BUSINESS PROPOSAL FOR PAINT

PRODUCTION

BY

ALPHA CHEMICAL AND SCIENTIFIC ENTERPRISE

NO: 25 EZEUDU STREET OFF ZIK AVENUE AWKA

08136178270, 08169137057
Email: myalphaprojects@gmail.com.ng

TABLE OF CONTENT.

1.0 Executive Summary

1.1 Objectives

1.2 Mission

1.3 Keys to Success

2.0 Company Summary

2.1 Company Ownership

2.2 Company History

2.3 Company Locations and Facilities

3.0 Products
3.1 Product Description

3.2 Competitive Comparison

3.3 Sales Literature

3.4 Sourcing

3.5 Technology

3.6 Service and Support

3.7 Future Products

4.0 Market Analysis Summary

4.1 Market Segmentation

4.2 Target Market Segment Strategy

4.2.1 Market Needs

4.2.2 Market Trends

4.2.3 Market Growth

4.3 Industry Analysis

4.3.1 Industry Participants

4.3.2 Distribution Patterns

4.3.3 Competition and Buying Patterns

4.3.4 Main Competitors

5.0 Strategy and Implementation Summary

5.1 Strategy Pyramids

5.2 Value Proposition

5.3 Competitive Edge

5.4 Marketing Strategy

5.4.1 Positioning Statement

5.4.2 Pricing Strategy

5.4.3 Promotion Strategy

5.5 Sales Strategy

5.5.1 Sales Forecast

6.1 Organizational Structure

6.2 Management Team

6.3 Management Team Gaps

7.0 Financial Plan

7.1 Important Assumptions

7.3 Break-even Analysis

7.4 Projected Profit and Loss

7.5 Projected Cash Flow

7.6 Projected Balance Sheet

BUSINESS DESCRIPTION

Our company, is a dynamic paint Producing Company; employing

the state of the art facilities for production and sale of high qualities
Architectural paint and coatings for private and industrial users.
The commercial manufacture of paints is simply the mixing of paint
constituents in a quality controlled ratio that meets standard and
can be faithfully produced in commercial quantities. Its
constituents are (I) Dispersion medium- water (ii) Binder- resins.
(iii) pigment-colorants. (iv) fillers- calcium and kaolin. (v) Antifungal
agents. (vi) Marble dust (texture coats). The plant is expected to
commence production with 300 drums daily and expend to
700drums within the next 3yrs.
OUR PRODUCT- We hope to start our paint making business with
about 6 product brands that caters for different coating
needs/market segment. These brands will be fully registered trade
names:

 V-Nice Acrylic Emulsion.

 V-Nice Premium Matt Emulsion
 V-Nice Premium Silk Emulsion
 V-Nice Texcoat.
 V-Nice Gloss.
 V-Nice Premium Putty.

Others will also include; Protective wood sheen, Epoxy, Flex,

industrial coat, and Anti-corrosion system for metals and plastics.

Needs or problems

 PRODUCT BENEFITS- buildings just constructed might be

structurally complete but they would still be termed
incomplete without coating. Paints major functions are: (i) to
beautify (ii) to protect buildings from natural elements. (iii) To
add or increase the value of buildings.
 GAPS WE WISH TO FILL- we will provide coatings of
high/luxury quality at affordable prices; making our paints a
product of choice for middle class customers. This would be
achieved by adopting a clearly defined market positioning.
 EMPLOYMENT- at full funding, our business would employ
about 15-20 Nigerians who will be empowered with adequate
salaries and skill. They would include MD, factory/logistics
manager, production manager, production supervisor, lab
attendant, factory hands, store clerk, accountant, marketers,
cleaners, security, and driver.
Innovation statement

 PACKAGING- Our containers will not just have a digital

graphic print but also an embossment. We would include a
10litre bucket to the customary 20litre and 4liter. Products
will be sealed in crested plastic bags before plastic containers.
 PAINT APPLICATION- we have created some artistic
applicator paint designs, measured in square meters,that can
be applied by our trained painters only. Examples are (i) multi-
flek series- multi colour paint spraying using air compressor
machines. (ii) Pearl series- multicolor luminous spray painting
with embedded crystals and comb rakes.
 WEBSITE- will have the best interactive and content based
website than any paint maker in Nigeria. All our products and
effects will be fully described with pictures. We will have a
page dedicated to teaching do-it-yourselfers how to apply our
paints and get professional results. This page will also route
them to a YouTube video of a demonstration.

