How does the business operate on a daily basis?
Daily operations at this business begin with procuring raw materials, drying and processing them into bottle tubes known as preforms.

HIGHLEVEL: Manufacturing and finishing of bio-based bottles from sugarcane/Bio-PET and related materials, including quality control, warehousing, and distribution to B2B customers.

Enquiries and orders received via website/email; production in Cape Town. From there, the production of the products takes place, which includes the actual extrusion (never done extrusion) and manufacturing with blow molding machines, and the "containers" needed.

Quality control, packaging, and distribution through handling customer inquiries and managing their supply chain is key to ensure timely delivery of products

How are the clients attracted to the business?
Predominantly through direct sales to target customers and this yields a very high conversion rate of new customers.

Inbound via company website, industry referrals, and social media presence; positioning as a local specialist in biodegradable/plant-based packaging.

Clients are attracted through the unique selling proposition of eco-friendly, biodegradable products, and the salesperson visits and closes the sale.

The emphasis on sustainability and the use of plant-based materials appeals to environmentally conscious consumers

What Advertising/Marketing is carried out?
The business uses a combination of online marketing, including social media and SEO, to reach its audience.
Their Corporate website, product pages, social media presence (Instagram), and PR/online features highlight biodegradable packaging solutions.

Does the business have any contract work?
No official contracts exists but they do have existing SLAs with wholesale companies and other businesses in need of sustainable packaging solutions.

What competition exists?
The business competes with other manufacturers of biodegradable and eco-friendly packaging. However, their unique focus on plant-based materials and complete biodegradability sets them apart from competitors

They do not have real competitors at their scale in South Africa within the fully biodegradable product range.

What are the seasonal trends?
The demand for biodegradable products may peak during environmental awareness events or seasons when sustainability is a focus

Is the business VAT Registered?
Yes

What VAT documentation is on file?
To be provided during a DD

Are there up-to-date Management Accounts available?
Full Financials and Management Accounts will be provided to serious buyers and investors who have proven their ability to acquire the business.

How could the profitability of the business be improved?
Expanding their product line, enhancing marketing efforts, and exploring new markets could improve profitability.
Investing in research and development to innovate further in biodegradable materials could also provide a competitive edge.
The business will soon be using its own borehole water, which will also give it a competitive edge in other Blue Chip markets.
Scale volumes on existing molds, optimize material sourcing for bio-based resins, increase direct enterprise accounts, and expand medical/closure lines; evaluate light contract manufacturing (OEM) for steady capacity utilization.

Is Seller finance available and for what amount?
In Summary:
The Seller is willing, for the right group, to exit within 2 years.
A structured deal could be considered, with an upfront lump-sum payment and deferred payments linked to the company's growth over time.
The sale will be a cash-free, debt-free model, with negotiations on the Shareholders' Loan to be paid over the period the seller remains involved.
The seller's epectations are:
a) Sell the FortisX shares and receive cash for the business.
b) His shareholders' loan to be paid back to him over a period of time ( +- R 8,5mil ) and for that, he is willing to stay involved for a period in some capacity.

What is the total staff complement?
56
An organogram is on file.

Give a breakdown of staff/ functions/ length of service?
Owner as Managing Director
General Manager
2 x Operational Managers
Admin Manager
Filling Staff Members
Printing Department
Blow Molding
Warehouse staff and Drovers
Injection Molding

Are they on contract?
All on contract

How involved is the Owner in running the business?
Fully but he is trying to be strategic 'ontop' of the business and not in the business

What are the main assets of the business?
Full Asset list is on file.
Vehicles, blow and extrusion molding machines
Printing machines
Filling machines etc

Are any items not included in the sale?
All included

How have they been valued ?
Owners Fair market related values

Which assets are on lease/HP and with whom?
Assets to be settled by the seller

Are they presently insured?
Yes

Strengths?
1) Eco-Friendly Products: Offering biodegradable and compostable products appeals to environmentally conscious consumers and businesses
2) Innovative Materials: Use of advanced materials like Bio-PET, PHA, and sugarcane-based plastics sets the business apart from traditional plastic manufacturers.
3) Regulatory Compliance: Aligning with increasing environmental regulations and bans on single-use plastics.
4) Brand Image: Strong emphasis on sustainability enhances brand reputation and customer loyalty
5) Local manufacturing presence in Cape Town; growing demand for sustainable packaging solutions;

Weaknesses?
1) Higher Production Costs: Biodegradable materials often have higher production costs compared to conventional plastics.
2) Limited Durability: Some biodegradable products may not match the durability and performance of traditional plastics.
3) Infrastructure Challenges: Lack of adequate composting and recycling infrastructure can hinder effective disposal.
4) Market Education: Consumers may need education on the benefits and proper disposal of biodegradable products
5) Scale relative to larger packaging players; dependency on bio-based resin pricing; supplier concentration and mold-specific demand.

Opportunities?
1) Growing Market Demand: Increasing consumer and business demand for sustainable products presents significant growth opportunities.
2) Expand medical-grade and closures portfolio; secure supply agreements with FMCG and health/beauty brands
3) Government Support: Policies and regulations promoting the use of biodegradable materials can drive market expansion.
4) Product Diversification: Expanding the product line to include more biodegradable options can attract a broader customer base, export within SADC.
5) Global Expansion: Entering new markets with high environmental awareness can boost sales and brand presence.

Threats?
1) Competition: Rising competition from other biodegradable product manufacturers and traditional plastic companies adopting green practices.
2) Economic Factors: Fluctuations in raw material prices and economic downturns can impact profitability.
3) Misleading Claims: The market is susceptible to greenwashing, where competitors may falsely claim their products are eco-friendly.
4) Technological Advances: Rapid advancements in alternative materials could render current products obsolete

What is the reason for the sale?
The owner would like to pursue New Ventures. He is passionate about starting new businesses and wants to explore new opportunities and industries.
Selling the current business can provide the capital needed to invest in new projects.

He is willing to be in a JV with the purchaser for new product development

The business has experienced exceptional growth, and market conditions for biodegradable products are at their peak. The owner believes the business now needs to be taken to a level he cannot manage.

A larger company might offer to buy the business as part of its growth strategy.

He feels he has family commitments, a desire for a different lifestyle, and that his personal and family well-being, as well as his work-life balance, are important.

Running a business can be demanding, and the owner needs the right staff mix as they scale operations, manage cash flow, or navigate regulatory changes.

Why is this a good business?
The following could be key reasons to acquire this business:

1) Growing Market Demand: The demand for eco-friendly and biodegradable products is increasing as consumers and businesses become more environmentally conscious. Investing in this company positions you in a growing market with significant potential for future expansion.

2) Innovative Product Line: The business offers unique, plant-based biodegradable products that differentiate them from traditional plastic manufacturers. Their innovative use of materials like Bio-PET and PHA provides a competitive edge and appeals to sustainability-focused customers.

3) Regulatory Support: Governments worldwide are implementing stricter regulations on single-use plastics and promoting sustainable alternatives. This regulatory environment supports the growth of businesses like this, making it a strategic investment.

4) Strong Brand Reputation: The owner and business has built a strong brand around sustainability and environmental responsibility. This positive brand image can attract loyal customers and partners, enhancing the business's market position and growth prospects.

5) Scalability and Expansion Opportunities: The biodegradable products market is still in its early stages, offering ample opportunities for scaling and expanding into new regions and product lines. Investing allows you to capitalize on these opportunities and drive significant growth.

These factors makes an attractive investment, offering both financial returns and the satisfaction of contributing to a more sustainable future.