Five Star Gas LTD(Edited )

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Five Star Gas LTD

The Discovery of Oxygen

•Oxygen was discovered by Carl Scheele in Sweden in 1771

when it was named ‘air of fire’. He perceived that the ordinary

air was a mixture of nitrogen and oxygen. In Leeds, England,

Joseph Priestley extracted and described oxygen on August 1,

1774.

•After World War 2 metallurgical oxygen processes became the

main consumer of the world's oxygen production.

•In 1953 Shell announced the development of a direct ethylene

oxide process using pure oxygen, the advantages claimed over

the air process being reduced purge loss, lower capital cost,

improved yield, and a reduced gaseous effluent.

• The Industrial Gases industry is a part of the wider Chemical Industry.

• The industry came into being with the advent of the liquefaction of air allowing the separation of oxygen from air for use in steelmaking.

• Air separation allowed the bulk production of nitrogen and argon in addition to oxygen, and these three are often also produced as cryogenic liquid.

• Industrial gases are used in many industries including • oil and gas, mining, steelmaking,• petrochemicals, medicine, pharmaceuticals,

biotechnology,• chemical Industry, fertilizers,• power, metals, environmental protection, • nuclear power, electronics and aerospace.

The Financial Status

The company is ready to be financed with a net investment of 48 million BDT. We have gathered sponsors who have agreed to pay 13 million BDT, and the remaining amount will be financed by a few banks. We have paid up a capital of 7.2 million BDT and the business is set for initiation.

Industrial Oxygen

•Smelting of iron ore into steel consumes 55% of commercially produced oxygen.•Another 25% of commercially produced oxygen is used by the chemical industry.•Most of the remaining 20% of commercially produced oxygen is used in medical applications, metal cutting and welding, as an oxidizer in rocket fuel, and in water treatment.

Medical Oxygen

•Uptake of O2 from the air is the essential purpose of respiration, so oxygen supplementation is used in medicine. •Treatment not only increases oxygen levels in the patient's blood, but has the secondary effect of decreasing resistance to blood flow in many types of diseased lungs, easing work load on the heart.•Oxygen therapy is used to treat emphysema, pneumonia, some heart disorders (congestive heart failure), some disorders that cause increased pulmonary artery pressure, and any disease that impairs the body's ability to take up and use gaseous oxygen.

Acetylene Gas•Acetylene is the primary fuel for oxy-fuel welding and is the fuel of choice for repair work and general cutting and welding. •oxy-acetylene welding equipment is quite versatile because it lends itself easily to brazing, braze-welding, metal heating (for annealing or tempering, bending or forming), the loosening of corroded nuts and bolts, and other applications. •Oxyacetylene welding may also be used in areas where electricity is not readily accessible.•As well, oxy-fuel cutting is still very popular and oxy-acetylene cutting is utilized in nearly every metal fabrication shop.

Business environment analysis Industry is the production of an economic goodor servicewithin an economy .

The characteristics of an industry are : geographic scope of the industry. the boundaries of the industry: dominant economic characteristics of the

industry

Business environment (cont …)The competitors are : The competitors are : BOC Bangladesh Limited Dhaka BOC Bangladesh Limited Chittagong Chittagong Oxygen Ltd Chittagong Bengal Oxygen Ltd. Chittagong Diamond Oxygen Limited Dhaka Saladin Oxygen Ltd Dhaka P H P Oxygen Ltd Chittagong Kabir Oxygen Ltd Chittagong Associated oxygen Chittagong Seema Oxygen Ltd Chittagong R M Oxygen ltd Chittagong A&S Industrial Corporation Dhaka Khulna Oxygen Ltd Khulna

Business environment analysis (cont …)

The customers are : Medical hospitals, clinics.ship builders.Breaker.scrap-cutter.job welders .re-rolling mills . fabrication shops of all industrial ventures. individual drivers are explorers .beverage companies.shrimp culturist.mechanics and manufacturer of firefighting

equipment.

Industry background Present range of using gas is more than

three core meter-cube. The demand and supply was about only 30 lack meter-cube at the time of liberation. Major quantum of the growth was during last 10 years and the market is growing with more speed now a day.

Present supply of the gases are not enough to meet the increasing demand. There are only a dozen of oxygen factory where the multinational company BOC is the leader

Industry background (cont…)The industry is spread out geography .

