1.0 Executive Summary
The main objective of this business plan is to provide investors information which necessary to evaluate the scope of Inferno Company in the market and the potential future growth in the global market. The market trend analysis and research has shown that there is great and sufficient room for business like Inferno Company to run. Inferno Company will have an energetic, young, inventive, responsible and progressive management style. The ethics and responsibilities toward environmental protection of the management and employees eventually stipulate and accelerate the growth and improvement of Inferno Company.
Inferno Roof Tiles is an invented roof tiles made from waste plastics and sand. This results in an eco-product which re-engineered waste into a new functional product. The gap between building construction and environmental friendly can be closer with the launching of Inferno roof tiles as a new building material for Malaysian construction. Inferno Company will work closely to the private construction sectors, as well as the government sector for the implementation of the Inferno roof tiles in their new and developing projects.
Inferno Company strives to compete with the current commercial roof tile companies and manufacturers and become the major supplier of green roof tiles in Malaysia followed by Asia and worldwide. This ambitious target is set once the company noticed about the increasing trend and demand in green building materials and tends in solving the environmental issues which is increasing in an alarming rate.
The company is seeking for a moderate investment from investors with the intention to launch and start-up the business to provide building and constructions industry the best alternative and solution. Inferno Company is expected to achieve profitability within a year.
Figure 1.1: Comparison chart for sales, gross margin and net profit in future 3 years.?
2.0 Company Description
Inferno is a freshly established company which was formed to create a supreme quality green roof tile manufacturing brand aimed at the Malaysian market. The company was formed with an intention to have strong focus on the development of green technology and materials as well as the development of skills at the same time creating job opportunities. With this aspiration, the company seeks to infiltrate the Malaysian market with the blue ribbon recycled roof tile solutions distributed through few platforms, notably E-Commerce, direct supply in large quantities to construction companies (both private and government) and retailed stores such as hardware stores.
There has been an increasing demand for roof tile in developing countries like Malaysia. However, commercial roof tiles nowadays are usually not environmental friendly and require greater energy to produce or manufacture. This has prompted the materials engineers to develop a greener roof tiles which can be manufacture or produce in a lower consumption energy and eventually reduce the burden of exploiting raw materials for production of roof tiles.
The product is named Inferno Tiles. It is made of a composite material which comprises recycled HDPE plastics and sand. Plastics are the major issues now and by using plastics as raw materials in the product can reduce the environmental impacts. The embodied energy in plastics allows the possibility of low energy consumption rate in manufacturing and hence lower cost is required to produce a piece of roof tile as compared to the commercial one which made from virgin materials. However, the performance of the roof tiles has been conforming and outstand the commercial ones.
Inferno Company strives to be the dominant provider of supreme green roof tiles. With this intention, strict quality control program, competitive pricing, timely response towards customers, after sale services and lean manufacturing will be implemented.
The company not only strives to provide green roof tile but also other green building materials in future. Green building materials can provide a better and more environmental friendly construction. Eco-house which is environmental friendly will be the vision of the company.
Inferno is a partnership, owned and operated by five materials engineers who had associated with the composite material projects for years and with the extensive research conducted as well as collaborations of the composite material projects ranging from biodegradable food packaging to building and constructions. Two of the materials engineers had experienced in invention of new materials specifically for buildings and constructions. Another three materials engineers had years of experiences in designing composite materials for multipurpose applications in diverse industries.
Our product, Inferno roof tile is a green and affordable building construction material. Inferno roof tile are made from the combination of HDPE plastics and sand with a ratio of 7 to 3 respectively. Our company collects or buys the waste plastics from recycle centers and categorizes all the recycled plastics according to their recycle grades. After categorization, the HDPE plastic is heated to its melting point. Then, sand is added into melted plastic and stirred by a mixer. The mixture will become a paste-like compound and it is poured into a roof tile mould to compress it to desired shape. Inferno plastic roof tile is formed after cooled.
Unit Selling Points (USP)
1. Recycling and re-engineering. Recycling is one of the effective ways to reduce the amount of plastic to be landfilled. Plastic bags used in this world per minute are 1,000,000 (Our Product, 2017). However, plastic takes more than 600 years to decompose (Our Product, 2017). Inferno roof tile utilizes the plastic wastes as one of the major materials. This case the waste plastics are re-engineered into a new functional product. Therefore, possibility of reduction in the waste plastic being landfilled or burned is greatly increased and accelerated.
