Crystal Granite and Marble Europe

Europe's Premier Granite and Marble Distributor
 

Introduction

Crystal Granite and Marble Europe A.G.

Crystal Granite and Marble Europe A.G. (CGE) - The European arm of Crystal Granite and Marble India Pvt. Ltd. (CGI) aim's to be one of the continent's premier Granite and Marble distribution facilities.  In an effort to expand the company distribution base in Europe; and take a giant leap over their Indian comeptitors; Crystal Granite and Marble Pvt. Ltd. India looks to knock directly on Europe's door.

While the United States and U.K. have been invaded by Indian manufacturers opening their own operations, for some time now; Continental Europe is still virgin terroritory.  The European market is still largely catered to by local distributors who Import materials from either India direclty, or through intermediatries in Verona and Carrara, Italy.  Indian materials account for almost 70% of the granite consumption in Europe.
The langague and cultural barriers, coupled with a host of logistical issues have been successful at deflecting Indian interest in the region.  These are the very barriers that CGI will work to overcome in order to be competitively placed in the heart of Europe.

The mission for CGE is to become one of Europe's largest Granite Slab distributors by volume; and as an extention, provide the parent company with atleast an additional distributon capacity of 40-50 containers per month.  This increase in distribution capacity will result in a substantial cost reductions across the board; from raw material purchasing, or overhead cost/unit of material produced, more competitive freight cost; and finally, additional revenues from sales.  The final result will provide CGI with a steady flow of ammunition to fight off the growing threat posed by their Indian, Chinese, and European Competitors.

Filed under  //   Introduction  
Posted December 11, 2009
 

Why Europe?

Why Europe?

As metioned in the introduction: The Continetal European market is still virgin territory for Indian Manufacturers; and has not been curropted by cut throat pricing and competition, as has happend with other markets around the world.  Some of the major European Economies, such as Germany, and France have already emerged from the Global Recession; albeit with extremely marginal growth.  Furthermore; most European nations, with the exception of Ireland, and Spain, and a couple of Baltic States, did not see a housing boom as was experienced by the U.S., and U.K. and hence did not see a bust.  Contruction and re-modeling activity is expected to resume to pre 2008 levels by the 2nd Quarter of 2010.
Europe also provides a much larger market within a reasonable distance; as opposed to the U.S.  The vast network of roads and railway's make it easy to distrube products to a market that is the largest in the world by population and purchasing power.  There are a series of graphs below; by the World Bank and IMF that will further help illustrate these findings.  Clicking on the name of the country will pull up the exact pertinent information.  The countries listed are those within a reasonable driving distance from the planned warehouse location; with the U.S. as benchmark.

GNI per capita based on purchasing power parity (PPP). PPP GNI is gross national income (GNI) converted to international dollars using purchasing power parity rates. An international dollar has the same purchasing power over GNI as a U.S. dollar has in the United States. GNI is the sum of value added by all resident producers plus any product taxes (less subsidies) not included in the valuation of output plus net receipts of primary income (compensation of employees and property income) from abroad. Data are in current international dollars. Source: World Bank, International Comparison Program database.

Filed under  //   Why Europe?  
Posted December 10, 2009
 

Why Switzerland?

Why Switzerland?


Switzerland is located in the heart of Continental Europe; and provides the largest possible radius of potential consumers.  Nowhere else in Europe is it possible to encompass such a vast market within a one day driving distance.  Also, although Swizterland is land-locked; there is a container port in Basel; which is known as "The Southernmost port of the North Sea"  This strategic advantage provides for an easy and cost effecitve method to transport goods to and from the port.
English is widely spoken, and can almost be considered the second langauge to German.  A bi, or tri-ligual laborforce is easily accessable.  French and Italian are the other two widely spoken langagues in the country.
One of the most important factors is that Swizterland has a society which is purely Capitalistic.  Unlike France and Germany, which are Socialistic; and Social Capitalistic, respectively; Switzerland enjoys a liberal business climate that is unparrelled.  The labor laws are fair, and provide the employer with exteme ease in matters of hiring and firing.  The social contributions by employer as a percentage of wages are substantially lower than all the neighbouring EU nations.  The corporate and individual tax rates are also far more competitive than those in the developed world.  The ease of obtaining credit facilities; and the low cost of borrowing capital further help facilitate steady growth.  Another imporant factor to consider is; as CGE expands and develops further distrubtion capacity in Europe, or eslewhere, the favorable tax conditions for a Swiss Domiciliary company would ensure substantial tax concessions, so long as the administrative base is located within the borders.  If 80% of revenues are generated outside of Switzerland; and 80% of costs are incurred outside of Switzerland; then the total corporate tax, including Federal, Cantonal, and Local Taxes will be under 10%.  Switzerland is perhaps one of the most "pro business" countries in the world; and a recent report by the World Economic Forum gave Switzerland the highest rating in Global Competitiveness.  --- source World Economic Forum; Global Competitiveness Report 2009-2010 http://gcr.weforum.org/gcr09/

The map below illustrates the distrubtion network for Crystal Granite and Marble Europe A.G. - The distances displayed are within a one working day driving distance from the proposed distribution facility.

