COASTAL TRANSPOST CC

Corporation Profile

2023
TABLE OF CONTENTS
PAGE
1. EXECUTIVE SUMMARY
1.1. Business Description 2
1.2. Background 2
1.3. Management Team 3
1.4. Market Landscape 4
1.5. Operational Strategy 4
1.6. Financial Plan 6

2. INDUSTRY ANALYSIS
2.1. Barriers to Entry 6
2.2. Suppliers 6
2.3. Sustainability 7
2.4. Competition 8

3. GROWTH STRATEGIES 8

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EXECUTIVE SUMMARY

The purpose of this company profile is to outline our vision and give a full
description of the nature, purpose and objectives of our operations as a business.

1.1 Business Description

Coastal Transport CC was established in 2020 and commenced operations in

Ernst in January 2021. The business is owned 50:50 by Ronel Steyn and Wishes
Nyoni, professional accountants and entrepreneurs based in Walvis Bay
Namibia. Currently the business owns a Scania R420 Truck with tri-axel skeletal
trailer and 40ft refrigerated container unit.

1.2 Background
The Port at Walvis Bay (Namport) is a natural source of traffic and work for
businesses in the transport and logistics sector.
The Namibian Ports Authority (Namport) handled a total of 5 561 999 tons during
the 2019/20 financial year through equal contribution from the ports of Walvis
Bay and Lüderitz, as well as the four corridors.
Of this figure, one million tons were handled through the Trans-Kalahari, Trans-
Oranje, Trans-Kunene as well as the Ndola-Lubumbashi development corridors.
This translates to a significant offtake off cargo by road transport on these
corridors.

Coastal Transport was established initially to target fish, the second largest
product, by tonnage handled by the port (after salt). This will constitute our
primary client market (product carried), until we are big enough to look at
diversification.
The Democratic Republic of Congo has a population estimated at 97million,
compared to just over 2.6 Million people in Namibia. It is a huge market, and our

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current fish exports to that country, do not come near to satisfying the overall
demand. As they say, “there are not enough fish in the sea”.
The truck we would like to finance in the attached application, will join our
existing truck and service the fish export route from Walvis bay, through Zambia
to Kasumbalesa, at the border between Zambia and The DRC. The product we
carry is offloaded into bulk storage on the Zambian side of the boarder and we
never actually cross into the DRC, which would come with its own risks and
challenges.
The trucks return from Zambia with loads of maize or soya cake used as stock
feed by farmers in areas such as Outjo, Tsumeb and Otavi in Namibia.

1.3 Management Team

The members of Coastal Transport CC have hands-on involvement in the day to
day running of the business. Additionally, we have employed the services of a
young local transport broker named Rual Louw. Mr Louw, who has been part of
our team from the beginning, and shares our long-term vision, earns a
commission on each load transported. He therefore has a vested interest in the
growth of the business. His greatest strength is that he has been in the transport
industry as a broker at the coast in Namibia for years. He has a large network of
contacts and he is responsible for securing loads and taking care of operational
logistics for our trucks. He monitors the movements of the trucks and co-
ordinates continuously with drivers. He schedules and supervises any repairs
and maintenance work, ensures consignment clearance documents, expense
invoices and all relevant records are in order. We believe that our management
team has proven entrepreneurial and management skills to operate in this
competitive industry. From the day our first truck started operating, we have
never struggled to find work and are consistently busy. As a team we have the
rare combination of quality academic training and experience in the market.

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1.4. Market Landscape
Coastal Transport CC recognizes the following industry trends:
• A growing economy that calls for increased capacity in the bulk road
freight transport industry;
• High barriers to entry because of high start up costs;
• Strong bargaining power of suppliers – labor and to a lesser extent,
manufacturers and retailers of heavy duty vehicles;
• Moderate bargaining power of buyers of the service;
• Fairly competitive operating environment;
• An enabling regulatory environment;
• An environment of enabling technological advancement.

1.5. Operational Strategy

Coastal Transport’s operational strategy is aimed at reducing the risks while
taking full advantage of the benefits of operating in this industry. To this end, the
focus is:
• Building up a fleet of vehicles that are able to effectively and efficiently
serve our client’s needs, and thus generate our target income;
• We will deliberately not pursue the acquisition of brand-new trucks at this
stage of the business’s lifecycle. Our strategy is to acquire used Scania
trucks, that have a complete service history and are less than 7 years old.
• Scania is our preferred brand. We have found these to be strong trucks
with a performance track record in African conditions. Scania’s are also
common along our targeted routes, making it easier to find spare parts,
capable mechanics and roadside assistance throughout Southern Africa.
• We believe that the cost of a brand-new truck, currently at over N$2.4
million, is not viable for small emerging transporters.