BUSINESS OBJECTIVES

 In 3-5yrs time, V-Nice premium paints will become a

household name in the Nigerian coating industry and
readily chosen over competitors wherever builders think of
quality coating at right pricing, artistic coating innovations,
customer/environmentally friendly operations. We would
achieve all this by adopting: (i) an effective and well defined
growth strategies. (ii) Superb market positioning policy.(iii)
efficient marketing and distribution strategy. (iv)Great
quality controlled production. (v) The best customer,
employee, distributor, supplier motivational incentive
programs in the industry.

 To generate reasonable turnover with manufacturing and

sale capacity of over 7 million liters of paints annually. This
 will enable us to become sustainable, create more jobs and
expand our operations. We achieve this by selling to diverse
markets, ensuring customers’ loyalty and optimal use of our
facilities.

 Customer satisfaction. We shall go extra mile to ensure that

all our customers are happy. We intend to do this by taking
time to understand their needs and assisting them to make
better decision. Effective listening, empathy and rapt
attention to customers shall be our watchword.

VISION

To establish a leading indigenous paint industry in Nigeria that will

be environmentally friendly and compete favourably with other
leading paint industries in the world through techno managerial
excellence.

MISSION

Bringing technology to the surface by surpassing the needs of our

customers through the production of quality paint products and
provision of services unrivalled in the paint industry.

KEY TO SUCCESS

 INNOVATION- one must develop innovative ways to produce

and sell. They must be ahead in technology, quality, design
and packaging.

 MARKET ESPIONAGE- to outcompete, one must have inside

information of a competitor operations, his products, prices,
and marketing strategy. This helps one react adequately.

 HIGH/EFFECTIVE DISTRIBUTOR BASE- ones products

should have a wide geographical spread through effective
 distributors. A company must be able to convey their vision
and mission with passion to their distributors.

 CUSTOMERS- one must invest in developing a strong brand

name and strategies to induce strong brand loyalty.

 HIGH PRODUCTION CAPACITY- one must have a production

capacity that is commercially feasible. Being bigger means
better access to materials, credit and producing at lower costs
due to economy of scale.

 SKILLED HUMAN RESOURCES- must hire qualified personnel

for crucial positions. Must also have a good employee
development plan.

Market Analysis.

WHO: V- Nice premium paints will have the following market :( I)

people or organizations erecting new buildings. (ii) People or
organizations repainting existing buildings. (iii) People or
corporations protecting the surfaces of wood and metal fabrications,
My customers are building contractors, general contractors,
concrete subcontractors, builders association, housing consultant,
development agencies, construction workers, civil engineers,
architect, land lords and individuals. Individuals building houses,
Building material markets in my state and south east, Construction
firms in the state handling building sites, Marketers of paints in
Onitsha, Nnewi and its environs, Household/industrial consumers,
Cooperate bodies, agencies, MDAs and estate managers.

WHERE: At maturity, we will have a vast distributor network that

covers most major cities in Nigeria. So the geographical market is
national.

SIZE: Checking with the 20million size of existing buildings in

Nigeria which statistics shows that about 50% will have need and
ability to pay for a fresh coat of at least 200 litres of paints in every
5-10 years at an average price of N150/litre. Our market size come
to (10million buildings x 200litresx N150) divided by (10yrs). This
comes to an annual yearly consumption of about 200million litres
and about 30billion naira annual sales.

Types of customer

Our market can be segmented based on psycho graphics:

 ECONOMY HOME OWNERS/RENOVATORS- these are home

owners/builders of low budget buildings. Their buildings are
normally residential houses in mass government assisted
housing, sparsely developed areas or rural setting.
 MIDDLE CLASS HOME OWNERS/RENOVATORS- this group
have middle class income and building budgets. Their
buildings are mostly commercial or residential houses found
at city centers and newly developing urban areas. This
segment is easily the most important group targeted by most
paint companies.
 LUXURY HOME OWNERS/RENOVATORS- these are home
owners/builders with high means and building budgets. These
are mostly high rise commercial buildings, hotels, mansions
and detached or semi detached buildings that can be found
that can be found in city centers and luxury estates.

Factors that will affect customers

 PRICE- Economy class customers are most likely to be

affected by price more than quality. An increase or high price
will easily see them move to a competitor product. This group
has the least brand loyalty.

 PERCEPTION- middle class customers are most likely to be

affected by innovation, technology and perception. They easily
 copy what they think is trendy or what they perceive is used
by high income earners. They are less likely to move to
substitute product.

 EMOTIONS- Luxury class customers are most likely to be

moved by technology and emotions like(ego and prestige). They
easily go for products of very high quality that makes them
stand out. They have the best brand loyalty.

