Investment opportunity

  • High-yielding investment in spare parts wholesale sector, financing of working capital increase of a Polish company MARTONFOX specializing in sale of spare parts for heavy machinery used for the agricultural works.
  • Secured debt, 18,5% planned annual return.
  • Investment principal buyback is available at 5% penalty rate.

Project description

The MARTONFOX company (http://martonfox.pl) specializes in the wholesale supply of spare parts for heavy machinery, mainly used in the agricultural sector. The average monthly turnover of the company is about one million euros. The latest financial results of the company confirm the correctness of the chosen business strategy in this economic segment. The company is actively developing and expanding its customer base, representatives of which have already fully appreciated the wide range of parts and the high level of service offered by the MARTONFOX company.

The company currently operates its own well-equipped warehouse of 1200 m2, located at Pulawska 34/5, 05-500, Piaseczno, Poland and served by seven employees. The above-mentioned warehouse area is sufficient to constantly maintain the availability of spare parts for the most popular vehicle models by customers that arrive at the MARTONFOX warehouse from China, Poland, Czech Republic, and France. Thus, the company ensures itself with an important competitive advantage: the ability to fulfil most of the orders within the shortest time possible. Well-organized cooperation with global courier service providers contributes to this. Partnership agreements are concluded only with enterprises that provide high-quality and efficient logistics services.

 

The company cares about the stability of high-quality products offered to consumers and therefore cooperates only with reliable manufacturers of spare parts for special vehicles. In order to reduce the buying price for goods, the procurement staff of MARTONFOX constantly monitors the market for manufacturers of auto parts, tests new products that appear on it, and signs distribution agreements on the most favorable conditions. As a result, the prices offered by MARTONFOX are 5-15% lower than the market average for goods of identical quality, which provides the company a significant competitive advantage on the local wholesale market.

The introduction by MARTONFOX of an innovative system of analysis and forecasting of customer demand allows purchasing managers to efficiently stock up the warehouse and keep in touch with customers, offering them not only spare parts that have already required replacement, but also those that are worth having in case of equipment breakdown. Thus, the average invoice amount is increased, as well as the loyalty of consumers who see the interest of MARTONFOX employees in the uninterrupted operation of special machinery.

The necessity to attract an additional investment is explained by the objective situation and trends of the agricultural market. The need to replace spare parts for agricultural machinery or other heavy special equipment usually arises in the season of its intensive use. Consequently, the owner of the equipment usually does not have the opportunity to wait several weeks for the delivery of the ordered part. Everything necessary must be instantly available, otherwise the supplier company will lose buyers who will be forced to turn to another seller. According to a customer survey conducted by MARTONFOX, no more than 10% of them are ready to wait for the delivery of ordered parts. Accordingly, MARTONFOX needs additional funds to expand its product range and storage space.

Furthermore, there is another issue that the attracted investment funds would help to resolve. A feature of the agricultural production market is a long cycle of work until the gain of profit. As a result, many buyers do not have the opportunity to immediately pay for the necessary expensive spare parts, in connection with which requests are received for instalments or deferred payment until the moment when the produced agricultural products are sold. In this regard, the scheme for the sale of spare parts for agricultural machinery, which includes instalments or deferred payment, is very common in the market. The ability to provide instalments or deferred payments will become an important additional competitive advantage for MARTONFOX. Indeed, in order to ensure this a certain increase in the volume of free working capital is required.

MARTONFOX is looking to attract an amount of up to EUR 1,2 million in several lots.

Market

Adopted from "Industry Europe"

Agriculture is one of Poland’s biggest industries, accounting for 3.8% of the country’s GDP and responsible for 12.7% of the country’s labor force. The industry is mostly private, as private farms make up 90% of the total farmlands. Majority of these private farmers (57%) own less than 5 hectares of farmland, and only 7% of private farms exceed 15 hectares in size in 1987. In contrast, most of the state-owned farmland was over 1,000 hectares in size.

However, most of the gross agricultural produce in Poland is attributed to private farms. 60% of the country’s land area (18.727 million hectares) is used for agricultural purposes, where 14.413 million hectares is in crop cultivation and 4.048 million hectares is used for pasture and meadows. Grains are the most important crops in the country, especially wheat, oats, barley, and rye. Poland has the world’s second-largest potato production and is the sixth-largest producer of milk and pigs in the world. Poland’s large population acts as an essential market for the country’s agricultural produce. Of the sugar produced in Poland, 83% is consumed domestically, as well as 90% of the poultry, 74% of the bacon, and 84% of the tinned meat.

 

Sample repayment schedule

Envestio participant’s investment - EUR 1 000.00
Payments:

  • 25.11.2019 - EUR 15.71
  • 25.12.2019 - EUR 15.21
  • 25.01.2020 - EUR 15.71
  • 25.02.2020 - EUR 15.71
  • 25.03.2020 - EUR 14.7
  • 25.04.2020 - EUR 15.71
  • 25.05.2020 - EUR 15.21
  • 25.06.2020 - EUR 15.71
  • 25.07.2020 - EUR 15.21
  • 25.08.2020 - EUR 15.71
  • 25.09.2020 - EUR 1015.71

Total expected return: EUR 1 170.30

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Loan information

Loan IDEN018127
Project start date25.10.2019
Borrower“MARTON FOX” SP. Z O.O. Tax reg.no. PL5252784475, Poland
Funding Target€ 300 000
Loan PurposeFinancing of working capital increase of a Polish company specializing in sale of spare parts for heavy machinery used for the agricultural works
Loan Period11 months
Interest Rate18.5% per annum
Repayment of Loan PrincipalIn full at the end of the Loan Period
Investment principal buyback availableYes, 5% penalty rate
Payment of Interest PaymentsMonthly, on a specific date
Financing typeSecured debt
Guarantee from the Project’s ownerCommercial pledge in favor of Envestio Collateral Agent, Personal guarantees

 

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