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25 October 1996

PRIVATE & CONFIDENTIAL

PRE-FEASIBILITY STUDY FOR A

LEATHER PROCESSING FACILITY

AT EBENEZER, QLD.

"MINAJI"1 (MS. CATHERINE J SCALLY)

1. PREFACE

This Feasibility Study sets out, inter alia, operational guidelines for a proposed leather processing facility project (‘‘the Project’’) to be carried out in the vicinity of Ebenezer, Queensland, under the auspices of an organisation to be incorporated in Queensland - Minaji (‘‘the Company’’2).

This Project, initiated by Ms Catherine Scally (‘‘the Client’’) has been carried out utilising the services of Gary O Garner & Associates (‘‘the Consultant’’) as a Regional Economic Development Program (‘‘REDP’’) Feasibility Study, as arranged through the Ipswich Regional Office of the Department of Tourism, Small Business & Industry (‘‘DTSBI’’).

1 Ms Catherine Scally. ACN to be registered under the nomenclature “Minaji” 2 The term "Company" as used throughout this document is a generic term used to describe the

organisation (“Minaji”) to be established for the purpose of progressing the Project.

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section PREFACE

25 October 1996 C:\DOCUMENTS AND

SETTINGS\GARNERG\DESKTOP\PUBLICATIONS\FEASIBILITY STUDY LEATHER PROCESSING PLANT QLD.DOC

TABLE OF CONTENTS

1. PREFACE ................................................................................................. 1

2. EXECUTIVE SUMMARY........................................................................... 8

3. INSTRUCTIONS/TERMS OF REFERENCE ........................................... 13

TERMS OF REFERENCE ................................................................................................ 13Introduction.................................................................................................................. 13Further Background and Feasibility Study Considerations ......................................... 14

Strategic Direction..............................................................................................................................14General Comments..............................................................................................................................15

METHODOLOGY & APPROACH..................................................................................... 15General Approach ....................................................................................................... 15Required Evaluation .................................................................................................... 16Purpose of Consultancy .............................................................................................. 16Objectives.................................................................................................................... 17

4. COMPANY DETAILS .............................................................................. 18

5. DEFINITIONS & PROCESS TERMINOLOGY ........................................ 19

COMMON METHODOLOGY & PROCESSES USED IN LEATHER TANNING /PROCESSING.................................................................................................................. 19

Curing.......................................................................................................................... 19Soaking and Unhairing ................................................................................................ 20Deliming and Bating .................................................................................................... 20Vegetable Tanning ...................................................................................................... 20Mineral Tanning........................................................................................................... 21Lubrication and Dyeing................................................................................................ 21Finishing ...................................................................................................................... 21

GENERIC TANNING PROCESSES................................................................................. 22Finishing ...................................................................................................................... 23Sources of Leather ...................................................................................................... 23

TANNING PROCESSES INTENDED TO BE USED BY THE EBENEZER PROJECT..... 23

6. PROFESSIONAL SERVICES ................................................................. 25

BANKERS......................................................................................................................... 25ACCOUNTANT................................................................................................................. 25SOLICITORS.................................................................................................................... 25

7. COMPANY BACKGROUND ................................................................... 26

ORGANISATION.............................................................................................................. 26COMPANY PRINCIPAL.................................................................................................... 26

8. THE ENTERPRISE - AN OVERVIEW..................................................... 27

MAJOR ACTIVITIES (SUMMARY)................................................................................... 27PRODUCTION & PROCESSING CONCEPTS (SUMMARY)........................................... 27PRINCIPAL PRODUCTS.................................................................................................. 28PRINCIPAL MARKETS .................................................................................................... 28FACTORS LEADING TO SUCCESS................................................................................ 28

9. S.W.O.T. ANALYSIS............................................................................... 30

STRENGTHS ................................................................................................................... 30WEAKNESSES ................................................................................................................ 30




OPPORTUNITIES ............................................................................................................ 31THREATS......................................................................................................................... 31

10. STATEMENT OF BUSINESS OBJECTIVES.......................................... 32

11. MISSION STATEMENT........................................................................... 33

12. PRODUCTS ............................................................................................ 34

SUMMARY OF PRODUCTS ............................................................................................ 34PRODUCT ALTERNATIVES............................................................................................ 34

General........................................................................................................................ 34Leather Substitutes ..................................................................................................... 35

COMPETITIVE ADVANTAGE .......................................................................................... 35FURTHER PRODUCT DEVELOPMENTS & PLANNED INITIATIVES............................. 35

13. PROPERTY, BUSINESS PREMISES & OTHER PHYSICAL RESOURCES.......................................................................................... 36

GENERAL DESCRIPTION OF THE EBENEZER PROPERTY ........................................ 36ACQUISITION (BASED ON VALUATION) ....................................................................... 37LOCATION ....................................................................................................................... 37TITLE PARTICULARS...................................................................................................... 38ZONING / TOWN PLANNING .......................................................................................... 38

ZONE NO. 1 (RURAL ZONE) ..................................................................................... 38Objectives of Zone...............................................................................................................................39Permitted Development.......................................................................................................................39Permitted Development Subject to Conditions....................................................................................40Permissible Development....................................................................................................................40Prohibited Development .....................................................................................................................40

NON-URBAN ZONE.................................................................................................... 41Current Development Consents / Conditions Affecting the Property .......................... 42

LAND USE........................................................................................................................ 42SITE DETAILS.................................................................................................................. 43SERVICES........................................................................................................................ 43PROPERTY SKETCH & LOCATION OF IMPROVEMENTS............................................ 44SOILS AND TOPOLOGY.................................................................................................. 46RAINFALL AND WATER SUPPLIES................................................................................ 46PASTURES AND VEGETATION...................................................................................... 47LOCALITY PLAN .............................................................................................................. 48INFRASTRUCTURE REQUIREMENTS........................................................................... 48

14. MARKET ANALYSIS .............................................................................. 50

INDUSTRY DESCRIPTION.............................................................................................. 50An Overview of the Leather Industry and Its Fit Within the Manufacturing

Industry ............................................................................................................. 50The “Wet-Blue” Market ................................................................................................ 52

INDUSTRY TRENDS, PROSPECTS & REGIONAL INFLUENCES ................................. 52General Manufacturing trends..................................................................................... 52Company Profits for Manufacturing............................................................................. 53

THE AUSTRALIAN HIDE MARKET.................................................................................. 54A PROFILE OF THE AUSTRALIAN TOURISM INDUSTRY - PROSPECTS,INFLUENCES AND IMPLICATIONS FOR THE PROJECT.............................................. 55

Overseas Visitor Arrivals ............................................................................................. 55Characteristics of international visitors........................................................................ 56Attitudes and expenditure of international visitors....................................................... 57Tourism trends ............................................................................................................ 57Tourism in Queensland ............................................................................................... 58

THE INTERNATIONAL TOURIST TRADE.................................................................................. 59Japan (Tourist Trade).................................................................................................. 59




Other Asia ................................................................................................................... 60Distribution of Shopping Expenditure .......................................................................... 60

Japan ..................................................................................................................................................62UK/Ireland ..........................................................................................................................................62Other Countries ..................................................................................................................................62Other Asia ...........................................................................................................................................63Type of Shop .......................................................................................................................................63Duty Free Shops..................................................................................................................................63Department Stores ..............................................................................................................................63

Major Markets.............................................................................................................. 64Other Shops ........................................................................................................................................64

Other Factors / Markets............................................................................................... 65Items Bought By Potential Customers.................................................................................................65

The Japanese Visitor................................................................................................... 68Australiana .........................................................................................................................................68Duty Free Related Goods....................................................................................................................68Other Goods........................................................................................................................................69

Other Asia ................................................................................................................... 69Australiana .........................................................................................................................................69Duty Free Related Goods....................................................................................................................69Other Goods........................................................................................................................................69

Major Markets - Overview ........................................................................................... 69Satisfaction Levels ...................................................................................................... 70

Range of Goods Available ..................................................................................................................70Quality of Goods.......................................................................................................... 71Value for Money .......................................................................................................... 75

EXISTING CUSTOMER PROFILE & POTENTIAL MARKETS (DOMESTIC) .................. 76The Target Market....................................................................................................... 81Sydney Olympics 2000................................................................................................ 82

POTENTIAL MARKETS (EXPORT) ................................................................................. 83Merchandise exports and imports by commodity ........................................................ 83

Overseas Cargo - by Commodity ........................................................................................................86MARKET SHARE ............................................................................................................. 88COMPETITION (DOMESTIC) .......................................................................................... 88

Leather Tanning & Fur Dressing ................................................................................. 89Leather and Leather Substitute Product Manufacturing.............................................. 90Leather Tanning & Related Product Manufacturing .................................................... 91

COMPETITION (INTERNATIONAL) ................................................................................ 92CUSTOMER REACTION & PUBLIC PERCEPTION ........................................................ 92

15. ENVIRONMENTAL FACTORS ............................................................... 94

ENVIRONMENTAL MANAGEMENT PLANNING - REPORT TO THE IPSWICHCITY COUNCIL ................................................................................................................ 94

SCOPE & INSTRUCTIONS ........................................................................................ 94GENERAL DESCRIPTION & SUMMARY................................................................... 94PASTURES AND VEGETATION ................................................................................ 95

OVERVIEW.........................................................................................................................................95FAUNA ...............................................................................................................................................95SIGNIFICANT PLANT SPECIES .......................................................................................................96OTHER VEGETATION SPECIES.......................................................................................................96

LICENSE REQUIREMENTS: THE ENVIRONMENTAL PROTECTION ACT (QLD)1994.................................................................................................................................. 97INTERNATIONAL ENVIRONMENTAL MANAGEMENT SYSTEM STANDARDS(ISO 14000) .................................................................................................................... 100

The Quality Link ........................................................................................................ 100Unlimited Potential..................................................................................................... 101

16. MARKETING & SALES ACTIVITIES.................................................... 102

OVERALL STRATEGY................................................................................................... 102QEDS (Queensland Export Development Scheme).................................................. 102




Overview of Possible Strategies................................................................................ 103PRIME MARKETS TARGETED ..................................................................................... 103SELLING STRATEGIES................................................................................................. 105

Advertising & Promotional Activities .......................................................................... 105Pricing........................................................................................................................ 108

IDEAS & THE INVESTOR .............................................................................................. 108

17. PRODUCTION & PROCESSING OPERATIONS ................................. 110

OVERVIEW OF PRODUCTION PROCESSES.............................................................. 110CAPACITY...................................................................................................................... 111FACTORY LAYOUT / WORK FLOW EFFICIENCY ....................................................... 112SUPPLIER RELATIONSHIPS ........................................................................................ 113

18. RESEARCH & DEVELOPMENT........................................................... 114

CURRENT TECHNOLOGY............................................................................................ 114Innovation in Relation to Overseas counterparts ..................................................... 114

PATENTS, COPYRIGHT AND INDUSTRIAL DESIGNS................................................ 117FUTURE KEY RESEARCH REQUIRED ........................................................................ 118

Research and Experimental Development Activity in Australia, and the Degree of Expenditure by the Leather Industry..............................................................................................118

NEW PRODUCTS FOR THE FUTURE.......................................................................... 120THE INDUSTRY RESEARCH AND DEVELOPMENT BOARD ...................................... 120TAXATION IMPLICATIONS FOR RESEARCH & DEVELOPMENT............................... 120

General...................................................................................................................... 120TRADE MARK REGISTRATION .................................................................................... 122CUSTOMS AND EXCISE ............................................................................................... 124

19. MANAGEMENT..................................................................................... 125

KEY MANAGEMENT...................................................................................................... 125QUALITY ASSURANCE (QA) & TOTAL QUALITY MANAGEMENT (TQM) .................. 126

20. ORGANISATION & PERSONNEL........................................................ 129

ORGANISATIONAL STRUCTURE ................................................................................ 129ORGANISATIONAL CHART .......................................................................................... 129STAFFING LEVELS ....................................................................................................... 129

Sub-Contractors and Professional Support............................................................... 130Employee Engagement ............................................................................................. 131

GENERAL COMMENTS................................................................................................. 131Position Job Descriptions .......................................................................................... 131Use of Contract Labour and Enterprise Bargaining................................................... 132

21. SALES ESTIMATES, FINANCIAL PLANNING, & FINANCIAL ANALYSIS............................................................................................. 133

MAJOR ASSUMPTIONS................................................................................................ 133Production Capacity .................................................................................................. 134Product Prices ........................................................................................................... 136Other Assumptions.................................................................................................... 136

IMPORT CREDITS......................................................................................................... 137OBJECTIVES ................................................................................................................. 137CAPITAL INVESTMENT REQUIREMENTS................................................................... 138

Capital Expenditure ................................................................................................... 138Lease Costs .............................................................................................................. 140

EQUITY .......................................................................................................................... 141PROFIT & LOSS / CASH FLOW STATEMENTS ........................................................... 141

Profit & Loss Summaries........................................................................................... 143BALANCE SHEET ANALYSIS........................................................................................ 144

Profitability ................................................................................................................. 145




SENSITIVITY ANALYSIS ............................................................................................... 145BREAK EVEN ANALYSIS............................................................................................... 151FUNDING OPTIONS OR ASSISTANCE AVAILABLE.................................................... 151

Overall Funding Requirements.................................................................................. 151OTHER FUNDING SOURCES ....................................................................................... 152

Department of Trade Industry & Regional Development (DITRD - formerly DITAC) ............................................................................................................ 152

Premiers Department, Queensland........................................................................... 153Austrade .................................................................................................................... 153Department of Tourism, Small Business & Industry.................................................. 154Department of Employment, Education & Training ................................................... 155Department of Industrial Relations ............................................................................ 155Export Finance and Insurance Corporation [EFIC) ................................................... 156Federal Department of Industry, Science & Technology........................................... 156

22. SUMMARY OF MAJOR RECOMMENDATIONS & IMPLEMENTATION SCHEDULE (“ENTERPRISE DEVELOPMENT” PLAN).................................................................................................... 159

23. DISCLAIMER & QUALIFICATION BY CONSULTANT......................... 161

24. APPENDICES ....................................................................................... 162

APPENDIX A - RESUME OF MS CATHERINE SCALLY ............................................................ 162APPENDIX B - EXAMPLES OF WRITTEN JOB DESCRIPTIONS ................................................ 163

LABOURER / TRUCK DRIVER.................................................................................. 163LABOURER / MAINTENANCE MECHANIC ............................................................. 164MARKETING / CUSTOMER SERVICE MANAGER ................................................... 165PRODUCTION MANAGER ........................................................................................ 167SALES REPRESENTATIVE....................................................................................... 168LABOURER / MACHINE OPERATOR ....................................................................... 169

APPENDIX C - DESCRIPTION OF THE LEATHER TANNING INDUSTRY AND SUMMARY OF FINDINGS: UNITED STATES................................................................................................ 170APPENDIX D - LEATHER FINISHING: AN OVERVIEW ............................................................. 172APPENDIX E - SOCIÉTÉ INTERNATIONALE DE COMMUNICATION (SIC-SARL), PART OF THE SEMAINE INTERNATIONALE DU CUIR (SIC) GROUP ............................................................. 173APPENDIX F - MARKET NEWS SERVICE FOR HIDES, SKINS AND SEMI-TANNED LEATHER......... 175APPENDIX G - TRADE SHOW OPPORTUNITIES .................................................................... 177APPENDIX H - CSIRO LEATHER RESEARCH CENTRE ......................................................... 178APPENDIX I - INTERNATIONAL LEATHER INDUSTRY DIRECTORY ........................................... 180APPENDIX J -THE BARNETT HIDE MARKET REPORT ........................................................... 185APPENDIX K - INTERNET SITE FOR A.H. HIDES & SKINS AUSTRALIA PTY. LTD...................... 186

25. ATTACHMENTS ................................................................................... 188

PROJECT IMPLEMENTATION & ACTION (“ENTERPRISE DEVELOPMENT”) PLAN ...................... 188PROCESSING / PRODUCTION FLOWCHART - AT THE PROPOSED EBENEZER SITE.................. 188SCHEDULES TO THE FINANCIAL STATEMENTS..................................................................... 188PROFIT & LOSS / CASH FLOW SUMMARY - 1996/97 TO 2001/2002 - BALANCE SHEETS &RELATED FINANCIALS ....................................................................................................... 188ORGANISATION CHART ..................................................................................................... 188WATER QUALITY DOCUMENTATION (EX WOODWARD CLYDE) ............................................. 188LETTER OF SUPPORT - IPSWICH CITY COUNCIL.................................................................. 188SEPARATE DOCUMENTATION: BIZ-LINK REPORT (GOVERNMENT ASSISTANCE AVAILABLE) ...................................................................................................................... 188




LIST OF PHOTOGRAPHS / ILLUSTRATIONS FIGURE 1 - MS. CATHERINE SCALLY.................................................................................................26

FIGURE 2 - COOPERS ROAD, EBENEZER, LOOKING EAST TOWARDS THE IDEMITSU MINING OPERATION FROM THE NORTH-EAST CORNER OF THE PROPOSED SITE................................................................................................................29

FIGURE 3 - HIGH-SET POSITION AT THE EBENEZER SITE ............................................................36

FIGURE 4 - THE EBENEZER PROPERTY HAS AN ATTRACTIVE LAGOON SITUATED IN THE SOUTH-EASTERN PORTION..................................................................................37

FIGURE 5 - ANOTHER VIEW OF THE EBENEZER SITE....................................................................43

FIGURE 6 - ONE OF SEVERAL SUITABLE SITES FOR ESTABLISHMENT OF THE FACTORY PREMISES AT EBENEZER ...........................................................................44

FIGURE 7 - THE EBENEZER SITE - MAJOR FEATURES & NEARBY FACILITIES........................45

FIGURE 8 - ANOTHER SUITABLE LOCATION AT EBENEZER FOR PREMISES ESTABLISHMENT.............................................................................................................47

FIGURE 9 - LOCALITY PLAN - EBENEZER, QLD...............................................................................48

FIGURE 10 - PRODUCTION & PROCESSING OPERATIONS...........................................................110

FIGURE 11 - ANOTHER VIEW OF THE EBENEZER PROPERTY: SUITABLE FOR ECO-TOURIST DEVELOPMENT ............................................................................................128

FIGURE 12 - ORGANISATION CHART ...............................................................................................129

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section EXECUTIVE SUMMARY



2. EXECUTIVE SUMMARY

This Pre-Feasibility Study is designed to form the base document detailing

operational guidelines for a proposed leather processing project which is proposed to be established at Ebenezer, Queensland. A secondary (but complementary) activity will be the establishment of a eco-tourist facility that will encompass a factory contained within an environmental parkland.

The Project essentially examines the viability for the economic development and

manufacturing process of leather finishing (final tanning and processing). The primary activity - that of a relatively small (by industry standards) leather finishing plant - will establish as a superior tanning / finishing operation with products coming initially from small skins such as calf and deer, and eventually small exotic skins.

The Company name / brand name / trade mark will be known as “MINAJI”. The Project will require capital funding of $5.5m (Australian), which includes $0.8m

working capital. The balance - $4.7m - is required for development and establishment of capital works at the Ebenezer site. The financial projections contained in this Report assumes that this will be funded through an equity raising of 75% of the total requirement ($4.13m), with the balance ($1.38m) obtained through debt finance.

The Project enjoys a number of competitive advantages which include:

1. An ability to make a superior product in Australia, without having to go offshore to source raw material (skins) or other manufactured components.

2. An ability to use a wide variety of skins compared to other leather manufacturers.

3. In relation to the “tanning cycle”: an ability to undertake short production runs of specific high quality items made from various types of raw material (skins).

4. Ability to adapt and change quickly, compared to other tanneries (small size, specialised plant for economically sustaining smaller production runs, etc.).

Principal products will include both Finished Skins (for the wholesale market) - calf

and deer; and Manufactured Items (for the retail market), i.e. finished goods derived from calf, deer, and eventually other exotic skins such as ostrich, emu, crocodile, sea snake, and fish. Items will include the manufacture of accessories (handbags, belts, wallets, keyrings) for the tourist industry. Whilst the Company intends to eventually become involved in the direct manufacturing of manufactured items, this is an additional project and is outside the scope of this study.

The Company will target unique market niches involving the supply of wholesale

(skins) of superior leather quality to the domestic and international wholesale markets, as well the Australian (high quality finished goods) retail tourist market. Despite a proliferation of leather substitute products in the market, the Company’s target market is not, in general terms, interested in the acquisition of




leather substitutes since their primary motivation is quality, style, but still value for money.

The Company intends to exploit a high level of dissatisfaction in the availability,

quality, and range of Australian made goods currently available. In this regard, special targeting will be directed towards the Japanese / Asian markets. In terms of capturing the large tourist market for end-products, it will be important to highlight the fact that Minaji will be an Australian manufacturer producing Australian goods. In this respect, international competition is fierce. However, the markets for finished leather products is huge.

Sydney Olympics 2000 will also serve to bolster sales in the medium term. Minaji will need to develop market niches whereby the name is synonymous with

unusual high quality. The development of strong linkages with Italian (in particular), French and other European manufacturers is integral to the Company’s success. This should be a major strategy for future development. It will also be imperative to capture the unique enviro-firendliness of the “natural leather” product, and avoid the often held view that anything to do with a tannery is ecologically disastrous. For this reason, particular attention must be paid to the marketing aspects addressed in this report. Advertising and promotion will take account of the following, based on market research data obtained:

1. MINAJI is a caring, environmentally friendly organisation.

2. MINAJI is synonymous with high quality.

3. MINAJI is a “natural” alternative.

4. MINAJI products can be “designer-made” to order.

5. Individual product promotions can highlight their individual advantages. However, the above “broad concepts” should be kept as a simple and clear message.

Major infrastructure development on the Ebenezer site will include obtaining

water supply from the existing Council mains located approximately 2.5km from the property boundary, constructing a 2m high cyclone perimietre fencing around the 66 acre site, providing internal bitumenised roadworks, and providing telephone and electrical services on site. In addition, approximately $2.0m will be outlaid on premises.

Total cost of $4.7m for Capital works will include:

OPERATING PLANT & EQUIPMENT $1,730,743SUNDRY PLANT & EQUIPMENT $392,270INFRASTRUCTURE $375,175PREMISES (Ebenezer) $2,007,074OTHER CAPITAL COSTS $206,840

TOTAL $4,712,101PLUS - Capital Equipment acquired under lease 250,900.0TOTAL CAPITAL including leased equipment $4,963,001

Initial major time-frame milestones include the following activities:




• Gain investor support as a matter of priority by the end of 1996

• Establish and construct infrastructure and premises at Ebenezer (completion by April, 1997)

• Commence production trialling (complete by October 1997)

• Commence full-scale commercial production by October 1997

• Acquire major equipment purchases as detailed in the Schedules included in this Report, commencing March, 1997.

The above time-table is relatively ambitious program, however it should be borne

in mind that a number matters have been, or are currently being attended to, including environmental legislation compliance approvals, plant design, employee engagement, land acquisition, preliminary investor sourcing and site infrastructure negotiations (e.g. water supply)

The Base Model financials have assumed an initial take-up period of six to seven

months with 100% production (i.e. processing of around 20,000 skins per month) reached by October / November 1997 from initial commissioning in May 1997.

After the first 12 months of production, capacity will increase to 125.00% of the

Year 1 maximum (i.e. 25,094 skins per month in Year 2), building up to 200.00% by Year 4 (i.e. 40,150 skins per month). Annual sales volumes will therefore be achieved as follows:

Year 1

Year 2 Year 3 Year 4 Year 5

CALF SKINS 81,213 250,938 305,688 392,375 438,000 DEER SKINS 8,121 25,094 30,569 39,238 43,800 OTHER SKINS 0 0 0 0 0 TOTAL SKINS 89,334 276,031 336,256 431,613 481,800

Reasonably significant quantities of raw material - primarily calf skins - will need to

be acquired for this purpose, in Year 2 representing around 11% of total available within Australia (approximately 80% of Australia’s cattle hides are currently exported). However, the more critical aspect is the need to obtain high quality skins that do not have the blemishes typically present on cattle that have been parasite infested, branded or in other ways affected (e.g. barb wire scratches). This means that many of the skins available in Queensland or the Northern territory will not be suitable.

Other types of skins (e.g. deer) will be sourced from private contacts held by the

project’s proponent (Ms Catherine Scally). Some prospects exist for the importation of suitable quality skins from New Zealand and elsewhere.

Environmental risks are significantly reduced since it is intended to acquire skins

that have already been through primary stage tanning processes, i.e. they will be purchased “wet-blue”. Despite a re-tanning stage where chromates are used for re-treatment, processes will otherwise be able to be self-contained without the need for effluent discharge and treatment. Settling ponds will be used for chromates with a possibility of re-cycling. Solvents used in the finishing stage will be self-contained, with no chemicals used in the drying tunnel phase. Engineering specifications are such that the above equipment is capable of




treating approximately twice the amount of discharge produced by the Company’s operations.

There are four primary stages of production (1) Preliminaries: Delivery,

classification and stockpiling; (2) Re-tanning (re-treatment of wet blue skins, which are placed in drums); (3) Pre-finishing activities (skins are “horsed up” , colour dyed, stretched, dried using hot air, then ironed); and (4) Finishing (this involves classification and cutting , spraying , and final conditioning which includes staking, buffing and milling - the latter operations are all carried out “dry”). The skins are then measured (with a measuring machine), prior to delivery to wholesale markets or sent for manufacturing. Initially, all manufacturing for finished leather goods will be sub-contracted out.

Key management consists of the Managing Director, Marketing Manager, and

the Production Manager. The Company's internal bookkeeping will be contracted out initially, with an Accountant’s position becoming available approximately 6 months after commercial production commences.

Staffing levels to be established will eventually see a full complement of 22

positions. In addition, the Project will require the ongoing support of contract / professional specialist personnel, including a Maintenance Crew, Security Guard Contractor, Electronic & Electrical Engineering Contractor (all SUB-CONTRACTORS), as well as a PROFESSIONAL SUPPORT GROUP which includes Industrial Chemist / Analyst, Consultant (General), and an external Accountant.

The investment will see owners equity increasing from $4.125m to $21.199m by the

end of Year 2001. Whilst the cash flow indicates a positive cash position based on obtaining the levels of funding indicated, the first Year will see an after tax “Loss” of $0.6m after accounting for depreciation. From that point on, profitability grows from $1.7m after tax (Year 2 being 1997/98), to $4.2m in the longer term (YIYO) position. [The value of Import Credits (if any) has not been incorporated into the Financial analysis].

Provided one can be satisfied with the ability to market product at the levels

indicated, the proposed investment of $5.5m will see an excellent return to investors based on the assumptions provided.

Financial analysis conducted shows that the Project is very sensitive to the

following major variables:

• Calf Skin - Buying Price

• Calf Skins - Selling Price

• Average Daily Production

• Production levels (Maximum) There is moderate to high sensitivity to:

• Income Tax rate

• Ratio of Deer: Calf Skins (10% is budgeted)

• Days closed for maintenance - per annum

• Cost of Power - Per Skin




There is low sensitivity to:

• Equity:Debt Ratio

• Bank Borrowing (Interest) Rate

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section INSTRUCTIONS/TERMS OF REFERENCE TERMS OF REFERENCE



3. INSTRUCTIONS/TERMS OF REFERENCE

TERMS OF REFERENCE The terms of reference for this Consultancy results from discussions held with Ms

Catherine Scally, and liaison with DTSBI's Ipswich Office staff (Mr Alastair Kane), and as contained in the Consultant’s brief (dated 29 July, 1996), Consultant's response to the Brief dated 4 August 1996, and agreement dated 20 August 1996.

Introduction

The following information was provided in the introduction by the Consultant for

the Project, and provides a comparative overview of the Company before commencement of the Consultancy:

The terms of reference for this consultancy contain an outline of the proposed

manufacturing facility, together with brief details of the target market, opportunities, strategy, production levels and investment size. This information, together with other information gleaned at interview, is summarised below as a matter of record.

From her experience in the fashion industry and involvement in high quality

leather products, the Client has determined that a unique market niche exists for the supply of wholesale (skins) of superior leather quality to the domestic international wholesale market, as well an opportunity to further value add by the manufacture of Australian high quality tourist goods - currently an unsatisfied niche - and similar products, to the retail (finished goods) markets.

The client has responded to this need by proposing to establish a manufacturing

facility capable of supporting these markets. In particular, the ability to offer a range of superior quality tanned skins, in addition to some of the more exotic skins (such as emu, crocodile, ostrich, and shark) which are apparently gaining in popularity. The client has a number of contacts and sources for the supply of calf skins and deer which will assist in guaranteeing supply. Total production is expected to rise from an initial 800 skins per day rising to meet demand as it grows.

Total capital investment is expected to be close to $7m including plant,

building(s)3, equipment and working capital, with 15 people employed in Stage 1 of the Project. Funds are intended to be raised through private investors and established financial institutions.

The reason for this market becoming available is the lack of suitable

manufactured leather in Australia which has resulted in a rise of imported finished goods, and a subsequent lessening demand for domestic products. Indeed, the ability to produce high quality leather products into a currently un-serviced market is seen as the Project’s major competitive advantage. Market share for high quality skins for the domestic / international market will be obtained on an import replacement basis, whilst the production of exceptionally high quality finished goods will extend the afore-mentioned high quality tourist goods

3 Plans have been drawn for the building which will be around 2,500 metres for the first stage

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section INSTRUCTIONS/TERMS OF REFERENCE TERMS OF REFERENCE



operations to overseas markets. This niche specifically excludes overseas competitors and limits domestic competition due to lack of supply or interest and know how by existing tanners in Australia.

The market opportunities are re-inforced by an increase in the international

tourism industry in Australia (strengthened by the Olympics in Sydney 2000, and increasing expenditure on shopping by tourists - particularly Asians). Research has made available to the client which suggests a high dissatisfaction in the availability, quality, and range of Australian made goods in the market-place. The client has subsequently identified a niche opportunity to supply finished goods to this market.

Distribution of product is intended to be primarily achieved via the supply of a

range of superior quality finished leather goods to specific retailers located in the major tourist centres of Eastern Australia. To balance production, tanned skins will be sold on the wholesale market. The prestige quality of goods supplied will ensure the ability to achieve high gross margins (for both tanning and retailing), especially since there will be an ability to align production to meet specific market needs.

The Client intends that the Project will result in them becoming THE company

internationally synonymous with high quality leather products made in Australia.

Further Background and Feasibility Study Considerations It is logical that the first step in proceeding with the proposed development is to

conduct a desktop market research for the Project (confirming market opportunities and assisting in determining strategy), and then proceed to examine the viability (economics and profitability) of the enterprise.

In this way the consultancy assignment can be designed to examine the market

and its targeting, financial viability, and finally task requirements (e.g. environmental, labour, plant, equipment, and other related issues). Having examined these issues, the assist the Client in a very practical way, with implementation i.e. achieving a commercial outcome.

Fundamental to this will be the production of a bankable document, including a

separately produced Executive Summary, all of which will address the needs of stakeholders and potential investors (including financiers).

The Consultant anticipates that a close working relationship will need to be

developed with the Client. This is not only to ensure that there is no duplication of effort, but to also ensure that the Client is fully involved in each stage of the consultancy whereby the process is interactive. The cost effectiveness of this approach has been factored into the quotation as detailed below.

Strategic Direction

The Client intends set in place a strategic direction which will involve them in the

high quality leather processing industry. Accordingly, a component of the Consultancy will involve a degree of market

research in order to establish the size, nature and scope in these markets. This will

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section INSTRUCTIONS/TERMS OF REFERENCE METHODOLOGY & APPROACH



ensure that the Client's entry has the best chances for success. Whilst the proposed initial investment is significant, the venture as proposed also represents a significant challenge in terms of management, future direction and funding.

General Comments

In addition to factors mentioned above, there are a number of reasons why the

establishment of the Project in Australia has become a commercial proposition. These include:

• An increase in world-wide effluent disposal costs and more stringent environmental controls - especially in Europe. Despite technological advancement in this area, this has reduced the opportunity for the establishment of leather processing / tanning facilities there.

• Access to suitable raw material (in this case, calf skins, deer. and a range of exotic leathers).

• Despite the degree labour intensity in leather processing operations - there are improvements in technological developments and work methods.

• Access to a growing market (especially the Asian tourism market), currently un-serviced by Australian operators due to lack of supply, interest, and know how by existing domestic tannners.

• Other factors as outlined in the introduction to this Proposal, including the apparent high level of dissatisfaction in the availability, quality and range of Australian-made goods in the high quality end.

The challenge for the Client is one primarily of its ability to promote sales of

processed product. There is anecdotal evidence supporting the Client's ability or effectiveness in this regard. The Consultant has numerous contacts in the political, bureaucratic and financial sectors which may be the subject of further action as the Project progresses.

METHODOLOGY & APPROACH

General Approach Our general approach to the Feasibility Study is based on the following model:

T H E F E A S I B I L I T Y S T U D Y A Brief Summary

WHAT IS IT?

An comprehensive study which examines the most likely prospects for a new Project or an existing enterprise.

WHAT ARE THE AIMS & OBJECTIVES?

To provide an assessment of viability for an existing or new enterprise or Project. Usually the feasibility study will encompass significant market research, financial planning, and operating scenario assessments. The Feasibility Study invariably




incorporates the marketing, financial and organisational plans with sufficient detail in order to provide the owners of a business with a clear direction in terms of management and implementation of Strategy.

WHY DO IT?

Assists management in determining whether or not to proceed with a new Project or carry on an existing enterprise. It determines the Project’s “break even” points and degree of sensitivity to various inputs / outputs (e.g. interest rates, labour costs, plant capacity, etc.) The Feasibility Study is designed to cover the major elements of management, structure, supply

and funding, with preparation of cash flow / profit and loss projections for the full planning period specifying likely returns and expenditures. The projections provide a basis for developing organisational performance measures, and, most importantly,

provides detail as to capital expenditure and working capital requirements..

We propose to adapt the above model as detailed in the following sub-sections:

Required Evaluation Market Analysis - Market demand (current and future) in the Australian Region -

also, overseas demand for the superior end. Sources of Raw Material Supply - Location and numbers. Processed Product Competition - Australia and international - Profile each

company. Site Analysis - Sewerage or waste treatment - water supply - environmental

requirements - freight - local Government planning and requirements - power - roads and other infrastructure.

Environmental - Study requirements4 and estimated costs in order to satisfy

requirements of the Environmental Protection Act 1994 (Qld) as amended, and other relevant legislation.

Capital Items - land - buildings - equipment - working capital. Financials - Revenue and expenditure budgets and analysis - return on assets -

break even points - cash flows etc. Timing - strategic importance of completion dates etc. Financial Assistance - apply for NIES, REDP or other Government assistance to

support this project. Recommendations

Purpose of Consultancy The proposed consultancy is designed to cover the major elements of

management, structure, supply and funding. This is fundamental in the evaluation process in order to establish the viability of a Leather Processing Facility / Finishing Plant which is capable of producing the superior quality tanned skins and finished leather products as outlined above.

4 For example, Environmental Management Plan, and / or Environmental Impact Study.




Objectives The primary objectives of the Consultancy are to:

• In overall terms, to ensure the key issues associated with the development

of a leather processing plant are addressed. It is believed that our approach is simple and robust.

• Provide a detailed marketing plan which defines the current and future prospects specifically in Australia, and concentrating (in as far as the international market is concerned) on the Asian region.

• Prepare cash flow / profit and loss projections for the full planning period specifying likely returns and expenditures, complete with sensitivity and break even analysis. The projections will provide a basis for developing organisational performance measures, and provide detail as to capital expenditure and working capital requirements.

• Provide an in depth site analysis which examines, inter alia, infrastructure requirements, inputs (such as water supply, power supply, transport, etc.), effluent control and statutory requirements, and outputs including sewerage and waste treatment.

• Ensure the feasibility study (incorporating marketing, financial and organisational plans) is sufficiently detailed to provide the Client with a clear direction in terms of the management and implementation of the Strategy.

• Recommend the appropriate corporate mechanism for delivery of the Strategy.

• Provide a detailed Implementation (Action) Plan identifying the key tasks and allocation of resources.

• Assuming to this point that the proposed venture offers good prospects for viability and success ...

• Assist with the practical aspects of implementation in order that the key tasks are able to be effectively carried out.

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section COMPANY DETAILS



4. COMPANY DETAILS

Company Name:

Minaji (incorporation to be effected)

Postal Address:

186 Rode Road Wavell Heights Qld 4012

Physical Address (Factory):

Proposed to be: Coopers Rd Ebenezer Qld 2756

Registered Address:

186 RODE RD WAVELL HEIGHTS QLD 4012

Telephone (B/H):

07-32663871

Telephone (A/H):

07-32663871

Facsimile:

07-32669087

Mobile Phone:

n/a

A.C.N.:

059 267 033

Contact Name / Position:

Ms. Catherine Scally, Principal.

Action: Incorporation of ‘‘Minaji’’ to be effected ASAP - to reflect the nature of proposed business, in accordance with marketing strategy.

Rationale: Effective marketing of the business

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section DEFINITIONS & PROCESS TERMINOLOGY



5. DEFINITIONS & PROCESS TERMINOLOGY

leath·er

(léT´•r) -----n. 1. The dressed or tanned hide of an animal, usually with the hair removed. 2. Any of various articles or parts made of leather, as a strap or boot. 3. The flap of a dog's ear. -----tr. v.-ered., -er·ing., -ers. 1. To cover wholly or in part with leather. 2. INFORMAL. To beat with a leather strap. [ME lether < OE leðer.]5

Leather animal skin that has been chemically modified to produce a strong, flexible material that resists decay. Almost all the world output of leather is produced from cattle hides and calfskins, goatskins and kidskins, and sheepskins and lambskins. Other hides and skins used include those of the horse, pig, kangaroo, deer, reptile, seal, and walrus.

Leather is used for a wide range of products. The variety of skins and the way they are processed can produce leather as soft as cloth or as hard as a shoe sole. Cattle hides, the major raw material for leather production, range from being lightweight and supple to tough and strong. Tough hides are used in the production of the durable leather required for soles of shoes, machine belting, engine gaskets, and harnesses. Calfskin is lighter and finer grained, and is used for making fine leather suitable for such articles as shoe uppers. Sheepskin is soft and supple; it yields the type of leather suitable for gloves, jackets, and other apparel. Since ancient times, human beings have used animal skins and learned to make leather. The process of using chemicals to turn skins into leather is called tanning6. tan·ning (tán´íng) -----n. 1. The art or process of making leather from rawhides. 2. The browning of the skin by exposure to sun and weather. 3. INFORMAL. A beating; a whipping.7

COMMON METHODOLOGY & PROCESSES USED IN LEATHER TANNING / PROCESSING8

Curing

The raw materials used by the leather industry originate largely as by-products of

the meat-packing industry. Before entering the tanning process, the raw skins are

5 The American Heritage Dictionary, (Houghton Mifflin, 1987), Microsoft Bookshelf 1992, s.v. "leath·er." 6 "Leather," Microsoft (R) Encarta. Copyright (c) 1994 Microsoft Corporation. Copyright (c) 1994 Funk &

Wagnall's Corporation. 7 The American Heritage Dictionary, (Houghton Mifflin, 1987), Microsoft Bookshelf 1992, s.v. "tan·ning." 8 Primary Source has been a contribution of the Tanners Council of America, Inc. as provided in "Leather,"

Microsoft (R) Encarta. Copyright (c) 1994 Microsoft Corporation. Copyright (c) 1994 Funk & Wagnall's Corporation.

