Replay Plastics

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Plastics Recycling Business Plan

Company Summary

The Company will capitalize on the opportunities in the recycled resin and packaging markets through two main divisions: a Recycling Division and a Packaging Division.

Recycling Division

Using a patented process, the Company will create a PET cleaning and refining plant located in the western United States; we have chosen this region because all 16 major North American PET recycling plants are currently located in the eastern United States or Canada, despite western states' favorable recycling attitudes among consumers. Its initial annual capacity will be 46 million pounds and it will utilize bottle feed stock from California, Oregon and Washington States, which collect over 200,000,000 pounds per year. The Company will become totally vertically integrated, and use all or almost all of its recycled material in its Packaging Division.  Any surplus material produced will be sold to outside companies.

Packaging Division

We will create a plant (actual facilities to be shared with the Recycling Division) to manufacture extruded plastic roll stock sheet or high-strength strapping, employing state-of-the-art technology developed to utilize recycled PET resin.

The extruded sheet will be primarily sold to thermoformers who will convert it into high visibility packaging, as well as laminators and fabricators. The strapping will be sold to commercial users for use as package or pallet strapping.

The Company currently has commitments from customers to purchase all of the initial production capacity.  Excess flake will be sold to outside customers.

2.1 Company Ownership

Replay Plastics is owned by the initial founders, B. Braddock, S. McGuire and C. Smith, who are the proposed three executives of the operating entity. The plan was conceived and developed by these individuals, with the intent to apply their extensive experience and contacts in the industry to building a successful profitable corporation.

2.1.1 Potential Conflict

Our COO, Mr. Sam McGuire, the inventor and patent holder of the recycling process to be used by the Company, is a principal in Company A of Chicago, IL. For many years, Company has designed, manufactured and assembled plastic recycling equipment, and has given us quotes on meeting our needs in this area.

After a thorough investigation, Replay has found that Company A is able to source or supply the required equipment at considerably lower cost than any other company from which a quote was available. Mr. McGuire has disclosed that Company A has included a smaller than normal margin in their quote on goods they will manufacture, to cover overhead, contingency and profit which might result in a small benefit to him. They have agreed to source all of the equipment possible with no added margin.

Replay has concluded that the savings available outweigh any other consideration and that we will purchase the cleaning and refining equipment from Company A.

2.2 Start-up Summary

Our start-up expenses are budgeted at $210,000, which is mostly for on-site contractor services during facility preparation. $50,000 has been set aside for legal and accounting, $25,000 for special consulting that may be required during start up and $50,000 each for local engineering and lab equipment and supplies. $30,000 has been set aside as a contingency for the start up period.

Our largest Start-up Requirement is the building of the recycling and extrusion facility. Its final value at completion is listed below as a long-term asset of $3,620,000 (excluding expensed items like consultants and engineering listed above). Aside from the building itself, we need $25,000 in machinery and fixtures, $500,000 of inventory (plastic bottle feed stock) and cash to cover us through the initial year.

Start-up Funding
Start-up Expenses to Fund $210,000
Start-up Assets to Fund $4,790,000
Total Funding Required $5,000,000
Assets
Non-cash Assets from Start-up $4,145,000
Cash Requirements from Start-up $645,000
Additional Cash Raised $0
Cash Balance on Starting Date $645,000
Total Assets $4,790,000
Liabilities and Capital
Liabilities
Current Borrowing $0
Long-term Liabilities $800,000
Accounts Payable (Outstanding Bills) $0
Other Current Liabilities (interest-free) $0
Total Liabilities $800,000
Capital
Planned Investment
Founders $1,500,000
Investor $2,700,000
Additional Investment Requirement $0
Total Planned Investment $4,200,000
Loss at Start-up (Start-up Expenses) ($210,000)
Total Capital $3,990,000
Total Capital and Liabilities $4,790,000
Total Funding $5,000,000
Start-up
Requirements
Start-up Expenses
Legal & Accounting $50,000
Stationery etc. $5,000
Consultants $25,000
Lab Equipment $50,000
Local Engineering $50,000
Misc Start up $30,000
Other $0
Total Start-up Expenses $210,000
Start-up Assets
Cash Required $645,000
Start-up Inventory $500,000
Other Current Assets $25,000
Long-term Assets $3,620,000
Total Assets $4,790,000
Total Requirements $5,000,000