2. Environmental friendly. The manufacturing process of Inferno roof tiles does not create waste because the process is reversible as the excess from trimming will be collected and reuse in the melting process. After all, the main ingredients for Inferno roof tiles are most industrial and commercial wastes.
3. Long lifespan. The Inferno roof tile can last for at least 100 years because both plastic and sand does not decompose easily and it may have a lifespan of more than hundred years. This is a credit when this material is used for refurbishing and the maintenance of the historical buildings and important buildings which represent the culture and identity of certain countries or communities.
4. Great performance in strength. Inferno roof tile is having superb performance in strength than commercial clay roof tile. During installation process, the Inferno tile will not easily break when impact exerts from a height while the commercial clay roof tile breaks in no time. The reason behind this outstanding performance is Inferno roof tile has good impact absorption and good tensile strength compare to commercial clay roof tile which is a brittle material. Inferno roof tile can withstand the force more than human weight; this indicates that worker can step on it without the fear of breaking the roof tiles during installation.
5. Water, weather and flame resistance. Inferno tile is water resistance because plastic is having low water absorption properties. UV resistance of Inferno roof tiles are tested and proven to be effective when exposed under a hot weather in certain country especially those Asia country. The colours of Inferno tile will maintained under hot sun. Inferno roof tile aids in prevention of the flame spread out along the roof.
6. Soundproof. The noise can be reduced by Inferno tile during raining day. The impact of rain drop is absorbed as compare to a metal roof tile.
7. Light weight. The Inferno roof tile has an average weight which is approximately 1.3 kg which is 70% lighter weight compared to traditional roof tiles. The load applied by the roof tile to the framework of the roofing system can be reduced, thus the roofing system reinforcement during building construction can also be reduced. During installation, the worker can install it easily. Besides that, transportation cost can be saved as lighter weight of products consumes less petrol during transportation.
8. Variety. Inferno roof tile can be moulded into many shapes such as slate, roman, slate ridge and etc. It also comes in a wide range of colour choices and customization of colour choice by customer is also possible.
Inferno Slate Roof Tile
Weight per piece 1.3 kg
Size 300 × 600 mm
Thickness 25 mm
Headlap 75 mm
Inferno Ridge/Hip Cap for Slate Roof Tile
Weight per piece 1.3 kg
Size 300 × 600 mm
Thickness 25 mm
Headlap 20 mm
Inferno Roman Roof Tile
Weight per piece 1.3 kg
Size 330 × 420 mm
Wave height 40 mm
Headlap 50 mm
Inferno Ridge/Hip Cap for Roman Roof Tile
Weight per piece 1.3 kg
Size 330 × 200 mm
Wave height 40 mm
Headlap 20 mm
9. Low cost. The major materials used are waste plastics and sand. The material cost and energy consumption is much lower than virgin plastic. The maintenance and installation cost will be reduced because not easy to break as compare to clay tile and long lifespan of Inferno roof tile. The price of Inferno roof tile is RM 12 per square meter.
Table 3.1| The properties of Inferno Roof Tile.
Compression resistance 14 MPa
Temperature range -60°C to +80°C
Lifespan >100 years
Density 1103 kg/m2
Flame spread No flame spread
Water absorption 0.3%
Fracture toughness 3.5 kgf/cm2
Biological stability Moss and mold spread resistance
Chemical stability No reaction with acidic and alkaline environment
UV-resistance Resistance to UV-radiation and colour will maintain
Heat conductivity 2800 J/m2s
4.0 Industry Analysis
Roof Tile Manufacturing
According to Department of Statistics Malaysia, the population in Malaysia is estimated at 32 million in 2017 (Current Population Estimates, Malaysia, 2016-2017, 2017). With the growing of population, the number of households needed in the future will increase. The roof tiles industry is expected to increase in the future. The house owner will want to use the Inferno roof tiles which are cheaper and better strength and properties to replace the commercial roof tiles.
4.1 PEST Analysis
Political Factors: Politics can be one of the risk factors to roof tile industry. Recently Malaysia had been formed a new government, thus they can change business rules that bring positively or negatively impact to roof tile industry. Malaysia government had made announcement to abolish Goods and Services Tax (GST) and implement Sales and Service Tax (SST) start from 1 September 2018. Under GST, everyone need to be charged on the tax including supplier, manufacturer, whole seller and retailer (Sales and Service Tax (SST) in Malaysia, 2018). The range of taxable become lesser under SST can bring positively impact to Malaysian.
