Lichtenburg Nut Company Business Plan — Capital Expenditure
The plant and equipment programme, its phasing, and what each tranche of capital buys.
Section 26 of 37
Capital Expenditure
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- 0. Basis of Preparation and Important Notice
- 1. Executive Summary
- 2. Investment Thesis
- 3. The Company
- 4. Problem, Customer Need and Value Proposition
- 5. Products and Services
- 6. Industry Analysis
- 7. Market Analysis
- 8. Customer Analysis
- 9. Competitive Landscape
- 10. Business Model
- 11. Go-to-Market Strategy
- 12. Operating Model
- 13. Raw Material Supply and Contract Farming
- 14. Quality, Food Safety and Aflatoxin Control
- 15. Management and Organisation
- 16. Strategic Plan
- 17. SWOT Analysis and Strategic Implications
- 18. Risk Analysis
- 19. ESG and Development Impact
- 20. Implementation Roadmap
- 21. Financial Model and Assumptions
- 22. Projected Income Statement
- 23. Projected Balance Sheet
- 24. Projected Cash Flow
- 25. Capital Expenditure
- 26. Working Capital
- 27. Funding Requirement and Structure
- 28. Debt Serviceability
- 29. Break-even Analysis
- 30. Scenario and Sensitivity Analysis
- 31. Valuation and Investment Returns
- 32. Key Performance Indicators and Management Dashboard
- 33. Conclusion and Recommendation
- A. Appendix A: Detailed Assumption Register
- B. Appendix B: Ten-Year Financial Summary
- C. Appendix C: Glossary and Sources
25.1 Phase 1 schedule
Table 56. Phase 1 capital expenditure schedule (R’000)
|
Item |
Cost (R’000) |
Book life |
Tax treatment |
|---|---|---|---|
|
Leasehold improvements, food-grade fit-out and civils |
13,800 |
15 years |
s11(g), over lease term |
|
Groundnut intake, drying, shelling, grading and aerated storage |
11,200 |
12 years |
s12C, 40/20/20/20 |
|
Roasting, blanching, colour sorting and two-stage milling line |
21,000 |
12 years |
s12C, 40/20/20/20 |
|
Homogenising, de-aeration, scraped-surface chilling, tanks and CIP |
7,600 |
12 years |
s12C, 40/20/20/20 |
|
Retail filling, capping, labelling and case packing line |
10,400 |
10 years |
s12C, 40/20/20/20 |
|
Bulk pail, drum and IBC filling station |
3,000 |
10 years |
s12C, 40/20/20/20 |
|
Laboratory and aflatoxin testing suite (HPLC, ELISA, microbiology) |
3,600 |
8 years |
s12C, 40/20/20/20 |
|
Utilities: dual-fuel roaster energy, steam, chilling, compressed air, MV/LV reticulation, 250 kWp PV and standby generation |
9,400 |
15 years |
s12C, 40/20/20/20 |
|
Fire detection and suppression, effluent and food-safety infrastructure |
1,900 |
15 years |
s12C, 40/20/20/20 |
|
Materials handling equipment, racking and pallets |
2,300 |
8 years |
s11(e) wear and tear |
|
IT, ERP, batch traceability and warehouse management systems |
1,900 |
4 years |
s11(e) wear and tear |
|
Light delivery and site vehicles |
1,150 |
5 years |
s11(e) wear and tear |
|
Installation, engineering, project management and commissioning |
5,600 |
12 years |
s12C, 40/20/20/20 |
|
Pre-operating: recruitment, training, FSSC 22000 certification, product development, trial production and market entry |
5,600 |
5 years |
s11A on commencement of trade |
|
Contingency (7% of hard cost) |
6,500 |
12 years |
s12C, 40/20/20/20 |
|
Total Phase 1 |
104,950 |
Buildings are leased rather than purchased, avoiding an estimated R28 million of capital in exchange for rental of approximately R3.9 million a year at Year 5. This improves return on invested capital at the cost of a permanent operating expense.
25.2 Phases 2 and 3, and maintenance capital
Table 57. Phase 2, Phase 3 and maintenance capital
|
Phase |
Timing |
Content |
Cost |
Funding |
|---|---|---|---|---|
|
Phase 2 |
Months 37 to 42 (Operating Year 3) |
Snack roasting, seasoning, multihead weighing and vertical form-fill-seal packing line; warehouse extension of 800 m²; additional silo, intake and chilled holding capacity |
R17.3m |
Operating cash flow and the revolving facility |
|
Phase 3 |
Months 73 to 78 (Operating Year 6) |
De-bottlenecking of the roasting and milling train from 3,400 t to 4,800 t nameplate |
R31.3m |
Committed R30m expansion tranche drawn in month 74 |
|
Maintenance capital |
From Operating Year 3, ongoing |
1.5% of gross property, plant and equipment per annum |
R1.8m in FY2033 |
Operating cash flow |
Table 58. Capital expenditure and the asset base
|
R million unless stated |
FY2028 |
FY2029 |
FY2030 |
FY2031 |
FY2032 |
FY2033 |
|---|---|---|---|---|---|---|
|
Phase capital expenditure |
105.0 |
0.0 |
0.0 |
17.3 |
0.0 |
0.0 |
|
Maintenance capital expenditure |
0.0 |
0.0 |
0.0 |
1.8 |
1.8 |
1.8 |
|
Total capital expenditure |
105.0 |
0.0 |
0.0 |
19.1 |
1.8 |
1.8 |
|
Gross property, plant and equipment |
105.0 |
105.0 |
105.0 |
124.0 |
125.9 |
127.7 |
|
Net property, plant and equipment |
104.3 |
94.4 |
84.5 |
92.8 |
82.9 |
73.4 |
|
Depreciation charge |
0.6 |
9.9 |
9.9 |
10.8 |
11.7 |
11.4 |