheet
As of January 31, 2015 (In US $)

January February March April May June July August Septembe October November December
r

Assets
Cash $12,500 $22,100 $31,000 $36,000 $41,350 $46,750 $49,980 $52,300 $55,600 $57,900 $59,500 $61,000
Acc. $250 $500 $800 $1200 $1600 $1800 $2050 $2200 $2340 $2500 $2700 $2900
Receivable

Office $800 $800 $1000 $1200 $1200 $1300 $1400 $1600 $1750 $1750 $1800 $1900
equipment
Automobile $38,000 $38,000 $38,000 $38,000 $38,000 $38,000 $38,000 $38,000 $38,000 $38,000 $38,000 $38,000
s
Building $95,000 $95,000 $95,000 $95,000 $95,000 $95,000 $95,000 $95,000 $95,000 $95,000 $95,000 $95,000
Total $146,55 $156,40 $165,80 $171,40 $177,15 $182,85 $186,43 $189,10 $192,69 $195,15 $197,00 $198,80
Assets 0 0 0 0 0 0 0 0 0 0 0 0

Liabilities
Notes $40,000 $39,250 $38,700 $37,500 $36,100 $35,600 $34,560 $33,321 $32,145 $31,470 $30,220 $29,431
Payable
Salaries $15,300 $15,300 $15,300 $15,300 $15,300 $15,300 $15,300 $15,300 $15,300 $15,300 $15,300 $15,300
Payable
Total $55,300 $54,550 $54,000 $52,800 $51,400 $50,900 $49,860 $48,621 $47,445 $46,770 $45,520 $44,731
Liabilities

Owner’s
Equity

Capital $81,250 $87,850 $96,800 $102,60 $107,75 $110,95 $114,57 $116,47 $118,24 $120,38 $122,48 $123,06
Stock 0 0 0 0 9 5 0 0 9
Retained $10,000 $14,000 $15,000 $16,000 $18,000 $21,000 $22,000 $24,000 $27,000 $28,000 $29,000 $31,000
Earnings
Balance Sheet Predicted at the end of the next 4 years:

Year 2 Year 3 Year 4 Year 5

Assets
Cash $72,000 $85,000 $93,000 $107,000

Acc.Receivable $400 $5200 $6400 $7900

Office Equipment $3140 $3900 $4750 $5788

Automobiles $38,000 $50,000 $50,000 $50,000
Building $95,000 $95,000 $95,000 $95,000
 Total Assets $208,540 $239,100 $249,150 $265,688

Liabilities
Notes Payable $19,115 $18,387 $17,552 $16,082
Salaries Payable $15,300 $15,300 $15,600 $15,600

Total Liabilities $34,415 $33,687 $33,152 $31,682

Owner’s Equity
Capital Stock $135,125 $150,413 $158,998 $170,006
Retained Earnings $39,000 $55,000 $57,000 $64,000

Eastern Rubber Recyclers

Income Statement

As of Dec. 31, 2015 (In US $)

Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec Total
Gross Sales $41,000 0 0 0 0 0 0 0 0 0 0 0 $41,000

Purchases of $12,250 - $198. $198. - $198. - - $198. $198. - $198.5 $13,441

Goods Sold 5 5 5 5 5
$12,250 - $198. $198. - $198. - - $198. $198. - $198.5 $13,441
Cost of Goods and 5 5 5 5 5
Services Sold

Gross Profit $28,750 - (198) (198) - (198) - - (198) (198) - (198) $27,562

Operating
Expenses
Electricity& $400 $400 $400 $400 $400 $400 $40 $400 $400 $400 $40 $400 $4,800
Internet 0 0

Rent Expenses $2,200 $2,2 $2,20 $2,20 $2,2 $2,20 $2,2 $2,2 $2,20 $2,20 $2,2 $2,200 $26,400
00 0 0 00 0 00 00 0 0 00

Maintenance and $130 $130 $130 $130 $130 $130 $13 $130 $130 $130 $13 $130 $1,560
Repair 0 0

Lawyers, & Experts $2,200 $2,2 $2,20 $2,20 $2,2 $2,20 $2,2 $2,2 $2,20 $2,20 $2,2 $2,200 $26,400
00 0 0 00 0 00 00 0 0 00
Insurance $1,750 $1,7 $1,75 $1,75 $1,7 $1,75 $1,7 $1,7 $1,75 $1,75 $1,7 $1,750 $21,000
50 0 0 50 0 50 50 0 0 50

$2,6 $2,60 $2,60 $2,6 $2,60 $2,6 $2,6 $2,60 $2,60 $2,6
Publicity and $2,600 $2,600 $31,200
00 0 0 00 0 00 00 0 0 00
Advertising
$28 $28
$280 $280 $280 $280 $280 $280 $280 $280 $280 $280 $3,360
Office Supplies 0 0