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section DEFINITIONS & PROCESS TERMINOLOGY COMMON METHODOLOGY & PROCESSES USED IN LEATHER

TANNING / PROCESSING



“cured” by salting or drying them promptly after being removed from the slaughtered animal. The more common methods used in curing require the use of salt (sodium chloride) in one of two ways: wet-salting or brine-curing. In wet-salting, the skins are liberally salted and piled on top of one another until they form a pack. They are left in the pack for about 30 days to allow the salt to thoroughly penetrate the skin. Brine-curing is a much quicker method. In agitated brine-curing, the method most commonly used, skins are placed in large vats called raceways that contain a disinfectant and brine maintained close to full salt saturation. After about 16 hours in the raceway, the skins are completely penetrated by the salt.

Soaking and Unhairing

The cured skins are soaked in pure water to eliminate salt, blood, and dirt, and

also to replace moisture lost in the curing process. After the skins have soaked for a period varying from two hours to seven days, the flesh is removed mechanically from the inner surface. To loosen the hair, the skins are then immersed for one to nine days in a solution of lime and water containing a small amount of sodium sulfide. Following this operation the hair is easily removed by a de-hairing machine, and the distinctive pattern known as the grain can be distinguished on the outer surface of the skin. To ensure clear, clean surfaces, any remaining flesh and hair is scraped off, usually by hand with a dull knife, by a process called scudding.

Deliming and Bating

The next operation involves deliming the skins by soaking them in a weak solution

of acid, which reduces the swelling caused by the lime. Simultaneously, most types of skins are treated with a “bating” material consisting of enzymes to give a smoother grain and render the skin soft and flexible. The amount of bating varies greatly, from none at all for sole leather to a concentrated treatment for leather to be used in kidskin gloves. After the deliming and bating operations, the stock can be tanned.

Each type of skin may be treated by several tanning processes. The process is

chosen according to the use for which the leather is intended. The two principal tanning processes are mineral, or chrome, tanning, and vegetable tanning. Chrome tanning often can be completed in a single day, whereas vegetable tanning requires many weeks or months. Vegetable tanning results in a firmer leather with greater water and stretch resistance. Chrome tanning shrinks the stock and produces a longer-wearing leather with greater resistance to heat. The processes are sometimes combined to derive some of the advantages of each.

Vegetable Tanning

In this process the tanning agent, which renders the skin immune to decay and

prevents shrinkage, is a substance known as tannin. Tannin is extracted from the bark, wood, fruit, and leaves of trees. Chestnut wood, oak bark, and hemlock bark are the major domestic sources of the tannin used by the United States leather industry. Foreign sources, which provide more than 80 percent of the tannin supply, include the wood of the quebracho tree of South America, mangrove bark from the island of Borneo, wattle bark from South Africa, and myrobalan fruit from India.

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section DEFINITIONS & PROCESS TERMINOLOGY COMMON METHODOLOGY & PROCESSES USED IN LEATHER

TANNING / PROCESSING



In vegetable tanning the hides are suspended from rocking frames in a series of

vats containing increasingly stronger tannin solutions, called liquors. After several weeks the hides are transferred to a “layaway” section, which consists of larger vats containing still stronger liquors. Each week more tannin is added to the liquor, until the hides have absorbed enough tannin to complete the process. The last stages of the process may be accelerated by the use of warm liquors. Flexible vegetable-tanned leathers to be used for belting, luggage, upholstery, or harnesses are less heavily tanned than the leather intended for shoe soles.

Mineral Tanning

The mineral tanning process is known as chrome tanning because the tanning

agent used most frequently is a salt compound of chromium. Chrome-tanned leathers, which stretch more than vegetable-tanned leathers, are suitable for handbags, shoe uppers, gloves, and garments.

To prepare the stock for chrome tanning, the bated skins are pickled in a solution

of salt and acid. The skins are then immersed in a basic chromium-sulfate solution within a large revolving drum that tumbles the skins. This type of liquor penetrates the skins so rapidly that tannage is accomplished in less than a day. The chrome process originally involved the use of two different liquors, both solutions of compounds of chromium, and required substantially more time. Known as the two-bath process, it is still used for some varieties of leather. Aluminum or zirconium compounds may be used in place of chromium in the production of white leather. Alum, formaldehyde, gluteraldehyde, and synthetic tannins (Syntans) are also used to impart special characteristics.

In the production of combination-tanned leather, the skin is first chrome-tanned and then re-tanned with vegetable tannins. The modified applications of both processes produce leather with some of the advantages of each type.

Lubrication and Dyeing

After tanning, all types of leather undergo various operations that differ

according to the use of the desired product. Vegetable-tanned leather for shoe soles is first bleached a lighter color. Next, it is infused with such materials as epsom salts, oils, and glucose, and then lubricated with hot emulsions of soap, greases, and sometimes wax. Finally, the stock is run through rolling machines to give the leather a desired degree of firmness and a high gloss. Chrome-tanned leather intended for shoe uppers is split and shaved to the desired uniform thickness. It is then placed in a rotating drum for the dyeing process, which usually involves the use of several types of coloring materials to achieve color fastness and durability. Before or after dyeing, the leather is rolled in a “fat liquor,” which contains emulsified oils and greases. More than 100 leather colors exist, ranging from traditional tans and browns to such exotic shades as fuchsia and turquoise.

After dyeing and fat-liquoring, the stock is stretched for drying. Workers paste the

stock on frames made of glass or ceramics or “toggle” it on perforated metal frames. The frames are then conveyed through drying tunnels with controlled heat and humidity.

Finishing

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section DEFINITIONS & PROCESS TERMINOLOGY GENERIC TANNING PROCESSES



Heavy leathers are finished by coating the grain surface with a finishing

compound, and finally by brushing it under a revolving, brush-covered cylinder. The grain surface of light leathers is buffed, or sandpapered, to correct imperfections in the skin. Buffing the flesh side of leather raises the nap and produces the popular leather known as suede. For smooth finishes, most light leather is seasoned, or treated with a mixture of such materials as waxes, shellac or emulsified synthetic resins, dyes, and pigments. Pigments are used sparingly to avoid a painted look. Glazing gives the grain a highly polished surface. Several coats of thick, oily varnish are required to give patent leather its characteristic high gloss.

GENERIC TANNING PROCESSES9 Before tanning, hides and skins must be cured to prevent putrefaction. Large

hides are green salted: they are spread in layers for several days with salt between each layer. A faster process, used on smaller hides and skins, is brine-pickling--immersion in a salt-brine solution circulated by pumps or agitators.

At the tannery the hides and skins are trimmed, sorted into batches of the same

size and thickness, and finally washed and soaked to remove excess salt and restore the fibers to a condition in which they can readily absorb tanning agents. Solutions of lime and enzyme materials are applied to loosen the hairs, and a de-hairing machine leaves the surface smooth and the distinctive grain pattern visible. The hides and skins are then ready for one of several tanning processes.

Vegetable tanning with tannic acids is the oldest method. Used primarily for

heavy cattle hides, the process may take a month or more. Tannin extracts come from the bark and wood of several trees: the South American quebracho, the Bornean mangrove, and the Indian and East Indian gambier, as well as from the North American chestnut, oak, and hemlock. The hides are suspended in a vat containing a weak tanning solution; they are moved through a series of successively stronger solutions until the leather matures. The tanned leather is then bleached and impregnated with natural oils and greases. The final product of the vegetable tanning process is a firm, water-resistant leather used chiefly in shoe soles but also in upholstery, luggage, saddlery, and industrial belting.

Almost all leather made from lighter-weight cattle hides and from the skin of

sheep, lambs, goats, and pigs is chrome-tanned, using a process developed in the latter half of the 19th century. Hides and skins are tumbled in huge drums partially filled with chrome-salt solutions that produce a light blue green leather, which is then cleaned, dried, and smoothed by machine. The natural oils and greases lost in tanning are restored by fat-liquoring: the application of emulsified oils, egg yolks, and clay. The chrome-tanning process is very quick--a matter of hours rather than the days required by vegetable tanning--and produces leathers for shoe uppers, garments, handbags, gloves, and other small leather goods.

9 Rita V. Copelman. The New Grolier Encyclopedia (Rel 6). 1993 Grolier Inc. Bibliography: Garnes, Jane E.,

The Complete Handbook of Leather Crafting (1981; repr. 1986); Gustavson, K.H., The Chemistry of Tanning Processes (1956); Kellogg, Kathy, Home Tanning and Leathercraft Simplified (1984); Moseley, G.C., Leather Goods Manufacture: Methods and Processes (1986); O'Flaherty, Fred, and Roddy, William T., eds., The Chemistry and Technology of Leather, 4 vols. (1956-65; repr. 1978); Thorstensen, Thomas C., Practical Leather Technology, 3d ed. (1984). Welsh, Peter C., Tanning in the United States to 1850 (1964)

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section DEFINITIONS & PROCESS TERMINOLOGY TANNING PROCESSES INTENDED TO BE USED BY THE

EBENEZER PROJECT



Other tanning processes include tawing, or alum tanning, a mineral tanning

technique that uses alum combined with salt; a recently developed fast process called Secotan, using dry-cleaning solvents as the tanning agents; and chamoising, in which sheepskin or calfskin is treated with oils and fats. Chamois leather is napped, or sueded, on both sides and is very absorbent.

Finishing

After the leather is tanned, machines split it into flesh and grain layers. The

leather must now be dried. To prevent shrinkage it is often stretched on frames or smoothed flat on a glass or metal plate before being placed on a conveyor and passed through the drying cabinet. Dried leather is generally too stiff, and it may be conditioned by spraying with water until sufficient moisture has been absorbed to ensure flexibility.

Various types of finishes are then applied. Leathers are buffed with fine abrasives

to produce a suede finish; waxed, shellacked, or treated with pigments, dyes, and resins to achieve a smooth, polished surface and the desired color; or lacquered with urethane for a glossy patent leather. In boarding, the leather is folded and hand pressed with a board to produce tiny creases. In embossing, designs are pressed into the surface of cattle leather to give it the look of an exotic grain such as ostrich or reptile.

Sources of Leather

Cattle and calves are the largest single source of leather, and their hides and

skins are used in almost every area where leather is needed--from machine beltings and furniture to shoes, gloves, and handbags. The United States, the USSR, Argentina, and Brazil are the largest cattle-hide producers.

Sheepskin is produced primarily in Australia, New Zealand, and the USSR; goatskin, in India and China. Leather is also obtained from the skins of wild and domestic hogs, Asian water buffalo, snakes (especially Indian cobra and South American python), alligators, deer, sharks, and horses.

The United States, the USSR, India, Brazil, and Argentina are the world's leading leather manufacturing countries.

TANNING PROCESSES INTENDED TO BE USED BY THE EBENEZER PROJECT

Modern tanning methods have overcome many of the severe environmentally

unfriendly practices of the past. In the case of the Ebenezer Leather Processing Project, effluent control and environmental risks generally are further and significantly reduced since it is intended to acquire pelts and skins that have already been through primary stage tanning processes, i.e. they will be purchased “wet-blue”.

A comprehensive study of the production processes intended to be used are

covered in Section 17 of this Report “Production & Processing Operations”, however suffice to say that despite a re-tanning stage where chromates are

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section DEFINITIONS & PROCESS TERMINOLOGY TANNING PROCESSES INTENDED TO BE USED BY THE

EBENEZER PROJECT



used for re-treatment, processes will otherwise be able to be self-contained without the need for effluent discharge and treatment.

Settling ponds will be used for chromates with a possibility of re-cycling. Solvents

used in the finishing stage will be self-contained (from an effluent point of view, operations are solvent free), with no chemicals used in the drying tunnel phase. All chemicals and solvent used are water soluble ensuring that no significant pollution or smell will be present. Water useage will be restricted to 80,000 litres per day, with effluent equipment treating water waste to include:

• mixing tank • screening machine to 450 microns • aeration tanks (aerators) • bubbling tanks with air compressor

Engineering specifications are such that the above equipment is capable of

treating approximately twice the amount of discharge produced by the Company’s operations. pH of the final effluent is to be between 7 to 8, making such water suitable for dispersal as irrigation supply on the property. The future objective is to recycle effluent water to be used in the re-tanning processes employed.

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section PROFESSIONAL SERVICES BANKERS



6. PROFESSIONAL SERVICES

BANKERS Yet to be appointed.

ACCOUNTANT Ms Sare Danks

Griffin & Shaw, Accountants Third Floor, Worldcare House 47-49 Sherwood Road Toowong Qld 4066 Ph: 07-33719877 Fax: 07-33719158

SOLICITORS Mr Kerry Heibronn

Partner Clarke & Karm, Lawyers Colonial Mutual Building Post Office Square Brisbane Qld 4000 Ph: 07-32315222 Fax: 07-3229005

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section COMPANY BACKGROUND ORGANISATION



7. COMPANY BACKGROUND

ORGANISATION An incorporated organisation - to be known as MINAJI (PTY. LTD.) - will need to be

invoked to allow required investment to proceed. At the current time, ownership of the Project rests solely with the principal Ms Catherine Scally, whilst the Company (proposed to be Minaji) is anticipated to have at least two owner-shareholders including the proposed investor(s) for the Project.

COMPANY PRINCIPAL For full details, refer Catherine Scally - Resume,

located at Appendix A of this Report. Catherine Scally is a tertiary-qualified

individual whose original career involved her in the field of medicine. However, since the early 1980’s, Catherine has focused on investigating and developing a career in the leather industry, which culminated in the manufacturing and design of leather garments in Australia during the late 1980’s / early 1990’s. Having won a major fashion award, the company is exporting to various destinations including Canada and the United States.

During this time, Catherine discovered that it was very difficult to secure a reliable

supply of suitable skins domestically, given that the primary market was on the high-value, high fashion end. Together with a general interest in the industry, this led to a series of investigations including:

• investigation of various aspects of leather manufacturing including tanning operations - primarily through visits to, and contacts made in, France.

• undertaking and successfully concluding a Diploma in Export Management for which she received a “Diplomate of the Year Award”10.

• continued investigation into the tannery industry both within Australia and overseas, including a comprehensive European tour.

It may therefore be reasonably concluded that Ms Scally is in an excellent

position to promote the Project, and to be integrally involved as a part of the (yet to be developed) management team.

10 This was achieved in 1991 - the award was sponsored by EFIC and Austrade

Figure 1 - Ms. Catherine Scally

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section THE ENTERPRISE - AN OVERVIEW MAJOR ACTIVITIES (SUMMARY)



8. THE ENTERPRISE - AN OVERVIEW

MAJOR ACTIVITIES (SUMMARY) The primary activity of the Company will be that of a relatively small (by industry

standards) leather finishing plant. It will establish itself as a superior tanning / finishing operation with products coming initially from small skins such as calf and deer, and eventually small exotic skins.

A secondary (but complementary) activity will be the establishment of a eco-

tourist facility that will encompass a factory contained within an environmental parkland. Activities here potentially include the establishment of a small koala colony, with provision for the breeding and protection of other species of primarily Australian native fauna.

PRODUCTION & PROCESSING CONCEPTS (SUMMARY) A comprehensive study of the production processes intended to be used are

covered in Section 17 of this Report “Production & Processing Operations”. Whilst there are at least 18 separate stages in the production process, there are

four primary stages as follows:

1. Preliminaries: Delivery, classification and stockpiling

2. Re-tanning (re-treatment of wet blue skins, which are placed in drums)

3. Pre-finishing activities (skins are “horsed up”11, colour dyed, stretched, dried using hot air, then ironed)

4. Finishing (this involves classification and cutting12, spraying13, and final conditioning which includes staking, buffing and milling. The latter operations are all carried out “dry”).

The skins can then be measured (with a measuring machine), prior to delivery to

wholesale markets or sent for manufacturing. Initially, all manufacturing for finished leather goods will be sub-contracted out.

Production will commence at 800 skins per day (initially), equivalent to

approximately 20,000 skins per month. This is comprised of:

Skin Type Approx. Production per

month

Approx. Production per

week

Approx. Production per

day

Calf 18,000 4,100 690 Deer 850 -1,700 200 - 400 40 - 80 Total 18,850 - 19,700 4,300-4,500 730 - 770

11 Skins are racked for a period of time - set out. 12 Includes sorting and trimming 13 Skins are sprayed with various solvents

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section THE ENTERPRISE - AN OVERVIEW PRINCIPAL PRODUCTS



PRINCIPAL PRODUCTS

1. Finished Skins (wholesale market) - calf and deer

2. Manufactured Items (retail market), i.e. finished goods derived from calf, deer, and other exotic skins such as ostrich, emu, crocodile, sea snake, and fish. Items will include the manufacture of accessories (handbags, belts, wallets, keyrings) for the tourist industry.

Whilst the Company intends to eventually become involved in the direct

manufacturing of manufactured items, this is an additional project and is outside the scope of this study.

In all instances, there will be a concerted effort to provide products made from

superior quality leather.

PRINCIPAL MARKETS The Company will target unique market niches involving the supply of wholesale

(skins) of superior leather quality to the domestic and international wholesale markets, as well the Australian (high quality finished goods) retail tourist market.

Market share for high quality skins for the domestic / international market will be

obtained on an import replacement basis, whilst the production of exceptionally high quality finished goods will extend the afore-mentioned high quality tourist goods operations to overseas markets. This niche specifically excludes overseas competitors and limits domestic competition due to lack of supply or interest and know how by existing tanners in Australia.

The Company intends to exploit a high level of dissatisfaction in the availability,

quality, and range of Australian made goods currently available. Sydney Olympics 2000 will also serve to bolster sales in the medium term.

Distribution of product is intended to be primarily achieved via the supply of a

range of superior quality finished leather goods to specific retailers located in the major tourist centres of Eastern Australia. To balance production, tanned skins will be sold on the wholesale market. The prestige quality of goods supplied will ensure the ability to achieve high gross margins (for both tanning and retailing), especially since there will be an ability to align production to meet specific market needs.

The Company intends to become THE company internationally synonymous with

high quality leather products made in Australia.

FACTORS LEADING TO SUCCESS Factors identified as those which will lead the Company to successfully establish

operations include:

• Product innovation

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section THE ENTERPRISE - AN OVERVIEW FACTORS LEADING TO SUCCESS



• Marketing • Sufficient funding • Right people - technical expertise • Right land / zoning • Secure supplies of raw material • Happy work force (non-discriminating) • Commitment by local authorities • Consistency and quality of product

Figure 2 - Coopers Road, Ebenezer, looking east towards the Idemitsu mining operation from the north-east corner of the proposed site

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section S.W.O.T. ANALYSIS STRENGTHS



9. S.W.O.T. ANALYSIS Workshop held with the client has resulted in the identification of the Company's

perceived "Strengths, Weaknesses, Opportunities and Threats" (SWOT) as follows:

STRENGTHS

1. Availability of raw material in Australia availability of suitable skins

2. Market available - growing (esp. Tourism industry) - Product demand

3. Right technical expertise to support the Project

• Experience in the leather industry

• Definition of the markets (the Vision)

• Support of local council and other government authorities

• Property selected at Ebenezer (suitability for activities, close to markets and market distribution centres, availability of power, work force, development as a suitable eco-tourism development, etc.)

• Lift the image of Australian manufactured (finished goods industry)

• Few onshore competitors

• Ability to use a wide variety of skins (e.g. crocodile, fish, snake)

WEAKNESSES

1. Funding not yet arranged to support the Project

◊ Council Issues

◊ Environmental Management Plan

◊ Land rezoning not finalised

◊ Unclear: ability to secure high quality water supply.

◊ Infrastructure - timing etc.

• Concept not yet proven (not been done in Australia) - also a strength

• Difference between the Project concept and a “typical” tanning plant not well understood (i.e. leather finishing as against tanning).

• Succession planning for key individuals

• No operating track record

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section S.W.O.T. ANALYSIS OPPORTUNITIES



OPPORTUNITIES

1. Ability to exploit a unique market demand not currently being serviced (esp. tourism)

2. “Environmental Park” development, and / or other eco-tourist activities

3. Employment opportunities

THREATS

1. No funds currently available

2. Lack of Council action, e.g. Land rezoning, including bureaucratic intervention / Environmental planning requirements

• Ability of a major company to “pick up the project”

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section STATEMENT OF BUSINESS OBJECTIVES



10. STATEMENT OF BUSINESS OBJECTIVES

The following business objectives will be adopted:

1. To maintain a consistent and secure supply of suitable raw material (skins)

2. To maintain and improve the availability of technical expertise.

3. To exploit the market

4. To obtain investor support for the Project

5. To continually maintain and improve cordial relations with local Council and other Government authorities

6. To develop employment opportunities.

7. To develop a eco-tourism facility - a “haven” for wildlife

Action: Adopt business objectives as outlined above.

Rationale: Co-ordination of Company strategic direction.

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section MISSION STATEMENT



11. MISSION STATEMENT

The following keywords have been used in developing a Company “Mission

Statement:

• eco-tourism • technical expertise • high value market

The following "Mission Statement" is therefore recommended for adoption:

Developing supreme quality leather products through environmentally friendly practices.

Action: Adoption of company mission statement as provided. This should be clearly communicated to all staff.

Action: Written transcript of the Company's Mission Statement (as amended) to be provided in full view of clients and staff alike. Consideration should also be given for its circulation to key clients and its inclusion on company advertising material.

Rationale: Communication and promotion of the Company's image, and

improved employee and customer relations.

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section PRODUCTS SUMMARY OF PRODUCTS



12. PRODUCTS

SUMMARY OF PRODUCTS

1. Wholesale skins (initial run) • Calf • Deer

2. Wholesale skins (longer term) • Ostrich • Emu • Crocodile • Sea Snakes • Fish • Other

3. Sub-contracting out some of the best skins (initially) for the manufacture of accessories (handbags, belts, wallets, keyrings) - for the tourist industry

4. Direct manufacturing (this is an additional project: it is not included in the scope of this study)

The Company will be targeting traditional markets - not entering the “fickle” high

fashion industry.

PRODUCT ALTERNATIVES

General In general terms, the Company will be competing with alternate “high quality”

fashion and tourist items - not just leather goods. These include:

1. Other high quality tourist items (e.g. sheep skins, gemstones)

2. High quality imported goods generally. There is an extremely vast range of goods coming under the above categories. The most important aspect to be addressed, therefore, is product differentiation,

capitalising on a perceived inability by many tourists to acquire items of sufficient high quality to justify expenditure.

The Market Analysis section of this Report addresses the perceived shortcomings

held by the target market for Australia-manufactured goods. In particular, the opportunity to exploit those persons returning home from Australian destinations with un-spent cash due to their apparent inability to obtain items of sufficient quality or style. This infers that Australian manufacturers of leather items are currently not serving the market “top end” adequately.

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section PRODUCTS COMPETITIVE ADVANTAGE



Leather Substitutes Today, many artificial substances are produced and sold as “leather goods.”

These modern synthetics include such plastics as polyvinyl chloride and non-woven fibers impregnated with binders. These materials lack leather's porous quality, pliable nature, and resilience. However, the artificial materials cost less to produce than leather and have come to command a large share of the leather market, particularly in shoe soles14.

The Company’s target market is not, in general terms, interested in the acquisition

of leather substitutes since their primary motivation is quality, style, but still value for money.

COMPETITIVE ADVANTAGE The Company enjoys the following competitive advantages:

1. An ability to make the “best” product in Australia, without having to go offshore to source raw material (skins) or other manufactured components.

2. An ability to use a wide variety of skins than other leather manufacturers.

3. In relation to the “tanning cycle”: an ability to undertake short production runs of specific high quality items made from various types of raw material (skins).

4. Ability to adapt and change quickly, compared to other tanneries (small size, specialised plant for economically sustaining smaller production runs, etc.).

The above competitive advantages will be further explored throughout later

sections of this Report.

FURTHER PRODUCT DEVELOPMENTS & PLANNED INITIATIVES Direct manufacturing ( this is an additional project, and is not included in the

scope of this study)

14 Contributed by: Tanners Council of America, Inc. "Leather," Microsoft (R) Encarta. Copyright (c) 1994

Microsoft Corporation. Copyright (c) 1994 Funk & Wagnall's Corporation.

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section PROPERTY, BUSINESS PREMISES & OTHER PHYSICAL RESOURCES GENERAL DESCRIPTION OF THE

EBENEZER PROPERTY



13. PROPERTY, BUSINESS PREMISES & OTHER PHYSICAL RESOURCES

The Company intends to establish operations at a future industrial estate site at

Ebenezer, near Ipswich, Queensland. Negotiations to secure the property with current owners (Idemitsu) have, as at date of writing, been finalised.

Note: the majority of information related to the existing situation of the Ebenezer

property has been extracted from valuation completed by Gary O Garner & Associates (dated 2 August, 1996).

GENERAL DESCRIPTION OF THE EBENEZER PROPERTY The property, whose address is Coopers Road, Ebenezer, is a 26.7090 hectare (66

acre) vacant rural grazing property, with no physical (fixed) building structures. Reticulation is provided via two dams.

An inspection of all readily accessible parts of the improvements/property has

been carried out by the Valuer, with no obvious serious defects or no apparent obvious defects. However, the Valuer is not a building construction and/or structural expert and this report is not a building construction or structural survey report. It is recommended that advice be sought from such other expert(s) in respect of building construction / structural / survey issues.

Figure 3 - High-set position at the Ebenezer site

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section PROPERTY, BUSINESS PREMISES & OTHER PHYSICAL RESOURCES ACQUISITION (BASED ON

VALUATION)



ACQUISITION (BASED ON VALUATION) The property is to be acquired @ open market value which is equates to

$125,400.

LOCATION The subject property is situated at Ebenezer within the Moreton Shire, part of the

greater Moreton region. The local area is an agricultural and mining zone where the predominant activity is coal mining, being surrounded by beef cattle grazing.

The subject property is located approximately 5 km west of Willowbank, on the

southern side of Coopers Road. It is approximately 15 km south-west of Ipswich, which is a major provincial city serving the western outer metropolitan region.

Adjoining development consists of similar improved farming and grazing

properties where the predominant activity is beef cattle grazing, with smaller hectareages (20 hectares and less) commonly utilised for rural residential purposes including horse and cattle grazing and small fodder and vegetable cropping activities.

The immediate region consists of a number of open cut coal mines which tend to

dominate the surrounding landscape.

Figure 4 - The Ebenezer property has an attractive lagoon situated in the south-eastern portion

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section PROPERTY, BUSINESS PREMISES & OTHER PHYSICAL RESOURCES TITLE PARTICULARS



TITLE PARTICULARS The property is known as Lot 225 on Crown Plan CH3132, County of Churchill,

Parish of Jeebropilly, as contained on Certificate of Title reference 16338168. The property has an area of 66 acres or 26.7090 hectares.

The registered proprietor is Idemitsu South Queensland Coal Pty Ltd. The aforementioned Certificate of Title indicates that the property is free of

encumbrances, restrictions, caveats, encroachments, or other impediments of an onerous nature that would affect value15. However, we have not fully searched Title and our valuation is made on the basis that the property is free of such impediments in addition to mortgages, charges, and other financial liens, factors which should be confirmed by the appropriate title searches and legal advice before reliance is placed on this Valuation report.

There are no leases registered on the title.

ZONING / TOWN PLANNING Moreton Shire Council advises that the property is zoned Rural16. Its current use

therefore conforms with purposes for which buildings or other structures may be erected or used or for which land may be used without consent of the council (i.e. agriculture, animal husbandry, etc. - see “Permitted development below), subject to the following comments. Also allowable under the zone are “light” and “medium” industries.

Whilst Council has advised that there are no immediate planned changes to the

land zoning, please note the following extract from the Draft Moreton Shire Strategic Plan:

“Because of its size and location, the south-western parcel (south-west of

Cooper’s Road) would be suitable, subject to appropriate environmental controls, for “special industry” or “difficult to locate activities” estate including for example tanneries, wool scouring plants, abattoirs, waste disposal and recycling depot, production of animal feedstocks, chemicals, explosives, sand blasting or disposal of metals, oils, paint and medical waste”.

“...The possible future use of Ebenezer to accommodate the type of industries

previously mentioned is supported in principle by both Moreton Shire Council and the State Government”.

For this reason, the Valuer has included information on the “Non-Urban” zone

below after first detailing the requirements of the Rural Zone.

ZONE NO. 1 (RURAL ZONE)

15 However, registered on the title are Rights and interests reserved to the Crown by Deed of Grant No.

10259126 (POR 225) 16 A current zoning certificate has not been obtained. The obtaining of such a Certificate is time

consuming and costly, and often an excessive requirement for valuation purposes. The Valuer has therefore relied upon the verbal advice of Council.

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section PROPERTY, BUSINESS PREMISES & OTHER PHYSICAL RESOURCES ZONING / TOWN PLANNING



Objectives of Zone The objectives are:

(a) To enable the use of Rural areas for a wide range of primary production and ancillary purposes and extractive industry;

(b) To enable other forms of development including tourist and recreation

oriented uses to be undertaken in Rural areas provided they are in keeping with the rural character of the locality and do not prejudice rural operations existing within the area;

(c) To control development that may restrict the function of, or create traffic

hazards along main roads in rural localities; and (d) To ensure that development does not create unreasonable or uneconomic

demands, or both, for the provision or extension of public amenities or services.

Permitted Development

• Advertising Hoardings • Agriculture • Animal husbandry (where area of site greater than four (4) hectares) • Apiaries (where area of site greater than two (2) hectares) • Aquaculture (where area of site greater than two (2) hectares) • Aviaries (where area of site greater than two (2) hectares) • Catteries (where area of site greater than twenty (20) hectares) • Commercial horticulture (where area of site greater than two (2) hectares) • Country dwellings • Dairies (where area of site greater than twenty (20) hectares) • Display Home or Display Village (where required for a period of less than six

months) • Domestic pets • Extractive Industries - minor • Goat farms (where area of site greater than twenty (20) hectares) • Home Businesses • Home Occupations • Horse studs (where area of site greater than twenty (20) hectares) • Horse training establishments (where area of site greater than twenty (20)

hectares • Manager’s residence • Parks • Poultry farms (where area of site greater than forty (40) hectares) • Public utilities • Relatives’ flats (where located under the same roof as or having a common

wall with the principal dwelling unit) • Riding schools (where area of site greater than twenty (20) hectares) • Rural worker’s dwellings • Sheep farms (where area of site greater than twenty (20) hectares) • Stables (where area of site greater than two (2) hectares) • Stockyards (where area of site greater than two (2) hectares)




Permitted Development Subject to Conditions

• Animal Husbandry (less than fifty head of cattle) • Home Industries (where area of site not less than sixteen (16) hectares)

Permissible Development

• Light industries (if located not more than one hundred (100) metres from a Township Zone)

• Medium industries (if located not more than one hundred (100) metres from a Township Zone)

• Motor showrooms (if located not more than one hundred (100) metres from a Township Zone)

• Motor yards (if located not more than one hundred (100) metres from a Township Zone)

• Transport terminals (if located not more than one hundred (100) metres from a Township Zone)

• Any other purpose other than a purpose included in Item 2, 3 or 5.

Prohibited Development

• Automatic car washes • Car parks • Car repair stations • Child care centres • Clubs • Commercial premises • Crematoriums • Dual Occupancies • Dwelling-houses • Estate sales offices • Fast foods stores • Feedlot(s) • Hazardous industries • Health care institutions • Heavy industries • Hospitals • Hotels • Indoor entertainments • Institutional residences • Licensed clubs • Light industries (except as specified in Item 4) • Medium industries (except as specified in Item 4) • Milk depots • Motor showrooms (except as specified in Item 4) • Motor yards (except as specified in Item 4) • Multiple dwellings • Noxious or offensive industries • Professional offices




• Service industries • Shops • Storehouses • Transport terminal (except as specified in Item 4)

NON-URBAN ZONE This zone is intended for land for which, at the time of the preparation of this

scheme a firm commitment has not been made for either:

a) land designated Not Committed by the Strategic Plan;

b) land designated Mining or as a Mining Resource Priority Area by the Strategic Plan, which at the time of the preparation of this scheme was not being utilized for surface mining activities, or in which existing or future mining activities are likely to adversely affect the amenity or nearby urban communities, or which poses a threat to important flora conservation areas;

c) areas in which there are severe reservations about the suitability of land for

urban purposes as a result of past mining activities;

d) land contained in the proposed open space network, which the Council has not made a firm commitment to acquire;

e) a proposed low intensity rural buffer area adjoining the Amberley RAAF

Base;

f) a rural residential living area based on an existing large lot subdivision area at Bundamba.

Some of the land which has been included in the Non-Urban zone has also been

included in a Special Rural Buffer Area (refer to Part 6 of the Schedule). This land is situated in close proximity to the Amberley RAAF Base. It comprises that part of the City, outside of the Base area itself,, which is affected to the greatest extent by the activities of the Base and which is capable of having the greatest impact on the operations of the Base. Severe restrictions will be imposed on land use within the Special Rural Buffer Area. Within this area dwelling houses are not permitted, primarily as a result of noise exposure emanating from the Base, and agriculture is permitted subject to conditions, to enable control over agriculture, products and practices which may attract large numbers of birds and bats.

Outside the Special Rural Buffer Area the restrictions on land use are less severe.

However, it is intended that land within the Non-Urban Zone be developed generally in a low intensity manner. Outside the Special Rural Buffer Area dwelling houses may be permitted subject to the consent of the Council. There are no restrictions on agriculture. Throughout the Non-Urban Zone intensive forms of animal husbandry (such as dairy, kennel, lot feeding, piggery and poultry farm) are included as consent development. Careful consideration will be given to the likely impact of intensive animal husbandry development on the amenity of nearby land, particularly where such land is used, or intended to be used for residential purposes.

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section PROPERTY, BUSINESS PREMISES & OTHER PHYSICAL RESOURCES LAND USE



Extractive industry has been included as consent development within the Non-Urban Zone. It is intended that extractive industry will be permitted only where it can be demonstrated that there will not be significant adverse impacts on existing or proposed future urban areas or native flora conservation areas (as identified in Part B of the Strategic Plan). To ensure that the exploitation of extractive resources does not significantly affect the amenity of nearby areas, requirements may need to be imposed in relation to visual amenity, landscaping, buffering, noise, hours of operation, dust, blasting, water quality, water management, traffic generation, haulage routes and rehabilitation. Additional requirements (such as a supplementary watering and maintenance plan) may need to be imposed to ensure the preservation of native flora conservation areas. Most extractive resources in Ipswich comprise coal and clay reserves over which the Council’s town planning scheme has little control. Where it is proposed to extract these resources from land included in the Non-Urban Zone the Council will make submissions to the Mining Warden’s Court and/or the Mines Department to attempt to ensure the preservation of native flora conservation areas, and to seek the imposition of satisfactory requirements as indicated above in order to preserve the amenity of nearby land.

Within the Non-Urban Zone it is also intended to restrict the further subdivision of

land into smaller lots by specifying large minimum allotments sizes under the Subdivision of Land By-Law.

Current Development Consents / Conditions Affecting the Property With the exception of previous comments above (refer extract from the Draft

Moreton Shire Strategic Plan), there are no special conditions known to affect the subject property.

LAND USE The subject property is essentially a rural grazing property, used for the purpose of

breeding and fattening beef cattle. The property is particularly well suited for these activities, and capital

development and improvements on the site have been carefully and well planned for these enterprises. Neighboring properties also conduct similar activities so that the subject property's land use is very conducive to the area.

The property's main activity, agricultural / horticultural activities17, is listed by the

Australian & New Zealand Environment Council (ANZECC) as an activity posing significant environmental risk in relation to past, present, or future use. However, the Valuer could not readily detect any obvious detrimental effect of contamination upon the property even though the property is potentially contaminated. The Valuer therefore recommends that more detailed advice should be sought in this regard from a specialist environmental consultant before any reliance is placed upon this aspect. Any adverse report from such a specialist should be referred to the Valuer for comment and further determination as to what effect, if any, such information has on value.

17 The historical use of chemicals in many agricultural / horticultural activities gives rise to the possibility of

environmental risks.

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section PROPERTY, BUSINESS PREMISES & OTHER PHYSICAL RESOURCES SITE DETAILS



SITE DETAILS The site is basically rectangular in shape, having a frontage of approximately 695

metres to Cooper’s Road, with approximate eastern and western side boundaries of 384 metres respectively. The rear or northern boundary is approximately 695 metres. The eastern boundary has a frontage onto a gravel road (the road is not sign-posted).

The site contains a total area of approximately 267,090 square metres or 66 acres.

This is equivalent to 26.709 hectares. The property features:

• Views across local valley floor • relatively high-set position

SERVICES The whole site is well serviced by existing infrastructure with the exception of

water supply, gas and sewerage. Three Phase electrical power and telephone is available to the property, however none of these services have been made available actually on site.

The subject property is conveniently located near (within 5 kilometres) of the

minor provincial township of Willowbank, which provides a limited range of rural services and retail shopping.

Figure 5 - Another view of the Ebenezer site

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section PROPERTY, BUSINESS PREMISES & OTHER PHYSICAL RESOURCES PROPERTY SKETCH & LOCATION OF

IMPROVEMENTS



The city of Ipswich is located approximately 15 kilometres by road, and I provides

a wide range of personal and rural services including banking, a wide range of retail shopping, educational facilities up to and including tertiary level, stock sale yards, rural supplies, farm machinery sales and repairs, and other services and facilities.

Cooper’s Road is a bituminised roadway on which the subject property has its

frontage. Access is very good from this road except in times of major flooding. The property is located approximately 5 kilometres from the Cunningham Highway, which is a major bituminised highway stretching from Redbank / Ipswich to Warwick and beyond. It is also the major access route to the capital city of Brisbane.

PROPERTY SKETCH & LOCATION OF IMPROVEMENTS The following sketch is a diagrammatic representation of the subject property,

depicting major features and nearby facilities, and their approximate location.

Figure 6 - One of several suitable sites for establishment of the factory premises at Ebenezer

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section PROPERTY, BUSINESS PREMISES & OTHER PHYSICAL RESOURCES PROPERTY SKETCH & LOCATION OF

IMPROVEMENTS



Coo

per

s Ro

ad

Lane (gravel road)

Approximate boundary ofsubject property (yellow)

Idemitsu(Coal Mining)

Leo Green(Workshop)

Lot 225Parish - JeebropillyCounty - Churchill

Figure 7 - The Ebenezer Site - Major Features & Nearby Facilities

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section PROPERTY, BUSINESS PREMISES & OTHER PHYSICAL RESOURCES SOILS AND TOPOLOGY



SOILS AND TOPOLOGY The subject property is an undulating to moderately sloping block. The property is partly cleared and fully arable, with numerous areas natural

timber. The land parcel can basically thought of as being open grazing woodland, with lightly forested areas and re-suckering in parts.

The primary soil type18 found on the property ranges from a medium brown loam

over clay to small areas of more lighter / alluvial types present in areas subject alongside creek-beds. There are several small gravelly hills. Topsoil is generally fairly shallow.

There would appear to be NO site problems in relation to:

• Apparent contamination • Drainage problems • Obvious encroachments • Filled ground.