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• Our strategy is informed by what we have learnt and the results we have
achieved so far using our first truck. We own a 2007 Scania G420, which
we purchased cash using members funds in November 2020. After
extensive initial repairs and maintenance, to bring the truck to a good
refurbished standard, that truck has proved to be a reliable workhorse.
The income it has generated enabled us to purchase and fully refurbish
our tri-axel skeletal trailer as well as a 20ft reefer container unit. We have
also organically generated sufficient working capital to be in a position to
now put down the anticipated 30% deposit that would be required on the
HP for a new truck, without injection of new capital by the members.
• We have learnt that most breakdowns and repairs on a 30 ton truck,
emanate from the condition of the trailer. A perfectly operational trailer
results in less strain on the horse and tires and resultantly, less wear and
tear all around. As a result, our strategy is to always buy brand new
trailers, in combination with our used trucks.
• Our marketing plan centers on identifying and building relationships with
decision making individuals within target market organizations. We are
doing great thus far, and we often have more work than we can handle.
We sub-contract third party trucks in exchange for small commissions on
the extra loads that we get. We assess that the time is right for us to invest
in more of our own trucks.
• As accountants, the members are constantly tracking the statistics, such
as fuel consumption per loaded km, turnaround times and income per km.
We have built in controls to reduce the incidents of theft and illegal
activities. And will continue to review these as the business grows.

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1.6. Financial Plan

The members of Coastal Transport CC are partners in an established accounting

and audit firm in Walvis Bay. Coastal Transport CC is a project established by
them, with the intention of growing a separate legitimate business and does not
constitute the members primary source of income. There is therefor less financial
pressure on the business and the members currently do not draw any income
from the CC. This strategy will remain in place until we have grown our fleet to at
least 4 or 5 trucks. The attached budget and cash flow forecast illustrates the
potential viability of our plans and we believer that we will be in a position to add
a third truck by the end of the year 2023.
The business monitors and maintains a strict budget to control operating
overheads.

2. INDUSTRY ANALYSIS

This section will address the industry environment for road transport specifically
as it relates to bulk transportation of commodities such as fish and chicken.

2.1. Barriers to Entry

Barriers to entry in the transport industry are high. The required initial capital
outlay necessary to acquire assets and operate is substantial. The experience
curve of companies currently in operation poses further barriers to entry.
Economies of scale and the learning curve for operations combine to make the
cost of operations higher for new entrants compared to established companies.

2.2. Suppliers

Suppliers to the transport industry are labor and the manufacturers and retailers
of trucks and trailers. There is currently a shortage of suitably qualified and

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skilled drivers of heavy duty vehicles in Namibia. A lot of the drivers in the
market are Zambians and Zimbabwean. Coastal Transport CC has already
identified an experienced Namibian driver who use to work for one of our sub
contractors, who is prepared to join our team.

2.3. Sustainability

The only possible future threats to our current business model would be :

The establishment of rail transport network to service the corridor between

Namibia and the DRC. This is not going to happen in the near future. The
capital required for a cold chain railway route is significant. Currently the
railways is not even managing to service the transport demand of non
perishable products like copper.

Deterioration of the road network. The roads in Namibia are very good and
the roads on in Zambia are fair on our route. The new Government in
Zambia is also making an immediate impact and there are several projects
lined up for both maintenance and expansion of that country’s road
network.

There has been some concern about the trend of annual reductions in the
size of fishing quota’s granted to the local fishing industry in Namibia. It
seems that some fish species suffered over the years due to over-fishing,
particularly in Angola with whom we share the Benguela current. The bulk
of imports to DRC constitute Horse Mackerel. This fish species has
continued to thrive in our waters and we believe will remain viable for the
foreseeable future. We also carry a significant amount of imported chicken
and turkey from Brazil and other countries, destined for the DRC market.

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2.4. Competition

Unlike the Ports and Rail transport industries which are characterized by
monopolies, the environment in road transport is characterized by open
competition. Rivalry is intense with a large number of small operators and a few
big players. Due to our extensive contacts in the market, we have not struggled
for work to date.

3. GROWTH STRATEGY
Our expansion strategy is to leverage existing resources to diversify to other
markets with respect to cargo transported. Overall our ambition is to establish a
medium-sized transport business with up to 10 active trucks.

We believe that a business with more than 10 trucks would require a different
model and perhaps it would necessitate that one of the members dedicates all
his time and attention solely and primarily to this transport business. That
decision has not been made at this stage, as we have other business
commitments and an audit firm to run.

We have observed however, that there are many containerized dry loads that are
cleared through the port destined for countries in Southern Africa. There are also
incoming loads to the port from Southern African countries. This includes high
volume commodities such as Copper which is consistently shipped from Zambia
to the port. These and other opportunities can only viably be pursued once the
business has enough trucks. For now, we intend to grow one or two trucks at a
time, while we continue to make contacts and accumulate relevant information
and statistics.

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Thank you for taking time to review our company profiles:
We look forward to partnering with you in bringing our objectives to fruition.

Regards

Ronel Steyn
Member