KwaCrete Ready Mix — Executive Summary

KwaCrete Ready Mix seeks an R44.0-million upfront raise (R18.0m equity and R26.0m term debt) plus an R8.0-million working-capital facility to establish and operate a central ready-mix concrete batching plant in Gauteng — delivering a 33.1% project IRR, a 38.4% equity IRR and an NPV of R38.1 million at a 16% discount rate, with EBITDA margins expanding from 4.6% to 20.4%.

Section 1 · Business Plan

Executive Summary

This Plan sets out the market opportunity, competitive positioning,
operating model, management approach, implementation roadmap and a fully
integrated five-year financial model. It has been prepared to a standard
suitable for credit committee and investment committee review, with
transparent assumptions, scenario analysis and clearly articulated risk
mitigation.

1.1 The Opportunity

South Africa is entering a sustained public-infrastructure investment
cycle. Government has committed to consolidated expenditure of
approximately ZAR2.6 trillion in the 2025/26 fiscal year, with
multi-year capital allocations concentrated in transport and logistics,
energy, and water and sanitation — precisely the categories that consume
the greatest volumes of structural concrete. Independent analysis by PwC
places cumulative South African infrastructure investment at roughly
US$582 billion between 2025 and 2050, growing from about US$19 billion
per year in 2024 to an estimated US$26 billion per year by 2050.

Ready-mix concrete is a fundamentally local, logistics-bound product:
it must be batched and placed within roughly 90 to 120 minutes, which
limits an economic delivery radius to approximately 40 kilometres from
the plant. This characteristic protects well-located operators from
distant competition and creates defensible regional franchises. KwaCrete
is positioned to capture demand from infrastructure, commercial,
residential and industrial customers within its catchment, anchored by a
disciplined cost base and superior service reliability.


Investment highlights ▸ Structural demand tailwind: multi-decade public infrastructure pipeline and urbanisation in Gauteng, the country’s economic heartland. ▸ Defensible local economics: the ~40 km delivery radius insulates a well-sited plant from national competitors. ▸ Attractive returns: project IRR of 33.1%, equity IRR of 38.4%, and NPV of R38.1m at a 16% discount rate. ▸ Robust coverage: debt service coverage builds from 0.33x to 4.17x, comfortably above a 1.30x covenant by FY2027. ▸ Conservative gearing: term debt of R26.0m against R18.0m equity — a measured 59% debt share of the upfront raise.

Investment highlights ▸ Structural demand tailwind: multi-decade public infrastructure pipeline and urbanisation in Gauteng, the country’s economic heartland. ▸ Defensible local economics: the ~40 km delivery radius insulates a well-sited plant from national competitors. ▸ Attractive returns: project IRR of 33.1%, equity IRR of 38.4%, and NPV of R38.1m at a 16% discount rate. ▸ Robust coverage: debt service coverage builds from 0.33x to 4.17x, comfortably above a 1.30x covenant by FY2027. ▸ Conservative gearing: term debt of R26.0m against R18.0m equity — a measured 59% debt share of the upfront raise.

1.2 The Business Model

KwaCrete will operate a single, well-invested central batching plant
with a rated output of 60 cubic metres per hour, supported by a fleet of
six truck mixers, two concrete pumps and two front-end loaders. The
Company will sell certified, specification-grade concrete across the 15
MPa to 45 MPa range, together with specialised mixes (high-strength,
pumpable, fibre-reinforced and low-heat formulations) at a premium.
Revenue is generated per cubic metre delivered, with delivery and
pumping services billed separately to protect margin.

1.3 Financial Summary

The Company projects a measured volume ramp from 28,500 cubic metres
in FY2026 to 67,000 cubic metres by FY2030, equivalent to approximately
87% of practical plant capacity. Revenue grows from R47.5m to R134.9m
over the period, with EBITDA margins expanding from 4.6% to 20.4% as
fixed costs are absorbed across rising volumes.

Metric (ZAR)	FY 2026	FY 2027	FY 2028	FY 2029	FY 2030
Volume (m³)	28,500	41,000	52,000	61,000	67,000
Revenue	R47.5m	R71.7m	R95.4m	R117.5m	R134.9m
Gross profit	R14.4m	R22.2m	R30.2m	R37.9m	R44.0m
EBITDA	R2.2m	R8.9m	R15.8m	R22.5m	R27.5m
EBITDA margin	4.6%	12.4%	16.5%	19.1%	20.4%
NPAT	(R6.0m)	R0.7m	R5.5m	R10.6m	R14.5m
DSCR	0.33x	1.35x	2.39x	3.40x	4.17x
Closing cash	R0.5m	R0.5m	R0.5m	R0.5m	R11.1m

Table 1.1 — Five-year financial summary. See Section 11 for full
statements and assumptions.

Figure 1.1

Figure 1.1 — Revenue, gross profit and EBITDA-margin trajectory, FY2026–FY2030.

1.4 Use of Funds

The upfront capital raise is deployed predominantly into productive,
financeable assets — the batching plant, silos, mixer fleet and pumps —
which provide tangible security for lenders. A disciplined contingency
and working-capital allocation ensures the Company is funded through
commissioning and the ramp-up period without recourse to further
capital.

Figure 1.2

Figure 1.2 — Allocation of the R44.0m upfront raise across capital expenditure and working capital.

1.5 The Ask

Funding requirement Equity: R18.0m for an agreed shareholding, with board representation and customary minority protections. Senior term debt: R26.0m over six years at an assumed 13.5% per annum, secured against plant and fleet. Working-capital facility: R8.0m revolving line to fund debtor and inventory cycles during ramp-up.

In return, investors gain exposure to a cash-generative,
asset-backed business positioned in a structurally growing market, with
a clear path to a trade sale or recapitalisation at a conservative 4.5x
EBITDA exit multiple, implying an enterprise value of approximately
R123.6m by FY2030.

Confidential — this business plan is provided to prospective investors and lenders for evaluation purposes only and may not be reproduced or distributed without the written consent of KwaCrete Ready Mix (Pty) Ltd.