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Below is a list of information; provided courtsey of "The Greater Zurich Area" - Business Development Department. 

http://www.greaterzuricharea.com/content/01/01_001en.asp

Filed under  //   Why Switzerland?  
Posted December 9, 2009
 

Logistics and Movement between Switzerland and The European Union

Logistics and Freedom of Movement between Switzerland and the E.U.

Switzerland formally signed on as a party to the Schengen Agreement in December 2008; however is still not a memeber of the European Union.  This move extends the country a great deal of autonomy in matters of Trade and Taxation, while allowing for better freedom of movement.  For example; the Value Added Tax (VAT) base rate, set by the EU is 16%; while the same rate is 7.6% in Switzerland.  Fuel and energy costs are substantially lower, with petrol being almost 15% cheaper in Switzerland, than it's neighbors.  Swiss based companies can now recruit from a much wider talent pool, including workers from the originial EU 17 nations.  The opening of these borders has resulted in a large influx of workers from Eastern European countries, such as Poland and Romania.  This immigrant workforce has filled the vaccum left by the Swiss workers in the manufacturing, indurstrial and agricultural sectors.  Obviously, Swiss minimum wage restrictions, and labor laws must still be observed when negotiating a base salary with an employee, regardless of their origin.

Import Duties for Granite Slabs:

Granite Slabs can be impoted into Switzerland Duty Free.  Because India is considered a developing country; all duties are waved.  The Form A certifying country of origin is required. 
All goods imported into Switzerland are subject to a 7.6% VAT Tax.  This amount is then refunded, once the goods are re-sold.  The Swiss Customs will collect this VAT tax at the port, upon importation of the materials.  The refund is paid every 4th month by the Swiss Tax Authority.  The collecting and refunding authorities are different.  With a Bank Guarantee, the Swiss customs will extend a 60 day credit term on VAT Payments.  Banks typically require 10%-20% of the total amount as a security deposit in order to extend this guarantee.  The VAT rates for France and Germany are 20% and 19% respectively. 
The distribution facility will need to be designated as a Tax Free Bonded facility; and all imports will require a Replacement Form A, once they enter the country.  By doing this, the company can then re-export the goods to the EU, and avoid paying the 1.7% import duties levied by the EU Customs on granite slabs originating from Switzerland.  CGE can charge their European Clients a Delivered Duty Paid (DDP) rate which would save the clients the hassel of dealing with customs.  The European Clients will still be required to pay the VAT taxes in their respective countries.
Below is a confirmation from the Swiss Customs, certifying that Granite slabs imported into Switzerland from India are Duty Free.

Logistics:
The European Roadways are filled with trucks originating from Poland, Romania, Bulgaria, Latvia and Lithuania.  The rates charged by these companies are considered more economical than those by their Western European counterparts, including Switzerland.  A lot of Swiss, French, and Germany Logistic companies also employ Eastern European operators to save on expenses.  Purcahsing a flat bed truck may be an investment worth evalauting, once there is a steady flow of goods.  Further discussions with Logistic companies are forthcoming with freight quotations and delivery times.

 

Click here to download:
Tares.pdf (3 KB)
(download)

Filed under  //   Logistics  
Posted December 8, 2009
 

Proposed Distribution Facility

The proposed distribution facility is located in Kriens, Luzern CH, which is 98KM from the Port of Basel, and 50KM from Zurich City.The property is owned by Mobimo GMBH, and has been vacant for over 2 years.  It was previously used as a storage facility for Copper Products.  The property has 2 overhead cranes; and 2 loading docks.  Below you will find a video detailing the facility; an interactive map; and the proposed cost of leasing this facility by landlord.


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<br /><small>View Sternmatt 6 in a larger map</small>

Click here to download:
CANON45F035_LDAPMAIL_27112009-104313.PDF (730 KB)
(download)

Filed under  //   Distribution Facility  
Posted December 6, 2009
 

Requirements by Banks to Obtain Credit Facilities

Both United Bank of Switzerland (UBS) and Credit Susiss require that any new company; with no prior business history in Switzerland requires an International Bank Guarantee in order to secure credit facilites.  Below are the forms and requriments by the respective banks that need to be fulfilled in order to obtain a credit line.