Overall, these soil types are well suited to current activities, including the potential

to grow fodder crops such as sorghum. However, soils would be generally low to medium fertility, and the application of nitrogen (particularly when cropping) and phosphorus to a lesser degree is highly desirable (except where alluvial soils are in evidence). These comments are made without having conducted soil and/or plant analysis testing, and it is recommended that this be undertaken to more fully and exactly determine requirements. This would enable a more comprehensive analysis including determination of other possible deficiencies such as Potassium (K) in particular, as well as Molybdenum (Mo), Copper (Cu), Zinc (Zn), Sulphur (S), Magnesium (Mn) and others.

The site does not exhibit any apparent signs of contamination, nor apparent

potential contamination from surrounding properties. However, please note that the Valuer has not undertaken a search of the State Contaminated Sites Register, nor is the Valuer able to provide expert advice on site contamination. Should information become available indicating site contamination, the Valuer should be consulted to reassess any effect on the value stated in this valuation report.

RAINFALL AND WATER SUPPLIES The annual average rainfall at Ipswich is approximately 860mm (approximately

44 inches). The average at Ebenezer would be slightly lower than this amount, as the region experiences a progressive westward decline. The annual average rainfall at the subject property / Ebenezer would be in the order of 840 mm (33 inches). Rainfall is predominantly summer (the wettest months are usually January and February) which is obtained from cyclonic influences, with the driest period

18 A formal soil test has not been conducted. This report is based on observations as at date of inspection.

Reliance on advice or comments should not be made without formal testing of soils or plant analysis.

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section PROPERTY, BUSINESS PREMISES & OTHER PHYSICAL RESOURCES PASTURES AND VEGETATION



being spring (August and September) where rain is obtained mostly from South-east trade winds and the more unreliable thunderstorms from frontal activity.

Other than a soak (which has been enlarged into a relatively medium-sized

dam19 - located on the southern boundary near the gravel lane frontage), there is no naturally occurring permanent water supply. However, the property is criss-crossed with a number of creek-beds which, as at date of inspection, were dry. There is also a small dam off the Cooper’s road frontage. Because of this, water supply can be regarded as semi-permanent.

Flooding is a relatively uncommon occurrence, and, bearing in mind the

property’s overall high-set position, even the largest floods probably do not affect the property to any significant extent20. The subject property is a well-drained property because of its undulations.

PASTURES AND VEGETATION Native pasture is dominated by blue couch (Digitaria didactyla) in the more

lighter loam areas of the property, with the major introduced species found being the tropical grass Callide Rhodes grass (Chloris gayana). There is a wide variety of other pasture species present.

Ideally, pasture renovation could include the introduction of legumes such as

White Clover that would provide added frost resistance and naturally occurring

19 It is assumed that the dam is in fact a spring-fed soak which has been further enlarged. 20 However, no warranty is implied or given in respect of floodwaters. Persons should rely on their own

enquiries for further information.

Figure 8 - Another suitable location at Ebenezer for premises establishment

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section PROPERTY, BUSINESS PREMISES & OTHER PHYSICAL RESOURCES LOCALITY PLAN



nitrogen. It would also provide adequate nutrition for the winter diet. As at date of inspection, existing grass cover is excellent, however fodder crops such as oats would need to be grown if fattening of cattle in winter is contemplated.

Trees found over the whole property consist largely of spotted gum and iron bark.

There are significant areas of re-suckering. The Valuer estimates that approximately 30% of the subject property is forested.

The property has been kept free of noxious weeds and animals. There is no cropping conducted on the property.

LOCALITY PLAN

Approximate locationof subject property

LOT 225 ON CROWN PLAN CH3132County of ChurchillParish of Jeebropilly

INFRASTRUCTURE REQUIREMENTS The Project requires that infrastructure costs of approx. $0.375m be outlaid,

summarised as follows:

Figure 9 - Locality Plan - Ebenezer, Qld

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section PROPERTY, BUSINESS PREMISES & OTHER PHYSICAL RESOURCES INFRASTRUCTURE REQUIREMENTS



INFRASTRUCTURE - Sorted by total cost

Item No. Units Share Cost $ / Unit Total Cost ($)Cash Flow -

Month ofPurchase

Cost of Land - acres 66 $1,900 $125,400 1Perimetre Fencing - metres 1,463 $36 $52,668 1Water supply to site - metres (ex Idemitsu) Quote Ipswich CC 2,500 20.00% $100 $50,000 1Roadworks- bitumenised - metres 150 $240 $36,000 1CONTINGENCY ALLOWANCE 10.00% $34,107 $34,107 2Pits, holding tanks, other earthworks 1 $20,000 $20,000 1Other headworks incl. sewerage, gas storage and other 1 $18,000 $18,000 2

Fuel and other storage bunds 5 $3,000 $15,000 1Electrical Power to site 1 $10,000 $10,000 1Environmental Management Plan (consultancy) 1 $10,000 $10,000 0Telephone 1 $4,000 $4,000 1Environmental Impact Statement 0 $35,000 $0 0SEQEB Costs - Transformer, etc. 1 $0 $0 1Total - Infrastructure $375,175

The above infrastructure will therefore acquire the land, and effect all major

services to the site including:

• Water supply from the existing Council mains located approximately 2.5km from the property boundary21. The 20% allocated is the estimated shared cost of providing the resource, based on an estimated $0.25m capital outlay required for service from existing infrastructure.

• Cost of providing 2m high cyclone perimietre fencing around the 66 acre site

• Cost of providing internal bitumenised roadworks.

• Cost of providing telephone and electrical services on site. In addition to the above, approximately $2.0m will be outlaid on premises. Further

detail is shown on Schedule 4 of the attachments, with all capital expenditure summarised as follows:

CAPITAL WORKS SUMMARY By Major Category of Expenditure

1 OPERATING PLANT & EQUIPMENT $1,730,743 2 SUNDRY PLANT & EQUIPMENT $392,270 3 INFRASTRUCTURE $375,175 4 PREMISES (Ebenezer) $2,007,074 5 OTHER CAPITAL COSTS $206,840

TOTAL $4,712,101

PLUS - Capital Equipment acquired under lease 250,900.0

TOTAL CAPITAL including leased equipment $4,963,001

21 As per advice from Council.

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section MARKET ANALYSIS INDUSTRY DESCRIPTION



14. MARKET ANALYSIS

INDUSTRY DESCRIPTION The Company is involved in a number of industries, which may be broadly

described as follows:

Activity

Industry ASIC Code22

Leather Manufacturing or Tanning

Leather Manufacturing / Leather tanning, currying, dressing, finishing or dyeing

3451

Leather manufacturing Leather Bags / Goods Manufacturing 3452 Leather wholesaling Leather wholesaling 4752 Leather wholesaling Leather Goods / Bags wholesaling 4796 Eco-tourist park development and operation

Parks and garden operation 9141

For the purposes of market analysis, the Consultant has assumed that the primary activity is ASIC Code 3451 (leather manufacturing / tanning), with the most significant secondary activity being leather wholesaling (ASIC 4752).

An Overview of the Leather Industry and Its Fit Within the Manufacturing Industry

Leather manufacturing and tanning is part of the “Manufacturing, Wholesale and Retail Service Industries”. There were 38,285 manufacturing establishments operating in Australia at 30 June 1993, employing 882,500 persons. During 1992-93, manufacturing establishments paid $27,311 million in wages and salaries and recorded $170,100 million in turnover (see table below).

Summary of operations of the manufacturing industry, 1992-9323

Establishents operating at

30 June

Employment at 30 June(a)

Wages & salaries(b)

Turnover Persons employed per establishmen

t

Turnover per

employed

Industry subdivision (No.) ('000) ($m) ($m) (No.) ($'000)

Food, beverages & tobacco mfg 3,327 159,282 4,762 36,999 48 232Textiles, clothing, footwear & leather mfg

3,623 75,223 1,856 8,849 21 118

Wood & paper product mfg 3,372 57,772 1,741 9,909 17 172Printing, publishing & recorded media

4,299 84,965 2,720 11,539 20 136

Petroleum, coal, chemical & associated product mfg

2,639 87,428 3,116 27,550 33 315

Non-metallic mineral product mfg 1,586 38,394 1,282 8,362 24 218Metal product mfg 6,807 143,146 4,738 31,310 21 219Machinery & equipment mfg 7,483 188,379 5,987 30,781 25 163Other manufacturing 5,149 47,910 1,110 4,800 9 100Total manufacturing 38,285 882,497 27,311 170,100 23 193

22 Australian Standard Industry Classification Code, as used by the Australian Commonwealth Statistician. 23 Source: Manufacturing Industry, Australia (8221.0)

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section MARKET ANALYSIS INDUSTRY DESCRIPTION



(a) Includes working proprietors. (b) Excludes the drawings of working proprietors.

(93.1%)

(3.1%)

(3.8%)

Other Textiles, clothing & Footwear Manufacturing Leather Tanning and Fur Dressing

Leather and Leather Substitute Product Manufacturi

Summary of operations of the manufacturing industry (Australia)Number of Establishments (Textiles, clothing, footwear and leather manufacturing)

Source: Manufacturing Industry, Australia (8221.0).Source: ABS, Business Register Counts, Customised Report No. 8502, September 1996.

$36,999 (21.8%)

$8,849 (5.2%)$9,909 (5.8% )

$11,539 (6.8% )

$27,550 (16.2% )

$8,362 (4.9%)

$31,310 (18.4% )

$30,781 (18.1%)

$4,800 (2.8% )

Food, beverages & tobacco mfg

Textiles, clothing, footwear & leather mfg

Wood & paper product mfg

Printing, publishing & recorded media

Petroleum, coal, chemical & assoc. mfng

Non-metallic mineral product mfg

Metal product mfg

Machinery & equipment mfg

Other manufacturing

Turnover by manufacturing industry, 1992-93 (Australia)$ MILLION

Source: Manufacturing Industry, Australia (8221.0).Source - Australian Bureau of Statistics, 1996 Year Book Australia, ABS Cat.1301.0.30.001

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section MARKET ANALYSIS INDUSTRY TRENDS, PROSPECTS & REGIONAL INFLUENCES



The “Wet-Blue” Market

Overall, there is a shortage of raw material suitable for the making of leather -

especially high quality leather, throughout the world. Whilst Australia is a major producer (approximately 6 million cattle hides are exported each year), many hides suffer from tick marks and other parasite damage, especially those from Queensland and the Northern Territory. There are also problems with barbed wire scratching and branding, and in general terms it could be said that many of the skins are not therefore suitable for the manufacturing of high quality items.

The hide market generally fluctuates wildly from year to year across the world,

with this large industry often subject to government protection / intervention, i.e. protection of a country’s tanning industry.

The wet-blue market is currently expanding, primarily due to inefficiencies

associated with the more traditional brine cured product and the way in which it is typically processed. Gibson24 reports that “When marketing wet blue then, the exercise is not to find new markets for existing product, but to change the way the existing markets can purchase it”. Further, that “from a marketing perspective ... the product to be sold is not wet blue hides but advantages of wet blue. In these circumstances, capitalising on the competitive advantage can revolve as much around access to hides as around manufacturing capability”.

Gibson concludes that in relation to the marketing of finished leather, the only

future is if the domestic tanner can find a competitive advantage in quality, and can utilise this in the export market. The survivors in the Australian finished leather industry have tended to become specialised in their field, and have become involved in exporting specialised leathers to niche export markets.

In this instance, Minaji intends to become a very specialised operator, with a

differentiated product, meeting the needs of the market top end. On the face of it, this would appear in broad terms, to meet the overall criteria for a potentially successful Australian processor.

INDUSTRY TRENDS, PROSPECTS & REGIONAL INFLUENCES

General Manufacturing trends25 Movements in the real level of manufacturing activity described below are

based on the quarterly index of industrial production. The estimates relate to movements in manufacturing activity measured by means of constant price movements in Gross Domestic Product at factor cost.

For the year 1994-95, production was 8.4% higher than for 1993-94 which in turn

was 7.7% higher than the previous year. Over the ten year period from 1984-85 to 1994-95, the index of manufacturing production increased by 33% overall.

24 Gibson Management Pty Ltd, Pre-Feasibility Study Into a Wet Blue Plant at MacKay (undated report

commissioned by the Dept. Business, Industry and Regional Development, and Austrade). 25 Source - Australian Bureau of Statistics, 1996 Year Book Australia, ABS Cat.1301.0.30.001

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section MARKET ANALYSIS INDUSTRY TRENDS, PROSPECTS & REGIONAL INFLUENCES



Successive annual growth occurred from 1984-85 to 1988-89 then followed three years of steady decline which were followed by three years of growth.

Most subdivisions of the manufacturing industry demonstrated fairly similar

patterns over the ten year period to those demonstrated by total manufacturing. An exception was the Textiles, clothing, footwear and leather manufacturing industry, which remained stable from 1985-86 to 1988-89 and then began a steady decline. The subdivisions which have substantially higher activity levels in 1994-95 than in 1985-86 are non-metallic mineral products manufacturing (up 54%), Machinery and equipment manufacturing (up 45%), and Other manufacturing (up 44%).

Indexes of manufacturing industry gross product at average 1989-90 prices26

(Reference base year 1989-90 = 100.0) Industry subdivision 1989-90 1990-91 1991-92 1992-93 1993-94 1994-95 Food, beverages & tobacco mfg

100.0 102.2 102.5 109.3 114.0 120.8

Textiles, clothing, footwear & leather mfg

100.0 97.5 92.1 90.6 84.2 80.5


100.0 97.4 98.7 94.6 96.9 104.5


100.0 97.0 92.0 95.1 107.6 119.0


100.0 103.7 101.8 100.7 109.7 116.3


100.0 89.9 87.6 96.5 110.0 129.7

Metal product mfg 100.0 99.3 98.5 97.5 103.0 109.3Machinery & equipment mfg

100.0 96.8 91.5 100.9 113.1 125.2

Other manufacturing 100.0 84.9 81.9 86.8 97.4 114.7Total manufacturing 100.0 98.1 95.7 99.7 107.4 116.4Source: Quarterly Indexes of Industrial Production, Australia (8125.0).

Company Profits for Manufacturing27 Profits before income tax earned by manufacturing companies increased by 19%

between 1993-94 and 1994-95, following a rise of 33% from 1992-93. Growth in profits between 1993-94 and 1994-95 was strongest in Machinery and equipment (up 55%), Metal products manufacturing (up 27%) and Printing, publishing and recorded media (up 25%). The only industry to record lower profits in 1994-95 than in 1993-94 was Other manufacturing.

Metal product manufacturing contributed 19% to total manufacturing profits in

1994-95 followed closely by Food, beverages and tobacco manufacturing (18%) and Machinery and equipment (17%).

26 Source - Australian Bureau of Statistics, 1996 Year Book Australia, ABS Cat.1301.0.30.001 27 Source - Australian Bureau of Statistics, 1996 Year Book Australia, ABS Cat.1301.0.30.001

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section MARKET ANALYSIS THE AUSTRALIAN HIDE MARKET



Manufacturing companies - profit before income tax by industry28 ($ million) Industry subdivision 1992-93 1993-94 1994-95 Food, beverages & tobacco mfg 2,144 2,130 2,262Textiles, clothing, footwear & leather mfg 219 380 487Wood & paper product mfg 643 913 977Printing, publishing & recorded media 666 1,134 1,415Petroleum, coal, chemical & associated product mfg

1,350 1,633 1,782

Non-metallic mineral product mfg 816 1,047 1,130Metal product mfg 847 1,895 2,399Machinery & equipment mfg 1,259 1,402 2,178Other manufacturing 40 122 60Total manufacturing 7,983 10,655 12,690Source: Company Profits, Australia (5651.0).

THE AUSTRALIAN HIDE MARKET Australia currently produces around 8 million cattle hides and calf skins each

year, most (80%) of which is exported. The market which Minaji intends to source its primary supply from is the Calf hide market, due to the higher quality of leather produced from these types of skins. There are between 1.7 to 2.0 million calf hides produced in Australia each year, only a portion which would be suitable for acquisition by Minaji because of the aforementioned problems with marking from parasites, branding and wire cuts.

At the full 100% production rate, the Company will need to access approximately

240,900 skins annually, representing around 11% of the available market supply in Australia (in addition to acquiring deer skins and other types).

This data is shown graphically thus:

28 Source - Australian Bureau of Statistics, 1996 Year Book Australia, ABS Cat.1301.0.30.001

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section MARKET ANALYSIS A PROFILE OF THE AUSTRALIAN TOURISM INDUSTRY - PROSPECTS, INFLUENCES AND

IMPLICATIONS FOR THE PROJECT



2,000,000 (89.2%)

240,900 (10.8%)

Available Australian Supply Minaji requirement

MARKET SUPPLY OF CALF SKINS - AUSTRALIALEATHER PROCESSING FACILITY - EBENEZER

Minaji requirement assumes 100% production level

A PROFILE OF THE AUSTRALIAN TOURISM INDUSTRY - PROSPECTS, INFLUENCES AND IMPLICATIONS FOR THE PROJECT29

Overseas Visitor Arrivals

During the 6 year period to 1990 the number of short-term overseas visitors arriving

in Australia increased from 1.1 million in 1985 to 2.2 million in 1990. In this period there was only one decline between years, this occurred between 1988 and 1989.

The number of short-term visitors arriving in Australia was greater for each of the

four quarters of 1990 than for the corresponding quarters in 1989. For example, in December quarter 1990, 642,300 persons arrived compared with 614,100 in December quarter 1989.

29 Primary source and data for information in this section is: Tourism Statistics (Taken from: Ian Castles,

Directory of Tourism Statistics 1991, Aust. Bureau of Statistics, 1992, Australia





Of the overseas visitors who arrived in Australia in December quarter 1990, 59 per cent stated that the main purpose of their journey was a holiday and a further 23 per cent came to Australia to visit relatives.

The two major source countries for overseas visitors in December quarter 1990

were Japan and New Zealand, with the proportion of short-term visitors being 19 and 17 per cent respectively. The reasons for visiting Australia differed significantly depending on country of residence, 87 per cent of Japanese visitors were in Australia on holiday, compared with 45 per cent of new Zealanders. On the other hand, only 7 per cent of visitors from Japan entered Australia for business or employment reasons while the comparable figure for New Zealanders was 16 per cent.

SHORT-TERM OVERSEAS VISITORS DEPARTING AUSTRALIA, DECEMBER QUARTER 1990.30

(‘000) State most time spent in

Length of Stay NSW Vic Qld WA Australia(a)Under 1 week 80.2 17.8 27.8 10.3 141.11 week and under 1 month 124.8 32.7 68.1 22.9 266.61 month and under 3 months 27.1 12.1 14.4 8.2 69.03 months and under 6 months 9.5 4.0 4.4 3.6 23.36 months and under 12 months

13.1 7.7 5.0 4.2 33.5Total (b) 254.6 74.4 119.6 49.1 534.4 (a) Includes other States and Territories not listed separately. (b) Includes ‘length of stay’ not stated.

Characteristics of international visitors Of the 2.1 million overseas visitors who arrived in Australia during 1989 the largest

proportion were aged between 20 and 29 years (517,300 or 25 per cent). Forty-two per cent of all Japanese were in the 20 to 29 year age group compared with only 15 per cent of visitors from the USA.

Of the total visitors in 1989, 56 percent were on their first visit. When country of

residence is considered, results indicate that 81 per cent of Japanese were on their first visit compared with only 19 per cent of New Zealanders. Seventy per cent of holiday visitors were on their first visit compared with only 34 per cent of business visitors.

The most common mode of transport (74 per cent) used by visitors in Australia

was a car (including both private and company cars). The least common was a motorcycle or bicycle with only 1 per cent of visitors choosing this method. In 1989 41 per cent of all visitors used rented self-drive cars, compared with only 19 per cent in 1988.

30 Source: ABS: Overseas Arrivals and Departures, Australia (3402.0): Ref: Chap 3.1.





Sixty-three per cent of Japanese visitors travelled by plane while in Australia compared with only 15 per cent of visitors from Singapore and New Zealand.

SELECTED CHARACTERISTICS OF AUSTRALIAN VISITORS, AUSTRALIA, 1989

Country of residence

Visitors (No.) First visit (%) Average nights in Australia (No.)

USA 260,700 70 22Japan 349,500 81 13New Zealand 449,300 19 22UK and Ireland 285,100 66 49Europe 245,600 71 43Total 2,080,300 56 30Source: Bureau of Tourism Research, International Visitor Survey: Ref: Chap. 3.2.

Attitudes and expenditure of international visitors Of the total visitors to Australia in 1989, 24 per cent said the aspect most enjoyed

while in Australia was the people, followed by 18 per cent nominating the climate and 10 per cent the scenery. Sixteen per cent of Japanese visitors nominated the wildlife as the most enjoyable aspect of their holiday, while 12 per cent most enjoyed the climate. The comparable figures for UK and Irish visitors were 5 per cent and 32 per cent respectively.

Forty-four per cent of all visitors to Australia in 1989 said there was not any aspect

of their stay they did not enjoy. Of the identified aspects least enjoyed, cost of living was nominated by 7 per cent of all visitors. Visitors from Singapore identified the food as the least enjoyed aspect (9 per cent), while 8 per cent of visitors from the United Kingdom and Ireland disliked the insects.

Scandinavians and Germans spent more per trip in Australia than visitors from any

other country. Japanese visitors spent more per night ($131) than all other visitors in 1989. However their average trip expenditure ($1,701) was less than the overall average ($1,968) due to their respectively short length of stay (13 days, compared with an average of 30 days for all visitors).

Visitors on holidays spent more than all other visitors, with an average of $2,069

per person in 1989. However business visitors spent the highest amount per night of $157 per night.

ASPECTS MOST ENJOYED BY OVERSEAS VISITORS, AUSTRALIA 1989

(per cent) Purpose of Visit

Aspect Business Holiday Visit relatives Total People 25 22 21 24Climate 14 18 24 18Beaches 2 7 5 6Scenery 7 10 11 10Food 7 4 4 4Source: Bureau of Tourism Research, International Visitor Survey: Ref: Chap 3.2.

Tourism trends





There was rapid growth in the number of short-term international visitors arriving in

Australia during much of the 1980’s. The Japanese and other Asian visitors proved to be very significant growth areas over the last decade. Their markets now account for the first and third largest shares of the total arrivals. New Zealand used to be the largest source of visitors to Australia, but its share of all visitors declined since 1979. Visitors on holidays have dominated the inbound tourism scene, with their numbers increasing by 3.5 times over the last 10 years.

Overall, outbound tourism experienced a 6 per cent average annual growth rate

between 1980 and 1990. The total number of short-term residents departing Australia in 1990 was 2,169,900, an increase of 9 per cent over 1989 and 25 per cent over 1988. During the last 10 years, Asia has gained considerable popularity as a tourist destination for Australian residents. By 1990 Asia accounted for more than a third of all short-term Australian resident departures.

Australia’s four largest international airports (Sydney, Melbourne, Brisbane and

Perth) collectively accounted for 93 per cent of international passenger movements in 1990. However airports in Queensland, the Northern Territory and Adelaide have been increasing their share of international passenger movements.

Domestic tourism has been relatively subdued in recent years. The number of

domestic trips undertaken by Australian residents was 8 per cent higher in 1990-91 than in 1984-85.

SHORT-TERM INTERNATIONAL VISITOR ARRIVALS BY REGIONS OF STAY, AUSTRALIA31

(‘000) Year NSW Vic Qld Total(a)

1984 651.9 339.5 286.4 940.21986 968.3 468.8 458.9 1131.81988 1,533.8 765.2 1,021.1 2,097.91990 1,418.9 660.9 958.3 2,065.4 (a) Includes other States and Territories not listed separately.

Tourism in Queensland In 1989-90 over six million people made visits in Queensland, staying 32.2 million

visitor nights and spending $2,748 million. Over half (58.5 per cent or 3.5 million) of these visitors were Queenslander’s on intrastate trips, 28.5 per cent (1.7 million) were interstate visitors and 13.1 per cent (778,600) were from overseas.

One-quarter (623,100) of the people who travelled to Queensland arrived on

domestic aircraft, 1.2 million (47.2 per cent) in private vehicles and 347,800 (14 per cent) on international aircraft. Seventy-six per cent (4.5 million) of all visitors in Queensland travelled for holiday or recreational purposes. Twenty-three per cent (791,000) of Queenslander’s and 25.4 per cent (8,900) of Japanese visitors travelled wither on business or for a conference.

31 Source: Bureau of Tourism Research, Australian Tourism Trends: Ref: Chap 3.6.

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section MARKET ANALYSIS The International Tourist Trade



During 1989-90 a total of $2,747.9 million was spent by visitors in Queensland. The largest proportion (29.2 per cent or $801.6 million) of this went towards accommodation with an average of $24.90 being spent per visitor per night. The purchase of food and beverages represented one-quarter ($699.3 million) of total expenditure and an average of $21.70 per visitor night.

Considerable variation in the age distribution of visitors in Queensland become

apparent when usual place of residence is considered. For example, 38.4 per cent of Japanese visitors were aged between 20 and 24 years, compared with only 4.5 per cent of New Zealanders. In contrast, 11.8 per cent of Japanese travellers were aged between 45 and 59 years, while 30.7 per cent of New Zealanders fell into this age group.

SELECTED CHARACTERISTICS BY REGION VISITED, QUEENSLAND,

1989-90 Region Visitors (‘000) Average length

of stay (nights) Averages

expenditure per night ($)

Gold Coast 1,580.2 5.8 95.80Brisbane 1,012.0 3.2 123.00Far North (Cairns) 718.6 5.8 102.6Northern (Townsville)

552.2 3.2 77.20

Barrier Reef 216.5 3.8 155.00Queensland 6,022.2 5.4 85.3Source: Queensland Tourist and Travel Corporation: Major Survey Research Programme: Ref: Chap 3.14.

The International Tourist Trade32

Japan (Tourist Trade) Japanese visitors were the biggest spenders on shopping with an average of

$709 each during the December quarter 1992. They spent more on shopping as a proportion of their expenditure on all items (64%) than visitors from any other source market. However, this ratio is distorted by the exclusion of expenditure on inclusive package tours purchased outside Australia from the total expenditure figure. The majority of Japanese visitors travel on such packages.

Japanese visitors stay in Australia for less time on average (7 nights during the

survey period) than other visitors, so consequently their average shopping expenditure per day is the highest of any source market. Japan is also Australia’s largest source of international visitors, so even a small increase in average duration of stay will lead to a large rise in total shopping expenditure by Japanese visitors. Total Japanese shopping expenditure was estimated at almost $111 million over the survey period, and Japan ranked first by a large margin (50 per cent more than the second largest contributor) amongst source markets by this measure.

32 Primary source for material in this Sub-section is the publication: Holidays in Store: Occasional Paper # 14

- Shopping Patterns of International Tourists. All due acknowledgment is given.




Other Asia Visitors from Asia excluding Japan spent an average of $518 on shopping, which

represented only 18 per cent of Asian’s average expenditure on all items. This was the lowest such proportion of any source market. In terms of total expenditure on shopping, however, Other Asia ranked second behind Japan. Visitors from Asia including Japan accounted for almost half of total shopping expenditure in Australia.

Average Expenditure per Person on Items in Australia by Country/Region of Origin, December Quarter 1992

Expenditure ($) New

ZealandJapan Other

AsiaUSA Canada UK/Ireland Europe Other Total

Long Distance Train/Coach Fares 12 9 6 15 59 54 47 10 21Organised Tours (excl Accomm.) 11 51 22 53 26 63 76 22 41Organised Tours (incl Accomm.) 12 2 15 63 110 138 137 43 51Domestic Air Fares 8 6 21 74 47 92 76 43 38International Airfares Bought in Aust. 14 2 36 27 21 13 20 36 19Taxis, Limousines 22 10 30 34 24 70 29 37 30Self Drive Cars, Vans 26 6 27 71 112 30 143 23 43Petrol and Oil for Vehicles 15 3 19 33 21 38 78 10 25Shopping 449 709 518 333 472 646 472 558 541Food, Drink and Accommodation 359 242 625 775 662 1088 1068 615 627Horse Racing and Gambling 10 26 62 23 8 4 10 12 24Entertainment 36 12 56 51 51 68 73 45 46Convention Registration Fees 13 1 3 4 10 11 3 10 6Departure Tax 19 17 18 19 20 20 20 18 19All Other Expenditure 84 19 1383 140 109 126 173 376 359Average Expenditure 1087 1114 2842 1715 1752 2459 2426 1856 1889Total Number of Visitors 124,165 156,213 140,836 70,280 14,686 91,403 92,528 39,335 729,446

Source: BTR Tourism Shopping Survey 1992

Distribution of Shopping Expenditure Average expenditure data mask the pattern of amounts spent by individual

visitors. Quite different expenditure distributions can produce similar averages. It is useful to examine expenditure distributions to gain an insight into spending patterns of various visitor groups. An example is the contrast in the spending patterns of visitors from Japan and Other Asia. Their average shopping expenditures per visitor for those who spent money on shopping were relatively close at $784 and $721 respectively. However, only 6 per cent of Japanese visitors who shopped spent between $400 and $599 on shopping, whereas 22 per cent of other Asian visitors spent amounts in this range.

The prior table shows the distributions of expenditure on goods to take home.

Those visitors who didn’t spend any money on shopping are excluded. This




accounts for the higher average expenditures compared to those in earlier tables.

The expenditure distribution (see table below) has been arbitrarily split into five

categories. 25 per cent of visitors who spent money on shopping spent less than $200, while a further 21 per cent spent between $200 and $399. About 17 per cent spent between $400 and $599, while 14 per cent spent between $600 and $999. Around 23 per cent spent $1000 or more.

Number of Visitors by Amount Spent on Goods Bought to Take Home and Country/Region of Origin33

Amount Spent New Zealand

Japan Other Asia

USA Canada UK /Ireland

Europe Other Total

Less than $200 24780 49130 19540 18200 3060 26940 14740 4800 161190$200 - $399 16570 16990 27530 19740 5020 25480 19090 6550 136960$400 - $599 20030 7710 28070 7900 1420 13750 19120 5170 103160$600 - $999 15530 20780 21010 7510 1390 7460 5630 3250 82540$1000 or more 30220 42390 28590 6100 2380 11160 13440 11900 146180Don't Know/Not Stated 0 120 0 70 0 0 310 0 500Total 107130 137100 124740 59530 13270 84780 72330 31670 630540

Average Expenditure($)

769 784 721 452 556 484 605 905 678

Base: Visitors who spent money on shopping while in Australia

33 Source: BTR Tourism Shopping Survey 1992




0

50

100

150

200

Tho

usan

ds

Amount Spent

Nu

mb

er o

f V

isit

ors

Less than $200$200 - $399

$400 - $599$600 - $999

$1000 or moreDon't Know/Not Stated

New Zealand

Japan

Other Asia

USA

Canada

UK/Ireland

Europe

Other

Number of Visitors by Amount Spent on Goods Bought to Take Homeand Country/Region of Origin

Source: BTR Tourism Shopping Survey 1992Base: Visitors who spent money on shopping while in Australia

Japan The shopping expenditure distribution pattern for Japanese visitors was heavily

weighted towards the extremes of the distribution compared with that for other visitors. Around 35 per cent of Japanese visitors spent less than $200 on shopping during the survey period, with most of these spending between $100 and $199. The proportion of visitors from all sources to spend less than $200 was 25 per cent.

At the other end of the scale, 47 per cent of Japanese visitors spent $600 or more

on shopping, with 31 per cent spending $1000 or more. The corresponding percentages for all visitors were 37 per cent and 23 per cent.

UK/Ireland

Visitors from the UK/Ireland were concentrated in the lower half of the shopping

expenditure distribution, with 77 per cent of them spending less than $600. Around 31 per cent spent less than $200 with a further 30 per cent spending between $200 and $399. Only 22 per cent spent $600 or more.

Other Countries

The distribution of spending on shopping for visitors from countries not included in

other market groupings was skewed towards the upper end. About 38 per cent of these visitors spent $1000 or more, which was the highest proportion in this




category for any of the source markets. Conversely, the percentage of them in the lowest expenditure category of under $200 was one of the lowest, at around 16 per cent.

Other Asia

Visitors form countries in this region were concentrated in the middle and upper

parts of the shopping expenditure distribution, with a lower than average proportion in the lowest category. 44 per cent of them spent between $200 and $599 as opposed to 38 per cent of all visitors. Only 16 per cent spent less than $200. The proportion that spent between $600 and $999 was slightly higher than the average for all visitors.

Type of Shop The amount spent on goods to take home varies by shop type. For any particular

type of shop, there is a considerable variation in the expenditure patterns of visitors from individual source markets. These attributes of shopping in various shop types are important in the development of targeted marketing strategies.

The shopping expenditure distribution for all visitors is the sum of the distributions

for each shop type. Consequently, the distributions for individual shop types are weighted towards the lower expenditure brackets. For this reason, a different distribution of expenditure was used for shop types.

Duty Free Shops

Around 43 per cent of visitors in the survey period who spent money on shopping

bought goods in duty free shops. This was a smaller percentage than that for department stores and other shops.

The average amount spent during December quarter 1992 in duty free shops by

visitors who spent money on shopping while in Australia was $124. The distribution of expenditure by international visitors in duty free shops is

weighted more towards the bottom end compared with the distributions for department stores and other shops. The proportion of shoppers who purchased goods in duty free shops valued at $100 or less was 24 per cent, which was higher that for other shop types. The majority of visitors in the bracket spent over $50.

The proportion of shoppers who spent more than $100 was correspondingly lower,

with only 15 per cent spending between $101 and $500 in duty free shops, and a further 5 per cent spending more than $500.

Japanese shopper were more likely to purchase goods in duty free shops than

visitors from any other source, with 64 per cent of them falling into this category. Their average expenditure in duty free shops was $289, around twice that of the next highest spending group.

Department Stores

The proportion of visitors to Australia who spent money on shopping and bought

goods in department stores in the survey period was 52 per cent, slightly higher




than that for duty free shops. However at $219, the average expenditure in department stores was considerably higher than that for duty free shops.

The shopping expenditure distribution for department stores was weighted

more towards the upper end than that for duty free shops. 28 per cent of shoppers who purchased goods in department stores spent between $101 and $500, with a further 11 per cent spending more than $500. Only 13 per cent of department store shoppers spent $100 or less.

Major Markets There were wide variations in department store spending patterns according to

source country. Visitors from New Zealand, Asian countries excluding Japan, and countries in regions other than our major source markets spent much more on average than those from other sources.

Japanese shoppers were less likely to purchase goods in department stores than

shoppers form any other source, and this was reflected in their relatively low average expenditure of $103 in shops of this type. 67 per cent of Japanese visitors who shopped did not spend any money in department stores. Those who did were most commonly represented in the $101 to $500 expenditure bracket, with 25 per cent of Japanese shoppers in the category.

The expenditure distribution for shoppers from the UK/Ireland is similar to that for

shoppers as a whole. Around 52 per cent of them spent nothing in department stores, while 17 per cent spent up to $100. 20 per cent spent between $101 and $500, with another 10 per cent spending more than $500. Their average expenditure in department stores was $184.

Shoppers from countries in Asia other than Japan were more likely to purchase

foods in department stores than those from any other source except New Zealand, and this was reflected in their high average expenditure of $318 in department stores. This was linked to their high probability of spending relatively large amounts in shops of this type. 37 per cent of them spent between $101 and $500, with another 18 per cent spending over $500. Only 35 per cent did not make any purchases in department stores.

Along with the Japanese, shoppers from the United States were the least likely to

purchase goods in department stores. Those who did make department store purchases were not likely to spend large amounts. Their average expenditure in department stores was only $87, the lowest for any of our source markets.

Other Shops

This category covers all shop types in which visitors bought goods to take home,

except duty free shops and department stores. Specialty shops such as handcraft outlets and jewellers are included in this category. Consequently, it is not surprising to find that a high proportion of visitors purchased goods in shops in this category. 79 per cent of visitors who shopped purchased goods in such shops, a much higher proportion than for either duty free shops or department stores.

The average expenditure of visitors in shops other than duty free shops and department stores was $343, much higher than the average for either of those shop types.




Visitors who shopped in these specialty outlets were more likely to

purchase goods of a higher total value than those who shopped in other types of stores. Around 22 per cent of shoppers spent up to $100 in specialty shops. 39 per cent spent between $101 and $500 and 10 per cent between $501 and $1000. A further 7 per cent purchased goods valued at more than $1000.

Other Factors / Markets Japanese shoppers spent an average of $441 in specialty shops, more than

visitors from most other sources. The distribution of shopping expenditure for Japanese visitors was weighted

towards the expenditure categories at each end of the distributions. About 25 per cent of them purchased goods worth more than $500. At the other end of the scale, 31 per cent spent up to $100. The amounts spent by the majority of these were towards the top of that range. 26 per cent made purchases to the valued at between $101 and $500, while 18 per cent did not spend any money in specialty shops.

Asian shoppers were less likely to purchase goods in specialty shops than those

from any other source. 32 per cent of them did not spend money in shops of this type. Those who did were most likely to have spent between $101 and $500 in specialty shops. 36 per cent of them fell in this category. Their average expenditure in specialty shops was $270.

Items Bought By Potential Customers

In the following discussion, the response from visitors are grouped into major

categories as follows:

- Australiana This category collects together items which have uniquely Australian

characteristics. Items in this category include handcraft goods (including paintings, carvings and sculptures), toys, sheepskins/household products (including linen and glassware), opals/gemstones/jewellery, wines and other souvenirs.

The most popular items in this category purchased to take home by visitors in

general were toys, including koalas and kangaroos. 48 per cent of visitors who spent money on shopping bought toys. The second most popular items were handcraft goods, including paintings, carvings and sculptures. Around 23 per cent of shoppers purchased goods of this type.

Opals, jewellery and gemstones were bought by 21 per cent of shoppers. Around

18 per cent of visitors who shopped bought sheepskins or household products such as linen or glassware, and 10 per cent of them purchased wine.

- Duty Free Related Goods

Items in the category are more often purchased in duty free shops than other

shop types. These include alcohol (excluding wines), tobacco products,




confectionery, photographic equipment, perfumes/cosmetics and watches/clocks. It should be noted that certain Australian-related goods are also purchased in duty free shops by some visitors, although they are not included in this category for the purposes of this discussion.

Confectionery, including chocolate, was purchased by 35 per cent of visitors

who shopped, while 21 per cent bought perfumes, cosmetics and toiletries. Around 18 per cent bought photographic equipment, including film. Traditional duty free goods in the form of alcohol (excluding wine) and tobacco products were purchased by 17 per cent and 15 per cent respectively. Watches and clocks were bought by 8 per cent of shoppers.

- Other Goods

Items in this category include foodstuffs (excluding confectionery), clothing,

footwear, books, CD’s/cassettes and travel goods/handbags/wallets. The following discussion analyses the distribution of goods purchased for all visitors

who shopped and for various visitor groupings. The most popular single item purchased by visitors, both in this category and

overall, is clothing. In total 72 per cent of shoppers bought clothing in Australia, with a further 20 per cent buying footwear. It is likely that many of the clothing items had themes relating to Australia in some way, such as printed T-shirts. Another 32 per cent bought books, and 15 per cent purchased CD’s or cassettes. 15 per cent bought items such as travel goods, handbags or wallets, while around 6 per cent purchased meats or other foodstuffs (excluding confectionery).




