Home > Project Experience > Investment Advisory

Investment Due Diligence, Ceramic Tile Manufacturer

In April 2007, Navigator was commissioned by the European Bank for Reconstruction and Development to implement a strategic, technical and commercial due diligence of a leading Ukrainian ceramic tile firm.

This enterprise is the largest national ceramic tiles producer with a wide range of tiles for walls, tiles for floor and decorative elements. The objective was to conduct strategic, technical, commercial and financial due diligence on the company, its shareholders and the proposed business plan of EUR 101.5 million.

A site mission to Ukraine was implemented from April 30-May 5 by Navigator consultants Philip Ammerman, Kyriakos Kyriakou and Maria Arkhangelskaya. The  objectives of the assignment were to provide an independent assessment of the client’s business and marketing strategy, the construction materials market and a commercial and technical review of the existing facilities.

Within the framework of the project some 14 customer interviews took place in Kharkiv, Lugansk, Slavyansk and Kiev. All interviews were carried out in person at sales offices or stores. The customer feedback was used for the assessment of the marketing and sales strategy, customer relationship management, identification of the market tendencies and forecast development. The customers included large and small ceramic tiles distributors, supermarkets, building materials distributors. The following companies participated in the interviews: Intelaktiv, Budman, Barvinok, Technogres, Argument, Keramika, Stalker Trade, Nova Linia, KSK, Standard Trade, Ukrstroitorg, Ligastroi, SBT, Bystrov.

A detailed financial analysis of the business plan was undertaken. This included the development of a key sensitivity model linked to a market share and pricing model. The model demonstrated that even with investments announced by competitors, national growth was occurring at a rate where the proposed doubling of manufacturing output could be absorbed by the market, partially through organic demand and partially through import replacement.

The analytical components of the report included the following main chapters:

Executive Summary

Investment Project Analysis

  • Corporate strategy and growth objectives
  • Description of the investment project

Ukrainian Demand for Ceramic Tiles

  • National Economic Growth
  • Property Development
  • Ceramic Tile Demand Forecasts
  • National Ceramic Tile Production
  • Forecast National Production Output, 2012
  • Ceramic Tile Imports
  • Exports
  • National Demand
  • Market Segmentation
  • Perception of National Producers

Client Marketing and Sales Analysis

  • Marketing and Sales Strategy and Objectives
  • Sales Objectives
  • Sales Analysis
  • General Sales Analysis
  • Sales by Product
  • Sales by Customer
  • Exports
  • Customer Profiles and National Market Trends

Operations Analysis

  • Site Description
  • Production Process and Product Range
  • Organisational Structure
  • Raw Materials and Purchasing
  • Production Planning
  • Defects and Waste
  • Quality Assurance
  • Occupational Health and Safety
  • Environmental Management

Financial Analysis

  • Organisation of the Finance and Accounting Department
  • Product Profitability
  • Product Costs per Equipment Type
  • Corporate Profitability
  • Profit/Loss Analysis
  • Balance Sheet Analysis
  • Cash Flow Analysis

HR, Management and Organisational Development

  • Human Resources Management
  • Staff Profiles
  • HR Strategy
  • HR Department
  • Recruitment
  • Training
  • Staff Assessment
  • Management Assessment

Investment Project

  • Equipment Description
  • Engineering Specifications and Construction Works
  • Project Budget

Investment Model

Conclusions

All information relating to this client, the specific investment project and its sponsors collected by Navigator Consulting Group Ltd. during this due diligence project  is strictly confidential and will not be released by Navigator Consulting Group Ltd. to any third parties. This information appears here as an indication of Navigator's consultancy capabilities in this field.