Economic Factors: Malaysia economic growth rate was increased from 4.2% to 5.9% in 2016 and 2017 (Malaysia Economic Outlook, 2018). The data showed that Malaysia current economy is in growing stage. More investments will come in to Malaysia to develop economic. Government is encouraging people to develop or create their own business.
Social Factors: Entrepreneurial spirit has been encouraged and promoted in Malaysia to own businesses. The strong competitiveness atmosphere causes people hard to find job. Creativities and innovative is what a company looking for. Inferno Company creates and design a new production line and product in Malaysia to survive in roof tile market.
Technological Factors: Nowadays, new technologies and high efficiency machines are sought by industry. The machines that use in roof tile industry need to be designed for faster and higher speed and also ensure the quality of product to be excellent at the same time. The industry need to be performed efficiency and effective at the same time. Old machines or second hand machines have lower performance rate and speed compared to new machines.
4.2 Porter’s Five Forces
Competitive Rivalry: There are lots of roof tile manufacturers in Malaysia and the market is considered quite competitive. Inferno Company also created as roof tile manufacturer but have unique and different with other competitors. Inferno Company is using HDPE to produce an eco-friendly roof tile. The strength and properties of this HDPE roof tiles is better than clay and cement roof tile. The competitive rivalry is minimal because there is no manufacturer produce this kind of roof tile in Malaysia. Hence, Inferno Company has tremendous strength and profits in the market.
Supplier Power: The main raw material needed is the waste HDPE plastics and sand. There are quite a lot of waste plastic supplier can be found in Malaysia. Waste plastics or HDPE plastics have no much in value and can buy it at cheaper price. Since there are many suppliers can be found, comparison on prices between different suppliers can be conducted and survey to get the most suitable supplier.
Buyer Power: The potential buyers of Inferno roof tile are the private sector contractor and government sector contractor for residential construction and non-residential construction in Malaysia. Large amount of roof tiles are needed for one construction. The different between Inferno and other competitors is Inferno provide roof tile with better strength and lower price. This can help to reduce plastic waste as the raw material used is waste HDPE plastics. Nowadays, contractors and government are looking for beneficial and effective ways to reduce pollution and waste. Launching of Inferno roof tiles can accelerate this event.
Threat of Substitution: In roof tile industry, the requirements for roof tile are strict where a building and construction material must be safety and at the same time strength must be significant. It is not easy to invent a new material to substitute the roof tile. Hence, the industry will face lesser threat of substitution.
Threat of New Entry: This roof tile business requires changing technologies to improve the process, huge capital investment is necessary. Inferno Company faces threat from local and top roof tile manufacturers which they may also will develop this kind of roof tile in the future. To overcome this problem, partnerships and reputations are mandatory for Inferno Company which can help to secure the business in the market.
In past few years, construction industry has a robust growth in Malaysia due to expansion of economics and development sectors. According to the Malaysia Country Report by Construction Industry Development Board Malaysia (CIDB), the collected data showed that the value of construction project awarded was recorded MYR 141.8 billion in 2015 increased to MYR 229 billion (Country Report Malaysia, 2017). In term of both value and number of project private sector have occupy 77.8% (RM178.1 billion) and 74.3% (5,091 projects) versus government sector at 22.2%(RM50.9 billion) and 25.7% (1,764 projects) (Country Report Malaysia, 2017).
Table 5.1| Value of Construction Projects Awarded by Sector and Type of Project (Country Report Malaysia, 2017).
Sector and type of Project Value (RM million)
In year 2014 2015 2016 2017
Total Private Sector 161,363.78 117,127.32 178,143.68 34,311.26
Residential 34,781.71 51,097.83 39,075.50 11,265.92
Non-Residential 91,973.73 49,374.63 38,964.58 15,072.84
Social Amenities 4,833.52 2,575.03 3,561.94 1,575.82
Infrastructure 29,774.82 14,079.83 96,541.66 6,396.68
Total Government Sector 23,653.56 24,724.12 50,882.08 6,045.07
Residential 2,139.25 2,677.18 1,560.38 909.06
Non-Residential 3,925.24 4,049.74 3,546.58 681.61
Social Amenities 3,343.55 2,940.88 5,110.49 1,047.74
Infrastructure 14,245.52 15,056.32 40,664.63 3,406.66
Grand Total 185,017.34 141,851.44 229,025.76 40,356.33
Note: As at 30 June 2017 Source: CIDB Malaysia
The tiles market has been greatly impacted by the growth in the construction industry in Malaysia. Nowadays, the amount of existing residential, commercial and government units increase continuously, this trend leads the market of replacement demand for tiles increase at the same time (Gupta, 2018). With growing of urbanization, the number of households and buildings are predicted to increase and cause the raising in the demand of tiles.