Most of them are located in Chittagong. There is a steady growth of demand in this

industry , which is about 10 to 15 percent per year.

the industry fragmented. The factors that might include the future

growth in this industry are : Infrastructure development within the country . Development of other industries like Ship

Breakers , Rolling mills , Hospital etc .

Market AnalysisGrowth in the real estate sector, human

medical service, livestock medical service, aquaculture has led to a very significant increase in the demand for industrial oxygen and other gases.

There is a steady growth of demand at a rate of about 10 to 15 percent per year

Major quantum of the growth was during last the 10 years and the market is growing even faster since the recent years.

Competitive AnalysisSome of our major competitors are:

BOC Bangladesh LimitedChittagong Oxygen LtdBengal Oxygen Ltd

Some of these competitors have been in the business for a very long time and they enjoy the benefits of brand recognition and customer loyalty.

They are a huge threat for us because some of them operate in large scale and enjoy economies of scale.

They could reduce prices to knock out any new company.

Sales & Marketing Plan

•Medical hospitals, clinics,

•ship builders, breakers,

•scrap-cutter,

•job welders,

•re-rolling mills,

• fabrication shops of all industrial ventures,

• individual drivers are explorers,

•beverage companies,

•shrimp culturist,

mechanics and manufacturer of firefighting equipment

DEMAND AND SUPPLY:

•RAW MATERIAL & SOURCES•Customer service:

•We are providing good quality product.•We are providing necessary supports customers seek for.•Our staffs are very customer-friendly.•We have an option for corporate delivery.•We carry out direct selling.

DEMAND AND SUPPLY:

•Sales Strategy:

•The primary sales strategy includes these factors:

• Exceptional customer service• Exceptional product knowledge• Large and varied inventory• Convenient location.

Advertising:Promotion

Discount Gifts Corporate/Office delivery

Market SegmentProduct Industrial

Oxygen Acetylene

Ship Breakers Rolling mills & scrap cutters Boat builders Mill factories Job welders Total

2,78,20,000 m3 1,04,86,000 9,84,000 7,50,000 12,60,000 4,13,00,000

13,57,700 7,56,0003,00,0001,96,8401,04,860

Medical Oxygen

Hospitals Clinics Sub Total Total

5,50,000 2,15,000 7,65,000 4,20,65,000

13,57,700

Market Plan and PricingThe proposed project has a plan to produce

only 1080000m3 gases (industrial oxygen 1008000m3, medical oxygen 72000m3 and 216000m3 acetylene) in a year.

Our initial target is to acquire about 5% of the market shares.

We are keeping our prices at the industry average level, which is 19 BDT for industrial oxygen, 40 BDT for medical oxygen and 180 BDT for acetylene gas.

Keys to SuccessSell products of the highest quality with

excellent customer service and support.Retain customer to generate repeat

purchases and make referrals.Continue to expand daily sales by adding to

the variety of oxygen we sell.Communicate with our customers through

creative advertising.

Research and DevelopmentThe project mainly consists of 4 major components:Oxygen generating plant – purchased from an existing company with the plant running at moderate efficiency.Acetylene generating plant- brand new imported from international waters.Cylinder Filling System- Workshop outfit

Operations PlanCapacity Planning

Rated capacity of the project will be a) Industrial oxygen-100800meter-cube per year, b) Medical oxygen-72000 meter –cube per year and c) Acetylene-216000meter cube per year. Capacity utilization of the project will gradually increase from year’s 75% to 80%, 85%90%, 95% and 100% during second, third, fourth, fifth and sixth year respectively.

Operations Plan (Contd.)Oxygen Manufacturing Flowchart

Operations Plan (Contd.)Geographical LocationOur plan will be located in an 80 decimals land at

Bonder, Narayongonj and we have procured 14 decimals land from the Bangladesh Railway on a 99 years lease basis. The leased land is beside the Madanpur-Madongonj highway and is adjacent to the purchased land. The management of the project is allowed to develop and use the leased land for any purpose. However to secure the project and make it suitable, we need a boundary wall of about 800 sq feet long and 8 feet high. 24000 cubic feet of earth filling will be required.

Management Summary

Financial PlanThe total cost of our plan including

everything would be approximately 42530166 BDT

This figure includes:Boundary wall – 876600 BDTOxygen Shed- 1355598 BDTAcetylene Shed and store- 1626953 BDTWorkshop Tools and Machinery – 398500 BDT

Conclusion