Number of Visitors by Types of Goods Bought to Take Home and Country/Region of Origin34

Type of Goods New

Zealand Japan Other

Asia USA Canada UK/

Ireland Europe Other Total

Paintings/Carvings/Sculptures/ Hand-crafted Works 5370 52770 25940 20900 2660 18790 18510 3190 148120 Toys (Including Koalas/Kangaroos)

24140 105560 65790 20890 6890 35100 32190 12210 302770

Sheepskins/Linen/Glassware/ Other Household Products 8910 30600 22670 13600 2420 15720 10680 7130 111710 Opals/Jewellery/Gemstones 10200 42920 24770 18310 1960 11640 18370 4650 132830 Wines 10110 3310 14850 8420 1810 9590 10740 1940 60770 Souvenirs 420 1590 1940 850 0 3650 2470 220 11130 Other Alcohol Including Beer, Spirits

37600 21050 14660 3550 2630 20910 6230 2590 109220

Cigarettes/Tobacco 18830 34180 9450 2650 310 19300 6790 3590 95110 Chocolates/Confectionery 37800 66770 69150 11320 3880 17050 10860 7050 223880 Photographic Equipment (incl. Film)

13250 31920 13240 8700 1990 20880 16930 4770 111680

Perfumes/Cosmetics/Toiletries 30720 31930 28620 6350 1120 16930 8380 8190 132220 Watches/Clocks 10430 12560 11030 1750 210 1710 8960 1000 47650 Clothing 87350 85320 92000 43720 9980 58920 53440 23560 454270 Footwear 40520 4090 28660 4560 2530 24670 13310 11310 129650 Books 39470 21280 43110 23240 3640 34590 25710 13610 204650 CDs/Cassettes 18580 2860 18010 6240 1490 18760 19570 11100 96610 Travel Goods/Handbags/ Umbrellas/Wallets Etc. 16420 16460 26340 6650 2590 13650 7330 7630 97060 Meat/Other Foodstuffs 1500 8030 20240 1920 500 3050 4170 1620 41030 Other 15520 3920 5540 3120 340 4800 4700 2870 40800 None 420 80 910 180 0 560 1860 240 4260 Don't Know/Not Stated 0 0 0 0 0 0 81 0 81 Total 107550 137180 125650 59710 13270 85340 74270 31910 634870

Base: Visitors who spent money on shopping while in Australia Number of Visitors by Amount Spent on Goods Bought to Take Home and Age/Sex of Visitor35

Males

Fe-

males

Type of Goods 15-24 25-34 35-44 45-54 55+ Total Males

15-24 25-34 35-44 45-54 55+ Total Female

s

Total

Paintings/Carvings/Sculptures/

Hand-crafted Works 6320 20060 9710 7610 8450 52140 7430 30600 8970 14280 34430 95980 148120 Toys (Including Koalas/Kangaroos)

17640 43110 28130 17440 28720 135050 14200 59590 24100 20010 49820 167720 302770

Sheepskins/Linen/Glassware/

Other Household Products

6340 12500 8130 5460 9170 41590 8130 23090 13770 7030 18090 70120 111710

Wines 2860 11250 7480 5290 3420 30290 2190 8800 7480 7480 4520 30470 60770 Souvenirs 700 180 3330 2090 1390 7680 390 250 1000 610 1210 3450 11130

34 Source: BTR Tourism Shopping Survey 1992 35 Source: BTR Tourism Shopping Survey 1992




CONTINUED...

Males

Fe-males

Type of Goods 15-24 25-34 35-44 45-54 55+ Total Males

15-24 25-34 35-44 45-54 55+ Total Female

s

Total

Other Alcohol Including Beer, Spirits

9060 16940 14460 13110 8740 62300 8480 10920 9810 6530 11180 46920 109220

Cigarettes/Tobacco 10580 19210 8980 4790 5280 48840 5570 17790 9930 5160 7820 46270 95110 Chocolates/Confectionery

12410 33940 20620 19080 13520 99560 17150 46960 24610 22150 13440 124310 223880

Photographic Equipment (incl. Film)

8300 19540 10740 6530 11310 56420 8150 27420 5100 7970 6620 55270 111680

Perfumes/Cosmetics/Toiletries

2070 23750 7640 14730 9320 57500 10440 25120 15830 11740 11600 74720 132220

Watches/Clocks 3290 8210 4530 3690 3820 23540 3010 11970 4530 610 4000 24110 47650 Clothing 24830 68780 39130 37610 34050 204400 31060 86450 44750 40830 46100 249870 454270 Footwear 10210 14860 10570 7530 12270 55430 7300 21700 12560 16330 16330 74220 129650 Books 8820 28830 21590 13770 19060 92070 14820 32890 21150 24400 19320 112580 204650 CDs/Cassettes 8470 15470 12810 4080 4720 45560 9630 8620 13110 11510 8190 51060 96610 Travel Goods/Handbags/

Umbrellas/Wallets Etc.

7370 14700 8210 5290 6510 42080 10150 18130 12590 8990 5120 54980 97060

Meat/Other Foodstuffs

1460 7770 3020 3420 1750 17430 4990 5800 5710 5500 1610 23600 41030

Other 2470 7650 4080 5100 1640 20940 4440 1900 4710 3780 5040 19860 40800 None 40 90 260 140 1390 1910 490 540 0 0 1320 2350 4260 Don't Know/Not Stated

0 80 0 0 0 80 0 0 0 0 0 0 80

Total 35550 89490 56300 49380 57470 288180 39770 104960 53830 57490 89980 346700 634870 Base: Visitors who spent money on shopping while in Australia

The Japanese Visitor

Australiana Japanese visitors were more likely to buy Australiana than those from any other

market. This applied to most of the items in this category. By far the most popular item was toys, with 77 per cent of Japanese shoppers buying fluffy Australian marsupials and other toys.

Second in popularity was hand-crafted goods, followed by opals, gemstones and

jewellery. The proportions of Japanese shoppers to buy these items were 38 per cent and 31 per cent respectively. 22 per cent purchased sheepskin products or household goods. In contrast to the general popularity of Australiana with Japanese visitors, only 2 per cent bought wine, which was the lowest percentage of any source market.

Duty Free Related Goods

Chocolates and other confectionery were more popular purchases with

Japanese and other Asian visitors than with those from any other source. Around half of Japanese shoppers spent money on confectionery. Tobacco products were also more popular with Japanese than with other visitors, with 25 per cent of Japanese shoppers buying cigarettes or other tobacco products. At 15 per cent, the proportion of Japanese shoppers who bought alcohol apart from wine was




similar to that for visitors as a whole. This was in contrast to their very low propensity to buy wine.

Other popular buys were perfumes, cosmetics and toiletries (23 per cent), and

photographic equipment and film (23 per cent). Given that most popular photographic equipment is manufactured in Japan, and consequently is relatively cheap to purchase there, it is likely that Japanese purchases of photographic equipment and film in Australia were mostly for film.

Other Goods

Items in this category were relatively unpopular with Japanese shoppers.

Although 62 per cent of them bought clothing, this was the lowest proportion of all the major source markets. Only around 3 per cent of them bought footwear. 12 per cent purchased travel goods, handbags, wallets or similar items, while only around 2 per cent bought CD’s or Cassettes.

Other Asia

Australiana The pattern of items bought in this category by Asians excluding Japanese

closely matched the pattern for all visitors. Toys were again the most sought after items, with 52 per cent of shoppers from this region purchasing them. Around 21 per cent of them bought hand-crafted works and 20 per cent purchased opals, gemstone or jewellery.

Duty Free Related Goods

In most cases, the proportions of shoppers from this market that bought items in

this category were lower than average. One exception was chocolates and other confectionery. 55 per cent of shopper from Other Asia bought these, which represented the highest proportion of any of the source markets.

Other Goods

With a couple of exceptions, the purchasing patterns of shoppers from this

market for items in this category were similar to those for all visitors. Again, the most popular item was clothing, with 73 per cent of them making this type of purchase.

Travel goods, handbags, wallets and similar items were bought by 21 per cent of

other Asian shoppers, a higher proportion than for shoppers from any other source except those included in the Other Countries category. The other point of interest was the high percentage of Asian shoppers to buy meat and other foodstuffs. Around 16 per cent of them bought goods of this type, significantly more than shoppers from any other source.

Major Markets - Overview Australiana related items were even more popular with Japanese package

visitors than they were for other types of Japanese travellers. Toys were the most




popular with around 80 per cent of Japanese on inclusive packages purchasing items in this category. Hand-crafted goods were bought by 41 per cent of them, while 32 per cent purchased opals, gemstones or jewellery.

The only Australiana related item which was significantly more popular with Asian

inclusive package travellers than with other Asian visitors was toys. Around 71 per cent bought items of this type. As with all Asian visitors, chocolates and confectionery were the only duty free related items to enjoy much popularity with Asian inclusive package visitors. Around 63 per cent of them bought items in this category, more than for other Asian visitors.

Satisfaction Levels Satisfaction levels with all aspects of shopping examined in the survey were

generally very high. Shopping in Australia generally received good marks in all of the aspects of

shopping examined in comparison with shopping in the visitors’ home countries. While large proportions felt there was no difference, significantly more thought these aspects of shopping in Australia compared favorable with their home countries.

Range of Goods Available

Only 2 per cent of shoppers were dissatisfied with the range of goods in shops. 92

per cent were either satisfied or very satisfied, with 37 per cent stating that they were very satisfied with this aspect of shopping. There were no significant differences among major source markets in satisfaction levels with the range of goods available in shops.

An overall 37 per cent of shoppers felt the range of goods was better in Australia

than in their home countries, while only 10 per cent thought it was worse. 44 per cent thought it was the same. Australian shops do not compare as well with shops in the United States in this regard, according to visitors from that country. Only 15 per cent of them believed the range of goods in Australia shops was better than at home, while 25 per cent said it was worse. Around half said it was the same. Approximately 15 per cent of shoppers from UK/Ireland thought Australian shops were better in this regard, and 17 per cent said they were worse. The majority (60 per cent) said they were the same.

A total of 78 per cent of visitors were satisfied with the range of Australian made

goods available. Around 24 per cent said they were very satisfied with the range of Australian made goods in shops. The proportion of shoppers in the ‘don’t know/no answer’ category was quite high at 13 per cent. This probably reflects the fact that this question is relevant only to those who were interested in Australiana related goods. As discussed earlier, the most popular items in this category were toys, including koalas and kangaroos, but still only 48 per cent of shoppers purchased an item of this type. The total dissatisfaction rate was 9 per cent.

Visitors from UK/Ireland showed the most dissatisfaction with the range of

Australian made goods in shops, with around 18 per cent saying they were wither dissatisfied or very dissatisfied. Asians excluding Japanese also had a relatively high overall dissatisfaction rate (13 per cent). Only 2 per cent of Japanese




shoppers were dissatisfied with this aspect of shopping. A high 27 per cent of New Zealand shoppers were in the ‘don’t know/no answer’ category, reflecting their relative lack of interest in Australiana related products.

There may be some room for improvement in the range of goods in duty free

shops, as 8 per cent of those to whom this question was applicable were dissatisfied to some degree with this. The proportion of shoppers in the ‘don’t know/no answer’ category was 17 per cent. Note that the tables referring to the satisfaction levels with aspects of duty free shopping contain data only for visitors who bought or attempted to buy duty free goods.

0

500

1,000

1,500

2,000

2,500

Tho

usan

ds

Level of Satisfaction

Num

ber

of V

isito

rs

Very SatisfiedSatisfied

DissatisfiedVery Dissatisfied

Don't Know

Range of Goods Avaiable in Range of Aust.-Made Good Quality of the Goods in Shop Value for Money of Goods i

Standard of Service in Shop Wrapping of Goods in Shop Display & Arrangement of G

Number of Visitors by Satisfction With Aspects of Shopping in Australia

Base: Visitors who spent money on shopping while in Australia or went into shops and considered buying goodsSource: BTR Tourism Shopping Survey 1992

Quality of Goods Overall, 91 per cent of shoppers were satisfied with the quality of goods in shops,

with around 4 per cent dissatisfied. However, only 26 per cent said they were very satisfied with this aspect of shopping, indicating that this may be an area which needs to be watched closely to ensure shoppers do not become disenchanted by perhaps relatively small reduction in quality of goods in the future.

The overall dissatisfaction rate was not significantly different from the average for

all of the major source markets except UK/Ireland and Japan. Around 9 per cent of shoppers from UK/Ireland were dissatisfied to some degree with the quality of goods. In contrast, only around 1 per cent of Japanese shoppers were dissatisfied.




Australia compared less favorable with home countries with respect to the quality of goods in shops than for other aspects of shopping. Only 28 per cent thought Australia was ahead in this regard, but nevertheless, only 10 per cent considered Australian shops to contain poorer quality goods. Most (55 per cent) thought the quality of goods in Australia was similar to that in their home country.

Three quarters of shoppers from countries outside our major source said the

quality of goods in Australian shops was better than in their home country, with very few saying it was worse. Asians from countries other than Japan said much the same, with over half believing quality in Australia was better. However, only 13 per cent of Japanese shoppers believed quality was better in Australian shops compared with those at home, and 25 per cent said it was worse. This is in stark contrast to the very low dissatisfaction rate with quality of goods in Australian shops expressed by the Japanese. This indicates that the Japanese were prepared to put up with lower quality goods here, or that they were loath to criticise this aspect of Australian shopping for some reason.

Shoppers were happy with the quality of goods in duty free shops, with only

around 1 per cent expressing any dissatisfaction. 17 per cent were in the ‘don’t know/no answer’ category.

Number of Visitors by Level of Satisfaction With the Quality of Goods Available in Shops and Country/Region of Origin36 Level of Satisfaction

New Zealand

Japan Other Asia

USA Canada UK/ Ireland

Europe Other Total

Very Satisfied 28470 41300 37060 16900 3440 15080 14560 12790 169590 Satisfied 71550 91610 78980 37970 8920 59380 53630 17860 419900 Dissatisfied 5290 1290 7020 1120 270 7290 2180 780 25230 Very Dissatisfied 0 380 270 770 0 400 360 0 2180 Don't Know 5860 3170 4610 3290 640 3200 3950 1980 26680 Total 111160 137740 127940 60050 13270 85340 74670 33410 643580 Base: Visitors who spent money on shopping while in Australia or who went into shops and considered buying goods





0

50

100

150

Tho

usan

ds

Country of Origin

Num

ber

of V

isito

rs

New ZealandJapan

Other AsiaUSA

CanadaUK/Ireland

EuropeOther

Very Satisfied

Satisfied

Dissatisfied

Very Dissatisfied

Don't Know

Number of Visitors by Level of Satisfaction With the Quality of Goods Available in Shopsand Country/Region of Origin

Base: Visitors who spent money on shopping while in Australia or who went into shops and considered buying goodsSource: BTR Tourism Shopping Survey 1992

Number of Visitors by Level of Satisfaction With the Range of Goods Available in Duty Free Shops and Country/Region of Origin37 Level of Satisfaction

New Zealand

Japan Other Asia

USA Canada UK Ireland

Europe Other Total

Very Satisfied 10610 30150 7690 1110 570 4970 1210 2190 58490 Satisfied 36870 52290 33370 10890 3020 22300 20540 4040 183300 Dissatisfied 6140 4760 3590 970 500 2900 1160 450 20470 Very Dissatisfied 900 70 520 0 0 2100 1510 80 5180 Don't Know 9350 4130 13450 5900 150 10540 8560 2330 54410 Total 63870 91390 58620 18860 4240 42800 32970 9080 321850

Base: Visitors who spent money on shopping while in Australia or who went into shops and considered buying goods





Number of Visitors by Quality of Goods in Australia Compared With that in the Visitors' Home Country and Country/Region of Origin38 New

Zealand Japan Other

Asia USA Canada UK/

Ireland Europe Other Total

Much Better 9440 1530 20010 1400 0 1260 2130 12930 48700 Better 21330 16670 44330 7430 1110 15950 11600 11500 129920 Same 70960 64920 48200 43430 10950 53050 52030 6700 350230 Worse 2410 34720 9010 3750 710 8340 4270 400 63620 Much Worse 0 370 290 710 0 0 570 120 2070 Don't Know 7030 19530 6090 3320 500 6740 4060 1770 49040 Total 111160 137740 127940 60050 13270 85340 74670 33410 643580

Base: Visitors who spent money on shopping while in Australia or who went into shops and considered buying goods

0

50

100

150

Tho

usan

ds

Country of Origin

Nu

mb

er o

f V

isit

ors

New ZealandJapan

Other AsiaUSA

CanadaUK/Ireland

EuropeOther

Much Better

Better

Same

Worse

Much Worse

Don't Know

Number of Visitors by Quality of Goods in Australia Compared With that in the Visitors' Home Countryand Country/Region of Origin

Base: Visitors who spent money on shopping while in Australia or who went into shops and considered buying goodsSource: BTR Tourism Shopping Survey 1992





Number of Visitors by Level of Satisfaction With the Quality of Australian Arts and Crafts Available in Shops and Main Purpose of Trip39 Level of Satisfaction Holiday Visiting

Relatives Business Other Total

Very Satisfied 103200 25370 7380 6860 142810 Satisfied 219710 67210 20840 23820 331580 Dissatisfied 6360 1680 1090 1540 10670 Very Dissatisfied 1260 2260 1190 0 4720 Don't Know 75810 40240 13210 15850 145100 Total 406340 136750 43710 48070 634870 Base: Visitors who spent money on shopping while in Australia or who went into shops and considered buying goods.

0

100

200

300

400

500

Tho

usan

ds

Type of Visitor

Num

ber

of V

isito

rs

Holiday Visiting Relatives Business Other

Very Satisfied

Satisfied

Dissatisfied

Very Dissatisfied

Don't Know

Number of Visitors by Level of Satisfaction With the Quality of AustralianArts and Crafts Available in Shops and Main Purpose of Trip

Base: Visitors who spent money on shopping while in Australia or who went into shops Source: BTR Toursim Shopping Survey 1992

Value for Money This aspect of shopping attracted a higher dissatisfaction rate than any other,

although it was still only 11 per cent. The number who were satisfied overall represented 86 percent of all shoppers, although only 23 per cent said they were very satisfied. Although there may be some trade off between value for money and quality, it may pay shop managers to examine the possibility of lowering mark ups on some products in order to generate increased profits through significantly higher turnover. The response of shoppers to this question of value for money certainly indicates that there is no room for complacency in this area.


“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section MARKET ANALYSIS EXISTING CUSTOMER PROFILE & POTENTIAL MARKETS (DOMESTIC)



Asians excluding Japanese were the most dissatisfied with value for money of

goods, with a new dissatisfaction rate of 22 per cent, while 16 per cent of shoppers from the United States expressed some level of dissatisfaction. Only around 1 per cent of Japanese shoppers were unhappy with the value for money of goods in shops.

The proportion of shoppers who said value for money was worse in Australia was

14 per cent, a lot lower than the proportion saying that the cost of goods was higher. This indicates that higher costs do not always correlate directly with worse value for money. However, a figure of 14 per cent is still fairly high. Together with a relatively high dissatisfaction rate with the value for money in Australian shops, this indicates that this is an area to be worked on.

The pattern for individual source markets was similar to that for the cost of goods

in shops. 30 per cent of Asians excluding Japanese and Canadians and 31 per cent of shoppers from the United States said value for money was worse in Australia than at home. However, only 6 per cent of Japanese believed the same, indicating a preparedness to pay high prices if they considered the value for money was there. This conclusion is supported by the low level of dissatisfaction with value for money in Australian shops shown by Japanese shoppers.

Around 10 per cent of shoppers were dissatisfied to some degree with the cost of

duty free goods in Australia. The dissatisfaction rate was higher for this aspect of duty free shopping than for any other. 17 per cent of shoppers were in the ’don’t know/no answer’ category.

EXISTING CUSTOMER PROFILE & POTENTIAL MARKETS (DOMESTIC)

Major markets will include:

• Asians - tourist trade. • Manufacturers in Australia and overseas.

The target Groups may be defined as follows (see key definitions next page): Major Group Significance

Broad Comments

Oceania and Antarctica Not significant Middle East & Nth Africa Not significant Sth. Asia Significant, and growing in

significance Target 25 y.o. holiday makers shopping in a wide variety of situations

Africa (excl. Nth. Africa) Not significant Europe & the Former USSR Moderately significant Wide target group SE Asia NE Asia Highly significant,

especially short-stay Japanese

Target 25 y.o. + holiday and business travellers: Japanese shopping in specialty stores

The Americas Significant Wide target group COUNTRIES UNDER MAJOR GROUP HEADINGS




Oceania and Antarctica

Europe & the Former USSR

Middle East & Nth Africa

SE Asia NE Asia Sth. Asia The Americas

Africa (excl. Nth. Africa)

Fiji Austria Israel Brunei China India Canada South Africa New Caledonia

Belgium Other Indonesia Hong Kong Other U.S.A. Other

New Zealand Denmark Malaysia Japan Other Norfolk Island

Former USSR & Baltic States

Philippines Korea

Papua New Guinea

France Singapore Taiwan

Vanuatu Germany Thailand Other Other Greece Other Ireland Italy Netherlands Norway Spain Sweden Switzerland United

Kingdom

Other SHORT-TERM MOVEMENT (a) - ARRIVALS OF OVERSEAS VISITORS COUNTRY OF RESIDENCE (b) AND PURPOSE OF JOURNEY (c) YEAR ENDED 30 JUNE 1996 Source: Aust. Bureau of Statistics: Overseas Arrivals and Departures, 3401.0, June 1996

Year Ended 30

June 1994 1995 1996Country of residence (b) ('000) ('000) ('000) % change

94-96% change

95-96Major Group- Not Stated 5.7 1.0 1.7 -82.46% 70.00%Middle East and North Africa

22.2 25.7 30.4 15.77% 18.29%

Southern Asia 17.2 23.0 31.2 33.72% 35.65%Africa (excluding Nth Africa)

41.1 42.0 46.9 2.19% 11.67%

The Americas 354.2 369.1 392.3 4.21% 6.29%Southeast Asia 431.7 537.0 614.3 24.39% 14.39%Oceania and Antarctica 590.2 608.6 722.1 3.12% 18.65%Europe and the Former USSR

676.5 747.4 756.1 10.48% 1.16%

Northeast Asia 1,030.2 1,181.5 1,371.2 14.69% 16.06%Total (d) 3,169.0 3,535.3 3,966.2 11.56% 12.19% (d) includes not stated.




0

500

1000

1500

Year Ended 30 June

('000

)

1994 1995 1996

Not Stated Middle East and No Southern Asia Africa (excluding Nt The Americas

Southeast Asia Oceania and Antarc Europe and the For Northeast Asia

SHORT-TERM MOVEMENT (a) - ARRIVALS OF OVERSEAS VISITORSCountry of residence (b)

Source: Aust. Bureau of Statistics: Overseas Arrivals and Departures, 3401.0, June 1996

-100%

-50%

0%

50%

100%

0

500

1,000

1,500

Country of residence (b)

% C

han

ge

(per

an

nu

m)

To

tal

Nu

mb

er o

f V

isit

ors

'000

Not StatedMiddle East and North Afric

Southern AsiaAfrica (excluding Nth Africa)

The AmericasSoutheast Asia

Oceania and AntarcticaEurope and the Former US

Northeast Asia

% change 94-96 % change 95-96 Total Visitors (1996)

SHORT-TERM MOVEMENT (a) - ARRIVALS OF OVERSEAS VISITORSIncrease in Visitors By Country of Residence

YEAR ENDED 30 JUNE 1996Source: Aust. Bureau of Statistics: Overseas Arrivals and Departures, 3401.0, June 1996




0

100

200

300

400

TREND ESTIMATE

Tho

usan

ds

Jan Feb March April May June July Aug Sep Oct Nov Dec

Other

Japan

New Zealand

United Kingdom

U.S.A.

Singapore

Germany

Hong Kong

Malaysia

Canada

Papua New Guinea

ARRIVALS OF OVERSEAS VISITORS BY COUNTRY OF RESIDENCE FOR SELECTED COUNTRIES (a)JANUARY 1995 TO DECEMBER 1995 ('000)

Source: Aust. Bureau of Statistics: Tourism Indicators, 8634.0 - December Quarter 1995

VISITOR ARRIVALS: COUNTRY OF RESIDENCE - JAPAN A. MAIN PURPOSE OF JOURNEY (a) BY INTENDED LENGTH OF STAY DECEMBER QUARTER 1995 ('000) Source: Aust. Bureau of Statistics: Tourism Indicators, 8634.0, December Quarter 1995

Intended length of stay Main Purpose of Journey

Under 1 week

1 wk. & under 2

wks

2 wks. & under 1

mth

1 mth. & under 2

mths

2 mths. & under

3 mths

3 mths & under 6

mths

6 mths & under 1

yr

Total (b)

Employment - 0.1 - - 0.1 - 0.2 0.4 Convention/conference 0.5 0.4 0.1 - - - - 1.0 Education 0.1 0.2 - - 0.1 0.5 0.4 1.3 Visiting friends/relatives 0.9 1.6 1.5 0.3 0.2 0.2 0.1 4.8 Other and not stated 3.0 2.4 0.3 0.1 - 0.1 0.3 6.2 Business 3.6 2.4 0.5 0.2 0.1 - 0.3 7.1 Holiday 77.1 90.0 6.6 1.0 0.4 0.8 1.4 177.3 Total 85.2 97.1 9.0 1.6 0.9 1.6 2.7 198.1




(0.2%)(0.5%)(0.7%)(2.4%)

(3.1%)

(3.6%)

(89.5%)

Employment

Convention/conference

Education

Visiting friends/relatives

Other and not stated

Business

Holiday

VISITOR ARRIVALS: COUNTRY OF RESIDENCE - JAPANA. MAIN PURPOSE OF JOURNEY (a) BY INTENDED LENGTH OF STAY

Source: Aust. Bureau of Statistics: Tourism Indicators, 8634.0, December Quarter 1995DECEMBER QUARTER 1995

0

20

40

60

80

100

Intended length of stay

('000

)

Under 1 week1 wk. & under 2 wks

2 wks. & under 1 mth1 mth. & under 2 mths

2 mths. & under 3 mths3 mths & under 6 mths

6 mths & under 1 yr

Employment Convention/conference Education Visiting friends/relatives

Other and not stated Business Holiday

VISITOR ARRIVALS: COUNTRY OF RESIDENCE - JAPANA. MAIN PURPOSE OF JOURNEY (a) BY INTENDED LENGTH OF STAY





0

20

40

60

80

Age Group (years)

('000

)

0-14 15-24 25-34 35-44 45-54 55-64 65 +

Employment

Convention/conference

Education

Visiting friends/relatives

Other and not stated

Business

Holiday

VISITOR ARRIVALS: COUNTRY OF RESIDENCE - JAPANB. AGE BY MAIN PURPOSE OF JOURNEY (a)


The Target Market The above data can therefore provide a profile of the Company’s primary target

market as follows:

VISIT OR ARRIVALS: COUNT RY OF RESIDENCE - JAPANB. AGE BY MAIN PURPOSE OF JOURNEY (a )DECEMBER QUART ER 1995('000)

Source: Aust. Bureau of Statistics: Tourism Indicators, 8634.0, December Quarter 1995

Age Group (years)

Ma in purpose of journey (a ) 0-14 15-24 25-34 35-44 45-54 55-64 65 + T ota lT arge tGroup

Employment - 0.1 0.1 0.1 0.1 - - 0.4 0.3Convention/conference - 0.1 0.3 0.3 0.2 0.1 - 1.0 0.9Education 0.1 0.9 0.3 0.1 0.1 0.1 - 1.5 0.6Visiting friends/relatives 0.5 1.0 1.7 0.7 0.4 0.4 0.2 4.4 3.2Other and not stated 0.4 0.7 2.1 0.9 1.0 0.6 0.5 5.8 4.6Business - 0.4 2.0 1.4 2.1 0.9 0.1 6.9 6.4Holiday 7.5 32.0 71.9 16.8 21.3 17.7 10.0 169.7 127.7T ota l 8.5 35.0 78.0 19.9 24.9 19.7 10.8 188.3 143.7T ARGET GROUP (Shaded):Target Group: 25 to 64Total Group: 0 to 65+




0

50

100

150

200

Main purpose of journey (a)

('000

)

EmploymentConvention/conference

EducationVisiting friends/relatives

Other and not statedBusiness

Holiday

Total Group: 0 to 65+ Target Group: 25 to 64

VISITOR ARRIVALS: COUNTRY OF RESIDENCE - JAPANCOMPARISON BETWEEN TOTAL AND TARGET GROUP


Sydney Olympics 2000 The Department of Tourism, Small Business and Industry has established a 1800

telephone number for firms interested in responding to business opportunities resulting form the Sydney 2000 Olympic Games.

The number to call is 1800 068 132 to register an interest in future business

opportunities.

The line will be open: 9.00 am to 4.45 pm - Monday to Thursday 9.00 am - 4.30 pm - Friday

A Web page is also being established through which Queensland businesses’ can

access information, and provide input and direction on ways government can respond to opportunities.

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section MARKET ANALYSIS POTENTIAL MARKETS (EXPORT)



An officer has been appointed to liaise with industry associations, regional groups, individual firms and Sydney organising committees to ensure information is being forwarded in a timely manner40.

POTENTIAL MARKETS (EXPORT)

Merchandise exports and imports by commodity41 The following table shows the values of major commodities exported and

imported in 1994-95 and their percentage of the total value of exports and imports, together with the value of all exports and imports, at broad commodity level, for 1992-93 to 1994-95. For the year ended June 1995, exports were $67,063 million, up $2,489 million (4%) on the previous financial year. The most significant contributors to this rise were textile fibres and their wastes, up $612 million (15%) to $4,589 million; non-ferrous metals, up $610 million (16%) to 4,509 million; and sugar, sugar preparations and honey, up $413 million (31%) to $1,729 million.

$0

$1

$2

$3

$4

$5

Tho

usan

ds

Year of Export / Import

$ M

ILLI

ON

Exports 92/93 Imports 92/93 Exports 93/94 Imports 93/94 Exports 94/95 Imports 94/95

Leather, leather manufa Rubber manufactures, n. Cork & wood manufactur Paper, paperboard & arti Textile yarn, fabrics, mad

Non-metallic mineral ma Iron & steel Non-ferrous metals(a)(b) Manufactures of metals,

Merchandise exports and imports by commodityAUSTRALIA

Source: Unpublished International Merchandise Trade data.Source - Australian Bureau of Statistics, 1996 Year Book Australia, ABS Cat.1301.0.30.001

40 Source: Dept. Tourism, Small Business & Industry - leaflet 41 Primary Source - Australian Bureau of Statistics, 1996 Year Book Australia, ABS Cat.1301.0.30.001




Merchandise exports and imports by commodity42 Source: Unpublished International Merchandise Trade data. ($ million) 1992-93 1993-94 1994-95 Commodity description Exports Imports Exports Imports Exports Imports Crude materials, inedible, except fuels

Hides, skins & furskins, raw 388 5 392 3 486 4 Oil seeds & oleaginous fruits 80 68 121 81 110 133

Crude rubber (incl. synthetic & reclaimed) 11 104 10 117 12 153 Cork & wood 465 571 519 659 633 613

Pulp & waste paper 12 157 16 126 44 160 Textile fibres & their wastes (not manufactured

into yarn or fabric) 4,017 144 3,977 162 4,589 188

Crude fertilisers & crude minerals (excl. coal, petroleum & precious stones)(b)

369 147 358 141 367 182

Metalliferous ores & metal scrap(c) 7,572 165 7,315 141 7,600 169 Crude animal & vegetable materials, n.e.s. 197 146 208 165 226 193

Crude materials, inedible, except fuels Total - b)(c)

13,112 1,506 12,917 1,595 14,066 1,794

Manufactured goods classified chiefly by material

Leather, leather manufactures, & dressed furskins, n.e.s.

284 134 368 146 515 166

Rubber manufactures, n.e.s.(b) 108 812 120 954 145 1,045 Cork & wood manufactures (excl. furniture)(a) 66 259 92 288 98 329 Paper, paperboard & articles of paper pulp, of

paper or of

paperboard(b) 259 1,419 258 1,518 267 1,859 Textile yarn, fabrics, made-up articles, n.e.s., &

related

products 307 2,144 385 2,246 464 2,455 Non-metallic mineral manufactures, n.e.s.(a)(b) 558 1,033 666 1,080 737 1,214

Iron & steel 1,211 945 1,496 1,041 1,579 1,287 Non-ferrous metals(a)(b) 3,996 465 3,900 498 4,509 679

Manufactures of metals, n.e.s.(b) 551 1,569 625 1,674 693 1,876 Manufactured goods classified chiefly by material - Total(a)(b)

7,341 8,779 7,911 9,445 9,006 10,910

Machinery & transport equipment - Total(b) 6,415 25,911 7,502 28,911 8,076 35,158 Miscellaneous manufactured articles, n.e.s. 722 3,733 798 4,160 852 4,462 Miscellaneous Goods - Total(b) 1,887 8,918 2,106 9,798 2,306 10,709 Food & live animals - Total(a) 11,679 2,228 12,967 2,478 12,549 2,821 Beverages & tobacco - Total 417 438 506 467 550 522 Mineral fuels, lubricants & related materials -Total(b)

12,102 3,857 11,116 3,441 11,244 3,668

Animal & vegetable oils, fats & waxes - Total(a)(b)

192 190 207 203 262 232

Chemical & related products, n.e.s. Total(a)(b) 1,996 6,625 2,351 7,045 2,671 8,010 Commodities & transactions n.e.c.Total(d)(e) 5,562 1,122 6,991 1,086 6,334 797 Total 60,702 59,575 64,574 64,470 67,063 74,621

(a) Excludes exports commodities subject to a confidentiality restriction. (b) Excludes imports commodities subject to a confidentiality restriction. (c) Excludes some commodities subject to a 'No Commodity Details' restriction. (d) Includes exports and imports commodities subject to a confidentiality restriction.

42 Source - Australian Bureau of Statistics, 1996 Year Book Australia, ABS Cat.1301.0.30.001




(e Includes revisions of $62 million in exports for November 1992 resulting from the omission of certain export entries for that month and also includes $10 million of exports for June 1995 which cannot be allocated to commodity classification codes.

$0

$200

$400

$600

Year of Export / Import

$ M

ILL

ION

Exports 92/93 Exports 93/94 Exports 94/95 Imports 92/93 Imports 93/94 Imports 94/95

Merchandise exports and imports by commodityLeather, leather manufactures, & dressed furskins, n.e.s.





$0

$1

$2

$3

$0

$10

$20

$30

$40

$50

Tim

es 1

E+

09

Tim

es 1

E+

09Year

Tex

tile

, cl

oth

ing

, fo

otw

ear

& l

eath

er

To

tal

Man

ufa

ctu

rin

g

1992-93 1993-94 1994-95

Textile, clothing, footwear & leather

Total Manufacturing

Merchandise exports by industry of originAUSTRALIA


Overseas Cargo - by Commodity43 The data below provides details of inward and outward overseas sea cargo

movements classified according to the Australian Transport Freight Commodity Classification (ATFCC).

INWARD AND OUTWARD OVERSEAS SEA CARGO BY COMMODITY, 1990-91(a)($ million) Source: Shipping and Air Cargo Commodity Statistics, Australia (9206.0). ATFCC Inward Outwarddivision Title cargo cargo 21 Hides, skins and furskins(b) 8 15261 Leather, leather manufactures(c) 55 13983 Travel goods, handbags and similar containers(c) 152 184 Articles of apparel and clothing accessories 684 28 Sub-Total of above Commodities 899 320 Total all commodities 35,116 42,995

(a) The recorded value of inward cargo is the free on board (f.o.b.) Customs value. The value of outward cargo is the f.o.b. transactions value expressed in Australian dollars.

(b) Excludes import commodities regarded as confidential. These items are included in Division 99.

(c) Excludes export commodities regarded as confidential. These items are included in Division 99.

43 Primary Source - Australian Bureau of Statistics, 1995 Year Book Australia, ABS Cat.1301.0




26.12 AUSTRALIAN MERCHANDISE IMPORTS: MAJOR SOURCE COUNTRIES, 1992-93 Source: Foreign Trade, Australia: Merchandise Exports and Imports, 1992-93 (5410.0).

$0

$2

$4

$6

$0

$20

$40

$60

$80

Tim

es 1

E+

09

Tim

es 1

E+

09

Year

Text

ile, c

loth

ing,

foot

wea

r &

leat

her

Tota

l Man

ufac

turi

ng

1992-93 1993-94 1994-95

Textile, clothing, footwear & leather

Total Manufacturing

Merchandise imports by industry of originAustralia


“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section MARKET ANALYSIS MARKET SHARE



MARKET SHARE When determining market share, the following information needs to be taken into

account:

• Raw material supply: 800 skins per day (approximately 600 calves and 200 deer skins)44 - approximately 11% of the Australian calf skin market will need to be acquired.

• Deer skins (will be sourced via personal French contact of Ms Scally - deer is also available from New Zealand on a quota basis - care will need to be exercised)

• Calf skins will be acquired from the wet-blue tanneries across Australia depending upon quality (because of this issue, it might not be able to source all skins at different times of the year from Australia.

• In relation to Tourist goods: the product returns back to Company from sub-contractor (required for quality control), then distributed to selected stores likely to be attractive to the market: e.g. some select duty free stores and hotels (approx. 40 outlets throughout Australia), as well as specialty stores.

• As a wholesale supplier of quality skins, a strong export trade will need to be developed

Trading for the end product will require accessing only a fraction of the multi-

billion dollar international tourist spending money in Australia, and even less share required for the wholesale skin market which by any measurement is huge.

Critical to success will be the supply to niche markets whom require quality

products. This applies at both the wholesale and retail levels. As mentioned previously in this Report, a window of opportunity exists for the supply of high quality finished leather to select manufacturers whom will be convinced of the apparent need to supply to the international tourist who is currently frustrated with available leather products (especially having an Australian theme). Responsiveness to customer needs and preferences is critical.

COMPETITION (DOMESTIC) Whilst it may be successfully argued that there is no domestic competition

meeting market needs of the top end, there are a number of tanneries operating in Australia.

Whilst the industry is dominated by a very few large players, there are a number

of specialty providers with relatively small operations. This is considered in the following data sets:

44 Calf skin (1kg) and deer skins (1.5 kg) measured on a square foot basis: calf skin and deer skins (7

square feet)

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section MARKET ANALYSIS COMPETITION (DOMESTIC)



Leather Tanning & Fur Dressing BUSINESS LOCATIONS: COUNTS BY STATES, ABS BUSINESS REGISTER, JUNE 1995 Business Location Counts (Number) Leather Tanning and Fur Dressing Source: ABS, Business Register Counts, Customised Report No. 8502, September 1996.