MARKETING STRATEGIES

 ADVERTISEMENTS- (i) online adverts-this is usually the

easiest and most neglected means. We will have an
aesthetically designed website that fully describes our
products and benefits. We will also have our presence in social
media like Facebook and twitter for easy interaction with our
customers. (ii) magazine adverts- we will make few magazine
adverts, mostly at the pre-launch of our products. This means
of advert is effective but might be above our advert budget at
the beginning.
 SITE TO SITE MARKETING- this is also a major way the
industry markets her products. Trained marketers working for
our distributors market building sites in different cities with
our catalogs, color chart, paint sample and other promotional
materials.
 STRATEGIC ALLIANCES- we will develop a multitude of
commission agents who earns substantial commissions on
sales made as a result of their introduction. We prefer
businesses or individuals relevant to building or seen as an
authority on the product type. Our chief target will be painters
and contractors.
 SHOWROOMS- we will have key distributors in every city set
up a showroom/studio space that will be tastefully furnished
 with air conditioners, DSTV entertainment and comfortable
seats. The walls of these spaces will be filled with a careful
arrangement of our product samples. In these spaces,
customers are meant to relax, view our samples and go over
matching colour combinations with the aid of our catalogue
and a marketer.
 CASH BACK POLICY- customers will be encouraged to return
unused product to our point of sale and get full cash back.
 PROMO- will run promos like; buy 3 drums (60ltrs) get 4ltrs
free.

Factors affect sales

PRICE- An increase in price of economy products will most likely

result in a drop in sales. The economy market segment will greatly
move to a competitor product of unchanged price.

Middle class customers- price changes will not affect this segment
as dramatically. Although to a small extent, an increase in price of
premium quality products will see loyal customers consume more
(increase in sales) of economy class products of same brand.

Luxury class customers- increase in price is least likely to cause a

change in sales volume in this segment. However a wide increase in
prices will see them shift to substitute products like tiling and stone
cladding.

SEASONAL ENVIRONMENT- there is always a significant drop in

sales of paint products during the raining season because
construction jobs, especially finishing are mostly suspended in this
season. There is also a corresponding increase in sales during dry
season.

QUALITY- increase or improvement in quality will decrease sales

volume if it comes with an increase in price especially in the
economy and middle class market segments.
Success factor

Effective distribution network. Customers need a location that is

convenient and accessible We need to be mobile and also have
depot in strategic locations. We intend to build a database of
customers and call them to know when to come and deliver the
goods to them. We shall equally have well maintained equipment
and reliable facilities that can respond and give you what you want
without incessant breakdown.

- Reputation/good image: Success in the industry requires

integrity, reliability and matching words with action. Our Word is
our bond; we shall strive to keep promises made. Good customer
relationship is the key to our breakthrough. As a result, we shall
handle complains effectively, show timely response to issues,
known for quality and durable products

- Large /diverse market: We need to serve large market in order

to be sustainable and keep our machines busy. Therefore business
Location is paramount for us. We shall situate the business in a
place accessible and convenient for our customers so that we will be
able to cover different segments of our market. Also, we shall have
peculiar Packages for different market segments.

Requirements to enter

 CERTIFICATE- the first point of registration is incorporation

with corporate Affairs Commission (CAC). This usually starts
with filling a name search and ending with issuance of
CERTIFICATE OF INCORPORATION and true copies of
ARTICLE AND MEMORANDUM OF ASSOCIATION. This is the
basic registration for private liability companies.

 TAX REGISTRATIONS- after the basic incorporation, one must

register his company to the different tax arms of the
government for PAYE (state), VAT and Company income Tax
 (FIRS). On full registration his company gets his
documentations bearing a unique TIN number (tax
identification number).

 PERMITS- the next important regulation is obtaining

zoning/housing permits before factory construction. Health
and environmental permits also need to be obtained from both
ministries. All local government permits and levies should also
be factored in.

 OTHERS- one will also need to join promotional/regulating

bodies like SON ( standards organization of Nigeria), state
chambers of commerce and industry, manufacturers
association of Nigeria, etc.

 INSURANCE- one will also need to undertake all compulsory

insurance ( group life, occupiers liability and comprehensive
auto) and some optional ones.

