Executive Summary - Ore Trucking Project / Brazil
Overview:
This project is based in Belo Horizonte, a capital city with
population approaching three million. We have a long relationship
with an experienced trucking expert there who has both administrative and
driving experience.
We will enter the ore trucking business
because work is available 48-49 weeks of the year without
need to market services, and the profitability is predictable.
Funding is required to purchase the first one or two rigs
for trucking the ore. An investment of $65,000 will generate
net profit of approximately $5,000 per month, allowing return
of P&I at up to 30% annual interest, all paid monthly or
quarterly at the investor's option.
Steven Yerow, American Citizen based in Jersey City, New Jersey
is a retired computer programmer and licensed realtor with a long history of familiarity
in Brazil, and semi-fluent in the language. He is the contact in
the USA who will maintain communication and oversight on behalf
of the investing group. He will not be commissioned or salaried, but will have a future interest in the company after investors have been paid or bought out.
Mauro C Araujo, Brazilian citizen, has over 15 years in the
trucking industry, including management on all levels of a
mid-size company (24 semis) which he ran for absentee owners.
He is expert in management of drivers, maintenance, scheduling
and cost oversight and control as well as reporting. Mauro is
an extremely sharp and impeccably honest individual. He will
be responsible for establishing and maintaining relationships
with the mines and the drivers and overseeing maintenance of
equipment.
Waldileia Dias de Araujo, Brazilian citizen, is a graduate in
business administration. Her duties will be to control data
flow, reports, money receipts and disbursements.
Drivers - will be selected by Mauro (above) and will be paid
standard scale for this type of work (10% of gross receipts
for their runs). An incentive program will also be based on
timely and honest performance, as well as demonstrated care
in the treatment of the rigs. Our financial projections
already include 20% extra premium for drivers. All drivers
will be required to have had good experience in heavy trucking.
A single driver can make two or three trips a day. The distance
is only 60 miles, and the return (unloaded) is the same. By
employing two shifts daily per truck, we will be able to make four
trips per day. We may also work occasional Sundays.
For purposes of financial projections, we have used 3.4 trips per
day, 6 days/week and only 46 weeks of operation. This leaves
6 weeks for vehicle maintenance or other unforseen downtime.
The annual profit per truck, operating at 97% of legal loaded
weight each trip on average, after deductions for driver,
tires, motor and drivetrain maintenance and fuel is projected
at $50,000+.
Debt service will represent 14-15 working days per vehicle per month.
The balance of earnings will be apportioned for expenses and
reserves for maintenance, and retained for fleet expansion.
Theoretical risk factors include unexpected breakdowns, drop in
demand for ore, strikes, road accidents, theft of the vehicle and
increase in fuel costs.
This business will stand solidly on the projections and a pilot project is
already in progress to confirm them.
Risk is a matter of perception, but we feel it to be very small for
many reasons. Roads are good. The cargo has no value to thieves.
Drivers will be experienced and have incentives to use care. There
will be no pressure to push driver performance, since each driver
will only drive the prescribed number of trips per day, and time
is not a critical factor. World demand for all ores is increasing.
Strikes in this industry are practically unheard of and would be
only temporary. Increases in fuel cost are matched by increase in
haulage rates after an acceptable delay.
Agreements will be drawn and a Brazilian holding company will be
formed with responsibility defined to the investing group. Mr. Yerow
or one of the larger investors will be chosen by the group to
administer subdivision of payments to investors, unless investors
should require another method for periodic receipts. All pledgable
assets are in Brazil.
Any investor is welcome to come to Belo Horizonte to meet
with Mr. Yerow and Mr. Araujo at any time before or during the course
of the investment. Food and lodging will be provided free for two days, and
at a small cost after that in case of an extended stay.
The initiation of a business is proposed wherein the principle
operator is highly experienced and the financial projections
are more than adequate to ensure the promised return to the
investors. Marketing is not an issue. Return of investment and
profits to investors will begin very quickly. The rate of return
is highly respectable, considering the minimal risks involved.
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