<5 5 to 9 10 to 19 20 to 49 50 to 99 100 or more

employees employees employees employees employees employees Total New South Wales 16 7 5 5 2 3 38 Victoria 14 6 3 4 3 3 33 Queensland 3 - 1 4 1 2 11 South Australia 5 1 3 1 - 1 11 Western Australia 5 2 3 1 1 1 13 Tasmania 2 1 - 1 - - 4 Northern Territory 1 - - - - - 1 Aust. Capital Territory 1 - - - - - 1 Total 47 17 15 16 7 10 112

(33.9%)

(29.5%)

(9.8%)(9.8%)

(11.6%)

(3.6%)

(0.9%)(0.9%)

New South Wales

Victoria

Queensland

South Australia

Western Australia

Tasmania

Northern Territory

Aust. Capital Territory

BUSINESS LOCATIONS: COUNTS BY STATES, ABS BUSINESS REGISTER, JUNE 1995

Leather Tanning and Fur Dressing

Source: ABS, Business Register Counts, Customised Report No. 8502, September 1996.




Leather and Leather Substitute Product Manufacturing BUSINESS LOCATIONS: COUNTS BY STATES, ABS BUSINESS REGISTER, JUNE 1995 Business Location Counts (Number) Leather and Leather Substitute Product Manufacturing Source: ABS, Business Register Counts, Customised Report No. 8502, September 1996.

<5 5 to 9 10 to 19 20 to 49 50 to 99 100 or more employees employees employees employees employees employees Total

New South Wales 27 12 10 2 - - 51 Victoria 22 6 3 7 - 1 39 Queensland 26 5 1 - - - 32 South Australia 3 1 - - - - 4 Western Australia 4 5 - - 1 - 10 Tasmania 0 0 0 0 0 0 0 Northern Territory 1 - - - - - 1 Aust. Capital Territory 0 0 0 0 0 0 0 Total 83 29 14 9 1 1 137

(37.2%)

(28.5%)

(23.4%)

(2.9%)

(7.3%)

(0.0%)(0.7%)

New South Wales

Victoria

Queensland

South Australia

Western Australia

Tasmania

Northern Territory


Leather and Leather Substitute Product Manufacturing





Leather Tanning & Related Product Manufacturing By amalgamating the above information, one can gain an insight into the

industry as a whole, as per the graphs below:

0

20

40

60

80

100

State

Bu

sin

ess

Lo

cati

on

Co

un

ts (

Nu

mb

er)

New South WalesVictoria

QueenslandSouth Australia

Western AustraliaTasmania

Northern TerritoryAust. Capital Territory

Leather Tanning and Fur Dressing Leather and Leather Substitute Product Manufacturing


Leather Tanning and Related Product Manufacturing


“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section MARKET ANALYSIS COMPETITION (INTERNATIONAL)



0

50

100

150

Number of Employees

Bu

sin

ess

Lo

cati

on

Co

un

ts (

Nu

mb

er)

<5 5 to 9 10 to 19 20 to 49 50 to 99 100 or more

Leather Tanning and Fur Dressing Leather and Leather Substitute Product Manufacturing

SIZE OF ENTERPRISES BY NUMBER OF EMPLOYEESSIZE OF ENTERPRISES BY NUMBER OF EMPLOYEESSIZE OF ENTERPRISES BY NUMBER OF EMPLOYEESSIZE OF ENTERPRISES BY NUMBER OF EMPLOYEES

Leather Tanning and Related Product Manufacturing


COMPETITION (INTERNATIONAL) All the major fashion name labels have entered into the accessories business,

which integrally involves the production of leather-based products, e.g. Bucci, Gucci, Christian Dior, etc.

However, in terms of capturing the large tourist market for end-products, it will be

important to highlight the fact that Minaji will be an Australian manufacturer producing Australian goods.

International competition is fierce. However, the markets for finished leather

products is huge. Minaji will need to develop market niches whereby the name is synonymous with

unusual high quality. The development of strong linkages with Italian (in particular), French and other European manufacturers is integral to the Company’s success. This should be a major strategy for future development.

CUSTOMER REACTION & PUBLIC PERCEPTION It will be imperative to capture the unique enviro-firendliness of the “natural

leather” product, and avoid the often held view that anything to do with a

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section MARKET ANALYSIS CUSTOMER REACTION & PUBLIC PERCEPTION



tannery is ecologically disastrous. For this reason, particular attention must be paid to the marketing aspects addressed later in this report.

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section ENVIRONMENTAL FACTORS ENVIRONMENTAL MANAGEMENT PLANNING - REPORT TO THE IPSWICH CITY

COUNCIL



15. ENVIRONMENTAL FACTORS

ENVIRONMENTAL MANAGEMENT PLANNING - REPORT TO THE IPSWICH CITY COUNCIL

An extract of this Report is provided below:

P R I V A T E & C O N F I D E N T I A L Mr Rob Sil Conservation & Landscape Management Ipswich City Council P.O. Box 191 Ipswich Qld 4305 V E G E T A T I O N & P R O P E R T Y R E P O R T : Lot 225 on Crown Plan CH3132 (County Churchill, Parish Jeebropilly) Coopers Rd, Ebenezer Qld. SCOPE & INSTRUCTIONS

I refer to your notification (as per discussions 23 August, 1996) concerning the

need to verify the presence of “a significant habitat of rare or threatened species of flora or fauna” in relation to the above property. This request follows enquiries made by Ms Catherine Scally in relation to Environmental Management Planning.

We understand that this request primarily relates to the possibility of the presence

of Marsdenia coronata (slender milkvine) - a small, slender climber previously presumed extinct, but now understood to exist on approximately 40 sites throughout the Ipswich region.

I advise that I have had the opportunity to inspect the subject property on 26

August, 1996, in the company of local vegetation expert Mr Lloyd Bird45, and now have pleasure in reporting as follows:

GENERAL DESCRIPTION & SUMMARY

The property, whose address is Coopers Road, Ebenezer, is a 26.7090 hectare (66

acre) vacant rural grazing property, with no physical (fixed) building structures. Reticulation is provided via two dams.

The property has been severely degraded by cattle, with the natural

environment having been completely altered from its original state and condition.

45 Mr Bird has provided the majority of technical vegetation information contained in this report.


COUNCIL



Native pasture is dominated by blue couch (Digitaria didactyla) and Callide Rhodes grass (Chloris gayana). There is a wide variety of other pasture and common aquatic water species present. Trees found over the whole property consist largely of Moreton Bay Ash, blue gum and spotted gum (Eucalyptus tessellaris; Eucalyptus tereticornis) and narrow leaf iron bark (Eucalyptus crebra). There are significant areas of re-suckering. No evidence of any endangered or threatened fauna was present on the property.

The only environmentally significant46 plant species found were two very small

paperbark ti-trees (Melaleuca tamariscina subsp. irbayna). However, this is a marginal habitat for this species and suitability for propagation / regeneration to any significant extent is most unlikely.

PASTURES AND VEGETATION

OVERVIEW Native pasture is dominated by blue couch (Digitaria didactyla) in the more

lighter loam areas of the property, with the major introduced species found being the tropical grass Callide Rhodes grass (Chloris gayana). There is a wide variety of other pasture and common aquatic water species present.

Ideally, (from an agricultural production point of view), pasture renovation could

include the introduction of legumes such as White Clover that would provide added frost resistance and naturally occurring nitrogen. It would also provide adequate nutrition for the winter diet. As at date of inspection, existing grass cover is excellent, however fodder crops such as oats would need to be grown if fattening of cattle in winter is contemplated.

Trees found over the whole property consist largely of Moreton Bay Ash, blue gum

and spotted gum (Eucalyptus tessellaris; Eucalyptus tereticornis) and narrow leaf iron bark (Eucalyptus crebra). There are significant areas of re-suckering. The Consultant estimates that approximately 30% of the subject property is moderately forested.

Except for the presence of very minor prickly pear infestation, the property has

been kept free of noxious weeds and animals. There is no cropping conducted on the property.

FAUNA The property has been severely degraded by cattle and may have been fully

cleared or essentially razed at least two times from the original vegetation. The natural environment has been completely altered, with domestic grazing animals having eaten many species present on the property.

The larger of the two dams was host two several black swans on the date of

inspection, together with one family of common ducks.

46 Environmentally significant in terms of a significant rare or threatened species


COUNCIL



There is no under-story available for the encouragement of natural breeding of small birds.

Whilst none were sighted, the presence of various eucalypt tree species would

render the property suitable for hosting a small number of koalas. However, there was also no evidence of any such animals present on the property.

SIGNIFICANT PLANT SPECIES The only environmentally significant47 plant species found over the whole

property were two very small (less than 25 cm tall) paperbark ti-trees (Melaleuca tamariscina subsp. irbayna). However, this is a marginal habitat for this species and suitability for propagation / regeneration to any significant extent is most unlikely.

OTHER VEGETATION SPECIES Other vegetation species present on the property are summarised below:

Botanical name Common name

Acacia farnesiana Chloris gayana Callide Rhodes grass Dianella revoluta blueberry lily Dichondra repens kidney weed Digitaria didactyla blue couch Eucalyptus crebra narrow-leaved ironbark Eucalyptus melanophloia silver ironbark Eucalyptus tereticornis blue gum, forest blue gum Eucalyptus tessellaris carbeen or Moreton Bay ash Glycine clandestina twining glycine Helichrysum ramossimum yellow buttons Lagenifera gracilis rosette daisy Lomandra multiflora Marsilea hirsuta Marsilea mutica shiny narcloo (fern) Melaleuca tamariscina subsp. irbayna paperbark ti-tree48 Myoporum debiele Nymphaea capensis Cape or blue waterlily Opuntia spp. Prickly Pear Oxalis corniculata creeping oxtails, yellow wood-sorrel Paspalum dilatatum Paspalum Botanical name Common name

Petalostigma pubescens quinine tree Philydrum lanuginosum woolly waterlily Phyllantus virgatus Portulaca pilosa hairy pigweed Resurrection Chielanthes sieberi

47 Environmentally significant in terms of a significant rare or threatened species 48 Two very small species only found as noted previously

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section ENVIRONMENTAL FACTORS LICENSE REQUIREMENTS: THE ENVIRONMENTAL PROTECTION ACT (QLD) 1994



Sida rhombifolia Typha sp. bull-rush

LICENSE REQUIREMENTS: THE ENVIRONMENTAL PROTECTION ACT (QLD) 1994

The following is an extract from letter (dated 26 September, 1996) provided by

the Consultant to the Ipswich City Council. It provides an update of the latest position in relation to the Company’s obligations / requirements under existing legislation, including the Environmental Protection Act (Qld) 1994.

Ms Pamela Payne Projects Officer Ipswich City Council PO Box 191 Ipswich Qld 4305

By Fax: 07-38106644 (originals following by mail)Copy to: Ms Catherine Scally

Dear Pamela,

Many thanks for your letter / fax 23 September 1996, and for your prompt attention. In relation to the matters raised, I comment / provide information as follows:

Environmental Impact Statement

Our client finds it difficult to comprehend how it is that the letter from the Department of Environment was not any more than a matter of ‘‘giving their opinion’’. It is even more untenable that the letter from the Department of Local Government & Planning could be construed as the ‘‘final decision’’ especially where our understanding is that the Department of Environment has ultimate responsibility for implementing the Environmental Protection Act (Qld) 1994 and associated legislation.

We would maintain that the more likely explanation is that there is very poor inter-departmental communication, and that there is dis-agreement amongst various authorities as to the need for an EIS. In view of our understanding of legislative responsibility, the quite apparent dis-agreement / confusion reigning amongst government departments, and quite clear advice from the DOE, in all fairness to the client, the decision should be to waive requirement for an EIS, with any further embarrassment saved on the part of local authorities. The following comments refer:

Further Environmental Considerations

Our client readily appreciates that environmental management is a politically sensitive issue nowadays, and Councils are understandably reluctant to depart at all from accepted guidelines in licensing a new facility, unless they can be certain that ‘‘the public interest’’ is being served, and that community sentiment is strongly in favour of the establishment of the facility.

We also appreciate that in the absence of any strong precedents relating to overall compliance under the relatively new Environmental legislation will mean that any and all Councils will be




extremely reluctant to commit themselves to approving any new project having environmental overtones without a very detailed submission.

In this case, we would argue that there would be compelling reasons for establishment of the facility, since the concept not only involves a finishing only facility (as against a tanning facility) but also the development of an ‘‘Environmental Park’’ for the protection of native flora and fauna. Not to mention significant employment opportunities.

In addition, the please note the following extract from the Draft Moreton Shire Strategic Plan:

‘‘Because of its size and location, the south-western parcel (south-west of Cooper’s Road) would be suitable, subject to appropriate environmental controls, for ‘‘special industry’’ or ‘‘difficult to locate activities’’ estate including for example tanneries, wool scouring plants, abattoirs, waste disposal and recycling depot, production of animal feedstocks, chemicals, explosives, sand blasting or disposal of metals, oils, paint and medical waste’’.

‘‘...The possible future use of Ebenezer to accommodate the type of industries previously mentioned is supported in principle by both Moreton Shire Council and the State Government’’.

Further at the insistence of Ipswich Council, we have already addressed the issue of verifying the presence (or not) of ‘‘a significant habitat of rare or threatened species of flora or fauna’’ in relation to the above property. This request followed incorrect information held by Council in relation to the presence of Marsdenia coronata (slender milkvine) previously presumed extinct, but now understood to exist on approximately 40 sites throughout the Ipswich region. In this instance the property has been severely degraded by cattle, with the natural environment having been completely altered from its original state and condition. In contrast to Council held information / mapping data, Marsdenia coronata is not present on the property in question.

Taking all the above into account, and in view of the ‘‘debacle’’ over the need for an EIS with conflicting advice from two departments, the situation underscores an apparent level of uncertainty about the intention of the government in the administration of the Environmental Protection Act. Nevertheless, our client has complied with the present policy of the Council which is to require a ‘‘Request for Terms of Reference for an Environmental Impact Statement’’ pursuant to Section 8.2 of the Local Government (Planning and Environment) Act which has been lodged with the Department of Housing, Local Government and Planning. (This particular Legislation defines ‘‘Designated Developments’’ requiring an EIS).

Therefore, and given that we are able to provide a very detailed specification of operating parameters, it may be strongly argued that there is no need for the Ipswich Council to insist furnishing of a formal Environmental Impact Statement.

Maunsell & Partners

We have followed up with Maunsell Pty Ltd (Consulting & Civil Engineers) their progress in regard to environmental planning work currently being undertaken for the whole of the area. They advise as follows:

1. They are not completing a formal EIS. However, some of the information may prove useful to us.

2. A draft report will be available next week

3. We cannot obtain a copy of the draft report direct from Maunsell. It requires the direction of Garth Moore from Ipswich Council whom Maunsell consider to be their primary client. They will not take direction from DTSBI (nee DBIRD) who are also funding Ms Scally’s




feasibility study (i.e. our job). Could you kindly arrange a copy of this Report to be sent to us, and advise costs (if any?).

Water Supply to the Site

The Project has a water requirement of 80 cubic metres (or 80,000 litres) per day. Water quality requirements are appended.

I have followed up the matter of water supply availability with Idemitsu’s Robert Mathieson who advises:

1. Their clean water supply is provided to the administration building (located approx. 1km east of the property in question) via a 2 inch polythene pipe which is in turn connected to Council main.

2. Robert is currently investigating just where they are connected to and will revert ASAP

3. As a general principle, Idemitsu do not consider themselves as property developers: the prospect of upgrading water supply to their land-holdings in the area holds no attraction to them and is not part of their ‘‘core focus’’. I gained the distinct impression that they see such responsibility laid squarely with prospective purchasers possibly entering into arrangements (if at all) with local government and / or other third parties.

Clearly, we would not wish to connect to the 2 inch poly but to the Council main, however we are not aware as to the closest proximity to the property in question (Lot 225 on Crown Plan CH3132, County Churchill, Parish Jeebropilly, Coopers Rd, Ebenezer).

If you were able to ask Andrew Underwood (Council’s Acting Work’s Manager) for his preliminary estimate of costs to supply water to the site from the existing infrastructure, it would be most appreciated.

Pam, I would appreciate your / Paul Pisale’s advice / follow up as required, and look forward to your response at the earliest time possible. Kind regards,

Yours sincerely,

Gary Garner

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section ENVIRONMENTAL FACTORS INTERNATIONAL ENVIRONMENTAL MANAGEMENT SYSTEM STANDARDS (ISO

14000)



TANNING AND LEATHER INDUSTRY

A summary of the quality requirements for water in the leather and tanning industry is given in the Table below.

The tanning industry uses water for the following processes: preservation, soaking, unhairing, fleshing, scudding, neutralising, bating, tanning, dyeing, fat-liquoring, drying and finishing the hides (CCREM 1991). In general, the water should be free of iron and maganese to prevent staining and discolouration. Water should also have low concentrations of free CO2, bicarbonate hardness, colour and turbidity. The presence of biocarbonate and free CO2 may cause deposition of calcium carbonate precipitates during liming, creating dye-resistant spots. High concentrations of bicarbonate may cause hides to swell (CCREM 1991).

Table: Water quality guidelines for tanning and leather industry (concentrations in mg/L unless otherwise indicated)

Parameters Tanning processes General finishing processes

Colouring

Alkalinity (CaCO3) <130.0 NS* NS pH 6.0-8.0 6.0-8.0 6.0-8.0 Hardness (CaCO3) <150.0 NS** ND Calcium <60.0 NS** ND Chloride <250.0 <25.0 - Sulfate <250.0 <250.0 - Iron <50.0 <0.3 <0.1 Maganese - <0.2 <0.01 Carbon chloroform extract - <0.2 ND Colour (units) <5.0 <5.0 <5.0 Coliform bacteria NS*** NS*** - Turbidity (NTU) ND ND ND

NS: Not specified; ND: Not detectable; NTU: Nephelometric turbidity unit * Water is usually acceptable as received ** Lime softened *** Should meet raw water for drinking water supply guidelines Sources: Hart (1974), Ontario Ministry of the Environment (1974), CCREM (1991)

INTERNATIONAL ENVIRONMENTAL MANAGEMENT SYSTEM STANDARDS (ISO 14000)

The Quality Link

The Environmental Management System (EMS) series of standards could be

considered the ‘second generation’ of management standards following the success of ISO 9000. Similarities between the systems include an emphasis on management leadership, incorporation in company policy and a focus on prevention rather than detection and correction. Other parallels include; a process of evolution and growth in line with corporate objectives, the intention to improve company profitability and competitiveness, full exploration of internal

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section ENVIRONMENTAL FACTORS INTERNATIONAL ENVIRONMENTAL MANAGEMENT SYSTEM STANDARDS (ISO

14000)



processes and external expectations, and finally the importance of acquiring, providing and controlling information49.

The EMS IS014000 series are not a “green standard”; rather, it recognises the need

for businesses to have “responsible” standards in place to meet regulatory, commercial, social, and stake-holder requirements.

ISO14000 doesn’t set specific environmental policies, objectives or targets. These

are for individual organisations to set based on their own unique internal and external factors. What it does provide is the framework for developing a formal, internationally recognised environmental management system, and establishing clear realistic objectives which can be easily measured and evaluated.

Unlimited Potential50 The benefits of International Environmental Management System standards (EMS)

are limited only by an organisation’s commitment to the process. A few examples include:

• lower costs through conservation of materials and energy

• maintaining good public and community relations

• satisfying investor criteria and improved access to capital

• obtaining insurance at a reasonable cost

• enhanced image and market share

• where required, providing the basis for third-party certification

• improved ability to dispose of waste

• meeting customers environmental expectations

• ease of site selection and obtaining permits

• the development of new and better technology

• improved industry/government relations

49 This section adapted from Standards Australia circular - ISO 14000, November 1995 50 Adapted from Standards Australia brochure - ISO 14000- Introducing the New Environmental

Management System Standards, November 1995

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section MARKETING & SALES ACTIVITIES OVERALL STRATEGY



16. MARKETING & SALES ACTIVITIES

OVERALL STRATEGY The Company's overall strategy should be one based on the development of a

consistent image of a Company capable of reliably producing in reasonable volume - consistent quality, medium to premium priced products, concentrating on value-added products wherever possible.

There is a need to "zero in" on high profit (margin) product lines and customers.

The Company should note that this may not necessarily be consistent with high turnover or high volume, though this may be the case for some lines. These concepts should form part of the Company's overall strategy for marketing and sales, which is to say:

"A consumer orientated producer of consistent

quality, value added premium priced leather products"

Action: Company to adopt Marketing Strategy as specified, ensuring that activities undertaken fit within the ambit of the Company's overall strategy"

QEDS (Queensland Export Development Scheme)

Note: As at date of writing, with recent changes to government services and new

budget allocations, the future of the QEDS program is in some doubt. The following information therefore relates to the scheme as it has been to the current time, and is subject to change.

QEDS is a scheme designed to encourage marketing activities in order to raise export performance in the sourcing of overseas markets. It is jointly operated by the Department of the Premier, Economic and Trade Development and the Department of Business Industry & Regional Development. If the Company Is considered eligible, a maximum grant of up to $100,000 in any twelve month period may be provided. Funding is categorised as follows: � Category 1 - Overseas Market Research (market research by professionals or the applicant. or in-market product

testing). � Category 2 - Product and Packaging Redesign and Modification (product/packaging redesign by professionals or applicant, including

associated market research. cost of product certification or implementation Quality Management Systems)

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section MARKETING & SALES ACTIVITIES PRIME MARKETS TARGETED



� Category 3 - Export Preparedness (Skills Development) engagement of professional assistance in assisting export market

penetration � Category 4 - Engagement of o Foreign Specialist (engagement of foreign market / product specialist) � Category 5 - Engagement of an Export Manager (costs of employing a full time export manager - non-director). Applications

for assistance should be mode through DTSBI or the Qld Dept. Primary Industries (Agribusiness section).

Action: QEDS application to be progressed for the purpose of conducting appropriate overseas market research, product testing, and/or the engagement of an Export Manager.

Overview of Possible Strategies

The Company, primarily through their potential involvement in export markets, will

need to avoid the trap of becoming price takers as against price makers. This is because of the fact that some product will be sold direct into wholesale markets. The only reasonable options open to the Company to continue with this trend are:

1. To become involved in value-adding activities 2. To market and secure contracts for niche markets or continuation of their

push into export markets.

The first of these two alternatives can in part be achieved through

• Investigation into value adding activities as suggested previously, including the possibility of forming Joint Venture projects for the development of new products or entry into new markets / market niches (taking the opportunity to "piggy back" onto joint venture projects).

• the Company's possible involvement in a Business Network Group The second option offers perhaps the most immediate, lucrative area of involvement. Further, there needs to a long term "survival" strategy, and the prospect of continued "shoring up" of domestic sales with export contracts is nevertheless considered to be sound.

PRIME MARKETS TARGETED The Company intends to target the following primary tourist markets:

• Japan, Taiwan, etc (Asian countries generally), plus the European market. • Other Asian including Singapore

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section MARKETING & SALES ACTIVITIES PRIME MARKETS TARGETED



... from a strategic point of view, the Company is advised to adopt the following process:

1. Target only one or two overseas markets in the initial phase of direct

exporting (i.e. not working through agents). With regard to sending product overseas, exporting is simply too time

consuming, complex and expensive process to target more than one, or at most two markets, at the one time. This would especially apply in the early stages of expansion into the export market.

2. Arrange for appropriate training through schemes such as the Export

Market Entry Program which is designed to assist Company personnel in their education of exporting, export strategic planning, and market entry approach.

3. In conjunction with (2) above, arrange follow up meetings with those clients

overseas with whom the Company already has made contact and with whom they have already made initial consignments.

4. Conduct targeted market research into those markets where prospects for

success seem most likely, and incorporate results into a formal Marketing / Business Plan.

The Consultant recommends that the Company should proceed to this phase as

soon as practical, and arrange assistance with its implementation through a well designed Marketing or Business Plan which must address all the above - and other - issues. Assistance for this should be available through one of a number of government assistance programs which are detailed later in this report. This could be done concurrently with, or post the proposed QEDS program.

The Company may also wish to investigate the employment / contracted

engagement of an Export Manager and obtain assistance for this purpose where possible51. The Consultant considers that this would best be done upon completion of the aforementioned planning process.

Action: Terms of Reference to be developed as soon as possible for a comprehensive Marketing Plan, probably concurrently or post the proposed QEDS program. Plan to be developed should include the identification of suitable export markets (and of course domestic markets) and their potential, proposed timing and costs of market entry, regulatory requirements.

Rationale: To provide a means by which the Company may enter an effectively

targeted and well researched marketing program, providing management with a well defined vision, and enhancing prospects

51 For example, the suggested QEDS program detailed earlier; or alternatively, Austrade's EDMG (Export

Market Development Grant Scheme), detailed later in this report.

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section MARKETING & SALES ACTIVITIES SELLING STRATEGIES



for success especially in the area of export sales. The end result being higher profitability. It should be designed to examine the opportunities available for new products.

Proposed Marketing Plan should incorporate targeted market research, staff

training, and strategic plan for export market entry.

SELLING STRATEGIES The advantages of the “natural leather” product are numerous and should be

exploited when attempting to sell product. For example, one of the properties of animal hides and skins is their ability to

absorb tannic acid, a plant extract, and other chemical substances that prevent them from decaying, make them resistant to wetting, and keep them supple and durable. In addition, the fibrous structure of hides and skins, which is retained in the leather, allows air and water vapor to pass through--thus, for example, perspiration will evaporate from leather shoes52.

Advertising & Promotional Activities An amount of 1.00% of gross sales volume has been allowed for advertising and

promotion in the budget. This equates to the following amounts: Base Model Cash Flow ($ Expenditure - Advertising and Promotion)

Yearly Total Yearly Total Yearly Total Yearly Total Yearly Total Year 1 Year 2 Year 3 Year 4 Year 5

$129,494 $268,379 $305,116 $363,284 $393,898 The above amounts will allow for the development of a comprehensive

promotional campaign which will include:

1. The development of Marketing and Sales Brochures 2. Advertising in key publications 3. Participating in key trade shows 4. Merchandising 5. Advertising: electronic media 6. Other

Trigger points established for the purpose of deciding entry to the above

campaigns are provided as follows:

52 Source: The New Grolier Multimedia Encyclopedia (1993). Grolier Inc.




Advertising &Promotion -Affordability

Monthly SalesLevel

(Minimum) $

Monthly SalesLevel

(Maximum) $

MaximumAdvertising

FundsAvailable

($ per qtr)

1 2 3 4 5 6

See Key below for above numberingAllocation = $0 $50,000 $26,500 NO NO NO NO NO NO

1.00% $50,000 $100,000 $28,000 YES YES ? NO NO NOof Gross Sales $250,000 $500,000 $40,000 YES YES YES YES ? NO

Volume, plus (p.a.) $500,000 $1,000,000 $55,000 YES YES YES YES YES YES$100,000 $1,000,000 above $55,000 + YES YES YES YES YES YES

Est. minimum Funds Required per quarter (generally excludes "up-front" capital costs)KEY Cost Per Quarter Cumulative1 1. The development of Marketing and Sales Brochures 8,0002 2. Advertising in key publications 4,000 12,0003 3. Participating in key trade and and industry shows 12,000 24,0004 4. Merchandising 8,000 32,0005 5. Advertsing: electronic media 20,000 52,0006 6. Other 10,400 62,400

Total $62,400 The above “trigger points” should be under continual revision in the light of results

being achieved, in accordance with the revision of calculations below (i.e. maximum funds available for advertising and promotion, to be matched against estimated minimum funds required for the type of strategy):

National Coverage Strategy Est. minimum

Funds Required per

quarter53

Cumulative Total ($)

1. The development of Marketing and Sales Brochures 8,0001. Advertising in key publications 4,000 12,0001. Participating in key trade shows 12,000 24,0001. Merchandising (including “in-store promotions”) etc. 8,000 32,0001. Advertising: electronic media including TV and local

radio; in-flight aeroplane promotions, etc. 20,000 52,000

1. Other (allow 10% contingency) 10,400 62,400

Total $62,400

Action: Confirm and implement National Marketing Strategy, establishing ‘‘trigger points’’ based on likely quarterly sales results.

All advertising and promotion should take account of the following, based on

market research data obtained:

53 (generally excludes "up-front" capital costs)




1. MINAJI is a caring, environmentally friendly organisation.

2. MINAJI is synonymous with high quality.

3. MINAJI is a “natural” alternative.

4. MINAJI products can be “designer-made” to order.

5. Individual product promotions can highlight their individual advantages as covered earlier in this document. However, the above “broad concepts” should not be lost - keep the message simple and clear.

A comprehensive advertising and promotional campaign will need to be

developed by the Sales staff in conjunction with management, as soon as possible. This would include the development of all aspects of the campaign including industry show / trade fair participation, advertising mediums and formats, marketing material, merchandising items (e.g. caps, T-shirts, toys, etc.).

The development of this campaign is considered to be a critical success factor. It

must be done in conjunction with third party professional assistance

Action: Comprehensive advertising and promotional campaign to be developed as soon as possible, upon employment of sales staff.

Rationale: Maximises the chances of the Company’s products succeeding in

the market place. (Having the ‘‘best product’’ does not always guarantee success).

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section MARKETING & SALES ACTIVITIES IDEAS & THE INVESTOR



Pricing

PRODUCT SALE PRICES (AVERAGES ONLY) - BASE MODEL54

Unit Buy In Price (per skin)

Av. Sq. ft per Unit

Recommended

Retail Per Sq.

ft

Recommended

Retail Per Skin

Retail Margin

Wholesale Net Wholesale

CALF SKINS - AVERAGE PRICES

each $26.00 8.00 $12.50 $100.00 45.00% $55.00 $55.00

DEER SKINS - AVERAGE PRICES

each $50.00 8.00 $25.00 $220.00 45.00% $121.00 $121.00

OTHER SKINS (Ostrich, Emu, Crocodile, Sea Snakes, Fish, Other)

each $50.00 8.00 $25.00 $220.00 45.00% $121.00 $121.00

Manufactured Garments each $0.00 $0.00 100.00% $0.00 $0.00

0

50

100

150

200

250

TYPE OF SKIN

AV

ERA

GE

PRIC

ES (

SKIN

S)

CALF SKINSDEER SKINS

OTHER SKINSMANUFACTURED GARMENT

Buy In Price (per skin)

Wholesale Margin

Retail Margin (est. only)

PRODUCT SALE PRICES (AVERAGES ONLY)LEATHER PROCESSING FACILITY - EBENEZER

BASE MODEL

Manufactured Garments have not been budgeted

IDEAS & THE INVESTOR Ideas and the Investor is a showcase for Australian new ideas, innovations,

products and small businesses needing investor assistance, e.g. money,

54 Above prices are estimates of average price received for all sizes

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section MARKETING & SALES ACTIVITIES IDEAS & THE INVESTOR



manufacturing, management expertise - provided in a simple two step advertising forum.

• Step 1 - In the first instance “Eyecatcher” advertisements are show on the

worldwide “National Ideas and Small Business Internet Database” for a period of 12 months, or until matched, whichever occurs first.

• Step 2 - Those with new ideas and innovations however, are also shown in

an 8 page monthly printed publication (300 ideas and innovations in ten issues per yea). Over 130,000 monthly publications (estimated viewing audience of over half a million people) will reach readers throughout Australia.

Investors or interested parties can then simply contact the person named in

the advertisement55.

55 Contact the National Coordinator, on (08) 373 2116 or; Head Office, Ideas and the Investor Aust. Pty.

Ltd., C/- SA Employers Chamber of Commerce & Industry Inc., 198 Greenhill Rd, EASTWOOD SA 5063.

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section PRODUCTION & PROCESSING OPERATIONS OVERVIEW OF PRODUCTION PROCESSES



17. PRODUCTION & PROCESSING OPERATIONS

OVERVIEW OF PRODUCTION PROCESSES The following flowchart depicts the major processing and production operations

to be conducted (shown in more detail as an Attachment to this Report):

EFFLUENTSettling Ponds

Chromates andeffluent for

re-treatment

DyeingAgents

STOCKRECEIVED

(Wet/Blue Skins)

STOCKPILE(Palleted)

Skins wrappedin plastic

SHAVINGRETANNING

Wet/Blue skinsplaced in drums(chrome tanned)

SKINS "HORSED UP"(Racked for a period

of time)

DYEING(Completed in smallstainless steel drum)

SKINS RACKED OUTSKIN STRETCHING

(Toggling Unit)completed dry

DRYING TUNNEL(Hot Air)

MEASURING MACHINE(Skins measured

- square feet)

IRONSKINS

CLASSIFYSKINS & CUT

(Sorting & Trussing))

FINISHINGSpraying

(usine solvents, etc.)

DELIVERYINTERNAL

PRODUCTION(OWN USE)

ACCESSORIESMANUFACTURING

(SUB-CONTRACTEDOUT)

WHOLESALEMARKET

DRY WORK(includes conditioning

machine)

CLASSIFYSKINS

(Grading)

Skins able tobe kept stockpiledfor up to a week

Milling

Buffing

DELIVERY

non-garments

2 or 3items

Stacking

The above processes may be split into four (4) major stages:

1. Preliminaries: Delivery, classification and stockpiling

2. Re-tanning (re-treatment of wet blue skins, which are placed in drums)

3. Pre-finishing activities (skins are “horsed up”56, colour dyed, stretched, dried using hot air, then ironed)

4. Finishing (this involves classification and cutting57, spraying58, and final conditioning which includes staking, buffing and milling. The latter operations are all carried out “dry”).

56 Skins are racked for a period of time - set out. 57 Includes sorting and trimming

Figure 10 - Production & Processing Operations

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section PRODUCTION & PROCESSING OPERATIONS CAPACITY



CAPACITY Production will commence at 800 skins per day (initially), equivalent to

approximately 20,000 skins per month. This is comprised of: Skin Type Approx. Production

per month (number)Approx. Production per week (number)

Approx. Production per day (number)

Calf 18,250 4,212 750Deer 1,825 421 75Other 0 0 0Total 20,075 4,633 825 Assumptions for calculating the above data include:

• 6 Operation days per week (normal) • 20 Days closed for maintenance - per annum • 0 Days closed for holidays, etc. - per annum • 292 Number of days operated per annum • 24.33 Number of days operated per month • 5.62 Number of operational days per week (average) • 10% Ratio of Deer : Calf Skins

0

5

10

15

20

Tho

usa

nds

Production Period

No.

of s

kins

Per Month Per Week Per Day

Calf

Deer

Other

LEATHER PROCESSING FACILITY - EBENEZER

PRODUCTION LEVELS

BASE MODELAt 100% Production level (Year 1)

58 Skins are sprayed with various solvents

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section PRODUCTION & PROCESSING OPERATIONS FACTORY LAYOUT / WORK FLOW EFFICIENCY



This will result in the following sales volumes:

0

10

20

30

40

Tho

usa

nds

no.

Dec-96 Jun-97 Dec-97 Jun-98 Dec-98 Jun-99 Dec-99 Jun-2000 Dec-2000 Jun-2001

Total Product Sales - Calf Skins Total Product Sales - Deer Skins OTHER SKINS


PRODUCT SALE VOLUMES

MONTHLY SALES VOLUMES SHOWNTOTAL SKIN PRODUCTION

FACTORY LAYOUT / WORK FLOW EFFICIENCY The Company has already engaged the services of an engineer to assist with

design of the factory and layout. A draft is available. Essentially the building is approximately 3,000 square metres, with budget allocation of $2,007,074.

The building will be a purpose-built construction, with room for future expansion.

Features include:

• Office and meeting room complex including staff training room(s)

• Workshop, Chemical store, laboratory, external gas storage area, separate sorting trimming, measuring and packing room.

• Sufficient space for additional finishing machine and related equipment to allow for future expansion.

• Separate inwards and outwards loading docks, with associated hard-standing areas

• Separate truck and visitor access

• “Up-market” facade (environmentally sympathetic) - important for eco-tourist activities.

• Bitumen access to Coopers Road.

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section PRODUCTION & PROCESSING OPERATIONS SUPPLIER RELATIONSHIPS



Action: Instigate design audit of manufacturing / workshop facilities utilising assistance through appropriate NIES program.

Rationale: Audit would facilitate improvements in work-flow and design,

resulting in increased throughput and efficiency. The above process may be able to carried out by an independent consultant,

specialising in manufacturing design, with possible funding through a DBIRD59 N.I.E.S.60 program. A recommended suitable consultant able to be retained for this purpose is Mr. Bob Dawes61.

SUPPLIER RELATIONSHIPS Securing a reliable supply of quality “unmarked” skins is fundamental to the

success of the enterprise, and possibly represents one of the greatest challenges for management. Therefore, the Company will be sourcing skins from a number of reliable local suppliers in order to reduce risk. The primary suppliers will be:

1. Shannon Guilfoyle, Asia Pacific Pty Ltd (Sydney), and

2. Michael Tarney (primary producers of wet-blue calf skins), South Australia. The Project depends upon the supply (initially) of around 800 skins per day, and

preliminary enquiries indicate that at this level supply can be reasonably assured. Amounts greater than this may depend upon the sourcing of suitable skins from other States (e.g. Victoria), and / or importing skins.

Because of the problems associated with ticks and brandings in the case of

Queensland, and subsequent lower quality “marked” skins, it is unlikely that this State will be a primary skin supplier.

59 Dept. Business, Industry, & Regional Development 60 National Industry Extension Service 61 Robert Dawes & Associates, 14 Dulhunty St, Chapel Hill, Qld 4069. Telephone 07-8783497, Facsimile 07-

3786139.

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section RESEARCH & DEVELOPMENT CURRENT TECHNOLOGY



18. RESEARCH & DEVELOPMENT

CURRENT TECHNOLOGY Base technology used but application differs. Two laboratories have been

included in the design which will ensure continual product improvements and new techniques.

Innovation in Relation to Overseas counterparts62

There is very little comparative data available - especially for the leather industry

specifically, as Innovation surveys are fairly new and data from the latest round of surveys in Europe are not yet available. Data are however available for Norway and Ireland, even if on slightly different bases. Before making any international comparisons one needs to make allowances for these differences. However, the Australian data can be manipulated to be on a consistent basis with each of them separately. The results of these analyses are shown in the tables below. The consistency can only be perfectly achieved at the total Manufacturing level, as the industry classifications are slightly different between the countries.

Proportion of manufacturing businesses which are innovative in Australia, Norway and Ireland by manufacturing subdivision(a) Source: Statistics Norway, Norwegian Innovation Survey, 1993; Forfa's, Evaluation and Statistics

Unit, Technological Innovation in Irish Manufacturing Industry, preliminary findings from the Irish Innovation Survey, November 1994; Innovation in Australian Manufacturing (8116.0).

(%) 5 or more

employees 10 or more

employees

Manufacturing subdivision Australia(b) Norway Australia(b) Ireland Food, beverages & tobacco 41 37 52 . .Food . . . . . . 21Drink & tobacco . . . . . . 35Textile, clothing, footwear & leather 33 . . 41 . .Clothing/footwear 32 . . . . . .Textiles, wearing apparel, leather . . 30 . . . .Textiles . . . . . . 36Wood & paper products 18 . . 29 . .Wood products . . 24 . . . .Paper products . . 62 . . . .Wood products, furniture . . . . . . 20Paper products, printing . . . . . . 26Printing, publishing & recorded media 42 . . 51 (c)Printing & publishing . . 35 . . (d)Petroleum, coal, chemical & associated products

55 . . 69 . .

