Investment opportunity

  • High-yielding investment, factoring-type financing for a construction materials and furniture trading company.
  • Secured debt, 18.15% planned annual return.
  • Investment principal buyback is available at 5% penalty rate.

Project description

The company ALJANSAS NR.1 is a Lithuanian venture working in the sphere of importing certain assortment of construction materials, furniture, and design elements from China to the market of Eastern and Central Europe. China is an unquestionable world leader in the industry that is producing an enormous quantity and assortment of construction materials each year. Like other Chinese industries, mass production of construction materials started with economy class produce that was characterized by moderate, sometimes questionable, quality and cheap prices. Nowadays, China produces not only economy, but also medium and premium class materials, which still are characterized by very attractive price/quality ratio.

Chinese market of construction materials is enormous, therefore, ALJANSAS NR.1 specializes mainly on three product groups: porcelain stoneware, wall panels, and furniture.

 

  • Chinese porcelain stoneware industry with its 3,5 billion of m2 made annually constitutes around 50% of world’s total production. Porcelain stoneware is produced by 2500 Chinese factories, most of which are concentrated in cities of Foshan, Zibo, and Quanzhou that is considered one of the biggest porcelain stoneware production clusters in the world. ALJANSAS NR.1 is cooperating mainly with companies from Foshan, as this region is characterized by most modern production lines, developed logistics chain, proximity to the high-quality mineral resources and orientation towards medium-high and premium market segments.
  • Wall panels constitutes another part of ALJANSAS NR.1 interest on Chinese market of construction materials. The company specializes on import of two types of modern wall panels such as calcium silicate boards and magnesium oxide boards. These materials are considered next-generation finishing materials due to their qualities: incombustibility, moisture resistance, durability, environmental friendliness, and sound insulation. Separate part of ALJANSAS NR.1’s orders is constituted by orders of decorative boards from the same material, which are widely as a high-quality replacement for wooden, plastic, and drywall boards.
  • Furniture. Partners of ALJANSAS NR.1 are only well-known factories, which are producing premium-level furniture elements that are afterwards exported to Central and Western Europe, Northern America, and Middle East. Often the final customers are 4* small and medium size design hotels, which aim for creating specific atmosphere, but can’t afford buying furniture from European or American premium class furniture producers. Also ALJANSAS NR.1 is importing bed linens, curtains, and other types of textile cloth.

ALJANSAS NR.1 is working with a network of clients, such as construction companies, hotel chains, design bureaus etc. who are regularly placing specific orders for the goods to be delivered. The goods are delivered by sea or by sea + railroad, which sometimes takes up to 2 months for the goods to reach the buyer. In this connection, the company is in constant need of operating capital as noticeable share of product cost has to be paid in advance.

ALJANSAS NR.1 is looking to attract factoring-type financing enabling it to maintain additional purchases of construction materials and furniture orders and secure timely delivery of the ordered goods to the buyers.

Market

(Adopted from EUROCONSTRUCT press release)

Construction will continue to grow in Europe in the next few years

Thanks to a simultaneous construction output growth in the 19 Euroconstruct countries for the first time since years, 2017 recorded a growth peak of 4.1% (volume). The construction market should keep growing at 2.8% in 2018 and slow down at a yearly average rate of 1.6% (in volume) over the forecast period (2019-2021) supported by smoothing but still positive GDP’s evolution. In the very short term, confidence for households is reaching a peak in 2018 fuelling the new-residential sector. On a more structural point of view, the 2021 construction market volume would stay still 15 % behind 2007’s level for the EC 19 countries, but when eliminating the extrema situations in Ireland, Spain and Portugal, the level of output would be recovered for the sum of the other countries.

 

Residential construction

The gap between new building and building renovation markets has recently reduced, especially thanks to the 2017-2018’s new-residential growth. However, building renovation’s growth should take over new activity starting 2019 because of the slowdown of new building output. Collective housing progressively overrides individual dwellings with 58% of collective vs. 42% of individual completions expected in 2021. This should have positive consequences for countries CO2 emissions by the reduction of transport distance (less sprawling), and shorter networks for utilities. From a structural point of view, the EUROCONSTRUCT area’s population should keep growing over the 3 next years but at a slower pace than in the past. Despite this demography dynamic, we observe that household’s growth would not necessarily be linked to the housing completions growth, leading to an imbalance between offer and demand in some countries with consequences on prices and poor housing issues. In the short term, offer and policy drivers impact stronger the residential markets.

Non-residential construction

As a whole, non-residential construction output (new and renovation) is growing at a pace of 1.5% per year with 14 growing countries over the 2019-2021 period. But it should be noted that public buildings and offices are reversing the non-residential market in the UK and Germany. This is mainly due to public budget allocation and anticipated effects of the Brexit. An abrupt stop is expected in offices’ sector progression in the UK.

Civil Engineering

With a phase lag, civil engineering would become the new driving force during the forecast period with annual growth rates between 2.5 and 5% in volume. Civil engineering will still benefit from European Commission infrastructure’s plans and from national plans supporting especially roads and railways renovation, and from the global healthy economic situation.

Sample repayment schedule

Envestio participant’s investment - EUR 1 000.00
Payments:

  • 15.06.2019 - EUR 15.42
  • 15.07.2019 - EUR 14.92
  • 15.08.2019 - EUR 15.42
  • 15.09.2019 - EUR 15.42
  • 15.10.2019 - EUR 14.92
  • 15.11.2019 - EUR 1015.42

Total expected return: EUR 1 091.52

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Informationen zum Projekt

Kredit IDEN018107
Projektstartdatum15.05.2019
Kreditnehmer“Aljansas Nr.1” UAB, Reg. Nr. 305048646, Lithuania
Finanzierungsziel€ 250 000
Zweck des DarlehensTrade financing/factoring for the purchase of construction materials and furniture
Darlehenszeit6 Monate
Zinsrate18,15% jährlich
Rückzahlung des DarlehensIn full at the end of the Loan Period
Kapitalrückkauf möglichYes, 5% penalty rate
Zahlung von ZinszahlungenMonthly, on a specific date
Typ der FinanzierungSecured debt
Garantie vom Eigentümer des ProjektsCommercial pledge in favor of Envestio Collateral Agent, Personal guarantees

 

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