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Business Plan Africa Investor-Ready Plans

Mainstreet Brick Business Plan

Investor-ready concrete masonry business plan: R20.21m project, 1.345m units a month, Year 5 revenue R63.7m and a candidly marginal 15.5% IRR.

Mainstreet Brick — cured concrete masonry units stacked in the plant yard
Business Plan & Investment Proposal · South Africa

Brick Manufacturing Business Plan — South Africa

Mainstreet Brick Manufacturing · A Marginal Investment, Stated As One.

A start-up concrete masonry plant producing stock bricks, maxi bricks and hollow blocks
— a semi-automatic static hydraulic press running two shifts at 1 345 000 units a month installed,
serving a 100 km delivery radius. Total project cost of R20.21 million: R6.30 million equity,
R8.50 million development finance at 11.5 per cent, R3.61 million equipment finance at
13.0 per cent and a R1.80 million committed working capital facility.

R20.21mTotal project cost
1.345mUnits a month installed
R63.7mYear 5 revenue
15.5%Project IRR

Read the executive summary →

Most business plans are written to clear the hurdle they set themselves. This one does
not, and it says so on its cover. Mainstreet Brick returns a project IRR of 15.5 per cent against a required
16.5 per cent — a full percentage point short — and rather than quietly lowering the threshold it
reports the shortfall and devotes a section to what would close it. The reason sits in the nature of the business:
concrete masonry is fixed-cost manufacturing, cash break-even needs 80.4 per cent of installed capacity, and
the plant only clears that during Year 4. Cement dominates variable cost and cannot be passed on quickly in a market
of established yards, while a 100 km delivery radius caps the addressable demand because bricks are heavy and
cheap. A funder should read this as an honest marginal case, which is more useful than an optimistic one.

The plan at a glance

Six measures that determine whether this plant and its funding stand up.

R20.21mTotal project costR6.30m equity, R8.50m development finance at 11.5%, R3.61m equipment finance at 13.0% and a R1.80m working capital facility.
15.5%Project IRRAgainst a 16.5% hurdle. The plan does not clear its own threshold and says so on the cover rather than adjusting the hurdle.
80.4%Cash break-even utilisationOf installed capacity. Very little room — the plant must run close to full to cover its costs.
1.345mUnits a month installedStock bricks, maxi bricks and hollow blocks from a semi-automatic press across two shifts.
8.4%Year 5 EBITDA marginOn R63.7m of revenue. Fixed-cost manufacturing: utilisation, not price, decides the outcome.
100 kmDelivery radiusBeyond which transport erodes the margin on a low-value, high-mass product.

The number the plan does not hide

What the project returns against what it was required to return — reported rather than reconciled away.

15.5%Project IRR deliveredWhat the plant actually returns on the base case over five years.
against a
16.5%Hurdle rate requiredThe plan falls short of its own threshold by a full percentage point — and states that on its cover instead of quietly lowering the bar.

Five years of trading

Revenue and EBITDA on the base case. Capacity utilisation and the cement price are the two assumptions that matter most, and both are stressed in Section 15.

Revenue build, and capacity utilisation behind it

Revenue tracks utilisation of a fixed 1,345,000-unit monthly capacity. Cash break-even sits at 80.4% of that capacity, which the plant only clears in Year 4.

Year 1

R21.4m · 52%
Year 2

R38.9m · 66%
Year 3

R50.3m · 78%
Year 4

R57.8m · 86%
Year 5

R63.7m · 92%

EBITDA and margin

EBITDA reaches R5.32m on R63.7m of revenue — an 8.4% margin. Masonry is a fixed-cost business, so the margin is made or lost on utilisation rather than on price.

Year 1

R0.34m · 1.6%

Year 2

R2.51m · 6.5%
Year 3

R3.86m · 7.7%
Year 4

R4.71m · 8.1%
Year 5

R5.32m · 8.4%

Why this plan works the way it does

1
The plan fails its own hurdle, and says soA 15.5% project IRR against a 16.5% required return. Most plans would move the hurdle; this one reports the shortfall on its cover and devotes a section to what would close it.
2
Utilisation is the whole businessCash break-even needs 80.4% of installed capacity. In fixed-cost manufacturing there is no volume at which the plant is comfortably profitable and no price rise that substitutes for running it full.
3
Cement is the input that moves everythingIt dominates variable cost per unit. A cement price rise cannot be passed on quickly in a market of established yards competing on price.
4
Geography caps the marketBricks are heavy and cheap. Beyond a 100 km radius transport eats the margin, which fixes the addressable demand regardless of how well the plant runs.
5
Value levers are named, not assumedA dedicated section sets out what would lift the return above the hurdle and what each lever is worth, rather than building the improvement into the base case.

Financial snapshot

Four charts from the plan. The full set of twenty-four appears throughout the sections below.

Revenue and capacity utilisation
Figure 2. Revenue and capacity utilisation.
Where every rand of Year 3 revenue goes
Figure 12. Where every rand of Year 3 revenue goes.
Returns against the exit assumption
Figure 17. Returns against the exit assumption.
Project IRR across scenarios, with Year 5 EBITDA
Figure 21. Project IRR across scenarios, with Year 5 EBITDA.

Contents

Twenty-two sections and five appendices. Every page carries full navigation, a section outline and links to the sections either side of it.


!
Important Notice and Basis of PreparationBasis of preparation, data sources and forward-looking statement caveats. Please read first.

Appendices
Confidential. This document is provided for the purpose of evaluating an
investment in Mainstreet Brick Manufacturing and may not be reproduced or distributed without written consent. Projections are
forward-looking statements based on the assumptions registered in Section 21 and are not guarantees of future
performance.