62 Primary source: Australian Bureau of Statistics, 1996 Year Book Australia, ABS Cat.1301.0.30.001




Chemical, rubber, plastic products . . 66 . . . .Chemicals/pharmaceuticals . . . . . . 45Non-metallic mineral products 43 . . 50 42Mineral products . . 38 . . . .Metal products 39 36 47 . .Basic metals . . . . . . . .Basic/fabricated metals . . . . . . 26Machinery & equipment 54 . . 60 . .Machinery . . 52 . . 38Instruments . . 55 . . 40Electrical appliances & supplies . . 57 . . . .Electric/electronic . . . . . . 61Transport . . 38 . . 41Other manufacturing 39 37 47 . .Furniture . . 38 . . (d) Total 41 40 51 33

(a) Industry categories align broadly with international standards but have been presented at different levels. (b) Australian data has been recalculated using the size cutoff to allow direct comparison. (c) Included above with Paper products. (d) Included above with Wood products.

The conclusion is that compared to manufacturers in Norway, Australian

manufacturers have a fairly similar propensity to innovate. The results for most industries seem to be similar. There are however differences by size of business, with a much smaller proportion of small Norwegian businesses considered innovative. The apparent similarity in the totals, despite the differences by business size, reflects the different industrial structures between the two countries.

0

20

40

60

Country

%

5 or more employees Australia(b)Norway

10 or more employees Australia(b)Ireland

Textile, clothing, footwear & leather Total Manufacturing

Proportion of manufacturing businesses which are innovative in Australia, Norway and Ireland

By manufacturing subdivision(a)

Source: Statistics Norway, Norwegian Innovation Survey, 1993; Forfa' s, Evaluation and Statistics Unit, Technological Innovation in Irish Manufacturing Industry, preliminary findings from the Irish Innovation Sur

(a) Industry categories align broadly with international standards but have been presented at different levels.




Compared to manufacturers in Ireland, Australian manufacturers seem to be significantly more innovative. This phenomenon occurs across all industries and all size of business.

The analysis shows that innovative activity is fairly widespread. However it does

not answer the question of how much innovative activity each particular innovating business undertook. An insight can be obtained from the share of a firm's income spent on innovative activities. The table below shows the results of this analysis on both an industry and a size basis.

Innovation intensity of technologically innovative businesses63 Innovation intensity (% of sales) Source: Innovation in Australian Manufacturing (8116.0). Employment size Less than 5 15 5-9 6 10-19 4 20-49 5 50-99 4 100-199 4 200-499 4 500-999 2 1,000 or more 3 Selected ANZSIC subdivisions Food, beverages & tobacco mfg 2 Textile, clothing, footwear & leather mfg 3 Wood & paper product mfg 5 Printing, publishing & recorded media 5 Petroleum, coal, chemical & associated product mfg 3 Non-metallic mineral product mfg 4 Metal product mfg 2 Machinery & equipment mfg 6 Other manufacturing 4 Total 4 An ABS survey showed that one in every three manufacturing businesses in

Australia undertook some technological innovation over the period July 1991 to June 1994. A business was considered to be technologically innovative if during the period it introduced one or more new, or substantially changed, products or if it used new, or substantially changed, processes to manufacture its products.

There are substantial differences across industries and sizes of business in the rate

at which technological innovation occurs. Forty six per cent of businesses in the Petroleum, coal, chemical and associated product manufacturing industry were technologically innovative; this industry was the one most technologically innovative, followed by the Machinery and equipment industry (42% of businesses). At the other end of the scale, only 15% of businesses in the Wood and paper product manufacturing industry were innovative. The incidence of

63 Source: Australian Bureau of Statistics, 1996 Year Book Australia, ABS Cat.1301.0.30.001

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section RESEARCH & DEVELOPMENT PATENTS, COPYRIGHT AND INDUSTRIAL DESIGNS



innovative activity in all other manufacturing industries was in the 30-37% range. These results are shown in the table below:

Businesses undertaking technological innovation by manufacturing subdivision Manufacturing subdivision % Food, beverages & tobacco mfg 35.6 Textile, clothing, footwear & leather mfg 29.9 Wood & paper product mfg 15.1 Printing, publishing & recorded media 33.5 Petroleum, coal, chemical & associated product mfg 46.4 Non-metallic mineral product mfg 36.7 Metal product 32.0 Machinery & equipment mfg 41.9 Other manufacturing 31.0 Total manufacturing 33.7 Source: Innovation in Australian Manufacturing (8116.0).

0 10 20 30 40 50

Man

ufa

ctu

rin

g s

ub

div

isio

n

%

Food, beverages & tobacco mfg

Textile, clothing, footwear & leather mfg



Petroleum, coal, chemical & assoc. mfng


Metal product

Machinery & equipment mfg

Other manufacturing

Businesses undertaking technological innovation by manufacturing subdivision

Australia

Source: Innovation in Australian Manufacturing (8116.0).Source - Australian Bureau of Statistics, 1996 Year Book Australia, ABS Cat.1301.0.30.001

PATENTS, COPYRIGHT AND INDUSTRIAL DESIGNS Any expenditure incurred by a taxpayer in obtaining or seeking the grant of a

patent, registration of a copyright or design, or extension of the term of a patent or design, is deductible to the extent that the expenditure was incurred. The deduction may be allowable even though the taxpayer was unsuccessful in

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section RESEARCH & DEVELOPMENT FUTURE KEY RESEARCH REQUIRED



obtaining the grant or extension, providing that the expenditure was incurred for the purposes of producing assessable income.

Capital expenditure incurred on the development or purchase of such a patent,

registered design or copyright, or for the purchase of a license to use such an asset, is deductible over the effective life of the right. The deduction commences from the first year in which the right is used for the purpose of producing assessable income.

In this instance, it is not expected that any of the processes used by Minaji will be

patentable as it will be utilising existing (known) technology. Ongoing product improvement will, however, be a feature of research and

development carried out - e.g. quality research.

FUTURE KEY RESEARCH REQUIRED No particular key research is required to be undertaken in order to commence

operations. There are a number of centres undertaking significant research and

development, e.g. the Centre Internationale du Cuir - Based in Lyon (typical of such organisations, it is extremely hard to get any information from this source, being a private organisation subsidised by the French government).

However, it is likely that various product research Projects will be carried out in

partnership with tertiary institutions and / or government organisations such as the CSIRO Leather Research Centre, e.g. elasticised leather is currently being researched in Australia. For this reason, budget allocations have been made.

Research and Experimental Development Activity in Australia, and the Degree of Expenditure by the Leather Industry64

Research and experimental development (R&D) activity in the business context is

systematic investigation or experimentation involving innovation or technical risk, the outcome of which is new knowledge, with or without a specific practical application or new or improved products, processes, materials, devices or services. R&D activity extends to modifications to existing products/processes.

Total expenditure on R&D by manufacturing business enterprises in 1993-94

remained virtually unchanged compared with 1992-93. Wood and paper product (up 132%) and Other manufacturing (up 34%) had the largest percentage increases over the period. Printing, publishing and recorded media (down 21%) and Metal product (down 13%) had the largest percentage decreases.

64 Primary Source: Australian Bureau of Statistics, 1996 Year Book Australia, ABS Cat.1301.0.30.001

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section RESEARCH & DEVELOPMENT FUTURE KEY RESEARCH REQUIRED



18.15 Expenditure on research and experimental development by manufacturing Source: Research and Experimental Development, Business Enterprises, Australia (8104.0). ($ million) 1992-93 1993-94 Type of expenditure Industry subdivision Capital

expenditure Labour

costs(a) Other

current expenditure

Total

Food, beverage & tobacco mfg 136.1 14.0 64.9 61.0 139.8 Textile, clothing, footwear & leather mfg 28.8 2.7 12.4 21.5 36.6 Wood & paper product mfg 44.4 n.p. 12.5 n.p. 103.0 Printing, publishing & recorded media 15.3 n.p. 6.4 n.p. 12.1 Petroleum, coal, chemical & associated product mfg

279.6 23.3 106.4 122.5 252.2

Non-metallic mineral product mfg 30.9 4.6 12.8 13.3 30.8 Metal product mfg 335.7 60.3 93.6 138.9 292.8 Motor vehicle & part & other transport equipment mfg

307.7 12.0 105.8 152.0 269.8

Photographic & scientific equipment mfg 96.5 8.2 53.4 41.0 102.6 Electronic & electrical equipment & appliance mfg

336.8 27.8 190.2 142.0 360.0

Industrial machinery & equipment mfg 65.2 5.2 35.7 31.3 72.2 Other manufacturing 10.9 1.9 7.1 5.6 14.6 Total manufacturing 1,688.0 171.1 701.1 814.3 1,686.6

(a) Includes wages and salaries, payroll tax, payments to contract staff on the payroll, fringe benefits tax and workers compensation, holiday pay, long service leave payments, sick pay, employer contributions to superannuation and pension schemes.

0 100 200 300 400

Ind

ust

ry s

ub

div

isio

n

$ MILLION

Food, beverage & tobacco mfg

Textile, clothing, footwear & leather mfg





Metal product mfg

Motor vehicle & part & other transport equipment mfg

Photographic & scientific equipment mfg

Electronic & electrical equipment & appliance mfg

Industrial machinery & equipment mfg

Expenditure on research and experimental development by manufacturing divisionAustralia

Source: Research and Experimental Development, Business Enterprises, Australia (8104.0).Source - Australian Bureau of Statistics, 1996 Year Book Australia, ABS Cat.1301.0.30.001

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section RESEARCH & DEVELOPMENT NEW PRODUCTS FOR THE FUTURE



NEW PRODUCTS FOR THE FUTURE Future new products will be derived from research and development activities, in

addition to ongoing expanding of the range of accessories.

THE INDUSTRY RESEARCH AND DEVELOPMENT BOARD Specific elements of the Industry Innovation Program - 150 per cent Tax

Concession, Competitive Grants and Concessional Loans65 - are administered by the Industry Research and Development Board66.

The Board’s role is to help companies successfully enter local and export markets

by encouraging:

• more and better use of research and development;

• successful commercialisation of new technologies; and

• greater collaboration and networking between firms and research institutions.

The Board has a number of committees which consider expressions of interest

and applications on eligibility and merit. AusIndustry advise that “strict precautions are taken by the IR&D Board and its committees to avoid conflicts of interest on information provided by applicants”.

TAXATION IMPLICATIONS FOR RESEARCH & DEVELOPMENT

General All income tax concession is available to a company for expenditure incurred on

qualifying research and development in Australia. The concession is in the form of a deduction against assessable income. As of 30 June 1996 the allowable deduction is 125 per cent of qualifying research development expenditure. Companies wishing to claim the concession should register with the Industry Research and Development Board (IR&D). Inquiries on the taxation provisions should be directed to the nearest Taxation Office and registration requirements to the Industry Research and Development Board67.

The 125 per cent Tax Concession for Research and Development, which supports

much of the industrial R&D spending in Australia, is administered jointly by the Australian Taxation Office and the Industry Research and Development Board.

The tax concession enables companies incorporated in Australia, public trading

trusts and eligible companies in partnership to deduct 125 per cent of R&D expenditure when lodging their corporate tax returns.

65 See next sub-section for details on these programs 66 The Head Office of AusIndustry / Industry Research and Development Board is 51 Allara Street, Canberra

City ACT 2601 (PH: 06-2762307, FAX: 06-2761122) 67 Reference: Australian Government Publishing Service, Taxation, AGPS Press, 1991, Canberra

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section RESEARCH & DEVELOPMENT TAXATION IMPLICATIONS FOR RESEARCH & DEVELOPMENT



To attract the full 125 percent concession, total annual expenditure on R&D must

be $20,000 or more. Companies can also benefit from the concession by contracting out R&D work to

other companies or to Registered Research Agencies (RRAs). RRAs are research institutions that have demonstrated that they have the expertise and facilities to undertake certain types of R&D on behalf of firms.

Syndication is a special part of the tax concession program which allows for big

or risky R&D programs to be carried out by a group of companies. It is essentially a financing scheme that provides companies with access to finance for R&D projects that are close to being brought to market. To qualify for syndication status, a minimum R&D expenditure of $500,000 must be incurred.

Concerning Research and Development expenditure for agribusinesses such as

Minaji, please note the following major points68 : � The 150% tax concession (against income earned) for R&D is no longer

available - the amount has been changed to 125%. The definition of R&D expenditure basically applies up to but NOT INCLUDING Marketing stage, including conducting Market research. That is, R&D is only claimable until the Marketing stage unless the product is being in some way modified or further improved. The concession is subject to, inter alia:

1. Companies which incur expenditure on research and development

may claim a 150% deduction in respect of wages, salaries, other labour costs and expenditure exclusively for R&D activities.

2. Research and development activities cover systematic, investigative,

or experimental activities which involve innovation and technical risk, carried on for the purpose of:

✎ acquiring new knowledge (whether or not it will have special

practical application. ✎ Creating new or improved materials, products, devices,

processes or services (i.e. experimental or developmental) ✎ Activities directly related to R&D activities including industrial

design, engineering design, production engineering, operations research, mathematical modelling and analysis, psychological research; design, construction and operation of prototypes where the primary objective is technical testing or to make technical improvements; and finally feedback R&D directed at problem solving beyond the R&D stage, e.g. technical problems arising during initial production runs.

3. To be eligible for R & D concessions a company must be registered with

the Australian Industrial Research and Development Incentives Board, or the Industry Research and Development Board.

68 Information in this section has been largely referenced from the Agri-Food Council publication - An Agri-

Food Guide to Getting More R&D for your Money. (1994)

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section RESEARCH & DEVELOPMENT TRADE MARK REGISTRATION



Certain other benefits also apply in particular situations.

� It has been previously possible in many situations it may be possible to "claw back" expenditure made - and not claimed - for the previous four years, and sometimes beyond. The Consultant understands that this feature may have now been removed with new legislation.

� A good contact enabling (at a cost) a "ruling" to be obtained for relevant

expenditure is: Mr Paul Scammell Assistant Director, Tax Concessions Dept. Industry Technology & Commerce GPO Box 2704 Canberra ACT 2601 Phone: 06-2761000 Fax: 06-2761122

� Generally speaking, expenditure of $50,000 and above (meeting the

criteria) will be an acceptable minimum. Expenditure below this level may be subject to a "sliding scale".

The Company should also be aware that they may have the opportunity to:

• directly employ a graduate through the National Teaching Co scheme specifically for the research and development of new (value-added) products

• access concessional loans for the commercialisation of technological innovation (AusIndustry / IR&D program69)

• access grants for research and development (AusIndustry / IR&D program70)

• access other AusIndustry Programs.71 Information on the above programs are covered later in the Report.

TRADE MARK REGISTRATION72 Trade marks distinguish goods or services of a trader from those of other traders.

They can be in the form of a word, picture or symbol, or a combination of these. In the case of Minaji, a distinguishing trademark symbol will serve to differentiate

the Company and its products, and re-inforce the favourable image that an environmentally friendly product creates.

69 Industry Research and Development Board 70 Industry Research and Development Board 71 The Queensland office for AusIndustry is 12th Floor, AGL House, 60 Edward Street, Brisbane Qld. 4000,

Phone 07-2315111 Fax: 07-2290017. The AusIndustry HOTLINE is Ph: 008 026 121 72 Primary source for this information is: AIPO Trademark Leaflets 1, 2, 3 & 4, Printed by AIPO Print Room,

March 1995.

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section RESEARCH & DEVELOPMENT TRADE MARK REGISTRATION



Registration of trade marks is obviously not compulsory, but has several benefits. These benefits include:

• Protection of investments made in products and their promotion

• Legal rights to exclusively control and use the trade mark for the goods or

services for which it was registered

• Ownership rights additional to common law rights

• Protection of trade mark from misleading use in the market place

• Australia wide registration, which can be useful when seeking registration overseas.

Only distinctive marks, or marks that are capable of becoming distinctive, can be

registered. These could include; names represented in a distinctive manner, an invented word, or a distinctive mark.

Trade mark registration differs from business name registration. A business name is

a name, style, title or designation under which a business is conducted, whereas a trade mark is used to identify and distinguish goods or services of a business or trader.

To apply for a trade mark an application form must be filled out and lodged.

Application forms are available from the Trade Marks Office. Applications are examined in order of lodgement, and it is usually several months before the application is processed. Applications are examined to determine whether they meet the requirements of the Trade Marks Act. Results of the examination are sent to the applicant.

If the application is in order a notice of acceptance is sent to the applicant. An

advertisement of acceptance is placed in the Official Journal of Trade Marks, and there is a three month period where any person may give notice of opposition to the registration. If there is no opposition and the fee has been paid, the trade mark will be registered and a certificate of registration will be sent out. Registration lasts for seven years initially. After that it can be renewed for 14 year periods.

For further information contact the Trade Marks Office:

7th Floor 280 Adelaide St Qld 4000 Ph: (07) 864 8277

Action: Register Minaji trade mark ASAP

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section RESEARCH & DEVELOPMENT CUSTOMS AND EXCISE



CUSTOMS AND EXCISE73 The Federal Government imposes excise duties on a narrow range of products.

The principal items affected are oil, petroleum products, normal strength beer, spirits, and tobacco.

Customs tariffs are levied on a wide range of imported goods. These tariffs

provide protection for Australian manufacturers and producers. Tariff levels are altered only after a review of the industry concerned has been carried out by the Industries Assistance Commission (IAC). The IAC considers submissions from those likely to be affected by a change in tariff.

Where there is no equivalent Australian manufactured product or equivalent

goods sold in a separate market, it may be possible to obtain a tariff concession order, reducing duty on the product imported to minimum levels.

Where goods exported from Australia contain imported materials, a refund of

duty paid on importation may be available to the exporter under a “duty drawback” system. An extension of this is known as the By-Law for Export, which is designed for regular users of the Drawback System. It allows for the goods to be imported without payment of duty and sales tax, providing they are imported for industrial processing and are subsequently exported.

Where goods have been sold to Australia at an “export price” less than their

“normal value” (which is determined as being the domestic price in the country of origin) Anti-Dumping legislation provides for the imposition of a penal duty in addition to that which would normally be payable. Similarly, a comparable remedy, known as countervailing duty, applies where there has been a subsidy, bounty, or other assistance paid in the country of export, which has caused injury of threatened to injure or hinder the establishment of an Australian industry.

73 The information in this sub-section has been primarily sourced from: Coopers & Lybrand, Tax Facts and

Figures 1988-89, Coopers & Lybrand Aust, 1988, Australia.

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section MANAGEMENT KEY MANAGEMENT



19. MANAGEMENT

KEY MANAGEMENT Key management, consisting of the Managing Director, Marketing Manager, and

the Production Manager, are vested with quite different and distinct responsibilities as follows:

➮ Managing Director - export accommodation, vision, general oversight

➮ Marketing Manager - sales management, marketing and public relations

➮ Production Manager - production oversight, recruitment, training, skin

purchasing, laboratory experimentation, skin classification

➮ The Company's internal Bookkeeping will be contracted out initially, with an Accountant’s position becoming available approximately 6 months after commercial production commences.

Key Management Risk The SWOT analysis identified that there was a reliance of "Key Persons" (i.e.

Catherine Scally). Because of the critical management and other functions undertaken, a considerable risk to the ongoing viability of the Company exists, should Ms Scally become incapacitated for a medium term or longer.

One way that this may be overcome is for key management to identify suitable

persons for succession. It is in fact in their own interest to do so - if the business is to become more self-reliant, it is imperative that this matter be attended to without delay.

In addition to the above, the management may wish to investigate suitable

income protection insurance as follows:

Action: Company to investigate the cost effectiveness of Key Man Insurance via an income protection plan for illness or disability. Premiums should be based on a minimum waiting period of say, 15 weeks with accident / sickness benefit payable for at least 18 months (maximum say 60 months).

Rationale: Protection of income earning capacity and skill base, in the event

of incapacity of key persons within the organisation.

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section MANAGEMENT QUALITY ASSURANCE (QA) & TOTAL QUALITY MANAGEMENT (TQM)



QUALITY ASSURANCE (QA) & TOTAL QUALITY MANAGEMENT (TQM)

Management recognise the need for proceeding with the implementation of a

formal Quality Assurance program. The Company should now proceed to full implementation a formal program of Quality Assurance, in line with a Quality System fulfilling the requirements of Australian Standards AS3901 or AS3902 as may be applicable - the AS3900 Series Standards required by the Clever Country Policy of the Federal Government and the State Government Purchasing Policy 1991. This will be sufficient to meet the expectations and demand of clients both domestic and international, and the industry in general.

The future success of the Company's direct market penetration to export markets

in particular could well depend upon the Company's commitment to QA accreditation, and should be addressed with some priority. Progression to TQM is an option further on, however will capitalise and strengthen a formal commitment to QA principles.

Objective: Implementation of Quality Assurance / Total Quality management to

ensure the highest possible product quality standards, and a commitment to quality by all staff.

Meaning:74 Traditionally Quality has been assessed by a product's reliability,

durability and conformance to specifications. While these are still important criteria, customer' expectations today

are broader; they are influenced by perceptions of the whole organisation, not just the products it makes. Enterprises with a high overall quality rating in the eyes and minds of customers will win both market share and repeat business. An ongoing competitive advantage.

Thus, the starting point for Quality-based management is the

customers' viewpoint. It's the perspective from which the enterprise will plan to utilise the principles of Quality-based management, known internationally as Total Quality Management (TQM). Total Quality Management is the driving force for company-wide improvement; commitment to improving performance at every level; strategies to improve its processes and systems; enhanced productivity and profitability; involvement and development of every employee.

It embraces all products, all services, all processes, all people, at all

levels.

74 Adapted from NIES brochure - Quality: The Strategic Advantage




Responsibility:75 Initially, management must have an awareness and understanding of Total Quality Management. It is they who must be convinced of its potential strategic advantage. It is they who must commit to shaping, leading and resourcing their organisation in the TQM implementation. TQM recognises the role of people as managers and workers in the system and the vital contribution they can make together towards improvement in every aspect of the business.

So quality improvement in an organisation becomes a way of

life; it involves everyone from the CEO to the most junior employee in the process of on-going improvement.

Implementation: NIES has developed a comprehensive TQM 'How To' model. the

NIES network will assist in the selection of a trained and licensed consultant.

This should follow the Company's involvement in the QA

process. A high level of Quality Control can be achieved through the Company's

commitment to a formal program of Quality Assurance / Total Quality management, including export accreditation (AS 3902 - 1987)76.

Action: Implementation of Quality Assurance to commence as soon as possible to ISO9002

75 Adapted from NIES brochure - Quality: The Strategic Advantage 76 Company to install a Quality system fulfilling all the requirements of Australian Standards AS3901 or

AS3902, now more generally described as the ISO9000 series.




Action: Implementation of Total Quality Management to commence upon substantial implementation of Quality Assurance.

Figure 11 - Another view of the

Ebenezer property: suitable for eco-tourist development

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section ORGANISATION & PERSONNEL ORGANISATIONAL STRUCTURE



20. ORGANISATION & PERSONNEL

ORGANISATIONAL STRUCTURE Few changes in the initial organisational structure are proposed pending

development of export markets and further business expansion activities (see next section for details of proposed structure).

ORGANISATIONAL CHART

PROPOSED LEATHER PROCESSING FACILITY AT EBENEZER, QLD.PROPOSED LEATHER PROCESSING FACILITY AT EBENEZER, QLD.

ORGANISATION CHARTORGANISATION CHART

BOXES SHADED BLUE ARE POSITIONS TO BE EMPLOYED AT A LATER DATE

MARKETING MANAGERx 1

Initially, Sales ManagerPublic Relations

MarketingINITIALLY

ONEPOSITION

ASSISTANT MANAGER / TRAINEEx 1

FORKLIFT DRIVERx 1

LABOURERx 1

WET AREA (RECEPTION)

LABOURERx 1

LABOURERx 1

LABOURERx 1

LABOURERx 1

LABOURERx 1

RE-TANNING

LABOURERx 1

LABOURERx 1

LABOURERx 1

LABOURERx 1

LABOURERx 1

FINISHING #1Stretching

LABOURERx 1

LABOURERx 1

LABOURERx 1

LABOURERx 1

FINISHING #2Final Stages incl. packaging

LABOURERx 1

GroundsmanSecurity

General Hand

OTHER

UNSKILLED / SEMI-SKILLED PEOPLEAll employed on a revolving work duty basis

PRODUCTION MANAGERx 1

Recruitment:Training;

Production oversight;Skin buyer (skin classifier);

Purchasing (Chemicals, skin, etc);Laboratory experimentation

OFFICE MANAGER& Secretary

x 1General Office DutiesSecretarial services

ACCOUNTANTSub-Contractor

x 1Wages;

Invoicing;Payments

(WILL EVENTUALLY BE AN EMPLOYEDPOSITION)

DIRECTORCatherine J Scally

x1Export accommodation;

Vision;General Oversight

STAFFING LEVELS The following table details staffing levels to be established by the Company,

which will eventually see a full complement of 22 positions (refer the Attached Schedule 7 to this Report):

Figure 12 - Organisation Chart

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section ORGANISATION & PERSONNEL STAFFING LEVELS



BASE MODEL Start

Month No. Amount Per

Annum Per Person ($)

Plus Loadings

(%)

Gross Annual

Salary - All Persons ($)

DIRECTORS FEES Directors 1 3 $15,000.00 0.00% $45,000 TOTAL DIRECTORS FEES 3 $15,000.00 0.00% $45,000 SALARIES & WAGES Management & Administration Managing Director 1 1 $120,000.00 30.00% $156,000 Marketing Manager 5 1 $60,000.00 30.00% $78,000 Production Manager 1 1 $70,000.00 30.00% $91,000 Office Manager / Sales Representative #1

4 1 $35,000.00 30.00% $45,500

Accountant 11 1 $50,000.00 30.00% $65,000 Assistant Manager / Trainee 5 1 $25,000.00 30.00% $32,500 Secretary / Clerk 4 1 $30,000.00 20.00% $36,000 Sales Representative #2 16 1 $35,000.00 30.00% $45,500 Operations & Production Forklift & Loader Operator 5 1 $26,000.00 20.00% $31,200 Groundsman / Security / General Hand

3 1 $25,000.00 20.00% $30,000

Plant Operator (Labourer) 5 6 $26,000.00 20.00% $187,200 General Hand / Labourer 5 6 $23,000.00 20.00% $165,600 Truck Driver / Labourer 5 0 $28,600.00 20.00% $0 TOTAL SALARIES & WAGES 22 $963,500

Sub-Contractors and Professional Support In addition to full-time staff positions detailed above, the Project will require the

ongoing support of contract / professional specialist personnel. The attached budgets have allowed for this support to be provided as follows

(refer Attachment - Schedule 7 of this Report for full details):

Start Month

No. Amount Per Annum Per Contractor

($)

Gross Annual

Salary - All Persons ($)

Amount Per Month ($)

SUB-CONTRACTORS Maintenance Crew 10 1.0 $10,000.00 $10,000 $833 Security Guard Contractor 4 1.0 $4,800.00 $4,800 $400 Electronic & Electrical Engineering Contractor

10 1.0 $5,400.00 $5,400 $450

0.0 $0.00 $0 $0 TOTAL SUB-CONTRACTORS 3.0 $20,200 $1,683

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section ORGANISATION & PERSONNEL GENERAL COMMENTS



PROFESSIONAL SUPPORT GROUP

Industrial Chemist / Analyst 5 0.0 $0.00 $0 $0 Consultant (General) 0 1.0 $5,000.00 $5,000 $417 Accountant (external) 4 1.5 $8,000.00 $12,000 $1,000 TOTAL PROFESSIONAL SUPPORT

2.5 $17,000 $1,417

Employee Engagement

Action: Commence recruitment of key staff positions ASAP

For a number of reasons, it could be useful to employ a human resource

specialists for the purpose of employee engagement. A suitable, recommended consultant is Vision Human Resources (Brisbane)77.

Action: Utilise human resource consultant for advertising key job positions, and for the initial selection processes.

Rationale: Increased exposure for prospective job search; freeing up

Managing Director’s time during the selection process; expert assistance and advice in the search process; increased likelihood of a suitable staff selection (even though greater expense incurred).

GENERAL COMMENTS Position Job Descriptions

In view of the likelihood of staff turnover, accompanied by expected strong

growth and the changes this will bring about, the matter of job definition will require urgent attention. This should be done along with the definition of all staff employed at that time.

Resolution of this can be largely achieved through the development of written

Job Descriptions, defining the nature, scope and job function, along with relevant authority levels. It is emphasised that a key factor in bringing about an efficiently managed organisation will be the clear definition of job functions and reporting lines. This becomes of even greater significance as employee numbers increase, and where the available time to spend with employees becomes less. For this reason it is strongly recommended that job descriptions be developed for all proposed positions, providing - in a written form - clear delineation of job duties/responsibilities and reporting lines. Ideally, this should be completed in conjunction with each employee.

77 Contact: Mr. Malcolm Burrows, Vision Human Resources. Level 5, 139 Leichardt Street, Spring Hill Qld

4000. (GPO Box 2324 Brisbane 4001). Phone 07-38398255 Fax: 07-38398267.

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section ORGANISATION & PERSONNEL GENERAL COMMENTS



Action: Written job descriptions to be developed for all staff positions (new and existing positions) by mid 1997.

Examples of written job descriptions are located at Appendix B. These models

could be used as a basis for the development of all staff positions. The major features of worthwhile and meaningful job descriptions are:

• Results and duties are both stated (the result expected and the duties

needed to accomplish the result) • Accomplishment is emphasised over "doing" (employees need to first know

where they are going - only then can it be explained "how you get there") • The focus is on results (including how the job fits into the overall scheme of

the organisation, and how the job fits into the organisations' mission) • Clear writing style, with job descriptions simple and easy to understand. • Job Descriptions must be changed when job requirements change. • Linkage should be established here possible with QA Procedures

documentation. Use of Contract Labour and Enterprise Bargaining

The Company may be interested in following up prospects of enterprise

bargaining; from its point of view, in an effort to improve productivity (it may also have the potential to increase capacity utilisation of factory/processing operations.).

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section SALES ESTIMATES, FINANCIAL PLANNING, & FINANCIAL ANALYSIS MAJOR ASSUMPTIONS



21. SALES ESTIMATES, FINANCIAL PLANNING, & FINANCIAL ANALYSIS

MAJOR ASSUMPTIONS Major assumptions related to the Project are located on the attached Schedule

1 of the Financial Reports. This information is summarised thus: Essentially, the Project will require capital funding of $5.5m (Australian), which

includes $0.79m working capital (the balance - $4.7m - being development and establishment of capital works at the Ebenezer site).

The “Base Model” cash flow assumes that this will be funded through an equity

raising of 75% of the total requirement ($4.13m), with the balance ($1.38m) obtained through debt finance.

The Consultant has taken direction from the client with regards the initial major

time-frame milestones, which includes:

MAJOR PROJECT TIME-TABLES

Completion Date

1 Feasibility completed and approvals obtained

Dec-96 i.e. Month 0 of Cash Flow

2 Investor support gained Jan-97 i.e. allow 1 months for investor sourcing

3 Ebenezer Site establishment / construction

Apr-97 i.e. allow 3 months for completion

4 Production trialling Oct-97 i.e. allow 6 months for Ebenezer site proving

5 Production commences full commercial

Oct-97 i.e. allow 0 months for 100% capacity prod'n

MAJOR EQUIPMENT PURCHASES (PAYMENT)

Mar-97 i.e. allow 1 month prior to (3) above

Action: Gain investor support as a matter of priority

Action: Establish and construct infrastructure and premises at Ebenezer (completion by April, 1997)

Action: Commence production trialling (complete by October 1997)

Action: Commence full-scale commercial production by October 1997




Action: Acquire major equipment purchases as detailed in the Schedules (commencing March, 1997, to complete by April 1997)

Although the above time-table is relatively ambitious, it should be borne in mind

that as at date of writing, the following matters have been, or are currently being attended to:

• Environmental legislation compliance approvals

• Plant design

• Employee engagement

• Land acquisition

• Investor sourcing

• Site infrastructure negotiations (e.g. water supply)

Production Capacity The Base Model financials have assumed an initial take-up period of six to seven

months with 100% production (i.e. processing of 20,000 skins per month) reached by October / November 1997 from initial commissioning in May 1997.

After the first 12 months of production, capacity will increase as follows:

Year Estimated capacity

Production Month

Cash Flow (Project month)

Number of Skins Per Month

1 Production is 20.00% 1 5 4,015 Production is 100.00% 12 16 20,075

2 Production is 125.00% 13 17 25,094 3 Production is 150.00% 25 29 30,113 4 Production is 200.00% 37 41 40,150 5 Production is 200.00% 49 53 40,150

Annual sales volumes are therefore summarised as follows (refer Attached

Schedule 3 for full details);




PRODUCT SALE VOLUMES - BASE MODEL Unit Year 1 Year 2 Year 3 Year 4 Year 5

CALF SKINS no. 81,213 250,938 305,688 392,375 438,000DEER SKINS no. 8,121 25,094 30,569 39,238 43,800OTHER SKINS no. 0 0 0 0 0 TOTAL SKINS no. 89,334 276,031 336,256 431,613 481,800 MANUFACTURED GARMENTS

no. 0 0 0 0 0

TOTAL PRODUCTION

no. 89,334 276,031 336,256 431,613 481,800

The above information may be more clearly seen on the graph below:

0

100

200

300

400

500

600

Tho

usa

nds

Num

ber

of S

kins

Year 1 Year 2 Year 3 Year 4 Year 5

CALF SKINS DEER SKINS OTHER SKINS


PRODUCT SALE VOLUMES

TOTAL SKINS




Product Prices

PRODUCT SALE PRICES (AVERAGES ONLY)78 BASE MODEL

Buy In Price (per skin)

Recommended Retail Per

Skin

Net Wholesale (i.e. Sale Price)

CALF SKINS - AVERAGE PRICES $26.00 $100.00 $55.00 DEER SKINS - AVERAGE PRICES $50.00 $220.00 $121.00 OTHER SKINS (Ostrich, Emu, Crocodile, Sea Snakes, Fish, Other)

not budgeted

Manufactured Garments not budgeted

Other Assumptions All other assumptions are laid out in Schedule 8 (attached). The major ones here

include the following:

ESTIMATED OUTGO

Gas 2.00% of Gross Sales Advertising $100,000 Per Year, PLUS 1.00% of Gross Sales Consultants Charges (Sundry) $1,500 Per month (includes implementation of

Quality Assurance) Debt Collection - 0.50% of turnover (risk is low due to primarily

corporate exposure) Packing Materials 1.50% of Gross Sales Postage $45 per month Year 2 Year 3 Year 4 Year 5 Power (Primary Plant Operations)- $3.00 Per Skin $2.97 $2.94 $2.91 $2.91 Repairs & Maintenance - Plant - 1.00% of Capital Value 3.00% 4.00% 5.00% 5.00% Repairs & Maintenance - Property -1.50% of Capital Value 1.75% 2.00% 2.50% 2.50% Seminars & Conferences $2,000 Per Annum $3,000 $4,000 $5,000 $5,000 Telephone $3,000 per month 5,000 7,000 9,000 10,000 Staff - Superannuation: 5.00% of Wages & Salaries costs Tools & Equipment Replacements 0.25% of Gross Sales Travelling & Accommodation 1.00% of Gross Sales INPUTS - CALF SKINS $26.00 Per Skin INPUTS - DEER SKINS $50.00 Per Skin INPUTS - OTHER SKINS & OTHER $50.00 Per Skin INPUTS - CHEMICALS, ETC. FOR ALL SKINS $5.00 Per Skin Workers Compensation 5.00% of Wages & Salaries costs Research & Development 2.00% of Gross Sales INTEREST: Bank Overdraft: 12.50% (annual effective rate) Sundry Expenses 2.00% Contingency allowance over all

operating costs 78 Prices are estimates of average price received for all sizes

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section SALES ESTIMATES, FINANCIAL PLANNING, & FINANCIAL ANALYSIS IMPORT CREDITS



IMPORT CREDITS The Import Credits Scheme enables Australian Exporters of certain textiles,

clothing and footwear (TCF) - including finished leather goods, to earn import credits calculated as a percentage of the domestic value added content of their exports. Import credits expressed in $A amounts are tradeable and can be used by the holder of the credit to offset customs duty that would otherwise be payable on the imports of TCF goods.

The value of an import credit is calculated as follows:

C = X x VA x a(n) where C = Import Credit ($) X = Export Sales ($A FOB actually received) VA = Value-added Australian content (% of sales

value) a(n) = Multiple (Export rate)

The export rate for 96/97 is 0.25. Applications for import credits will only be

accepted where persons have exported more than $A100,000 (FOB) of TCF goods.

Whilst this scheme may prove to be a valuable source of income for Minaji,

calculations for their inclusion have not been made in the financial analysis. The reasons for this are:

1. The future of the scheme is not assured and is subject to further legislation after year 2000.

2. Import credits only fall into the hands of the actual trader (exporter). Whilst in this instance the Project may be subject to a distribution / agency arrangement, the point would be negotiable with traders with at least some of the import credits potentially available to the Company.

3. There must be a value-added component; also, skins must be wet-blued. The issue of exporting whole skins without some form of manufacturing (e.g. into accessories or garments) is not altogether clear.

As a consequence, the Consultant has adopted a conservative approach by not

including the value of import credits that may become held by the Company. Nonetheless, management should be aware of the considerable benefit that

may be derived through this scheme.

OBJECTIVES In overall terms, a number of matters need to be attended to in the area of

financial management - particularly the monitoring and control functions. Major financial objectives for the Company, with regard to financial

management should include:

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section SALES ESTIMATES, FINANCIAL PLANNING, & FINANCIAL ANALYSIS CAPITAL INVESTMENT REQUIREMENTS



• To have the ability to readily conduct product gross margin analysis79. • To be able to conduct close monitoring of cash flow, and comparison of

monthly actuals to budget.

• To ensure there is adequate funding to implement proposed enterprise program (as per cash flow)

• To reduce costs wherever possible, particularly Contract and labour costs.

