Seeking%20Investment%20in:%20Univertical%20International%20(Suzhou)%20Co.%20Ltd

1
Seeking Investment inUnivertical International
(Suzhou) Co. Ltd
PRI Partnership with
2
Who are Univertical Corporation?

• Univertical Corporation (UC) is the 70 majority
  investor in Univertical International (Suzhou)
  Co. Ltd.
• Univertical Corporation is privately-held USA
  company Univertical Corp., started in 1938.
  Univertical currently has one factory based in
  northeast Indiana, and they are the worldwide
  market-share leader in the supply of specialty
  chemicals and copper anodes to the printed
  circuit board (PCB) and metal plating industries.
  
• The President of Univertical Corporation is Chuck
  Walker, son of founder, Charlie Walker.

3
Who is PRI?

• Privately held USA Company Pacific Resources
  International LLC.
• Headquartered in Beijing
• 12 China locations
• Manufacturing and Consulting
• Primarily foreign high-tech companies.

4
Formation of the New Venture

• Univertical International is a new company
  established in Suzhou, China, and owned offshore
  by Univertical International (Mauritius).
• It is a partnership between Univertical
  Corporation (70) and Pacific Resources
  International LLC (30).

5
What is the Business?

• Copper Anodes
• Solder and Tin Balls
• Solder and Tin Bar Balls
• Sold to
• Plating Companies
• Printed Circuit Board Manufacturers
• Distributors End Users

6
Milestones to June 04

• November 2002 Purchased land completed design
  for new factory
• December 2002 - Temporary office and sales team
  established in Suzhou
• January to September 2003 Hired General
  Manager, management team and technical staff
• September to November 2003 Imported production
  equipment
• November 2003 Relocated to new custom-designed
  factory (60,000 sq. ft.)
• December 2003 Commenced production
• June 2004 Reached 60 tons per month in
  specialty chemical sales

7
Company Successes for 2003-2004

• Commenced Production of 1st product (nickel
  sulfamate). Generated a profit on first product
  line in May 2004.
• Increased customer base from 18 in 2003 to 39 in
  2004.
• Initiated production of second product (tumbled
  rolled copper).

8
Company Successes continued

• Initiated production of third product (copper
  sulfate).
• Calendar year 2004 estimated sales at 20 million
  RMB.

9
Milestones Planned for Next Year

• Copper Casting by March 05
• Nickel Sulfate Production by March 05
• Nickel Chloride Production by Sep 05

10
Key Learnings over Last Year

• Univertical branding gives us a key advantage
  over competition.
• We do not try to match competitors pricing, but
  position ourselves as the high-quality,
  high-priced market leader. Focus on positioning
  rather than just volume.
• To sell copper in China, we need to go direct to
  end-users, as well as distributors.

11
What will it take to Win/What are the Risks

• Winning Factors
• Maintain Univertical Reputation for High Quality
• Start Production of new products on time
• Do not enter price wars
• Risks
• Not achieving sales targets
• New players entering the market affecting short
  term sales growth.

12
Sales Marketing
13
Invoiced Sales by Product
Products year 2003 year 2003 to Aug 2004 to Aug 2004
Products Kg RMB Kg RMB
Nickel Sulfamate 105,671.04 2,295,303.94 427,690 10,237,882.27
Rolled Copper Ball 18,800 495,545 44,300 1,671,538
Electroless Nickel Sulfate 0.00 0.00 2,311.40 45,135.80
Nickel Chloride 0.00 0.00 50.80 1,181.10
Copper Sulfate 0.00 0.00 16.70 96.86
Total 124,561.04 2,790,848.94 474,368.9 11,955,834.03
14
Invoiced Sales by Product
15
Invoiced Sales by Sales Person
Sales Person year 2003 year 2003 to Aug 2004 to Aug 2004
Sales Person Kg RMB Kg RMB
John Li 34,945.3 826,,776.43 159,598.9 4,385,897.17
Michael Deng 17,042.5 42,7693.27 56,643.6 1,688,993.34
Joseph Seah 72,573.24 1,536,379.24 258,126.40 5,880,943.52
Total 124,561.04 2,790,848.94 474,368.9 11,955,834.03
16
Number of Customers by Classification
17
Customer Categories

• G1big distributor Large Multinational or
  Chinese Distributors.
• G2small distributor Small Chinese Distributor
• G3end user

18
Investment Terms

• Univertical International is currently valued at
  13.2 million. This is worked out on
• Discounted Cashflow 17 over 7 years
• Or
• 2.5 mulitiplier of 2006 forecast after-tax
  cashflow.
• PRI owns 30 of UI. PRI will sell you all
  dividend and related equity-associated rights at
  a rate of 130,000 for each 1 of Univertical
  International.

19
Use of Proceeds

• Working Capital (2.465 million)
• Purchase of inventory to support forecast sales
  of 5 million per month by 2007. Inventory
  (mainly copper) retains full value if not sold.
• Capital Projects (735,000)
• _______________________________________
• PRI portion of this is
• 30 of 3.2 million 960,000
• To be raised by Aug 05 (145,000 paid in since
  July)

20
PRI and PRIs Management has personally invested

• PRI has two seats on the Univertical
  International Board of Directors.
• Both of PRIs assigned directors have invested
  personal funds into UI.
• PRIs Assigned Managers
• Dwight Nordstrom Graeme Winthrop

21
Estimated Costs for 2004-2005 Capital Projects
Project Description Estimated Cost Production Start Date
Casting Machine 185,000.00 1/3/2005
Spectrometer 75,000.00 11/1/2004
Heading Machine 90,000.00 12/1/2004
Large shear 60,000.00 2/1/2005
Small shear 50,000.00 3/1/2005
Nickel sulfate 60,000.00 7/1/2005
Nickel chloride 50,000.00 9/1/2005
Forklifts (2) 40,000.00 12/1/04 and 4/1/05
Wastewater 10,000.00 ASAP
ISO implementation 5,000.00 1/1/2005
Generator 110,000.00 1/1/2005
Total Expenditures 735,000.00
22
Headcount
Note that this company has a lean head-count for
a high sales volume.
23
Manufacturing Staff
24
Sales, Engineering, Mgmt Staff
25
Sales and Marketing Goals

• Expand sales beyond China.
• Continue to upgrade sales teams ability
• Increase customer base to 50 - 60.

26
Questions