Click here to download:
Application to open a capital payment account.pdf (202 KB)
(download)

Click here to download:
Capital Payment Account_en.pdf (168 KB)
(download)

Click here to download:
Basic Agreement.pdf (2.62 MB)
(download)

Click here to download:
zkt_zvkkpreise_en.pdf (177 KB)
(download)

Click here to download:
Bank Guarantees.pdf (50 KB)
(download)

Click here to download:
fra_3[1].7.3.3.3_credit_line_e.pdf (53 KB)
(download)

Click here to download:
Account Opening Request - Questionnaire.doc (157 KB)
(download)

Filed under  //   Banking  
Posted December 5, 2009
 

Additional Partners

In order to make this operation a true success; the facility needs to carry a broad range of products; including natural stones from all over the world.  There is also a rapidly growing market in Europe for artificial stones.  Crystal Granite's strength has been it's ability to procure materials from all over the world, and process these raw blocks into high quality finished slabs; at an economical price.  Due to the ever increasing range of products in the market, it is simply not possible to process the entire range of colors that the consumer desires.  Moreover, medium and large scale distributors, and fabricators are increasingly looking to combine this range of materials into single shipments. 
In order to be competitively place in the market; it is important that Crystal Granite select 3 strong partners who will sub-lease a portion of the premises in order to stock and sell their goods.  These may include a Brazilian Manufacturer of Granite Slabs; an Artificial Stone manufacturer, and a Marble manufacturer. 
This arrangement will enable all the above mentioned manufacturers to directly distribute their products to the end consumer; thereby eliminating the "Middle Man".  These companies will also be able to "Piggy Back" on one another; meaning that all these materials can be combined into a single shipment; thereby making the products more marketable. 
The benefits to the partners would greatly outweight the costs, thereby reaping healthy profits in the near, and long term.  Below are a list of benefits that CGE's partners can expect.

-- The ability to stock materials at their own warehouse, in the heart of Europe.
-- Access to a market of over 200 million consumers within one day's driving distance of the proposed facility
-- The flexibility to set their own pricing
-- The ability to sell products to clients who would otherwise be unable to buy in full container loads.
-- Leveraging on Crystal Granite's existing client base in Europe - and gaining a marketing platform on CGE's Mail and Online Advertisements
-- Rapidly gaining market share with the help of some of Europe's most experienced sales force in the field.
-- No directly liability
-- A weekly sales and progress report, with real-time inventory status

Technical Details of Arrangement

--The monthly cost to partner will be EUR 8500
--The partner will have to also pay an additional 5% commission to CGE.  Of this 5%, 2.5% will be paid to sales staff as a commission; and 2.5% will be retained by CGE
--All Goods must be shipped Pre-Paid to Warehouse including Transit Insurance
--CGE will collect the proceeds from sales.  At the end of each month; CGE will deduct the monthly fee of EUR 8500 + Commission and remit balance funds to partner in the form of Certified Check, or Wire Transfer.
--The commission paid to sales staff will be a fixed rate of 2.5%; this apply's to all sales, regardless of material type.  CGE will also pay sales force 2.5% commission on sales of their own products.
-- CGE is not liable for any tax payments on behalf of partner.
-- Partner must deposit a 6 month security deposit at time of signing contract.
-- While CGE will make every effort to promote materials; it cannot guarantee sales volume

Filed under  //   Partners  
Posted December 4, 2009
 

Financial Plan

Click here to download:
QUOTATION OF EUROPE INVENTORY.xls (47 KB)
(download)

Filed under  //   Financial Plan  
Posted December 3, 2009
 

Our Competitors

<br /><small>View Our Competitors in a larger map</small>

Filed under  //   Competition  
Posted December 2, 2009
 

Freight Quotation

1. Tansportation of 20' DV-Container from port of Antwerp/Rotterdam upto Switzerland

 

from CFR arrival vessel Antwerp or Rotterdam upto free arrival warehouse Basel Area or Luzern City Limits, including THC and ISPS at port of destination, port handling fee, inland haulage from port to warehouse, drop off charges at ICD Basel as well as return of emtpy container into ICD Basel, all in

commodity: Granite/Marble, weight per Container approx. 27 tons, carrier: ???

(CHF and US$ are actually 1:1)

 

 

a) to Basel warehouse

 

1 x 20' Container CHF 1'575.00

 

 

b) to Luzern warehouse

 

1 x 20' Container CHF 2'025.00

 

 

 

2. Distribution from warehouse to different cities in Europe

 

from FOT warehouse Basel resp. FOT warehouse Luzern upto free arrival (FOT) final destination european cities as mentioned below, full trailer loads with 25 tons payload (weight-limit within Europe)

 

a) from FOT warehouse Basel

 

Paris Euro 700.00

Amsterdam Euro 650.00

Frankfurt Euro 450.00

Hamburg Euro 900.00

Prague Euro 900.00

Vienna Euro 950.00

Zagreb Euro 1100.00

Budapest Euro 1450.00

Brussels Euro 650.00

Barcelona Euro 1450.00

 

 

b) fromFOT warehouse Luzern 

plus Euro 200.00 per trailer on above mentioned rates.

 

 

Extra:

- transport insurance, if to be covered by us

- any offloading charges (for containers)

- any loading charges (for trucks)

- any customs clearance costs in Europe

- any duties and taxes/VAT

 

Conditions:

- todays terms and conditions

- free carriage

- general conditions of SPEDLOGSWISS

Filed under  //   Logistics  
Posted November 30, 2009