CAPITAL INVESTMENT REQUIREMENTS

Capital Expenditure Refer Attachment - Schedule 4 (CAPITAL COSTS) for full details, summarised as

follows:

CAPITAL EXPENDITURE SUMMARY (By category of expenditure) Excludes plant and equipment acquired under lease

1 OPERATING PLANT & EQUIPMENT $1,730,7432 SUNDRY PLANT & EQUIPMENT $392,2703 INFRASTRUCTURE $375,1754 PREMISES (Ebenezer) $2,007,0745 OTHER CAPITAL COSTS $206,840 TOTAL CAPITAL EXPENDITURE: $4,712,101

79 One of the problems identified under "Business Systems & Office Automation”.




(36.7%) OPERATING PLANT & EQUIPMENT

(8.3%) SUNDRY PLANT & EQUIPMENT

(8.0%) INFRASTRUCTURE

(42.6%) PREMISES (Ebenezer)

(4.4%) OTHER CAPITAL COSTS


CAPITAL EXPENDITURE SUMMARY (By category of expenditure)

Excludes plant and equipment acquired under lease

$0

$500

$1,000

$1,500

$2,000

$2,500

Tho

usa

nds

Category of Expenditure

Am

ount

of E

xpen

ditu

re

OPERATING PLANT & EQUIPMENTSUNDRY PLANT & EQUIPMENT

INFRASTRUCTUREPREMISES (Ebenezer)

OTHER CAPITAL COSTS


CAPITAL WORKS SUMMARY

By Major Category of ExpenditureExcludes plant and equipment acquired under lease

CAPITAL EXPENDITURE SUMMARY (by time of expenditure)





YEAR 1 4,712,101 YEAR 2 0 YEAR 3 0 YEAR 4 0 YEAR 5 0 TOTAL CAPITAL EXPENDITURE: $4,712,101

$0

$1

$2

$3

$4

$5

Milli

ons

CA

PITA

L C

OST

S

YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5


CAPITAL EXPENDITURE SUMMARY (by time of expenditure)


Lease Costs

The above capital expenditure details do not include plant and equipment proposed to be leased, summarised as follows (refer attached Schedule 6 for full details):

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section SALES ESTIMATES, FINANCIAL PLANNING, & FINANCIAL ANALYSIS EQUITY



LEASE COSTS (CAPITAL EQUIPMENT) - BASE MODEL

Item No. Units

Cost $ / Unit Cash Flow - Month of Purchase

Total Cost ($)

Vehicle - Managing Director 1 $55,000 1 $55,000 Vehicle - Production Manager 1 $35,000 1 $35,000 Vehicle - Marketing Manager 1 $30,000 5 $30,000 Vehicle - Utility #1 (General Purpose) 1 $25,000 3 $25,000 Computer Equipment - Office 1 $6,000 4 $6,000 Computer Equipment - Portable 1 $3,500 4 $3,500 Forklift 1 $25,000 4 $25,000 Photocopier 1 $3,500 4 $3,500 Fax / Answer Machine 1 $2,000 4 $2,000 Phone System 1 $3,500 4 $3,500 Mobile Phones 3 $800 4 $2,400 Vehicle - Sales Representative #1 1 $30,000 4 $30,000 Vehicle - Sales Representative #2 1 $30,000 16 $30,000 TOTAL $250,900

EQUITY

Debt to Equity Ratios

Proposed Total Capital Funding = $5,500,000Equity: 75.00%Debt: 25.00%EQUITY REQUIRED: $4,125,000DEBT REQUIRED: $1,375,000 Comprising: Capital Purchases: $4,712,101Working Capital $787,899 $5,500,000

PROFIT & LOSS / CASH FLOW STATEMENTS Five Year cash flows / Profit & Loss Statements are included in the attachments to

this Report as follows:

• Year 1 Cash Flow 1996/97 • Year 2 Cash Flow 1997/98 • Year 3 Cash Flow 1998/99 • Year 4 Cash Flow 1999/2000 • Year 5 Cash Flow 2000/01 • Year-In-Year-Out (YIYO)

• Profit & Loss Summary for the above Periods.

This information is summarised in the following graphs:

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section SALES ESTIMATES, FINANCIAL PLANNING, & FINANCIAL ANALYSIS PROFIT & LOSS / CASH FLOW

STATEMENTS



$0

$10

$20

$30

$40

Milli

ons

YEAR

AUD

$'s

1 2 3 4 5 Y.I.Y.O.

TOTAL ESTIMATED INCOME TOTAL ESTIMATED OUTGO

Net Income This Year: CLOSING BANK BALANCE


CASH FLOW SUMMARY

BASE MODEL

-5

0

5

10

15

20

Milli

ons

$ A

ustra

lian

Dec-96 Jun-97 Dec-97 Jun-98 Dec-98 Jun-99 Dec-99 Jun-2000 Dec-2000 Jun-2001

TOTAL ESTIMATED INCOME TOTAL ESTIMATED OUTGO CLOSING BANK BALANCE


CASH FLOW SUMMARY

MONTHLY INCOME & EXPENDITUREBASE MODEL

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section SALES ESTIMATES, FINANCIAL PLANNING, & FINANCIAL ANALYSIS PROFIT & LOSS / CASH FLOW

STATEMENTS



The Cash Flow Summary (appended to this Report) has been further condensed

for convenience as follows:

C:\123\FILES\SCAL04.WK4 Yearly Total Yearly Total Yearly Total Yearly Total Yearly Total Yearly TotalYEAR 1 2 3 4 5 Y.I.Y.O.

LEATHER PROCESSING FACILITY - EBENEZER BASE MODEL BASE MODEL BASE MODEL BASE MODEL BASE MODEL BASE MODEL

CASH FLOW SUMMARY AUD $' sESTIMATED INCOME

SKIN SALES - Calf 4,466,688 13,801,563 16,812,813 21,580,625 24,090,000 24,090,000SKIN SALES - Deer 982,671 3,036,344 3,698,819 4,747,738 5,299,800 5,299,800EQUITY (CAPITAL INTRODUCED) 4,125,000 0 0 0 0 0LOANS (CAPITAL INTRODUCED) 1,375,000 0 0 0 0 0

TOTAL ESTIMATED INCOME 10,949,359 16,837,906 20,511,631 26,328,363 29,389,800 29,389,800

ESTIMATED OUTGOINPUTS - CALF SKINS 2,586,025 6,643,000 8,066,500 10,439,000 11,388,000 11,388,000TAXATION 0 0 1,127,369 1,555,948 2,202,946 2,688,326INPUTS - CHEMICALS, ETC. FOR ALL SKINS 547,044 1,405,250 1,706,375 2,208,250 2,409,000 2,409,000INPUTS - DEER SKINS 497,313 1,277,500 1,551,250 2,007,500 2,190,000 2,190,000Power (Primary Plant Operations) 268,001 819,813 988,694 1,256,380 1,402,470 1,402,470Salaries & Wages 597,125 948,333 963,500 963,500 963,500 963,500Research & Development 108,987 336,758 410,233 526,567 587,796 587,796Gas 108,987 336,758 410,233 526,567 587,796 587,796Sundry Expenses 107,387 261,946 312,885 395,924 430,757 430,757Packing Materials 110,109 234,200 284,714 367,373 404,110 404,110Advertising 129,494 268,379 305,116 363,284 393,898 393,898Travelling & Accommodation 54,494 168,379 205,116 263,284 293,898 293,898LOAN REPAYMENTS - Interest 157,552 171,875 171,875 171,875 171,875 171,875Debt Collection 27,247 84,190 102,558 131,642 146,949 146,949Telephone 26,000 60,000 84,000 108,000 120,000 120,000Repairs & Maintenance - Plant 14,153 63,690 84,921 106,151 106,151 106,151Other Costs 289,658 451,064 481,034 569,759 550,306 550,306CAPITAL EXPENDITURE 4,712,101 0 0 0 0 0Stamp Duty (Real Estate) 4,703 0 0 0 0 0

Sub-Totals 10,405,698 13,615,630 17,344,330 21,996,105 24,353,782 24,940,982INTEREST: Bank O/D 187 0 0 0 0 0

TOTAL ESTIMATED OUTGO 10,405,885 13,615,630 17,344,330 21,996,105 24,353,782 24,940,982Note: YIYO "Leasing" represents plant replacement cost allowance, c 5.00% of capital value

Net Income This Year: 543,474 3,222,276 3,167,302 4,332,257 5,036,018 4,448,818

Profit & Loss Summaries Profit & Loss Statements for the first five (5) years of the Project are provided

below (the Year-In-Year-Out position will essentially be reached by the end of year 5):

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section SALES ESTIMATES, FINANCIAL PLANNING, & FINANCIAL ANALYSIS BALANCE SHEET ANALYSIS



C:\123\FILES\SCAL04.WK4 25-Oct-96 Yearly Total Yearly Total Yearly Total Yearly Total Yearly Total Yearly TotalYEAR 1 2 3 4 5 Y.I.Y.O.

LEATHER PROCESSING FACILITY - EBENEZER BASE MODEL BASE MODEL BASE MODEL BASE MODEL BASE MODEL BASE MODEL

PROFIT & LOSS SUMMARYAUD $' s

See ScheduleTOTAL SALES 5,449,359 16,837,906 20,511,631 26,328,363 29,389,800 29,389,800

Less Purchases (raw materials) 3,083,338 7,920,500 9,617,750 12,446,500 13,578,000 13,578,000GROSS PROFIT 2,366,021 8,917,406 10,893,881 13,881,863 15,811,800 15,811,800

Less Expenses (ex interest) 2,452,707 5,523,255 6,427,336 7,780,752 8,394,961 8,496,781NET PROFIT BEFORE INTEREST, DEPRECIATION & TAX (86,686) 3,394,151 4,466,545 6,101,110 7,416,839 7,315,019

Less Interest 157,739 171,875 171,875 171,875 171,875 171,875NET PROFIT BEFORE DEPRECIATION & TAX (244,425) 3,222,276 4,294,670 5,929,235 7,244,964 7,143,144

Less Depreciation 360,421 331,587 305,060 280,655 258,203 250,000NET PROFIT BEFORE TAX (604,846) 2,890,689 3,989,610 5,648,580 6,986,761 6,893,144

Less Income Tax 0 1,127,369 1,555,948 2,202,946 2,724,837 2,688,326

NET PROFIT AFTER TAX (604,846) 1,763,320 2,433,662 3,445,634 4,261,925 4,204,818 The above information is summarised on the graph below:

($10.0)

$0.0

$10.0

$20.0

$30.0

$40.0

($2.0)

$0.0

$2.0

$4.0

$6.0

Milli

ons

Milli

ons

Yearly Total

AUD

$'s

NET

PRO

FIT

AFT

ER T

AX

1 2 3 4 5 Y.I.Y.O.

TOTAL SALES GROSS PROFIT NET PROFIT BEFORE INTEREST, DEPRECIA

NET PROFIT BEFORE DEPRECIATION & TAX NET PROFIT BEFORE TAX NET PROFIT AFTER TAX


PROFIT & LOSS SUMMARY

BASE MODEL

Note: Refer right hand side scale for NET PROFIT AFTER TAX only. All other amounts: refer left hand side scale.

BALANCE SHEET ANALYSIS The Attachment to this Report “Balance Sheet Schedule” shows owners equity

increasing from $4.125m to $21.199m by the end of Year 2001.

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section SALES ESTIMATES, FINANCIAL PLANNING, & FINANCIAL ANALYSIS SENSITIVITY ANALYSIS



Profitability

Whilst the cash flow indicates a positive cash position based on obtaining the

levels of funding indicated, the first Year will see an after tax “Loss” of $0.6m after accounting for depreciation.

From that point on, profitability grows from $1.7m after tax (Year 2 being 1997/98),

to $4.2m in the longer term (YIYO) position (refer attached schedule). The reader should bear in mind that the value of Import Credits (if any) has not

been incorporated into the Financial analysis. Provided one can be satisfied with the ability to market product at the levels

indicated, the proposed investment of $5.5m will see an excellent return to investors based on the assumptions provided.

SENSITIVITY ANALYSIS The following major variables have been tested for sensitivity80: 1 Variable Assessed degree

of sensitivity BASE MODEL

AMOUNT (N.P.A.T. =

$4.2m)

1 Production level (Maximum) high 200.00%2 Equity:Debt Ratio low 75.00%3 Bank Borrowing (Interest) Rate low 17.00%4 Income Tax rate moderate to high 39.00%5 Calf Skin - Buying Price very high $26.006 Calf Skins - Selling Price very high $55.007 Average Daily Production - Skins high 8258 Ratio of Deer: Calf Skins moderate 10.00%9 Days closed for maintenance - per annum low to moderate 20

10 Cost of Power - Per Skin moderate $3.00 The above assessments are clearly demonstrated in the following graph series

(note: the steeper the slope, the higher the degree of sensitivity to change):

80 Based on YIYO (Year-In-Year-Out) Profit & Loss results




0% 100% 200% 300%($1)

$1

$3

$5

$7

$9

Mill

ions

Production level (Maximum)

NET

PRO

FIT

AFT

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Base

LEATHER PROCESSING FACILITY - EBENEZER: SENSITIVITY ANALYSIS

Production level (Maximum)

1Based on YIYO Profit & Loss results

0% 20% 40% 60% 80% 100%($1)

$1

$3

$5

$7

$9

Mill

ions

Equity:Debt Ratio

NET

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Base


Equity:Debt Ratio





0% 10% 20% 30%($1)

$1

$3

$5

$7

$9

Mill

ions

Bank Borrowing (Interest) Rate

NET

PRO

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Base


Bank Borrowing (Interest) Rate


10% 20% 30% 40% 50% 60%($1)

$1

$3

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$7

$9

Mill

ions

Income Tax rate

NET

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Income Tax rate





$0 $10 $20 $30 $40 $50($1)

$1

$3

$5

$7

$9

Mill

ions

Calf Skin - Buying Price

NET

PRO

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AFT

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Base


Calf Skin - Buying Price


$20 $30 $40 $50 $60 $70 $80 $90($1)

$1

$3

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$7

$9

Mill

ions

Calf Skins - Selling Price

NET

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Calf Skins - Selling Price





0 200 400 600 800 1,000 1,200 1,400($1)

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Average Daily Production - Skins

NET

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Average Daily Production - Skins


0% 5% 10% 15% 20%($1)

$1

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Mill

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Ratio of Deer: Calf Skins

NET

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Ratio of Deer: Calf Skins





0 20 40 60 80 100($1)

$1

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Days closed for maintenance - per annum

NET

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Days closed for maintenance - per annum


$0 $2 $4 $6 $8 $10($1)

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Cost of Power - Per Skin

NET

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AFT

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Cost of Power - Per Skin


“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section SALES ESTIMATES, FINANCIAL PLANNING, & FINANCIAL ANALYSIS BREAK EVEN ANALYSIS



BREAK EVEN ANALYSIS Break even analysis has been conducted on all the above major variables, with

results calculated as follows:

MINAJIBREAK EVEN ANALYSIS Based on YIYO Profit & Loss resultsLEATHER PROCESSING FACILITY - EBENEZER: SENSITIVITY ANALYSIS

1 Variable BASE MODEL AMOUNT:N.P.A.T. = $4.2m

BREAK EVENVariableAmount

BREAK EVENTOTAL SALES

BREAK EVENGROSS PROFIT

BREAK EVENNET PROFIT

BEFOREINTEREST,

DEPRECIATION& TAX

NET PROFITAFTER TAX

1 Production level (Maximum) 200.00% 50.00% $7,347,450 $3,952,950 $458,581 $22,3912 Equity:Debt Ratio 75.00% not practically calculable3 Bank Borrowing (Interest) Rate 17.00% not practically calculable4 Income Tax rate 39.00% not practically calculable5 Calf Skin - Buying Price $26.00 $39.50 $29,389,800 $8,761,685 $123,901 ($395,677)6 Calf Skins - Selling Price $55.00 $41.25 $22,042,350 $8,464,350 $595,225 ($122,526)7 Average Daily Production - Skins 825 220 $7,837,280 $4,216,480 $610,946 $33,3588 Ratio of Deer: Calf Skins 10.00% not practically calculable9 Days closed for maintenance - per 20 not practically calculable

10 Cost of Power - Per Skin $3.00 not practically calculable The above table shows that whilst there is considerable flexibility in terms of

production levels (break-even point at only 50% of budgeted levels), there is a need to ensure that skin purchasing and selling prices are achieved.

Viability of the enterprise therefore rests on an ability acquire raw material / stock

at the budgeted levels (for calf skins: $26.00 buying price with a break even price of $39.50), and achieve sales as projected (for calf skins: selling price of $55.00 as budgeted, with break even point at $41.25).

Other factors such as interest rates, proportion of debt: equity, days closed for

maintenance and the cost of power has far less effect on the viability of the enterprise.

FUNDING OPTIONS OR ASSISTANCE AVAILABLE In consideration of funding options or assistance available, the Consultant

assumes a base premise that the Project must be commercially viable without a demonstrated need for propping up by Government or other 'artificial' assistance measures.

Overall Funding Requirements

As mentioned in the introduction to this section, the Project will require capital

funding of A$5.5m, which includes $0.79m working capital (the balance - $4.7m - being development and establishment of capital works at the Ebenezer site). The “Base Model” cash flow assumes that this will be funded through an equity raising of 75% of the total requirement ($4.13m), with the balance ($1.38m) obtained through debt finance.

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section SALES ESTIMATES, FINANCIAL PLANNING, & FINANCIAL ANALYSIS OTHER FUNDING SOURCES



Subject to the dividend requirements of investor(s), the Project has low sensitivity to the proportion of debt:equity. However, if debt is contemplated it is unlikely that support for the Project is likely to exceed 50% of capital requirements, i.e. $2.75m. On this basis, support by way of equity raising should be obtained at a minimum level of $2.75m.

Management should proceed immediately to liaise with possible supporters of

the Project with the results of this pre-feasibility Report for an indication of their support.

Action: Management to proceed immediately to obtain investor support for the Project, co-jointly with proposed financiers if required.

OTHER FUNDING SOURCES Having first made the previous comment concerning commercial viability, there

are however a number of programs available for which the Company may be considered eligible, and these are detailed below81. Clearly, management must give appropriate priority for actively canvassing such assistance in order to enhance best prospects for success.

The following assistance measures are considered by the Consultant to be those

schemes available (considering Company size, projected modus operandi, and funding requirements) to best assist the Company in achieving its objectives. "Actions" recommended are those funding or assistance measures available, which are considered to have greatest potential for impact on the Company's bottom line, and where the Company is most likely to meet the required eligibility criteria.

Note: at the current time, there is considerable change occurring with the nature

and type of government assistance programs available to business. For this reason, the following comments are subject to confirmation.

Department of Trade Industry & Regional Development (DITRD - formerly DITAC)82

DITAC may have funds available with / through the TCFTA - the latter whom may

have funding money83 available for value added processed products. The Discretionary Grants Scheme also provides grants for developing internationally traded goods, systems or services, specifically targeted for Companies unable to receive adequate benefit from the 150% research and development (R&D) tax concession but seek R&D assistance for projects that would otherwise not

81 Note: all schemes are subject to change without notice, and accordingly the Consultant implies no

warranty as to individual scheme terms and conditions and eligibility criteria, nor warrants the Company's ability to access funding or other support.

82 Refer Ms Alex Appleman and Mr Shane Campbell of DITAC (Ph 07-2315111) 83 There ore many highly desirable features of the Project which enhance prospects for a successful result

in obtaining funds from this source. Reference should be made to Mr Shane Campbell 07-2315111




proceed. It is also specifically targeted to small start up companies wanting to enter international markets and to industries involved in industry restructuring. Projects can be:

• assisted for up to three years

• maximum grant is 50% of eligible project costs exceeding $50,000 (for the

purpose of salaries, outside contracted work. and purchase of equipment used directly in the R&D and overheads).

Generic Technology Scheme Grants under this scheme are available for a maximum of three years covering

up to 90% of total eligible costs, for strategic research and development in technologies which have widespread application in industry. Projects must have at least one commercial partner and one public sector research body such as a University or the CSIRO. The Company would therefore need to source a public sector research body interested in, for example, food manufacturing technology and / or other manufacturing processes.

Advance Manufacturing Technology Development Program (AMTDP) Grant funds of up to 50% of project expenditure in excess of $500,000 may

become available for an Advance Manufacturing Technology Development Program (AMTDP). This scheme is designed to encourage the development, production and use of AMT in Australian Industry. Assistance is provided for the development and use of:

• advanced materials and related process technology

• advanced manufacturing techniques or services

• advanced computer controlled or microprocessor -based equipment used

in the design. testing or handling of a product.

Whilst only joint applications from an applicant company and a collaborating partner are considered, the Company, if it becomes a partly Network Venture capital resourced organisation, may well qualify for assistance84 ( but please bear in mind the qualifying size of the Project as indicated above).

Premiers Department, Queensland

Reference should be made to Mr Loftus Harris.

Austrade International Trade Enhancement (ITES) Scheme An export orientated business can obtain an interest free loan to 50% of capital

works, which can be repayable as a royalty on goods sold. Austrade will fund up to 50% of the Project expenditure usually to a maximum of $2.25 million as a concessional loan.

84 Contact Mr Shane Campbell on 07-231511 or the IR&D Hotline 008-026121




Export Market Development Grant (EMDG) Scheme85 In this scheme, grants of 50% of eligible expenditure are provided for overseas

promotion activities (e.g. research and development of overseas markets for goods, specified services, industrial rights and know-how which are substantially of Australian origin), with the maximum grant of $250,000.

The Innovative Agricultural Marketing Program (IAMP)86 This program provides financial assistance to producers, processors,

manufacturers and marketers in Australian agricultural, forestry, and fishing industries who have innovative projects with sound commercial potential. Austrade will fund up to 50% of the project budget to a maximum of $300,000 in any financial year for up to 3 years (i.e. a total of up to $900,000 may be available).

This IAMP program, together with the IETS and EMDG schemes, represents

perhaps one of the best ways to provide a significant capital inflow to the Company should it be considering a value-added Project.

Action: Company to approach Austrade with a view to obtaining assistance and funding including the IAMP and EMDG Schemes.

Project Marketing Loans Facility (PMLF) The facility provides interest-free loans for exporters who are pursuing

international projects or similar opportunities with significant Australian export content. The up front loans are repayable in full with a success fee payable only after the project is won. If the project is lost, then 50% of the loan is forgiven.

Department of Tourism, Small Business & Industry A range of NIES (National Industry Extension Service) programs may be available

for the Company, including the Marketing and Business Planning, Human Resource Program, PEP (Preparing for Export). Profit by Design, Total Quality Management (TQM - covered elsewhere in this report), and others. Most of these programs are delivered through registered consultants available to help with the strategic planning process and the conduction of related activities.

Action: Liaise with the Regional Office of DTSBI to access further NIES programs where required and appropriate

85 Contact the Export Market Development Grants Scheme directly (GPO Box 197 Canberra ACT 2601 Ph.

06-2765490. Fax. 07-276 5522) or Austrade's Brisbane State Office. 2nd Floor. 484. Queen Street. Brisbane Qld Ph 07-3647111 Fax 07-8321529

86 Contact the IAMP Scheme, Austrade's Brisbane State Office, 2nd Floor, 484 Queen Street, Brisbane Qld 4001. Ph. 07-364771 1 Fax. 07-8321529




QEDS Funding assistance under this scheme has been covered under various sections

of this report. National Teaching Company Scheme Support of up to $50,000 over two years may be provided towards the cost of

employing and supervising high calibre graduates for projects involving process improvement of the development of new products or services. The Company would receive $40,000 over two years towards salary and administrative costs of a graduate, allowing enlargement of research and development activities to keep abreast of new technologies or access specialist skills which will improve company performance. The participating research institution will receive $ 10,000 over two years towards academic support costs, and during the process will assist in developing a long term relationship between it and the Company with a transfer of technology and expertise.

Such a scheme could be utilised for the development of new products. The

Consultant understands that the "old scheme" with funding now depleted, has been replaced by the "new scheme", and therefore funding has once again become available.

Action: Company to submit application to DTSBI for assistance under the National Teaching Company Scheme once a suitable project has been identified.

Department of Employment, Education & Training Funds may be accessed through the Skill Share and Job Start programs. In

addition to this, assistance is available through several other schemes, including: Australian Trainee System (ATS) Financial support to offset the cost of broad based. structured training for young

people in non-trade occupations. Special Entry Level Training (SELT) Specially targeted assistance to expand the number of entry-level training

opportunities and to increase the access of special groups to these training opportunities.

Department of Industrial Relations

Australian Best Practice Demonstration Program Financial assistance is available for enterprises or groups seeking to adopt best

practice. i.e. projects that enhance the reform of work practices, production methods and organisational structures. Whilst the program requires a demonstrated affect on other enterprises and the wider community generally,




assistance is provided for strategic planning, improving productivity, development of an integrated training and skill formation strategy, and improvement of the organisation through decision making and the consultation process.

Export Finance and Insurance Corporation [EFIC)

EFIC is Australia's official export credit agency, and exists to facilitate and

encourage Australian Export trade by providing insurance and financial services and products. This includes:

☞ Insuring Australian suppliers of goods and services against non-

payment ☞ Guaranteeing trade finance for the purchase of Australian goods

and services ☞ Insuring Australian firms investing in enterprises overseas against

political risks ☞ Lending direct to overseas borrowers in support of particular classes

of capital goods and services transactions ☞ Indemnifying financial institutions or insurers which provide bonds or

guarantees to overseas buyers and providing performance bonds in support of Australian export contracts

☞ Insuring Australian suppliers of goods and services against unfair

calling of such bonds or guarantees The Manager for Queensland is Mr Tyrrell McGeever who should be contacted in

the first instance to arrange initial transactions87.

Action: Where direct import / export is contemplated, export credit and insurance to be arranged through EFIC to cover Irrevocable Letter-of-Credit, External Trade Cover, Extended Terms, Unfair Calling Insurance, etc. as deemed appropriate by Company management when exporting proper commences.

Federal Department of Industry, Science & Technology

Export Access Financial assistance is available for agricultural enterprises requiring training or

practical assistance for the development of offshore activities. Participation in Export Access assists with:

• Identification of opportunities (evaluation of Company's products / services

and advice on financial and management requirements. 87 Mr Tyrell McGeever, Export Finance & Insurance Corporation, 9th Floor 484 Queen Street, Brisbane Qld

4000 Ph. 07-4052601 (private 07-3951930). Mobile 018-747898. Fax. 07-8312021




• Training (assistance with strategic planning and assisting with the

preparation of a Business Plan). • Overseas market visits (up to 10 days subsidised accommodation and living

costs per company in the target market) • Post Market Evaluation

The Consultant suggests that this program could be utilised for the purpose of

proceeding to the next step - the development of a Marketing or Business Plan - which should incorporate a good deal more market research than possible under this program.

Action: Company to obtain funding from Export Access for the purpose of proceeding to develop a Marketing or Business Plan.

Competitive Grants for Research and Development88 Competitive Grants for Research and Development are intended to support

projects involving R&D or product development (including development of prototypes) or trial or demonstration and related market research.

The maximum grants if 50 per cent of project costs. Grants are provided, on a competitive basis for:

• market driven R&D in dynamic firms needing assistance but unable to gain full financial benefit from the 150 per cent Tax Concession for R&D;

• collaborative R&D activities, that are high risk but could provide extensive

benefit to Australia;

• trial and demonstration activities between technology developers and potential customers; and

• collaborative R&D activity between industry and research institutions.

Concessional Loans for Commercialisation of Technological Innovation89 Concessional loans support small firms in the early commercialisation of

technological innovation of goods, systems or services. The maximum loan is 50 per cent of project costs. Commercialisation activities supported by the loan are limited to the following

activities, which may include related market research:

88 Contact is the Queensland office for AusIndustry which is: 12th Floor, AGL House, 60 Edward Street, Brisbane Qld. 4000, Phone 07-2315111 Fax: 07-2290017. 89 Contact is the Queensland office for AusIndustry which is: 12th Floor, AGL House, 60 Edward Street, Brisbane Qld. 4000, Phone 07-2315111 Fax: 07-2290017.




• product/process design;

• trial production runs including tooling up costs;

• regulations and standards compliance;

• protection of core intellectual property;

• trial and demonstration activities; and

• product documentation.

Loans will be made for a maximum period of six years from the date of the loan

agreement, with repayment commencing after 42 months. Interest will begin to accrue three years from the date of the loan agreement. At

the time of writing, interest was being calculated daily at 40 per cent of the Commonwealth Bank Loan Reference Rate.

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section SUMMARY OF MAJOR RECOMMENDATIONS & IMPLEMENTATION SCHEDULE (“ENTERPRISE DEVELOPMENT” PLAN)



22. SUMMARY OF MAJOR RECOMMENDATIONS & IMPLEMENTATION SCHEDULE (“ENTERPRISE DEVELOPMENT” PLAN)

Action: Incorporation of “Minaji” to be effected ASAP - to reflect the nature of proposed business, in accordance with marketing strategy. .............................. 18

Action: Adopt business objectives as outlined above. ....................................................... 32

Action: Adoption of company mission statement as provided. This should be clearly communicated to all staff............................................................................ 33

Action: Written transcript of the Company's Mission Statement (as amended) to be provided in full view of clients and staff alike. Consideration should also be given for its circulation to key clients and its inclusion on company advertising material. .................................................................................................. 33

Action: Company to adopt Marketing Strategy as specified, ensuring that activities undertaken fit within the ambit of the Company's overall strategy" .................................................................................................................... 102

Action: QEDS application to be progressed for the purpose of conducting appropriate overseas market research, product testing, and/or the engagement of an Export Manager..................................................................... 103

Action: Terms of Reference to be developed as soon as possible for a comprehensive Marketing Plan, probably concurrently or post the proposed QEDS program. Plan to be developed should include the identification of suitable export markets (and of course domestic markets) and their potential, proposed timing and costs of market entry, regulatory requirements............................................................................................................. 104

Action: Confirm and implement National Marketing Strategy, establishing “trigger points” based on likely quarterly sales results. ...................................................... 106

Action: Comprehensive advertising and promotional campaign to be developed as soon as possible, upon employment of sales staff.......................................... 107

Action: Instigate design audit of manufacturing / workshop facilities utilising assistance through appropriate NIES program. ................................................... 113

Action: Register Minaji trade mark ASAP............................................................................. 123

Action: Company to investigate the cost effectiveness of Key Man Insurance via an income protection plan for illness or disability. Premiums should be based on a minimum waiting period of say, 15 weeks with accident / sickness benefit payable for at least 18 months (maximum say 60 months).... 125

Action: Implementation of Quality Assurance to commence as soon as possible to ISO9002...................................................................................................................... 127

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section SUMMARY OF MAJOR RECOMMENDATIONS & IMPLEMENTATION SCHEDULE (“ENTERPRISE DEVELOPMENT” PLAN)



Action: Implementation of Total Quality Management to commence upon substantial implementation of Quality Assurance. .............................................. 128

Action: Commence recruitment of key staff positions ASAP............................................ 131

Action: Utilise human resource consultant for advertising key job positions, and for the initial selection processes. ................................................................................ 131

Action: Written job descriptions to be developed for all staff positions (new and existing positions) by mid 1997................................................................................ 132

Action: Gain investor support as a matter of priority ......................................................... 133

Action: Establish and construct infrastructure and premises at Ebenezer (completion by April, 1997)..................................................................................... 133

Action: Commence production trialling (complete by October 1997) .......................... 133

Action: Commence full-scale commercial production by October 1997...................... 133

Action: Acquire major equipment purchases as detailed in the Schedules (commencing March, 1997, to complete by April 1997).................................... 134

Action: Management to proceed immediately to obtain investor support for the Project, co-jointly with proposed financiers if required. ...................................... 152

Action: Company to approach Austrade with a view to obtaining assistance and funding including the IAMP and EMDG Schemes. ............................................. 154

Action: Liaise with the Regional Office of DTSBI to access further NIES programs where required and appropriate .......................................................................... 154

Action: Company to submit application to DTSBI for assistance under the National Teaching Company Scheme once a suitable project has been identified. ... 155

Action: Where direct import / export is contemplated, export credit and insurance to be arranged through EFIC to cover Irrevocable Letter-of-Credit, External Trade Cover, Extended Terms, Unfair Calling Insurance, etc. as deemed appropriate by Company management when exporting proper commences................................................................................................. 156

Action: Company to obtain funding from Export Access for the purpose of proceeding to develop a Marketing or Business Plan......................................... 157

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section DISCLAIMER & QUALIFICATION BY CONSULTANT



23. DISCLAIMER & QUALIFICATION BY CONSULTANT

It should be noted that much of the data and material presented in this

Feasibility Study, including financial data, has been sourced from client records and information which have been made available to the consultant for analysis. Our report is prepared on the basis that full disclosure of all information and facts which may affect our report and / or advice has been made, and therefore the Consultant cannot accept any liability or responsibility whatsoever for the report and / or any advice contained therein unless such full disclosure has been made.

In accordance with the normal practice of Gary O Garner & Associates, I confirm

that this report90 is confidential to, and solely for use of Ms Catherine Scally, subject to its provision to the Department of Tourism, Small Business & Industry (as instructed). No responsibility is accepted to any third party who relies on the whole or any part of our report.

Finally, neither the whole of the report nor any part or reference thereto, may be

published in any document, statement or circular nor in any communication with third parties without the prior authorisation and written approval by Gary O Garner & Associates of the form and context in which it will appear.

GARY OWEN GARNER B.Bus., A.V.L.E.(Val.), Assoc.Dip.Val., P.Ag., Dip.Ag., A.I.M.M., M.A.A.A.C. Registered Valuer (Qld) No. 1959

90 The majority of financial information (in particular, cost of certain items of capital plant and equipment)

has been prepared from information provided by the client, and whilst every care has been taken with its preparation no responsibility is accepted by Gary O Garner & Associates or its employees for the accuracy of any data contained herein.

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section APPENDICES Appendix A - Resume of Ms Catherine Scally



24. APPENDICES

Appendix A - Resume of Ms Catherine Scally Born in France 1970’s Studied medicine - Paris University - worked as a Nurse

(qualified) 1976 Came to Australia 1979 Returned to France 1982 Studied Bachelor of Oriental Medicine (Queensland) 1982-1988 Practiced oriental medicine for 5 years - Brisbane

Queensland. 1980’s Investigated (informally) various aspects of leather

manufacturing including tanneries - primarily through visits and contacts to France.

1987-90 Commenced manufacturing of leather gowns (utilising primarily imported skins). Found it difficult to source suitable skins. Won various awards. Exporting mostly to Canada and the United States - primarily high value items.

1990 Sold designs and stock during recession. 1991 Toured Europe to investigate tanneries. 1992 Course in - Diploma in Export Management. Received

award (Diplomate of the Year 1991 EFIC/ Austrade) Member of the Australian Institute of Export 1993 - present Continued investigation into the tannery industry (overseas

and domestically).

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section APPENDICES Appendix B - Examples of Written Job Descriptions



Appendix B - Examples of Written Job Descriptions The following examples91 demonstrate the general format by which written job

descriptions can be formulated.

JOB TITLE: LABOURER / TRUCK DRIVER JOB PURPOSE: TRANSPORTS AND DELIVERS PRODUCT OR MATERIAL by operating a trailer / truck. ESSENTIAL JOB RESULTS: % of Time

% of Time

1. DETERMINES CONDITION OF VEHICLE by inspecting vehicle before and after use; logging inspection; reporting requirements.

5. MAINTAINS SAFE VEHICLE AND CONDITIONS AND PROTECTS LOAD by complying with organisation policies and procedures and highway rules and regulations.

2. ENSURES CORRECT LOADING OF VEHICLE by loading product or material; directing material handlers.

6. CONSERVES RESOURCES by using equipment and supplies as needed to accomplish job results.

3. DELIVERS PRODUCT OR MATERIAL TO DESTINATION by loading product or material; directing material handlers.

7. MAINTAINS RECORDS by completing driver log; obtaining shipper and receiver authorisations; filing documents.

4. ENSURES OPERATION OF EQUIPMENT by completing preventive maintenance requirements; following manufacturer's instructions; troubleshooting malfunctions; calling for repairs; maintaining equipment supplies; evaluating new equipment and techniques.

8. CONTRIBUTES TO TEAM EFFORT by accomplishing related results as needed.

91 Taken from source material: Plachy RJ, Plachy SJ, Results-Orientated Job Descriptions, Amacon (1993)




JOB TITLE: LABOURER / MAINTENANCE MECHANIC JOB PURPOSE: MAINTAINS PRODUCTION AND QUALITY by ensuring operation of machinery and mechanical equipment. ESSENTIAL JOB RESULTS: % of Time

% of Time

1. ENSURES OPERATION OF MACHINERY AND MECHANICAL EQUIPMENT by completing preventive maintenance requirements on engines, motors, pneumatic tools, conveyor systems, and production machines; following diagrams, sketches, operations manuals, manufacturer's instructions, and engineering specifications; troubleshooting malfunctions.

8. MAINTAINS EQUIPMENT, PARTS, AND SUPPLIES INVENTORIES by checking stock to determine inventory level; anticipating needed equipment, parts, and supplies; placing and expediting orders; verifying receipt.

2. LOCATES SOURCES OF PROBLEMS by observing mechanical devices in operation; listening for problems; using precision measuring and testing instruments.

9. CONSERVES MAINTENANCE RESOURCES by using equipment and supplies as needed to accomplish job results.

3. REMOVES DEFECTIVE PARTS by dismantling devices; using hoists, cranes, and hand and power tools; examining form and texture of parts.

10. PROVIDES MECHANICAL INFORMATION by answering questions and requests.

4. DETERMINES CHANGES IN DIMENSIONAL REQUIREMENTS OF PARTS by inspecting used parts; using rules, callipers, micrometers, and other measuring instruments.

11. PREPARES MECHANICAL MAINTENANCE REPORTS by collecting, analysing, and summarising information and trends.

5. ADJUSTS FUNCTIONAL PARTS OF DEVICES AND CONTROL INSTRUMENTS by using hand tools, levels, plumb bobs, and straightedges.

12. MAINTAINS TECHNICAL KNOWLEDGE by attending educational workshops; reviewing technical publications; establishing personal networks.

6. CONTROLS DOWNTIME by informing production workers of routine preventive maintenance techniques; monitoring compliance.

13. MAINTAINS CONTINUITY AMONG WORK TEAMS by documenting and communicating actions, irregularities, and continuing needs.

7. FABRICATES REPAIR PARTS by using machine shop instrumentation and equipment.

13.




JOB TITLE: MARKETING / CUSTOMER SERVICE MANAGER JOB PURPOSE: MAINTAINS CUSTOMER SATISFACTION by defining and developing product, service, and problem-solving

information; training and maintaining staff to provide information and resolve problems.

ESSENTIAL JOB RESULTS:

% of Time % of Time

1. MEASURES CUSTOMER PERCEPTIONS AND AWARENESS LEVELS OF PRODUCTS AND SERVICES by designing and implementing survey methodologies; validating results; tracking effectiveness of advertising or information campaigns.

7. COMPLETES CUSTOMER SERVICE OPERATIONAL REQUIREMENTS by scheduling and assigning employees; following up on work results.

2. ASSESSES CUSTOMER SATISFACTION WITH GOODS OR SERVICES by designing and implementing satisfaction surveys and other research tools; analyzing and interpreting results; designing and implementing organizationwide customer service training programs.

8. ACHIEVES FINANCIAL OBJECTIVES by preparing an annual budget; scheduling expenditures; analyzing variances; initiating corrective actions.

3. RESOLVES CUSTOMER DISSATISFACTIONS by planning and directing the receipt, investigation, evaluation, and settling of complaints and claims; following up with customers; personally resolving difficult situations.

9. MAINTAINS CUSTOMER SERVICE STAFF by recruiting, selecting, orienting, and training employees.

4. RESOLVES DISCREPANCIES by consulting with other managerial personnel; collecting and analyzing information.

10. MAINTAINS CUSTOMER SERVICE STAFF JOB RESULTS by coaching, counselling, and disciplining employees; planning, monitoring, and appraising job results.

5. AUTHORIZES RETENTION OF DATA BY analyzing future applicability of complaint resolution information.

11. MAINTAINS PROFESSIONAL AND TECHNICAL KNOWLEDGE by attending educational workshops; reviewing professional publications; establishing personal networks; participating in professional societies




MARKETING / CUSTOMER SERVICE MANAGER (Continued)

6. MAINTAINS CUSTOMER SERVICE OPERATIONS by initiating, coordinating, and enforcing program, operational, and personnel policies and procedures.

