An Opportunity to Save and Invest
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AN OPPORTUNITY TO SAVE AND INVEST
Dear Directors of Arabian Packaging,
Please look at the following proposal as we discussed.
Executive Summary
It was found that theres a high demand for fruit juice in Dubai. Juice-To-Go has the necessary capacity, experience and resources to serve this demand.
The demand for fruit juice increased by 13% over the last two years, while the supply remained the same. This means that there is currently a shortage of 13% in Dubais fruit juice market. The plan is to build a packaging plant in Dubai. This way Juice-To-Go can be part of the Jebel Ali Free Trade Zone and provide Dubai and other surrounded countries with retail-ready fruit juice that meets their requirements. All of this can only be done with an investment of a major company like yourself.
An investment of approximately R50 million is needed to bring Dubais fruit juice market back in equilibrium. According to the attached Statement of Financial Position Juice-To-Go will start generating profit within three years.
Its recommended that:
The investment take place within the next 6 months
A relationship develops between Arabian packaging and Juice-To-Go
The equilibrium of fruit juice is reached as soon as possible
Juice-To-Go gains 55% of market share
Juice-To-Go have competitive prices
Proposal
Background of Juice-To-Go
JUICE-TO-GO (PTY) LTD is a large retailer of retail-ready fruit juices based in Bellville near Cape Town. Juice-To-Go currently supplies both the South African market and certain areas of the United States and Europe. Presently local sales and export sales each constitute about 50% of the companys turnover.
Why expand to Dubai?
The recession caused some constraints for exports especially in the US with their debt crisis. Dubai and China are the countries that recovered the best. Chinas culture makes it very difficult and the demand for fruit juice isnt as high as in Dubai. Dubais economy is in better shape than that of several industrialized countries and has a 13% fruit juice shortage. This means there is definitely a market for fruit juice.
The action plan
Juice-To-Go in SA is going to export fruit juice in bulk to Dubai. We are negotiating with MSC for a 10 year shipping contract. In Dubai the fruit juice will be bottled and packed at our new packaging department. From there it will be distributed and exported in Dubai and surrounded countries. Because of the Jebel Ali Free Trade Zone Juice-To-Gos fruit juice will have lower costs which mean we will have a competitive advantage.
Why Arabian Packaging?
Arabian Packaging is the biggest packaging company in the Middle East. They have the experience,