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Business Plan

IDA S.A. 2016-2020

May 2016
TABLE OF CONTENTS
I. EXECUTIVE SUMMARY ................................................................................. 2
II. BUSINESS DESCRIPTION .............................................................................. 3
III. SHAREHOLDERS OF IDA S.A. ....................................................................... 4
IV. MANAGERS EXPERIENCE ............................................................................ 5
V. SWOT ANALYSIS .............................................................................................. 6
VI. EXTRUSION PROCESS AND
PRODUCTLINE ........................................................................................................... 7
VII. MARKETING PLAN ......................................................................................... 8
VIII. CONTRACTS UNDER NEGOTIAION .......................................................... 9
IX. SALES PROJECTIONS .................................................................................... 10
X. SOTERO PERALTA SALES PROJECTIONS ................................................ 11
XI. FUTURE PROJECTS ....................................................................................... 12
I. EXECUTIVE SUMMARY
In the past 5 years International Dominican Aluminum (IDA SA) has had losses due to
the continuing decline in international prices of aluminum billets (65% of our total cost
of production). Limited cash flow that caused us losses in production because of the
lack of raw materials, maintenance problems with our presses (now resolved), refusing
customers and suppliers of raw material because of the bad experience they had with
the previous company (Aluminio Dominicano, Aldom). This rejection took
approximately 2 years to be overcome. Other reasons are the unfair competition from
the Chinese extrusion producers, which is impossible to compete.

The market for office towers and condominiums in the United States is starting to take
off, especially in South Florida. Pre-construction condo projects from West Palm Beach
to Downtown Miami (80km) amount to 417 towers (see attachement "South Florida
New Condo Projects Chart" CraneSpotters.com 05/09/2016). An increase of 34% in
one year. In the next two years the South Florida projects contracts are valued in more
than one billion dollars in curtain walls, commercial fronts, windows and doors. IDA is
negotiating with the company United Glass Systems (UGS) and Aluminum Specialties
Wholesale Systems (ASW) to guarantee 80% of the total production of IDA SA. The
production or sales is mainly to produce curtain walls, windows and doors trade fronts.

The aluminum industry is going through a restructuring where China is the world's
largest producer of primary aluminum. This is causing the rest of the world to take steps
to become more efficient and profitable. For an aluminum company to be competitive
in this world of drastic changes it has to be as integrated as possible. Therefore, IDA
SA plans in its strategic plan is to produce their own raw material through getting an
aluminum smelter, acquire value added companies in Florida and cut costs with the
purchase of solar panels and produce their own dies.

BUSINESS PLAN IDA S.A. 2016-2020 JUNE 2016 2


II. BUSINESS DESCRIPTION

Aluminum International Dominican SA (IDA) is the largest extruder in the Caribbean.


Located in Santo Domingo, Dominican Republic, it covers an area of 22,500 m2. IDA has a
production capacity of 10,000 tons per year and materials can be painted through our two
powder paint lines which can go up to 30feet.

BUSINESS PLAN IDA S.A. 2016-2020 JUNE 2016 3


III. SHAREHOLDERS OF IDA S.A.

Enrique Castells - President

Founder of International Dominican Aluminum S.A. Former founder and CEO of


VENALUM; BCHE, University of Florida, AMP Harvard.

Abbas Jafarian - Managing Partner

Founder and COO of Black Pearl Capital. Senior partner of International Aluminum
SA Dominican degree in business administration and international relations. MBA at
London Business School. Former investment executive at Morgan Stanley, Deloitte
and Arthur Anderson.

Ramon de la Rocha - Managing Partner

Founder and CEO of Constructora Delta, Dom Rep.; Member of the Board of
Banreservas (biggest bank in the Dominican Republic.; BSCI, UNPHU, D.R.

BUSINESS PLAN IDA S.A. 2016-2020 JUNE 2016 4


IV. MANAGERS EXPERIENCE

Betsabe Dominguez - Administrative Manager

Bachelor of Business Administration - Universidad Centro Occidental Lisandro


Alvarado (UCOLA) Barquisimeto, Venezuela. More than 20 years of experience in
aluminum trading.

Simon Dominguez - General Manager

Mechanical Engineer - University Experimental Jose Antonio de Sucre


(Barquisimeto, Venezuela). Specializing in industrial hydraulics, industrial
refrigeration, manufacturing processes, quality control, personnel management,
development and implementation of industrial projects.

Miguel Feliz - Sales Manager

Degree in Financial Management and International Business. 24 years of experience


in the industry aluminum extrusion, both in marketing locally and regionally.
Development of lines of architectural aluminum products as well as the
Administrative and Financial Management Aluminio Dominicano CxA (Aldom).

Javier Alejo - Operations Manager

Industrial Engineer - Dominican University O & M, Santo Domingo, Dominican


Republic 24 years of experience in the area of plant supervision, manufacturing,
production, distribution and quality, both the aluminum industry and textiles...