.




JOB TITLE: PRODUCTION MANAGER JOB PURPOSE: PRODUCES PRODUCTS by creating new designs and modifications. ESSENTIAL JOB RESULTS:

% of Time % of Time

1. PLANS PROJECTS by studying customer requirements, market demand, and competitors' products; identifying and analyzing trends in technology; conferring and collaborating with other members of management.

7. MAINTAINS ENGINEERING STAFF JOB RESULTS by coaching, counselling, and disciplining employees; planning, monitoring, and appraising job results.

2. DETERMINES FEASIBILITY OF PROJECT by identifying and forecasting costs and requirements.

8. ACHIEVES FINANCIAL OBJECTIVES by preparing the engineering budget; scheduling expenditures; analyzing variances; initiating corrective actions.

3. COMPLETES PROJECTS by directing and approving design and modification activities.

9. COMPLIES WITH FEDERAL, STATE, AND LOCAL LEGAL REQUIREMENTS by studying existing and new legislation; anticipating future legislation; enforcing adherence to requirements; advising management on needed actions.

4. MAINTAINS PROFESSIONAL AND TECHNICAL KNOWLEDGE by attending educational workshops; reviewing professional publications; establishing personal networks; participating in professional societies

10. MAINTAINS ENGINEERING OPERATIONS by initiating, coordinating, and enforcing project, operational, and personnel policies and procedures.

5. COMPLETES ENGINEERING PROJECTS by scheduling and assigning employees; following up on work results.

11. MAINTAINS ENGINEERING DATA BASE by developing information requirements; designing an information system.

6. MAINTAINS ENGINEERING STAFF by recruiting, selecting, orienting, and training employees.





JOB TITLE: SALES REPRESENTATIVE JOB PURPOSE: SERVES CUSTOMERS by selling products; meeting customer needs. ESSENTIAL JOB RESULTS:

% of Time

% of Time

1. SERVICES EXISTING ACCOUNTS, OBTAINS ORDERS, AND ESTABLISHES NEW ACCOUNTS by planning and organizing daily work schedule to call on existing or potential sales outlets and other trade factors

7. RESOLVES CUSTOMER COMPLAINTS by investigating problems; developing solutions; preparing reports; making recommendations to management.

2. ADJUSTS CONTENT OF SALES PRESENTATIONS by studying the type of sales outlet or trade factor.

8. PREPARES SALES OUTLET PERSONNEL, CONTRACTORS, AND OTHER TRADE FACTORS WITH PRODUCT KNOWLEDGE AND SELLING SKILLS by conducting and/or participating in sales promotion and educational meetings.

3. FOCUSES SALES EFFORTS by studying existing and potential volume of dealers.

9. MAINTAINS PROFESSIONAL AND TECHNICAL KNOWLEDGE by attending educational workshops; reviewing professional publications; establishing personal networks; participating in professional societies.

4. SUBMIT ORDERS by referring to price lists and product literature.

10. PROVIDES HISTORICAL RECORDS by maintaining records on area and customer sales.

5. KEEPS MANAGEMENT INFORMED by submitting activity and results reports, such as daily call reports, weekly work plans, and monthly and annual territory analyses.

11. RECOMMENDS CHANGES IN PRODUCTS, SERVICE, AND POLICY by evaluating results and competitive developments

6. MONITORS COMPETITION by gathering current marketplace information on pricing, products, new products, delivery schedules, merchandising techniques, etc.





JOB TITLE: LABOURER / MACHINE OPERATOR JOB PURPOSE: FORMS PRODUCT by operating fabricating equipment ESSENTIAL JOB RESULTS: % of Time

% of Time

1. DETERMINES SEQUENCE OF OPERATIONS by studying blueprints, specifications, and work orders.

7. ENSURES OPERATION OF EQUIPMENT by completing preventive maintenance requirements; following manufacturer's instructions; troubleshooting malfunctions; calling for repairs.

2. PREPARES MACHINE FOR PRODUCTION by positioning and securing dies, stops, guides, and turntables.

8. MAINTAINS STOCK INVENTORY by checking stock to determine amount available; anticipating needed stock; placing and expediting orders for stock; verifying receipt of stock.

3. REGULATES MACHINING by setting and adjusting controls.

9. MAINTAINS CONTINUITY AMONG WORK TEAMS by documenting and communicating actions, irregularities, and continuing needs.

4. PRODUCES PARTS by locating and marking reference points on workpiece with rule, compass, template, etc.; positioning or aligning workpiece against stops and guides or with die; operating equipment.

10. DOCUMENTS ACTIONS by completing production and quality logs.

5. MAINTAINS SPECIFICATIONS by observing operations; detecting malfunctions; inspecting parts; controls; replacing dies.


6. RESOLVES PRODUCTION PROBLEMS by altering process to meet specifications; notifying supervisor to obtain additional resources.

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section APPENDICES Appendix C - Description of The Leather Tanning Industry and Summary of Findings: United

States



Appendix C - Description of The Leather Tanning Industry and Summary of Findings: United States

This information has been provided by the United States Government (located on Internet

site, and is reproduced in full). INDUSTRY 3111, LEATHER TANNING AND FINISHING This industry is made up of establishments primarily engaged in tanning, currying,

and finishing hides and skins into leather. Also included in this industry are establishments primarily engaged in leather converting (buying hides and skins and having them processed into leather on a contract basis by others).

The 1992 definition of this industry is the same as that used in the 1987 Standard

Industrial Classification (SIC) system. The SIC number and title also are the same. In the 1992 Census of Manufactures, Industry 3111, Leather Tanning and Finishing,

had employment of 16.6 thousand. The employment figure was 14 percent above the 14.6 thousand reported in 1987. Compared with 1991, employment increased 44 percent. The 1991 data are based on the Census Bureau's annual survey of manufactures (ASM), which is a sample survey conducted each year between censuses.

The leading States in employment in 1992 were Pennsylvania, Michigan, and

Wisconsin accounting for approximately 36 percent of the industry's employment. This represents a shift from 1987 when New York, Wisconsin, and Pennsylvania accounted for approximately 35 percent of the industry's employment.

The total value of shipments for establishments classified in this industry was $2.9

billion. Establishments in virtually all industries ship secondary products as well as

products primary to the industry in which they are classified and have some miscellaneous receipts, such as resales and contract receipts Industry 3111 shipped $2.8 billion of products considered primary to the industry, $51.5 million of secondary products, and had $61.5 million of miscellaneous receipts, resales, and contract work. Thus, the ratio of primary products to the total of both secondary and primary products shipped by establishments in this industry was 98 percent (specialization ratio). In 1987, the specialization ratio also was 98 percent.

Establishments in this industry also accounted for 95 percent of products

considered primary to the industry no matter where they were actually produced (coverage ratio). In 1987, the coverage ratio was 96 percent.

The products primary to industry 3111, no matter in what industry they were

produced, appear in file MC92F6A and aggregate to $2.9 billion. For further explanation of specialization and coverage ratios, see file MC92F5B and the appendixes.

The total cost of materials, services, and fuels and energy used by establishments

classified in the leather tanning and finishing industry amounted to $2.0 billion. Data on specific materials consumed appear in file MC92F7.

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section APPENDICES Appendix C - Description of The Leather Tanning Industry and Summary of Findings: United

States



Single-establishment companies in this industry with less than 20 employees were excluded from the mail portion of the census. The data for these establishments (and a small number of larger establishments whose reports were not received at the time the data were tabulated) were obtained from administrative records of other agencies or developed from industry averages. These establishments accounted for 5 percent of the total value of shipments.

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section APPENDICES Appendix D - Leather Finishing: an Overview



Appendix D - Leather Finishing: an Overview Note: this information has been sourced from the Internet, and is Copyright © 1995 Offset Info Service

srl, Italy, All Rights Reserved. Leather, in fact, is a unique material which prevents liquids from passing but not

gases or vapours. In tanning, there is an important distinction between the upper part of the dermis, in contact with the epidermis, which makes up what is called grain leather and is characteristic of each different type of animal, and the part below (reticular layer) which is called the split.

FINISHING TECHNIQUES Finishing includes all those operations which are carried out on the dry dyed hide

and which transform it into a practically finished product. Numerous methods and materials are used and very depending on the result desired but they all add up to one thing: the application of chemicals.

These substances can be distributed over the hide with three methods, used

singularly or in combination:

• using a pad • spraying • coating.

Finally, other operations can be carried out such as polishing or glazing, pressing

and printing.

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section APPENDICES Appendix E - Société Internationale de Communication (SIC-SARL), part of the Semaine

Internationale du Cuir (SIC) Group



Appendix E - Société Internationale de Communication (SIC-SARL), part of the Semaine Internationale du Cuir (SIC) Group

LEATHER MARKETS is the first international newsletter for the leather industry. It has

been commissioned by the Société Internationale de Communication (SIC-SARL), part of the Semaine Internationale du Cuir (SIC) Group. The new newsletter for the leather industry was launched on 6 March 1995. Appearing fortnightly, LEATHER MARKETS looks at current events in the leather industry throughout the world from a new angle, by showing how and just how much macro-economic developments affect industrial and commercial activities in general and leather markets in particular. The intention is not simply to add another publication to the existing specialist press, but instead to offer a new journal, one with two original features:

• it will be original firstly in its content for the editorial subject matter will be

only the economic aspect of the leather industry and this aspect alone. Thus, in contrast to existing publications, LEATHER MARKETS does not intend to address technical issues and fashion trends;

• it will be original secondly in its form as the choice of a unique format in the professional press will enable the decision-maker - for whom LEATHER MARKETS is intended - to read it easily and quickly, especially as it intentionally does not contain any advertising, thus reinforcing its independence and devoting its entire content to information alone.

To make LEATHER MARKETS even more practical and useful, Internationale de

Communication has signed a cooperation agreement with the International Trade Centre in Geneva for the exclusive publication in each issue of the whole Markets News Service reports on hides and leather, written by Ron Sauer, an expert on the international hide and leather trade.

LEATHER MARKETS is divided into six main sections, written and presented in a

readable and practical way:

1. INTERNATIONAL: a series of brief articles about the main leather-producing countries throughout the world, all illustrated with a graph or table presenting accurate and reliable statistical data;

2. COUNTRY PROFILE: a report on the leather industry in a particular country, considering both the sectorial aspect of the market and the economic components which characterise it;

3. FEATURE: an in-depth article addressing topics as wide-ranging as legislation, consumption, the environment, methods, marketing etc.

4. PRICES: comments and quotations from some fifty countries which produce and export untreated leather and hides worldwide;

5. EUROPEAN UNION: current economic and legal events in the Europe of Fifteen, addressed from an angle which concerns the leather industry directly;

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section APPENDICES Appendix E - Société Internationale de Communication (SIC-SARL), part of the Semaine

Internationale du Cuir (SIC) Group



6. LEATHER MARKETS' primary goal is to get to the heart of the matter, so as to

provide a worthwhile service to professionals in the leather industry worldwide, regardless of country or sector of activity. This approach is totally in line with the spirit which has always motivated SIC's management team.

Information

Frequency: fortnightly Language : English Number of pages: 36 Subscriptions: 2,500 FF inclusive of all taxes (US$500) Issue no. 1: 15,000 copies Number of subscriptions anticipated: 1,500 Publication Manager: Pierre-Marie BARNABE Chief-Editor: Frédéric TADDEI Editorial address: 109, rue Saint-Honoré, 75373 PARIS CEDEX 08 FRANCE Tel.: (33-1) 43 59 05 69 Fax: (33-1) 43 59 30 02

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section APPENDICES Appendix F - Market news service for hides, skins and semi-tanned leather



Appendix F - Market news service for hides, skins and semi-tanned leather

This Appendix has been sourced from the Internet, with primary credit to Ron Sauer, International

Trade Centre (UNCTAD/GATT), Geneva

World view November 13, 1995 A rather limited report since our previous one was issued only a short while ago

and not much has changed since then. Hard times continue everywhere and making money in the raw material trade remains extremely difficult. Nothing is really clear and it is hard to point out any outstanding business.

The most active trade of two weeks ago, north American hides to Asia has

reduced considerably. Today the most visible buying countries are Turkey and Hong Kong. Turkey for both hides and skins in all possible varieties. Hong Kong, as usual in low grade material mostly of the bovine type. The most visible articles in demand are still Brazilian hides in either raw or wetblue (although clearly decreasing now because of quality ÔsurprisesÕ) and wool -on- sheepskins for shoe/boot lining. for the latter buyers are clearly Turkey (again) but also Eastern Europe.

The general opinion of the market is very much divided in two. Half say things are

as quiet as before with day to day business only. The other half says things are slowly getting better. Where all agree upon is that October was definitely better than September, that things have not gone worse and that actual business deals remain few. Opinions for the rest of the year are surprisingly optimistic in many places. Some say work for the summer season will start immediately after the fair, so still this year (but we - MNS- said the same about the outcome of the Dusseldorf fair). Others doubt something will change before the year end. Prices remain basically unchanged but for European hides the situation is extremely unclear.

In England and Ireland prices are a bit firmer, in Holland, Belgium and Switzerland

a bit easier, in Germany and France nobody wants to hear about lower prices so nothing changed and Scandinavia is sold out for the rest of the year. The thing all have in common however, is that nobody sells anything except than for the small quantities of top quality material from the usual places which always finds buyers.

With today’s little business and minor price changes in general the theory comes

us up that any increase in demand will immediately have to result in higher prices. There is some logic in that statement but please note it is not ours. Everybody speaks about the importance of a real winter. It seems it started last week in Europe and shops started selling straight away indeed. Unfortunately temperatures have recovered this week and the effect on retail sales seems to have disappeared. A difference with the situation of two weeks ago is this: previously tanners said prices were not high and not important since they had no orders anyway. So high or low, they would not buy since they did not need anything. This week we hear of a fair amount of bids on all kinds of material everywhere.

Still hardly any business is seen but tanners who bid seem to need something at

least; after all, sellers might accept their bids. this was not the case a fortnight ago. There were hardly any bids then.

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section APPENDICES Appendix F - Market news service for hides, skins and semi-tanned leather



Australia November 13, 1995 The rumour we printed in our previous report about much reduced double face

skin prices cannot be true. Taking the continuous demand from Turkey and Eastern European countries for skins with wool-on into consideration the story that these skins hold their value is more likely. This would also explain why fellmongers in France cannot afford these skins and are forced to reduce their production.

France November 13, 1995

Fellmongers enjoy better demand but lack of raw material forces them to reduce

production. Wool prices are no longer going down (Australian and New Zealand auction prices increased by 5/7%) but it is too early to say all is well again. Packers are already asking more for skins however. woolskins have already become too expensive it is said. Interest for French hides has improved with the reducing interest for Brazilean hides in Italy. The Lineapelle fair in Bologna (Italy) may have added to the renewed interest also. Suppliers but also buyers have small stocks. for the moment business remains extremely scarce however.

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section APPENDICES Appendix G - Trade Show Opportunities



Appendix G - Trade Show Opportunities

AUSTRALIA' S INTERNATIONAL FASHION & BOUTIQUE SHOW This information has been extracted from the Internet. Credit is therefore afforded as follows: Copyright © 1995 Offset Info Service srl, Italy, All Rights Reserved.

APRIL

PRODUCTS: RAW HIDE, TANNERY, SHOES ( M, W), LEATHER-GOODS ( LUGGAGE, HANDBAGS,

SMALL LEATHER-GOODS), LEATHER AND FABRICS GARMENTS ( M, W), SECURITY, SHOPFITTING, CARRYBAGS, COMPUTER SYSTEMS, SEMINARS.

ORGANIZERS:

FASHION & BOUTIQUE SHOW, 30 BETRAM STREET, CHATSWOOD NSW 2067, AUSTRALIA. TEL. (2) 4360422 - 4196049 FAX : 4392157

ADDRESS:

DARLING HARBOUR SIDNEY. HALL 5. MERINO BOULEVARD DARLING HARBOUR NSW 2000 AUSTRALIA.

France & Italy

• EQUIPÕ MAG/SALON DU COMMERCE

• EURO MOSAIQUE • EXPOPROTECTION-

EXPOSECURITƒ • SALON INTERNATIONAL DE LA

FRANCHISE • INTER-SELECTION • ITALMODA INTERNATIONAL • EXPOSITION DE LA

MAROQUINARIE ET ARTICLES DE VOYAGE

• MAROVISION ACCESSOIREXPO • SALON INTERNATIONAL DE

MEUBLE • MEUROPAM INTERNATIONAL

PROMEUROPAM • MIDEC • PREMIERE CLASSE • ÒPREMIERE VISIONÓ TISSUS

CREATION

• PRƒSƒLECTION ARTICLES CHAUSSANTS

• PRESELECTION EXPO CHAUSSURES

• PRESELECTION MODE FOURNITURES

• SALON INTERNATIONAL DU PRET-A-PORTER FƒMININ

• PROMO-CHAUSSURES • SALON INTERNATIONAL DE LA

MODE ENFANTINE • SEHM • SEMAINE INTERNATIONALE DU

CUIR • S.I.G. • S.I.I.F. • SIMA • SISEL • TEXITECH

Germany • C.A.T. • FUR & FASHION FRANKFURT • G D S • I F L • IGEDO INTERNATIONALE

MODEMESSE MIT IGEDO DESSOUS

• I.M.S. • INTERSTOFF

• INTERZUM • ISPO /SPRING • ISPO /AUTUMN • INTERNATIONAL LEATHER

GOODS FAIR • MODEFORUM OFFENBACH • MODE WOCHE MÜNCHEN • P.L.W. • SCHUH AKTUELL

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section APPENDICES Appendix H - CSIRO Leather Research Centre



Appendix H - CSIRO Leather Research Centre This information has been extracted from the Internet, with text provided by the CSIRO Leather

Research Centre:

CSIRO Leather Research Centre's mission is to increase the demand for Australian

hides, skins and leather by improving the technology and productivity of the domestic tanning industry with the aim that all our raw material is processed in Australia and that increased demand will lead to enhanced financial returns to producers of the raw material and to the tanning industry.

Personnel: 25 Professional and Technical staff Expertise: Applied and strategic research in both mechanical and chemical engineering of

processes to produce premium quality skins, hides and leathers with minimal impact to the environment.

CSIRO research on hides, skins and leather began in 1965 and built on basic

research into protein structure and reactivity as well as early fellmongering investigations.

The Leather Research Centre, located at Clayton, Victoria, is part of the CSIRO

Division of Wool Technology and conducts research on the conversion of hides and skins into leather.

The Centre has excellent research facilities and has access to a wide range of

advanced analytical techniques , spectroscopy , microscopy and sophisticated pilot-plant facilities.

In order to transfer new technology to industry, the Centre's staff carry out many

large scale trials in partnership with tanneries throughout the country. The Centre has a wide expertise in leather science and technology and the

research program concentrates on those items which will take the Australian industry into the 21st century.

Achievements:

1.Hides Hair-saving processes

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section APPENDICES Appendix H - CSIRO Leather Research Centre



2.Skins Anti-felting process for woolskins Direct Lime Process Wool Recovery Medical Sheepskins 3.The Environment Salt free pickling Total chrome recycling 4.Consultancy

For further information, please contact:

Diane Beruldsen Email: [email protected] CSIRO Division of Wool Technology Leather Research Centre Bayview Avenue, Clayton, Victoria, AUSTRALIA

Postal address: Private Bag 10, Clayton South MDC Clayton, Victoria AUSTRALIA 3169 Telephone: +61-(03)-9542 2364 Fax: +61-(03)-9542 2363

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section APPENDICES Appendix I - International Leather Industry Directory



Appendix I - International Leather Industry Directory

An Internet Search on those organisations registering themselves in terms of

Leather Research Centres, Associations and Related Links is provided by the “International Leather Industry Directory”. This site provides information on a range of organisations including:

• Raw Material - Hides, Skins, Wet-blue, Pickle • Leather Producers • Footwear Producers - Manufacturers; Wholesale; Retail; • Leather Products - Manufacturers; Wholesale; Retail; • Machinery • Chemicals • Leather, Footwear & Associated Fairs • Leather Publishing • Exotic and Specialised Leather • Leather Linked sites

The following selected data has been extracted, summarised as follows:

Exotic and Specialised Leather 1. Ostrich-Emu InfoNet (USA) 2. Ostriches Online (UK) 3. Ostriches and Emus (UK) 4. Development Leather Goods Factory (HK) 5. Total Leather Care (USA) 6. David Morgan (USA) 7. Rhea Grande Rhea Leather (Canada) 8. Breeding "Allevamento Corte Croce - Mattioli"(Italy) 9. The Absolute Worldwide Ostrich Information Center 10. Ostrich / Leather (USA) 11. Mid-Tex Ostrich Co. (USA) 12. ALL SOUTH MARKETING CORPORATION (USA) 13. R & V Leather International(USA) 14. New Mexico Ostrich Association (USA) 15. Paco Morelli Leather, Inc. (USA)




Leather Producers 1. Hutchings & Harding Ltd.(UK) 2. Volen (Russia) 3. Argentina Leather (Argentina) 4. Vietnam Leather & Shoe Industry 5. Kanter Auto Products (USA) 6. Leather & Shoe Industry (India) 7. Conceria MONTANA s.r.l.(Italy) 8. Scottish Tanning Industries (UK) 9. Buckskin Fur & Leather Co

(Canada) 10. Monti and Monti s.r.l. (Italy) 11. Conceria Alba s.p.a. (Italy) 12. Automotive Upholstery Leather

(USA) 13. Solettificio Maffei Mila snc (Italy) 14. Elmo Calf AB (Sweden) 15. Twin Leather Co. Inc. (USA) 16. Ostrich Leather (S.A) 17. Kaufmann Demuth & Co. Ltd. (UK) 18. Pittards plc (UK) 19. Shrut and Asch Leather Company

Inc. (USA) 20. El Nasr Tannery Co. (Egypt) 21. David Morgan (USA) 22. Consorzio Overgroup (Italy) 23. Consorzio Leather World (Italy) 24. Saulys Enterprise (Lithuania) 25. Multiprod (India), Pvt. Ltd. (USA) 26. Italo Leather (USA)

27. Iceland Skin Industries Ltd. (Iceland)

28. Crossroads Fine Leather (USA) 29. A Handy Guide - Leather &

Leather Goods (USA) 30. Agiogroup (Russia) 31. AsisMart (USA) 32. Vergolani Gianantonio (Italy) 33. THE MASTROTTO GROUP (Italy) 34. POLAR LEATHER Ltd (Finland) 35. FOX VALLEY TANNING (USA) 36. Leather Supply Guide of Canada! 37. Bungert's Gerbhaut (Germany) 38. AutoCare Direct (USA) 39. The Sponge Fishing Company

(USA) 40. Federation Leather Collection

(Australia) 41. Ostrich / Leather (USA) 42. Mid-Tex Ostrich Co. (USA) 43. CONCERIA SCAVO SRL (Italy) 44. The Hungarian Leather and

Footwear Homepage 45. CURTUMES FABRÍCIO, LDA.,

(Portugal) 46. Strong & Fisher Ltd. (UK) 47. EXPOPELL s.r.l. (Italy) 48. Teneria Cuauhtemoc (Mexico)

Raw Material - Hides, Skins, Wet-blue, Pickle 1. Volen (Russia) 2. H. Hides & Skins Australia Pty. Ltd

(Aus) 3. Scottish Tanning Industries (UK) 4. NEW EUROPE TRADING

CORPORATION (Canada) 5. Arcapelli s.a.s. (Italy) 6. Quaker City Hide Co. (USA) 7. San Ramón Agro-Ind. Y Com

(Paraguay) 8. Kaufmann Demuth & Co. Ltd. (UK) 9. Pittards plc (UK) 10. Saulys Enterprise (LITHUANIA)

11. Agiogroup (Russia) 12. Friedrich Sturm GmbH & Co. KG.

(Germany) 13. POLAR LEATHER Ltd (Finland) 14. Business International (UK) 15. Bungert's Gerbhaut (Germany) 16. Ostrich / Leather (USA) 17. Mid-Tex Ostrich Co. (USA) 18. Twin Leather Co. Inc. (USA) 19. BARNETT TRADING INC. (USA) 20. Pakistan Leather Industry 21. Strong & Fisher Ltd. (UK)

Leather Products - Manufacturers; Wholesale; Retail 1. MATTS'S Home Page (Australia) 2. Gosh Leather Home Page

(Australia)




3. Canterbury Leather International Ltd (Australia)

4. Federation Leather (Australia) 5. Pecari Leather Wear (Australia) 6. Don Logozzo Fur & Leather

(Australia) 7. Reidel's Fine Leather Pty Ltd

(Australia) 8. L&J Leather Manufactures

(Australia) 9. Jackaroo - Australian Hats (Aus) 10. Hutchings & Harding Ltd. (UK) 11. Golf Brothers (Italy) 12. Shepherd's Flock (USA) 13. Kin Hing Manufacturing Company

(Hong Kong) 14. JMS Trading (USA) 15. Falls Leather Gallery (USA) 16. Trans-Actions International Ltd.

(USA) 17. Cirrus "THE SPIRIT OF ADVENTURE"

(UK) 18. Mobilex (USA) 19. Selecciones PERGAMINO Madrid

(Spain) 20. AMATINA'S Leather House (USA) 21. Mik Trading Limited (Hong Kong) 22. Jackspeed Leather Special Pte

Ltd (Singapore) 23. Into Leather Inc. (USA) 24. Hong Kong Leather Goods & Bag

Manufacturers (HongKong) 25. Bugatti Fine Leather Goods (USA) 26. Spiegel Inc. (USA) 27. aimpes - mipel (Italy) 28. Braccialini s.r.l. (Italy) 29. Wap's Emporio (Italy) 30. Kirk's Suede Life, Inc. (USA) 31. David Enterprises (USA) 32. MiMoJo Home Page (USA) 33. Nappa Leather Jackets (USA) 34. Huntingtons - Business Leather

Goods (USA) 35. JAMIN' LEATHER CATALOG - SMALL

LADIES HANDBAGS (USA) 36. Total Leather Care (USA) 37. Red Dawg Leather Inc. (USA) 38. Outer World (USA) 39. Pieced Leather Shawl (USA) 40. Leather Craft Inc. Elegant Leather

Seating (USA) 41. Comfy/Inter-American Sheepskins

Inc. (USA) 42. Leather Accessories ConneXion

(USA)

43. Leather Draw Reins (USA) 44. Dinensen's Leather Only Furniture

(USA) 45. Foreign Affairs, Inc. (USA) 46. Elmo Calf AB (Sweden) 47. Carl Dyer's (USA) 48. Blue Valor Corp. (USA) 49. Leather Center Inc. (USA) 50. Flux Productions (USA) 51. Protocol Leather Apparel (USA) 52. Gun Leather Limited (USA) 53. Cyber-World Outwhere (USA) 54. TUSCANY PARK ARABIANS

(Canada) 55. Louis Vuitton North America (USA) 56. Campbell Furniture (USA) 57. ZAGAROLI CLASSICS (USA) 58. Action Lane (USA) 59. Pampas by Mail (USA) 60. Xuebao Group Company (China) 61. Leathersmith Computer Bags 62. Bonia The Italian Inspiration

(Singapore) 63. Collection Link (Hong Kong) 64. J-ARROW (USA) 65. Nauta s.r.l. (Italy) 66. Down Home Leather (USA) 67. Leather & Gift Outlet Mall (USA) 68. Brooks Saddle Company (USA) 69. Leather & Heavy Needle Work

Machines (USA) 70. Mike's Womens Leather Jackets

(USA) 71. Development Leather Goods

Factory (Hong Kong) 72. JORDAN CREEK LEATHER SHOP

(USA) 73. C. Design (USA) 74. New Way Development Co.

(Hong Kong) 75. Fox (USA) 76. Henk Berg Leather (TASMANIA) 77. Northwest International Furs (USA) 78. David Morgan (USA) 79. APC Srl (Italy) 80. Sheepskin and Leather (USA) 81. LA RANCIA VALIGERIA Italian

Workshop for leathergoods (Italy) 82. & G. s.r.l. (Italy) 83. Argos s.r.l. (Italy) 84. Prak-Sen Company, Inc. (USA) 85. CUOIO SCHEDONI MODENA

(Italy) 86. Roche Bobois (Canada) 87. JDS Leather Company (USA)




88. Fraker Saddlery (USA) 89. Cactus Rose Cowboy Co. (USA) 90. Saulys Enterprise (Lithuania) 91. KRAMER Handgun Leather (USA) 92. the olde Hide House (Canada) 93. Texas Iron (USA) 94. GOLDEN FLEECE IMPORTS (USA) 95. Repair of Footwear & Leather

Goods Directory (UK) 96. A Handy Guide - Leather &

Leather Goods (USA) 97. North Beach Leather (USA) 98. Technology Leather System Case

(USA) 99. LEATHER KING FURNITURE (USA) 100. Newton Furniture (USA) 101. Leather Furniture Co.of Seattle

(USA) 102. The Leather Furniture Company

(USA) 103. Arizona Auto Leather (TM) (USA) 104. Ferraridea 105. European Handbag Limited

(Hong Kong) 106. Classic Leather Company (USA) 107. Maris International - Leather 108. Custom Gifting by Lucas (USA) 109. Pak-Biz 110. Functional Leather (USA) 111. PELLE via roma (USA) 112. Mallory Western and Leather

Supply, Inc. (USA) 113. FINE HAND-CRAFTED LEATHER

GOODS (Italy) 114. Covetti (USA) 115. Peleteria Jalisco de Baja

California (Mexico) 116. Empire Jacket Co. (USA) 117. NUOVA CON-PEL S.r.l. (Italy) 118. Buckle & Hyde Leather (USA) 119. J and R Sanildo (USA) 120. THE LEATHER TOUCH (USA) 121. Welcome To Art Leather (USA) 122. THE COMPLETE LEATHER CARE KIT

(USA) 123. Craftsmen in Leather (USA) 124. Looper Leather Goods (USA) 125. Continental Furniture (USA) 126. THE RONSDALE TRAVELLERS CLUB

COLLECTION (Hong Kong) 127. GINO CERRUTI Leather 128. The Luggage Shop (UK) 129. Buffalo Rose Leather (USA) 130. Guess Fashion Page 131. BA Angeletti s.r.l. (Italy)

132. Paolo da Ponte S.r.l. (Italy) 133. Sabatini Abbigliamento Pelle

(Italy) 134. Roger McNear--Northwind

Leather (USA) 135. Montana Pitch-Blend (USA) 136. Pearson Furniture Co. (USA) 137. Mori Luggage and Gifts (USA) 138. Kiira Designs Leather Chairs &

Recliners (USA) 139. Case-Tech Leather Inc. (Canada) 140. American Leather Co (USA) 141. Leathers (USA) 142. Gagliard (Italy) 143. Brandywine Valley Harness

Company (USA) 144. Johnson Leather Corp (USA) 145. Santa Fe Leather Collection by

Dilana (USA) 146. Alfa & Omega International trade

(Argentina) 147. Theodore & William, Inc., (USA) 148. HATS by HEAD 'N HOME PAGE

(USA) 149. & G. s.r.l. (Italy) 150. Roadgear (USA) 151. Spider's Den (USA) 152. Advanced Leather Technologies

(Canada) 153. Pedro Dagorret S.A. (Chile) 154. GOLDEN LINE S.r.l. (Italy) 155. Mountain Leather Design (USA) 156. Guardolificio Record (Italy) 157. In.Fo.Trad.In. (Italy) 158. Jordan Image B.V. (Netherlands) 159. Dottee & T-Bird (USA) 160. ALL SOUTH MARKETING

CORPORATION (USA) 161. Marinelli Salotti S.r.l. (Italy) 162. alpa s.r.l. (Italy) 163. Deerskin Quality Leathers(USA) 164. R & V Leather International(USA) 165. Hensons High Plains Emporium

(USA) 166. Leather Loft Shafmaster Leather

Co. (USA) 167. Links to Leather Furniture

Resources on the Web.(USA) 168. Double L Leather Works (USA) 169. PSLAC -- Puget Sound Leather

Artisans Co-Op (USA) 170. Ellini Fine Leather Imported

Handbags (USA) 171. Airline International (USA) 172. Ariel Leather & Shoe Repair (USA)




173. Members of Made-in-Cumbria (UK)

174. Pakistan Leather Industry 175. Jen-Net's Internet Shopping

Centre (Canada) 176. E. Ekornes (Norway) 177. Banzet Saddle & Leather Products

Ltd. (Canada)

178. Leather Products of Costa Rica 179. Body Leather Inc (Canada) 180. Wendy Green's 'em are leather

(USA) 181. CELLULAR ITALIA S.p.A. (Italy) 182. GINO CERRUTI Leather (USA) 183. Industry Book (USA) 184. EXPOPELL s.r.l. (Italy)

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section APPENDICES Appendix J -The Barnett Hide Market Report



Appendix J -The Barnett Hide Market Report

Week Ending September 6, 1996 -- Barnett Trading Inc. -- Volume 5, Week 3692 CRYSTAL BALL: Holding Pattern for Paris

Weekly Prices in US Dollars per Piece basis FOB Producer's

Avg Wt. W/E 09/07/96 W/E 08/31/96 W/E 08/24/96 Last Year Hvy Nat Str 60/62 lbs $77.00-$78.00 $77.00-$78.00 $75.50-$77.00 $62.00 Hvy Nat Hfr 48/50 lbs $66.00 $66.00 $64.00 $52.25 Branded Hfr 50/52 lbs $63.00-$65.00 $63.00-$65.00 $60.00 $42.50 Butt Brd Str 60/62 lbs $70.00-$72.50 $70.00-$72.50 $67.00-$68.50 $58.50 Colo Brd Str 60/62 lbs $67.00-$68.50 $67.00-$68.50 $63.00-$65.00 $55.00 Hvy Texas Str 58/62 lbs $68.00-$72.00 $68.00-$72.00 $66.00-$68.00 $58.25 Hvy Nat Cows 48/50 lbs $49.00-$54.00 $49.00-$54.00 $49.00-$54.00 $45.50 Branded Cows 46/48 lbs $40.00-$44.00 $38.00-$40.00 $38.00-$40.00 $36.50 Dairy Cows 46/48 lbs $58.00-$60.50 $58.50-$60.50 $59.00-$60.50 $57.50

Packer Sales: Passable / Exports: Lagging behind / Small Packers: Steady

Export sales by Country for the Week Ending 08/08/96 Country Cattle Hides Wet Blue Hides & Grains Wet Blue Splits (in pounds) South Korea 162,200 2,700 274,000 Taiwan 36.900 0 -1,700 Japan 54,900 0 0 Hong Kong 5,300 6,600 2,222,900 China 14,500 1,700 -8,800 Thailand -5,400 1,800 0 Indonesia 0 0 33,100 Mexico 18,800 0 0 Canada 9,300 0 0 Spain 0 0 0 Italy 0 500 0 UK 0 0 0 Romania 8,000 0 0

92 This information has been extracted off the Internet, with acknowledgment to Barnett Trading Inc.

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section APPENDICES Appendix K - Internet Site for A.H. Hides & Skins Australia Pty. Ltd.



Appendix K - Internet Site for A.H. Hides & Skins Australia Pty. Ltd.

The following information has been extracted from the above Internet Site,

located at [email protected] What's Available :-

• Cattle Hides & Calf Skins: • Sheepskins: • Foxskins:

A.H. Hides & Skins Australia Pty. Ltd. has been established in the hide and skin

industry in Australia since 1971 and has developed extensive trade links and close relationships with the tanning industry world-wide. The company is now one of Australia's largest suppliers and exporters of quality Victorian meatworks cattle hides and skins all processed at our own brinecuring and export plant.

The plant is located in North Laverton, Victoria which is about 14km from the city

of Melbourne. We specialise in hides from those parts of Australia that produce the best quality

leather namely Victoria and southern New South Wales, but hides from other Australian states are also available.

The major products available are Brinecured Cattle Hides (Fleshed or Unfleshed),

Salted Calf Skins, Drumsalted or Airdried Sheep & Lambskins and Airdried or Alum.Dressed Red Foxskins.

For more information e-mail : [email protected]

A.H. Hides & Skins Australia Pty. Ltd. DESCRIPTIONS AND WEIGHT CATEGORIES

Victorian Meatworks Brinecured Cattle Hides: UNFLESHED (conventional) DESCRIPTION RANGE KG AVERAGE KG Calf(Japan) 1.3/2.3 1.8/2.2 Calf(Japan) 2.2/4.2 2.8/3.2 Calf(Europe) 1.3/4.5 2.7/3.2 Yearlings 5/14 11/13 Ox/Heifer 14/18 17.5 Ox/Heifer 18/23 20/22 Cow/Ox 23/31 25/27 Cow/Ox 25/+ 32/34 Feed Lot Ox 31/+ 38/42 Bulls 35/+ 44/48 Jersey Cows - 15/16 Spready Dairy Cows - 17.5 Spready Dairy Cows - 20/22

FLESHED

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section APPENDICES Appendix K - Internet Site for A.H. Hides & Skins Australia Pty. Ltd.



DESCRIPTION AVERAGE KG Cow/Ox 17/18 Cow/Ox 20/22 Cow/Ox 22/24 Cow/Ox 23/25 Cow/Ox 24/26 Cow/Ox 25/27 Cow/Ox 27/29 Feed Lot Ox 31/33 Spready Dairy Cows 19/21 Spready Dairy Cows 20/22 The above weight ranges are the most common offered however A.H. Hides can

supply each customers specific needs for unfleshed and fleshed categories on request.

HIDE SELECTION Most offers will specify a selection of 70/30, 80/20, 90/10 Sounds/Cuts

(Firsts/Seconds), this meaning there will be a maximum of 30%, 20% or 10% cuts/seconds respectively.

SOUNDS / FIRSTS These are hides with no holes in the prime area and up to three holes in the offal.

Area outside prime known as the offal.

CUTS / SECONDS Hides with up to three holes in the prime area and up to three or more holes in

the offal. TAKE OFF Although the standard of take-off may vary, the majority of Australian hides

originate from cattle that have been slaughtered in Government inspected slaughtering establishments and many of these have mechanical hide pullers and air knives.

CURING The majority of hides in Australia are cured by using one of two methods, namely

drumsalted or brinecured. During either of these processes the latest chemical bacteriacides are added.

“MINAJI” (MS C. SCALLY) FEASIBILITY STUDY FOR THE ESTABLISHMENT OF A LEATHER PROCESSING FACILITY AT EBENEZER Section ATTACHMENTS Project Implementation & Action (“Enterprise Development”) Plan



25. ATTACHMENTS

Project Implementation & Action (“Enterprise Development”) Plan

Processing / Production Flowchart - at the Proposed Ebenezer Site

Schedules to the Financial Statements

Profit & Loss / Cash Flow Summary - 1996/97 to 2001/2002 - Balance Sheets & Related Financials

Organisation Chart

Water Quality Documentation (ex Woodward Clyde)

Letter of Support - Ipswich City Council

SEPARATE DOCUMENTATION: Biz-Link Report (Government Assistance Available)

leather processing facility · manufacturing process of leather finishing (final tanning and...

Documents