Table 5.2| Number of Construction Projects Awarded by Sector and Type of Project (Country Report Malaysia, 2017).
Sector and type of Project Number
In year 2014 2015 2016 2017
Total Private Sector 6,276 5,643 5,091 1,645
Residential 2,161 1,929 1,762 597
Non-Residential 2,677 2,316 2,005 665
Social Amenities 257 250 263 81
Infrastructure 1,181 1,148 1,061 302
Total Government Sector 1,800 1,901 1,764 488
Residential 160 164 92 45
Non-Residential 342 376 404 97
Social Amenities 445 476 414 127
Infrastructure 853 885 854 219
Grand Total 8,076 7,544 6,855 2,133
Note: As at 30 June 2017 Source: CIDB Malaysia
4.3 Market Segmentations
In regards to the distribution business, there are more than 2,000 construction related businesses annually in Malaysia. All these businesses could be the potential customers of Inferno roof tiles.
Private and government sector contractor: Nowadays, people concerns about the environmental pollution. By using Inferno roof tiles, it can promote the event and activities on recycling of plastic. This also can be a new and unique selling point of the construction project.
Local businesses: The hardware store and roof tiles suppliers can look for new roof tiles to promote and sell to customers. This new design can grab the attention and curiosity of customer to know more information of this roof tile. The customers may buy the roof tiles for self-replacement in household.
Figure 5.1: Market analysis in pie chart.
4.4 Product and Business Analysis
The primary competitive advantage and selling point of Inferno roof tile is the unique and invention of roof tile which uses waste plastics as ingredient. This invention is currently cannot be found in market. As compare the Inferno roof tiles with commercial cement and clay roof tile, there are some advantages over the other competitors. The addition of plastic to the roof tiles gives the roof tiles considerable durability and it is environmentally safe and does not emit harmful substance. Besides, the Inferno roof tiles do not absorb moisture easily, thus it can last for a longer time and easy to clean. Another advantage is the price of Inferno roof tile which is cheaper than commercial clay and cement roof tile as the material cost and production cost are lower. According to a study in Science Magazine, Malaysia is the eighth worst country worldwide for plastic waste and Malaysia was estimated produced almost one million tonnes of mismanaged plastic waste (Jenna R. Jambeck, 2015). As using waste plastic as main material to make this tile, the mismanaged plastic scenario can also be reduced.
4.5 Competitor Analysis
In current roof tile market in Malaysia, there are many roofing tiles manufacturers, distributors and wholesalers that provide clay and cement roof tiles on a regular basis. There are no manufacturers and distributors produce this type of recycled plastic roof tile in Malaysia like Inferno. Majority roof tile manufacturers are using clay or cement as raw materials in production of roof tile. However, there are some roof tile manufacturers in oversea had started the businesses of recycled plastic roof tile:
• Resintile (EA) Ltd (South Africa): The primary objective of this business is to reduce the contamination and pollution of the environment and at the same time provide a product that is safe, light and easy to install. This roof tiles are not only cheaper but also eco-friendly to environment.
• Zhangjiagang Aicheng Machinery (China): China is the top country worst country for plastic waste which have around 8.82 million tonnes of mismanaged plastic waste (Jenna R. Jambeck, 2015). Thus, most of the company started to develop and manufacture product by using plastic waste. Zhangjiagang Aicheng Machinery has developed a recycled plastic roofing tile extrusion line. The industry produces PVC corrugated roof tile by extrusion.
Inferno Company creates a similar production line as the competitor to produce the recycled plastic roof tile. The production cost and material cost are lower because the production line and raw materials are readily available in Malaysia and no import fees are needed. Inferno roof tiles can supply to local market with lower price and may export to other countries in the future.