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Converting opportunities to reality
| Opportunities |
Means and Ways |
| ・Establish efficient pricing structure |
・Detailed costings in conjunction with Chief Engineer |
| ・Develop Memoranda of Understanding on key sector routes with
target partners. |
・Develop detailed study of sector routes in conjunction with
Marine and Works Authorities. |
| ・Cost cutting practices. Develop corporate culture of maximising
service delivery at minimal cost. |
・Establish a quality assurance committee who will be entrusted
with preserving Company assets and promote efficient practices. Identify also
effective security personnel |
| ・Identify local shipping industry capabilities and ensure
ship fully utilises available resources before extending to more costly options. |
・Develop detailed study of slipway and surveyors capabilities
or access feasibility studies conducted by Marine, Sasape or other statutory bodies.
Consider also cost benefit of getting local facility accredited if requirement
of target ship. |
| ・Secure long term lease on identified warehouse/office facility.
Initial approaches made to the existing tenant meet with favourable prospects. |
・Negotiation with Landlord and signing of tenancy agreement. |
|
SWOT Analysis
The SWOT (Strengths/Weaknesses/Opportunities/Threats) analysis is essentially a summary of the Internal Situational Analysis and External Environmental Scan and forms a basis for determining a sustainable competitive advantage.
| Internal Factors |
| Strengths |
Weaknesses |
・Ability to leverage political network for funding and support.
・Willingness
of assistance from statutory bodies
・Capital startup funds provided by National
Government as a development grant. |
・Startup phase and very high risk of failure
・Lack of expertise
in shipping management
・Lack of secure income base
・Declining economic activity
and worsening prospects
・Low income base of target customers |
| External Factors |
| Opportunities |
Threats |
| ・Detailed in section above |
・Political interference
・Funding not yet secured
・National
Government treasury funds dangerously depleted and cash flow becoming an increasing
problem.
・A destructive mindset of some people which may cause loss or damage
to the Company.
・The full effects of the Ethnic Tension not yet fully realised. |
|
Mission Statement
Our Vision:
We strive to establish a successful Shipping Company that will excel in the continuous delivery of reliable and safe shipping services to both RenBel Province and the rest of Solomon Islands.
Objective
・To secure funding quickly before economic or other identified threats affect the viability of shipping operations.
・To establish an office and warehouse, identify suitable ship, recruit staff and implement business plan and necessary infrastructure as identified under Terms of reference.
Strategies
1. To approach the National Government to clarify funding issues and discuss possibilities of securing immediately.
2. To develop a set of objectives and deadlines on achieving these
3. To secure funding for both the ship and setup costs through persistent informed negotiations.
These combined form the basis of the Terms of Reference for the "Working Committee"
Terms of Reference:
1. To review the establishment of Avaiki Shipping Company and provide an overview on the viability of its objects and mission.
2. Determine the quickest and most appropriate means of securing funds allocated to purchase a suitable shipping vessel.
3. Determine a business plan and strategies to implement necessary infrastructure prior to arrival of the ship.
4. To become operational by the 20th of July.
ATTACHMENT ONE: BUDGET AND FINANCIAL ANALYSIS
Assumptions:
Source
1 Target vessel will be capable of following (based on Isabella data)
Passenger Capacity 300
1
Crew 10
1
Hold capacity 70 cubic metres
1
Service speed 12 knots
1
Fuel consumption 125 l/hour
1
2 Crew wages based on seniority as follows:
Master 39840
2
Chief Engineer 57780
2
2nd Engineer 31692
2
Other crew (five crew members) 39785
2
3 Fuel costs is assumed to be at $1.77 per litre
1
4 Insurance is calculated at 2.5% of insured value 2.50%
actual
5 Lubricants for delivery vogage is assumed to be $ 9,458.58
1
6 Office expenses are as follows:
Wages Manager 45000
3
Accountant 25000
3
Sales/Cargo 8500
3
Driver/Storeman 5800
3
Electricity 1000 per month
Lease payments 6500 per month
Hire charges - freighting 500 per day used
Casual labour - loading hands $15 per hour
Radio licence fees 1000 per annum
HTC
Business licence fees 2000 per annum
HTC
Advertising/shipping service message 250 per month
Rations 10% of total shipping wages costs
Printing and stationary 3000 per quarter
Telephone/Communications 700 per month
7 Depreciation charged on a straight line basis
8 Purchase price of vessel (including delivery costs) 1226776.58
9 Ports/Harbour fees charged at 150 per day
10 Provision for customer claims based on 5% of freighting income
11 Telephone is assumed to be barred for IDD calls
12 Training expenses/recruitment expense 5500 first month only
13 Statutory audit 18000
14 Travel expenses- assumed two tickets per month 500 return
15 Sundry 1% loading on total expenses
16 Bank charges estimated at 350 per month
17 Total trips to Renbel Province 2 month
18 Assumed hours loading per trip 10 trip
19 Assumed travel cost per trip 460
20 Number of days ship is idle 12 days
21 Distance to Rennell island from Honiara port 245 nautical miles
22 Time taken to travel to Rennell is 14.58 hours
23 Fire Insurance value as per CAPEX
24 Anticipated value of overhaul expense 20% of purchase price
25 Overhaul assumed every 2 years
26 Freight charge is 300 cubic meter
27 Fare price one way to RenBel 85
28 Charter price - full steam only 780 hrs
29 Charter price - loading only 215 hrs
30 Total hours available for charter per mth full steam 151.2
31 Total hours available for charter per mth loading 64.8
32 Delivery and setup costs for vessel are capitalised
Source references
1 Report prepared by Mr Naniseni Basiara, principal surveyor, Marine division, received 21/4/2000
2 Extracted from European Commission Solomon Islands Shipping and Marine Sector Study
3 Extracted from internal report of existing private shipping company salary review findings
4 Other sources are based on Informed estimations and review of competitors annual reports
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