Entrepreneurs:Yakin Reza

Mahbub Muctadir.Sahedul Hoque

Ahmed Aman Yousoof.

WelcomeSandstone Ceramics

Overview of selected industry

1st Manufacturer: Tajma ceramics in 1958.

Monno Ceramic Industries, Shinepukur Ceramic Industries, Bengal Fine Ceramic Industries, Standard Ceramic Industries and Peoples Ceramic Industries.

Overview( Cont.)Estimated growth of 80% in next 2 years.Exported goods:

More than Tk 3,000 crore has so far been invested in the sector from home and abroad.

Around 20 percent annual growth rate.

2006-07 Tk 219 crore 2007-08 Tk 270 crore 2008-09 Tk 235 crore 2009-10 Tk 273 crore 2010-11 Tk280 crore

Overview (Cont.)RAK Ceramics (Bangladesh) Ltd, a UAE-

based company (2003), now grabs one-fourth of the domestic market share producing 6.0 million SQM of tiles every year.

According to the industry people, sales of the locally produced tiles did not go down even in the past two years, the worst time for the country's construction industry.

Industry

analysis

Future outlook and trendsFloor tile( Homogeneous)Wall tileRoof tileCommodes.Basins.

CompetitorsRAK ceramics.(polished tile)

Akij ceramics( New rising company).

ATI ceramics.

Fu wang ceramics.

Description of ventureProduct line:TilesSanitary ware.

Size of business: Initial investment around 3.5 billion BDT.

Production goal:Tile: 816000 units(yearly)Sanitary ware: 82000 units.

Abell’s FrameworkWhat is Customer’s need?good quality. durable ceramic wares.cheap price that fulfils their specific needs.New and innovative designs.How that can be fulfilled?producing enough units. decreasing the operating costs.

Abell’s framework( Cont.)

How my organization can fulfill the need?Going for huge production. Getting out from the traditional approach:

Shapes and designs.Selling in lowest possible cost.

PESTAL Analysis

Political, legal and environmental factors

Vulnerable one with the first two years of a democratic government deemed stable.

The political unrest is creating Hortals, dhoromoghots etc.

Stability of Govt.Anti trust regulations: Still not any.Tax laws: Raw materials: 7.5-15%.Special incentives: LDC.

Political, legal and environmental factors(Cont.)Foreign trade regulations:Laws on hiring and promotion.

Environmental protection laws:Poor drainage system.Embargo on cutting hills.

Economic factorsGDP US$ 105.56 billion

GDP Growth 6.70%

Inflation 11.2%

Exchange rate

Interest rate

1 US$=Tk 83.75 (average)15-18%

Social factors Lifestyle changes.

Career expectation.

Consumer activism.

Rate of family formation.

Growth rate of population:1.566%

Regional shift of people.

Life expectancy and death rates

Technological factorsExcellent designs and patterns.

Unique ambience patterns.

Bone china.

Investment on R&D sector: 5% of NET Income.

Monocuttura technology.

Product innovationsSpecially printed tiles.Circle shaped and huge sized tiles.

Material used for innovative production:

New red high efficiency mud. Imported raw materials like soda feldspar,

potash feldspar, clays from India, Indonesia, Malaysia, and Thailand. Fritz & glazes from Spain & other European countries.

Testing: A laboratory of highest standards.

SWOT Analy

sis

Strengths

Creativity over another potential market.

Less competitors.

Spread of housing Business.

Weakness

Political unrest of the country.

Power Shortage.

Lack of pressure in Gas.

OpportunityRising Industry:

Yearly growth of 6.0% in Bangladesh and a whole growth of 800% In the whole world.

Less competitors( Most of the ceramic industries produce tableware)

Market leaders are mainly focusing on the international market.

ThreatsPowerful competitors are already

penetrating the market.

New rising companies: Akij Ceramics.

Production process is long.

Productio

n Proces

sTiles

Raw material suppliers1. Habib Enterprise.2. Mila Chemicals.3. Tandem Chemicals.4. Topflight CO.

Machinery

Ball mill B390 D

Pan mixer P15 HD 5000 litre

Tiles machine P15 HD

Economic Air dryer

Ball mill (Glazer)

Glazed tile presser

Firing Machine.

Production

processSanitary ware.

Machinery and equipment

Powder mixer PM 125D

Sanitary dicer (KT 398J)

Spray glaze maker(SH 343 S)

Operational

plan

New technologies used in production

SKSZ series high speed rotating Dryer

Water jet cutting( Used by RAK ceramics)

High efficiency red mud( By product can be used as 53% cement)

Marketing plan

PricingHomogenous tiles( Only glazed): 48 Tk per

square feet.

Roof tiles ( Only Glazed): 48 Tk per square feet.

Wall tiles ( Only Glazed): 48 Tk per square feet.

Basins: 2500TK per Piece.

Commod: 5000 Tk per piece

DistributionDistribution through distributors.

There will be two type of distribution.

Type 01

Type 02

PromotionPromotional activities for our final

customers:TVCNewspaper, magazine.Billboard.Promotional activities regarding our

dealers:Trade incentivesTrade shows and exhibits

Organizational

plan

Form of ownership: It is now a limited company.Each one of us will invest 26.25 crore and

the distribution of profit will be equal.Any 1 of our parents as the chairman.Planning of the company bringing in DSE.

(49%).

Roles and responsibilities of partnersYakin reza: Vice president(Finance).

Mahbub Muctadir: Vice president(HR).

Mohammad Sahedul Hoque: Vice president ( Marketing and sales).

Ahmed Aman Yousoof: Vice president ( Production).

Assessment of riskWeaknesses of Business:1. Lack of domestic suppliers.2. New Company.3. New entrepreneurs.4. Misallocations of funds.5. Low priced tiles in some other companies.

Contingency plansLoan from IFIC bank in 2019 for 2nd plant.

Every partner has their nominee to perform in case of their absence.

In case of sudden decrease in demand: Tiles only.

Storage of raw materials: 2 years.

Forecasted Net Income.

Forecasted Break-Even Point.

Sources and applications of funds1. Agrani bank loan. (130 Crore). Based on factory equipment.

2. IFIC Bank.

3. Our own funds.

A big investment in this field of production, is on the way. This ceramic industry emits less waste and the by products are highly usable.

This industry needs enough manufacturers to get a perfect competition.

Traditional designs are about to extinct. To, setup an industry of average capacity, it may

take 100 crore. But the return is much higher. There are not too many competitors and also, this is

not a monopoly.

So maybe, this will be the right time to setup a factory.

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