STRENGTH:
• The industry shall have a staff strength of twenty (10) with
production capacity of 300drums (one drum = 20 liters) a day for a
Start.
• Since the population of Anambra State where this industry is to
be sited is about five million people, and the entire South East is
about twenty million (20m), enough and adequate manpower is
assured.
The projected 300drums a day is as a result of different colours
involved and also different types of paint products. We have
emulsion paints, texcoat paints, these are water soluble. There is
also oil and marine paints, there are resin and soluble in solvent.
The industry will make a substantial quantity of these paints
available during her productions so that what is demanded by the
customers is supplied. This will strengthen -the industry as a result
of the availability of the products irrespective of the type and colour.

 DISTRIBUTING- apart from key distributors, we will put in

place wide small-scale sub distributors known as SAMPLE
SHOPS which will not be more than 3 in a city. Our
distributors will be chosen based on their passion and
integrity, not the size of their pockets. In fact, we will
encourage more women entrepreneurs to become distributors
of our products. Our distributors and their key staff will
receive from us free regular training on winning selling
strategies.
 TECHNOLOGY- the adoption of a production technology and
process that would be efficient, cost advantageous and
ensuring great quality.

Weaknesses

 DISTRIBUTION BASE- unlike my competitors, we presently

have zero distributor bases. Will set aside 1-3 months before
factory production commences (pre-launch period) to
marketing effort dedicated to distributor acquisition. These
efforts will include adverts on national magazines, online
adverts and face to face marketing by 3 company trained
marketers, headed by myself.
 The weakness of the industry will result from epileptic power
supply, short supply or scarcity of fuel needed by the industry.
 Unfavorable government economic policies and programs like
heavy taxation or multiple taxation.

Opportunities
  The opportunity for the industry lies in its feasibility and
viability. Since almost everybody in Nigeria is embracing the
culture of clean and green, decoration and beautification, and
with company's environmental friendly philosophy, the entire
Nigeria is the market for the products.
 The privatization policy of the federal and state governments
has created favourable climate for private sectors investment.

 Another opportunity being that the World Bank assisted rural

electrification and water schemes has created favorable
environments which cottage industries can utilize to
advantage.

 EXPANSION WITH NEW TECHNOLOGY- paint making

controls 90% of the coating industry, with the remaining 10%
being made up of substitute products which are basically
variant ways of dispersing pigments. Paint making have the
capacity and know how to diversify by gradually adding these
product variants to their stable. For example (i) bagged
coloured cement- this is basically pigments dispersed in
Portland cement. (ii) stone veneer- these are pigments
dispersed in concrete (iii) tiles- these are machine applied
graphic pigment prints on hydraulically pressed clay bases..

Threats

 EMERGENCE OF SUBSTITUTE PRODUCTS- initially paints

controlled a 100% share in the coating industry but now has
to contend with substitutes like epoxy premixes, stone veneer,
metal boards, tiles and sand blasting.
 Global warming, this may result from some environmental
outbreaks caused by climatic change nowadays. This may
affect the colour pigments and other chemicals used in paint
production. This is anticipated future trend; every
precautionary measure shall be taken to remedy the situation
 in any event of such occurrence. In this case the policy of
government through the National Environmental and
Regulatory Enforcement Agency (NESREA) shall be adopted in
order to be on safer side of climatic change and remain in
business.
 Inadequate fund to run establishments is always a threat to
any given establishment, since fund is the life wire of any
organization, shortage in funding or little or no access to fund
when required will affect the production capacity of the
industry especially when there is speculation on increments in
the prices of raw materials and there is no fund to get enough
of the materials to store up before it increase, this will go a
long way to distort the production schedule of the industry
especially new establishments the like this business proposal.

Main competitors

There about 115 good selling brands in Nigeria with most being
regional players. Only about 30 brands can be found all over
Nigeria.

 DULUX - Dulux is an American franchise operated in Nigeria

by CAP Plc, a subsidiary of UAC, Lagos. This is the best-selling
brand in the world and in Nigeria. This brand targets the
middle and luxury homeowner. This is the oldest paint firm
business in the area. It has achieved reasonable acceptance in
the locale. However they are weak in marketing.
 INTERCOLOR PAINTS- this is a licensed product of Intercolor
Dubai ltd. They are manufactured in Nigeria by Intercolor
industries Nigeria Limited, Enugu. They are a good selling
brand. They also target the middle and luxury home owner
segment. This business uses modern gadgets and has been
able to attract building contractors. However, his price is high.
  SHARON PAINTS- by Sharon industries Nigeria. Limited ,
Enugu state. They are a top selling brand found all over
Nigeria, even rural. The initially targeted low income home
owners but has recently penetrated the middle and luxury
segment with new brands like VINEYARD.