Pedro Acosta - Finance

Degree in Accounting - Autonomous University of Santo Domingo (UASD). 20


years of experience in accounting and tax audit, social security, tax reform, labor
code withholdings and senior management of Income Tax (ISR).

BUSINESS PLAN IDA S.A. 2016-2020 JUNE 2016 5


V. SWOT ANALYSIS

Proximity to the largest market (United States).


Human resources with experience.
STRENGTHS Tax free trade zone.
Low labor cost. There are no unions at the plant.

Opening to the US market.


Growth of real estate market in South Florida with a
OPORTUNITIES potential market for aluminum profiles.
Diversity of products and value added products.

WEAKNESES Aluminum billets low prices of (main raw material).


Competition from Chinese extruders
THREATS Lack of cash flow

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VI. EXTRUSION PROCESS AND PRODUCT LINE

The production process involves aluminum extrusion of aluminum ingots to turn


them into profiles.

The ingot is hydraulically pushed through a fixed matrix section; then cooled,
stretched and cut to the desired size.

The profile is heated in an aging oven to give hardness

The hardened material passes through the powder coating process, then it is packed
and shipped to the customer.

Products and services


Extrusion department: Fabrication department:

Profiles Available alloys: 6063


Bars Cortes length and up to 30 feet long
Circular tubes Manufac services or n
Rectangular tubes Custom Packaging Services
Round tubes
Angular
Channels Packing and finishes:
Profiles for patio and pool
Profiles for doors Protech Certified Powder Coating
Profiles for fences AAMA 2603 Standard Colors
Shutters and hurricanes AAMA 2604 Architectural Finishes
Windows, doors and screens AAMA 2605 High Performance Coatings
Profiles for commercial fronts Specialty Packing & Export Services
Profiles for curtain walls
open matrices

BUSINESS PLAN IDA S.A. 2016-2020 JUNE 2016 7


VII. MARKETING PLAN

Produce and sell 900t per month


Attract new local and international clients
Produce 300t per month of profiles, curtain walls and storefronts for the
American market.
Offer type KYNAR paint with 25-year warranty that produces an additional
return of 60%.
Provide machined parts (value added). This increases the net profit of these
products by 30%.
Increase the range of products available, for example, shades, awnings, shutters,
vertical blinds, trusses, solar panels, among others.

Actual Markets
United States

Puerto Rico

Dominican Republic

Projected future markets

USA IDA S.A. Puerto Rico


20%
80%

BUSINESS PLAN IDA S.A. 2016-2020 JUNE 2016 8


VIII. CONTRACTS UNDER NEGOTIAION

HAYCO 5 years

o Approximate annual value: $5 Million dollars (projected 30% net


profit)
o Provide tubes for Procter & Gamble (Swiffer Swipper) approximately
1,000t/year.

Aluminum Specialties Wholesale (ASW)

o 300t per month of curtain wall, storefronts and profiles.


o Estimated value: $ 18 Million dollars or (approximately 30% net gain).

United Glass Systems

o 300t per month of curtain walls, storefronts and operable windows.


o Estimated value: $18 Million dollars.

Panama

o We are negotiating a $20 million contract for supplying windows to


Panama.

BUSINESS PLAN IDA S.A. 2016-2020 JUNE 2016 9


IX. SALES PROJECTIONS

SALES PROJECTIONS 2016-2020 - EXTRUSION DIVISION


Net annual Sales
tonnage* US$ Earnings
2016 (600t/month)
Profiles $14,400,000 2,160,000
7,250
Curtain wall and storefronts* $21,600,000 4,320,000
Total $36,000,000 $6,480,000

2017 (650t/month)
Profiles $15,600,000 2,340,000
7,750
Curtain wall and storefronts* $30,000,000 6,000,000
Total $45,600,000 $8,340,000

2018 (700t/month)
Profiles $16,800,000 2,520,000
8,250
Curtain wall and storefronts* $40,000,000 8,000,000
Total $56,800,000 $10,520,000

2019 (750t/month)
Profiles $18,000,000 2,700,000
8,750
Curtain wall and storefronts* $50,000,000 10,000,000
Total $68,000,000 $12,700,000

2020 (800t/month)
Profiles $19,200,000 2,880,000
9,000
Curtain wall and storefronts* $60,000,000 12,000,000
Total $79,200,000 $14,880,000

TOTALS 39,000 $285,600,000 $52,920,000

*20% Net earnings.

BUSINESS PLAN IDA S.A. 2016-2020 JUNE 2016 10


X. SOTERO PERALTA SALES PROJECTIONS

BUSINESS PLAN IDA S.A. 2016-2020 JUNE 2016 11


XI. FUTURE PROJECTS

ALUMINUM CASTING AND DIES FABRICATION

SOLAR PANELS INSTALLATION FOR OUR PLANT

PURCHASE OF VALUE ADDED COMPANIES IN FLORIDA

BUSINESS PLAN IDA S.A. 2016-2020 JUNE 2016 12

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