$9,5 $9,56 $9,56 $9,5 $9,56 $9,5 $9,5 $9,56 $9,56 $9,5 $114,72
Total External $9,560 $9,560
60 0 0 60 0 60 60 0 0 60 0
Services
$15, $15,3 $15,3 $15, $15,3 $15, $15, $15,3 $15,3 $15, $15,30 $183,60
Salaries $15,300
300 00 00 300 00 300 300 00 00 300 0 0
Non-Operating or
other
 $5,0 $5,00 $5,00 $5,0 $5,00 $5,0 $5,0 $5,00 $5,00 $5,0
$5,000 $5,000 $60,000
Interest Revenues 00 0 0 00 0 00 00 0 0 00

$3,2 $3,20 $3,20 $3,2 $3,20 $3,2 $3,2 $3,20 $3,20 $3,2
$3,200 $3,200 $38,400
Gain on sale of 00 0 0 00 0 00 00 0 0 00
investments
($7,2 ($7,2 ($7,2 ($7,2 ($7,2 ($7, ($7,2 ($7,2 ($7,2 ($7, ($7,20 ($86,400
($7,200)
Loan 00) 00) 00) 00) 00) 200) 00) 00) 00) 200) 0) )

($13. ($16. ($21. ($23 ($26. ($29. ($29. ($30 ($31.6 ($274.99
($13.33) ($20) ($20)
Depreciation 33) 67) 67) .33) 67) 16) 16) ) 7) )

Exp .Inter. ($10 ($162 ($216 ($27 ($324 ($37 ($43 ($486 ($540 ($59
($54) ($648) ($4,212)
8) ) ) 0) ) 8) 2) ) ) 4)

Total non- $878 $821. $654. $59 $541 $484. $430. $37 $320.3 $7,513.0
$932.7 $764 $710
operating .7 33 33 8.7 .33 84 84 6 3 1
expenses

Operating Income $25,792.7 $25, $25,6 $25,6 $25, $25,5 $25, $25, $25,3 $25,2 $25, $25,18 $305,83
Before taxes 738. 81.33 24 570 14.3 458. 401. 44.84 90.84 236 0.33 3.01
7 7 33
Income Taxes $310 $310 $310 $310 $310 $310 $31 $310 $310 $310 $31 $310 $3,720
0 0

$25, $25, $25,

$25,3 $25,3 $25, $25,2 $25,0 $24,9 $24, $24,87 $302,11
Net Income $25,482.7 428. 148. 091.
71.33 14 260 04.3 34.84 80.84 926 0.33 3.01
7 7 33
 Eastern Rubber Recyclers

Income Statement

As of Dec.31 Years 2016, 2017, 2018, &2019

2016 2017 2018 2019

Gross Sales $45,000 $52,000 $58,800 $65,500
Purchases of Goods Sold $14,120 $15,360 $16,500 $18,290
Cost of Goods and Services Sold $14,120 $15,360 $16,500 $18,290
Gross Profit $30,880 $36,640 $42,300 $47,210

Operating Expenses
Electricity &Internet $4,800 $4,800 $4,800 $4,800
Rent Expenses $27,000 $27,000 $27,000 $27,000
Maintenance and Repair $1,800 $1,800 $2,000 $2,000
Lawyers & Experts $2,500 $2,500 $2,800 $2,800
Insurance $21,000 $21,000 $21,000 $21,000
Publicity and Advertising $2,600 $2,800 $3,000 $3,000
Office Supplies $280 $300 $300 $300
Total External Services $59,980 $60,200 $60,900 $60,900

Salaries $192,000 $192,000 $195,000 $200,000

Non-operating or other
Interest Revenues $72,000 $72,000 $78,000 $78,000
Gain on sale of investments $42,000 $43,200 $45,600 $48,000
Loan ($90,000) ($90,000) ($92,000) ($95,000)
Depreciation ($52.33) ($65) ($79.16) ($96.46)
Expense Interest per year ($8,100) ($8,100) ($8,280) ($8,550)
Total non-operating expenses $15,847.67 $17,035 $23,240.84 $22,353.54
Operating Income before taxes $267,827.67 $269,235 $279,140.84 $283,253.54
Income taxes $360 $360 $360 $360

Net Income $267,467.67 $268,875 $278,780.84 $282,893.54

The cash we started with ($12,500) for the month of January of this year, 2015, was the result of the loan taken from Bank Audi, one
of our investors, with a value of $7,200 for each month of this year. The rest of the amount was shared between Mr. Sacca and Mr.
Mikati, our fellow investors as well, with a total amount of $2,650 each for the first month, and both contributed with a higher value
for the rest of the year (according to the needed cash for each month). So, as an investment cost, we need 418,000$ to start this
company. This amount we will be return within 6 to 7 years as a maximum.

