Product code : 3710569

Quality and standards: Ply wood fire rated doors (120 mins) Us certification UBC 72,ISO 9001 Certified
Year of production: July 2014
Company: Firetex doors
Al sanayah block 315A,
Ajman,U.A.E

Firetex doors was established in 1990, and it is one of the pioneers in the door
manufacturing industry as it has the right expertise and experience in establishing
timber or plywood doors over the years. Firetex believes in creating efficiency and
generating profit through cost management. In order to meet this core objective,
the company has established an efficient supply chain of outsourced unskilled labor
and non core activities. The new product plywood fire rated door(120 min).It
reduces the transmission of fire through the door for 120 Mins and is currently
being launched in Dubai as domestic market and Qatar as international market ,to
meet the rising demands as the number of hospitals, malls and construction is
increasing. Given that Dubai has won the expo 2020 bid and Qatar has won the
world cup 2022 bid, we anticipate a huge surge in demand of wooden doors as
construction is expected to rise.. the target markets will be business to consumers
and business to business as well. We plan to produce 5000 units in the second half
of 2014 out of which 3000 will be for domestic market and 2000 for international
market.

FIXED COSTS
LAND
Details
land lease 500sqm
Construction of sheds and
partioning
Total

Rate/sq Amt
Qty sq m
AED
500
150 75000

30000
1050
00

MACHINERY AND EQUIPMENTS

Details

qty

Hydraulic press
Glue mixer with motor and electricals
Saw cutter machine
Sanding machine
Extra blades, small tools including minor
hardware

rate
2
3
2
4

95000
10000
10000
500

Amt
AED
190,0
00
30000
20000
2000
2000
244,0
00

Total
Total fixed costs = 105000 + 244000= AED 349,000

RAW MATERIALS
Details
Veneer and plywood
Batter frames
Composite fire rated material
Glue

Total

qty
rate
Amt
5000
15 75000
60,00
3000
20
0
200,0
5000
40
00
100
50
5000
335,0
00

Total raw material variable cost per piece=(15+20+40+10)=AED 85

MANPOWER
Details
Labourers
Drivers
Cleaners
shift supervisors
Manager
Accountant
Secretary
sales staf

qty
30
3
2
2
1
1
1
2

Amt
rate
AED
15000 45000
18000 54000
11000 22000
25000 50000
50000 50000
25000 25000
28000 28000
30000 30000
304,0
00

Total
Total manpower variable cost per piece=( AED 60.8)

UTILITIES
Details
power (electricity 4 phase)
Water

Total

Total utilities variable cost per piece=(AED 13)

qty
Amt
units
rate
AED
2500
2 50000
1500
1 15000
6500
0

MISCELLANEOUS
Details
transportation
maintenance and repairs
Stationary
petty expenses

qty

Amt
AED
1000
4000
6000
4000

rate

1500
0

Total
Total miscellaneous variable cost per piece=(AED 3)

Hence therefore total variable cost per piece=(85+60.8+13+3)=AED 161.8

Total variable costs = 660500

AC T U AL
GDP

F O R E C AS T

QU AR T E R LY F O R E C AS T

L O N G - T E R M F O R E C AS T

VALUE

DATE

VALUE

DATE

Q1

Q2

Q3

Q4

2015

2020

2030

GDP PER CAPITA

24824.80

DEC-11

24715

DEC-12

24643

24639

24635

24633

24873

25362

26840

[+]

GDP PER CAPITA PPP

37392.46

DEC-11

37293

DEC-12

36930

36907

36884

36866

37179

37840

40038

[+]

GDP GROWTH RATE

4.40

DEC-12

5.98

DEC-13

4.62

4.63

4.64

4.65

4.65

4.4

4.15

[+]

GDP ANNUAL GROWTH RATE

4.40

DEC-12

5.98

DEC-13

4.62

4.63

4.64

4.65

4.65

4.4

4.15

[+]

GDP CONSTANT PRICES

1025623.10 JUN-12 1027068 DEC-12 1077743 1082567 1086906

1090827

1114030

1157444

1228076 [+]

GROSS FIXED CAPITAL FORMATION

259944.86

290930 [+]

GDP

360.00

JUN-12 260475 DEC-12 284223

DEC-11

364

DEC-12

437

285546

286601

287454

289481

290911

442

445

448

462

484

The above table extracted from(http://www.tradingeconomics.com/unitedarab-emirates/forecast) suggests the growth rate to be at 4.65% for 2014.

UAE and GCC countries fall in emerging markets, and have been on a
growth phase from the last decade with some slow down due to the recent
economic downturn. Saudi Arabia and Qatar have recently announced a
mega a series of projects, leading towards high government expenditure,
which is one of the strong indicators of an economical boom. Furthermore,
Dubais successful expo bid will be a catalyst to the economical growth
which is evident with recent announcement of several projects and
friendly competition by the capital Abu Dhabi
Boom
If the market is heading towards the boom. Production capacity will
increase by 5% , in line with GDP growth . In order to achieve that, Firetex
would lease 1000 sqft of extra land and increase the labour by 10%. We
intend to hire machinery per quarterly basis also and not purchase them
to maximize the output efficiency (according to the law of diminishing
goods effect). The result would be an increase in fixed cost of 5%.
Market remaining same
If the market remains the same firetex would increase its labour as the
demand would increase with the increase of gdp overall.
Recession

The study also stated that the UAE economy experienced four booms and three
recessions during 1975-2006. The average real GDP growth
period.

rate was 6pc over this

During first recession 1977-1978, the growth rate dropped from 14pc in 1977 to (5pc) in 1978. At the same time, the fall in global demand on oil, and hence the fall
in UAE oil exports and revenues, have resulted in low investment and public
spending. Subsequently, the recession got deeper.
The second recession happened during 1982-1988, when the real GDP growth
dropped as average by (-5pc). This coupled with a decrease in oil exports as a result

513

[+]

of global demand slowdown, and the UAE commitment of OPEC quotes system as
well.
The third recession happened during 1997-1999. The real GDP growth rate dropped
from 8pc in 1997 to approx zero in 1998. During this period, the UAE economy
influenced by the financial crisis hit the South East Asia and Latin America
economies
For the purposes of this report we have assumed that if a recession will cause a 5%
fall in demand.
Reference: Dubai Economic Council releases a Study on Business Cycles in the UAE

Feb 21, 2009 - 08:49 http://www.wam.org.ae/servlet/Satellite?

c=WamLocEnews&cid=1226858450533&p=1135099400124&pagename=WAM
%2FWamLocEnews%2FW-T-LEN-FullNews

Recession
In case of a recession, firetexs business structure is monopolist hence
price sensitive, it would reduce the labour in respect to demand and
provide additional services such as ( fixing doors) to maintain their market
share .

Secure and negotiate better outsourcing contract

Increase sales and marketing force and Watch out for over hiring of
staff (Capacity Planning)
Penetrative strategy, reduce price