COMPETITVE ADVANTAGES

 GREAT QUALITY AT RIGHT PRICES- our top quality products

especially targeted at middle and luxury class customers will
incorporate a low water-high acrylic resin mix, high steadfast
pigment load and effective additives. These products will be
sold at prices that are more competitive than their competitor.
we are using more local raw materials (plant pigments) so our
unit cost will be lower making us to open up to some market
segment that feels that high price is a barrier.

 AMIABLE CUSTOMER CARE- customers will buy our product

from comfortable studio/showrooms where they can relax and
make product, colour and design choices with the help of an
expert. Our product sales will include a cash back guarantee
on proven product damage or over order. We shall always see
our customers as partners and serve more like a consultant to
them.

 Exceptional product features and benefits: Our paints are an

innovation in the industry. It is mosquito repellant and fire
retardant. It is uniquely durable and can resist pressure. It is
suitable for swampy areas and flood prone environment.

 Brand name and reputation: I have in the past developed long

term relationship with major distributors and contractors. We
shall invest much in building a brand name through adverts,
publicity and quality/reliable services. People will take pride in
associating with us. We shall be a reference point and many
 who are class conscious will look for us. We shall treat our
customers as kings and go extra mile to satisfy them. We shall
move into uncontested markets like bidding for government
contracts

RISK IDENTIFICATION AND MITIGATION STRATEGIES

The risk associated with paint production can be identified as:
• Machine cut
• Electric shock
• Fire outbreak
• Inhalation of harmful chemicals
• Burglary and theft
• Machine breakdown/damage

MITIGATION STRATEGIES

INSURANCE COVER:
The industry will take insurance cover with an insurance company
in the areas of burglary and theft, and fire outbreak.

MATERIAL HANDLING:
Workers shall be properly trained on the best practices of material
handling since paint production is the type of production process
that requires a lot of chemicals. The knowledge of material handling
will remain top concern in the production process of the industry.

WORK SAFETY:
Work safety in every factory is always top priority. The industry will
adopt the simple saying "work safe today to work tomorrow." Safety
gadgets shall be provided to workers in order to mitigate the risk of
accidents in the factory.
MACHINE MAINTENANCE:
Routine maintenance shall always be carried out on the process
equipment from time to time to ensure at least 90% machine
efficiency. This is necessary to avoid machine breakdown during
production which can lead to wasteful batch thereby accruing loss
or leading to high production cost. Proper maintenance and periodic
checks on the process equipment will increase salvage value,
thereby yield the expected returns from the investment.

OPERATIONAL STRATEGIES:
The business will be operated with this structure
• CEO/Project manger
• Production mangers
• Marketing manger
• Inventory/Store keeper
• Company secretary
• Financial manger
• Other factory workers
The choice of the operational structure is to ensure professionalism
and efficiency. The CEO or the project manger co-ordinates the
activities of the production through efficient scheduling.

Management experience

I am a degree Holder in public admistration and have taken

advanced training in commercial paint making. I worked for 2years
as a director in the defunct Home Charm paints, Aba.
I will bring in my managerial expertise, passion, personal resources
and training gained over the years. As the manager of the business,
I shall oversee the planning, organizing, motivating my workers and
ensuring that results are achieved. My education and work
experience prepared me for this role having worked in paint
manufacturing firms as quality control officer and production
manager, I have accumulated reasonable contacts and experience
that could make this business a success.

I will also work with,

Mr Ikechukwu Okaroh a BSc Holder in Chemistry and has a 3

years experience as a project supervisor in a building construction
company, Nimex Leads Ltd. He is also presently a director in a
stone veneer company. His experience at factory production and
construction sites, organising of work process, sourcing of raw
materials and human resource management makes him suitable to
hold the job of Factory/Logistics Manager.

Mr Uchenna Onyenowe- with his training and experience in paint-

making, will work as the Lab Scientist in our business. He will
formulate precise mix formula for paint brands and be at hand at
production as a quality control officer to make sure quality is
faithfully reproduced.

The production managers shall be three (3) in their areas of

specialization.
• Chemical Engineer: The chemical engineer will be responsible for
certification of chemicals as regards its quality and effectiveness
before committing into production.
• Polymer Engineer: The Polymer Engineer combines or mixes the
different chemicals for the paint production at the right proportion
• Fine Artist: This is the colour specialist, for the industry to
maintain consistency in colour.
Marketing manger: Advertise and market the product.
Inventory/Store keep: Takes care of both the materials and
outgoing products.
Other factory workers include drivers, security men and other
unskilled workers in the factory.