Our fixed costs consist of the operating expenses, the salaries, the interest revenue, and the gain on sale of investments, taxes, and
loans. Therefore, the total fixed costs for each month in 2015 consist of a value of $40,570. However, the variable costs include
depreciation and the expense interest with a total amount of $4,486.99 for the first year. Taking January as an example for the break-
even analysis, the fixed cost is $40,570, while the variable cost is $67.33, and the average price of approximately all recycled tires is
$52, then the break-even point is:

Break-even point (per tire) = Total fixed costs/ (Price-Variable cost)

= 40,570 / (67.33-52) =2,646.5 tires (approximately 2,647 tires)
Then the monthly revenue break-even, in this case, the month of January, is 2,647 x $52 = $137,644.

Appendix
Board of Directors and All Managers:
The Board of directors of Eastern Rubbers Recyclers is known for its uniqueness in the country as well as globally due to the
professional team members and their qualified expertise that renders them undefeatable against the competing environment in addition
to the production process. As for our managers, they are individuals characterized for being top achievers in their old work
experiences as well as in the field they studied.

- The CEO, John Saadeh

Qualifications Summary: Over twenty years of experience in HR management, technical, and supervision of all processes that lead to
the manufacturing of creative products from recycled material.

Work History:

2000-2010: General Manager of Polymark (USA): Polymark has been a plastic scrap recycler for over 20 years, dealing worldwide in
reprocessed, virgin and wide-spec PVC, PET, PETG, Polycarbonate, Polystyrene, ABS, Nylon, Polyethylene and Polypropylene.
General Manager responsible for the supervision and management of staff and administration of programs for operational purposes.
Major achievements include 36 % increase in sales and first professional accreditation of facility.

Education:

Graduate of Public Health and Developmental Sciences of University Of Balamand, Lebanon

Masters in Business Administration, AUD, Dubai

- The marketing manager and the shareholder, Noah Saiidi

2014: Recently graduating from London University with a Ph.D. in marketing.

2011-2013: worked in H&C Leo Burnett the top 1 Advertisement Company in Lebanon.

2009-2011: Graduating from Lebanese American University with a master degree in marketing and communication.

- Sarah Nahleh

Qualification Summary: 10 years of experience in operational and supervision of all phases of glass and rubber recycling and
shipping.

Work History:

2004-2014: Co-owner of Lebanese Recycling Works SARL: Lebanese Recycling Works SARL is a company specialized in the
recycling of plastic to produce plastic boxes and cases, plastic packaging for the food and beverage industry, and plastic and rubber
waste collection and recycling services.

Education:

Graduate of Public Health and Developmental Sciences and with a minor in Environmental Sciences from University Of Balamand,
Lebanon. Masters in Health Promotion, AUB, Lebanon

Employees:
Some of the employees hired are university students to benefit from the profit obtained from low salaries and to give students the
opportunity to experience the work field related to their majors especially those who are majoring in public health, health promotion,
environmental sciences, business management… As for the labors, their long experience years in the industry fields that characterizes
them.

Suppliers:
As mentioned before our source of suppliers is vast including garages, hospitals, shopping centers, Lavaget, Sukleen, organizations,
and the Lebanese army. However, our main focus is on grand industrial factories, which manufacture products in huge quantities and
get rid of the waste material even though they can be recycled. Therefore, our main goal is to have Lavaget, Sukleen and
environmental NGOS along with huge factories as the main suppliers for our company.

Shareholders
1) Rim Mikati
Current: University Student, second year Public Health and Development Sciences in University of Balamand.
Past: Rawdat Al Fayhaa Secondary School Tripoli-Lebanon, Scientific background.

2) Lea Sacca
Current: University Student, first year Public Health and Development Sciences in UOB.
Past: Antonine Sisters School, Scientific Background.

3) Noah Saiidi
Current: Recently Graduating from University of London with a Ph.D. in marketing.
Past: American University of Beirut with MBA in maters. Worked for one year in the top 1 Advertisement Company in
Lebanon H&C Leo Burnett.
.

Product’s Life Cycle

 Year 1 Year 5
Year 2
Establishing the New marketing strategy
plant Production
New market place
Importing the New costumers
machines
New product development
Making deals
Collecting tires
Testing the

Year 3-5
Covering 70% of
the Lebanese
market
 http://
www.greenlebanon-lb.com/gallery.html
 References

 Association ofsmall business development centers. (1998). Writing Business Plans for Recycling Enterprises: Plastics, Glass or
Rubber. Retrieved from http://www.epa.gov/epawaste/conserve/tools/rmd/docs/nevada.pdf
 Appropriate technology development association. (n.d). Recycling Rubber. Retrieved from
http://www.seas.columbia.edu/earth/RRC/documents/recycling_rubber.pd
 A-Build Lebanon. (2013). Retrieved from http://abuildlebanon.com/about/
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http://www.unep.org/dewa/westasia/Assessments/national_SOEs/west%20asia/Lebanon/Chap3Industry.pd
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rubber-products/
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equipment.html
 UNDP list of NGOs by sector/type/geographic area. (2004). Retrieved from
http://www.undp.org.lb/partners/NGOs/GeographicArea.pdf