business plan aotc taipei-pdf.pdf

8/10/2019 Business Plan AOTC Taipei-PDF.pdf

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6A 6D5

CT


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Introduction

In 2010 AOTC divided into two business units(Rusyal & Ghala) but under one banking sector.

January 2012 Rusyal & Ghala functioned as twoseparate operations, with separate bankaccounts. However in the accounting world, andin the eyes of the authorities AOTC is one unit.

AOTC Ghalas core line of business is machine

shop work, shut-down, repair and O&M works

AOTC Rusyals core line of business is liftingsolutions, fabrication and EPC projects


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Core Value Statement

AOTC Rusyal is a customer driven Oil & Gasfabrication / EPC company, built upon talents

of motivated employees, who work together inorder to meet customer expectations. Throughethical business practices, quality andresponsiveness AOTC Rusyal strive to buildbusiness partnerships.


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Products and Services

Pressure vessels, flare stacks etc

Boilers, heat exchangers etc

Piping & Pipeline projects

Process equipment, skids, manifolds etc

Power plants fabrications

Storage tanks-fuel , oil and water (AOTC internal design)

Site erection and installation service

Heavy and light structural works

Special welding of SS/DSS/Hastalloy/Inconel piping


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Previous Market Game Plan

AOTC Rusyals initial 2010 game plan wasgeneral fabrication/tank/piping projects.

2011 the objective was the above core activities& to secure ASME quals & PDO approval tomanufacture pressure vessels: ASME was secured 2011 and PDO approval

was achieved in 2012.

AOTC Rusyal has received in-direct pressurevessel orders for PDO projects. Howeveralthough we faced serious challenges withinPDO, this year we have received a direct order

from PDO for two pressure vessels (65K RO).


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Game Plan Hurdles

Through 2010/2011/2012 AOTC Rusyal wascommitted to complete several projects that

could not cover current overheads; examples:

AOTC Rusyal was contracted with BEC for416K RO at 10.96 RO per inch dai for the newairport plant room (MC1). Rusyal secured MC3at 12.75 RO per inch dia, with BEC supplyingscaffolding & lifting equipment.

2012 AOTC Rusyal executed 1.5M of pipeshoes and clamps for Pertofac; because ofspecifications and overheads of 2.4 RO per

man hour; AOTC Rusyal made little profit.


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Game Plan Focus

During 2012 AOTC Rusyal executed projects thatgive good returns (Including direct labour):

PunjLloyd: Piping project 513K 71% GP

Mapna: ASME piping project 365K 83% GP

Wood-Group: Crane project 316K 70% GP

These projects have high efficiency, whichcompensated existing projects that AOTC tookon at a low man-hour rate. (Planning is also akey factor).


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Game Plan Focus

AOTC have and are qualifying exotic materials toPDO specification for the high end precision

market.

AOTC Rusyal plan to develop a power division forpower plant fabrications and alternative energy(Oman

s power demands increase by 8.5% PA).

AOTC will continue to target General fabrication

& Pressure fabrication

products.

AOTC will strengthen our organization to developour strive to bid and win EPC projects between 5

to 20 M RO.


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Game Plan Economic Focus

Rusyals 2012 completed projects show ourdirect labour at (13%). Although our efficiency

is acceptable, AOTC will invest in equipment tohelp automate the process of fabrication toimprove efficiency.

AOTC Rusyals man-hour rate has dropped from3.6 RO (2011) to 2.4 RO (2012). Our target is tobring this down under 2 RO, by targeting staff

cost awareness, such as transportation

Procurement stands at 44% for 2012, our targetis to be below 40% for 2013.


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SWOT Analysis (Key Elements)

Strengths:

AOTCs name is becoming a reputable namein the Oman market

The quality of workmanship has beenofficially recognised and appreciated

AOTCs performance has been recognised by

our customers with repeat orders. Clientsatisfaction has led to client retention.


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Weaknesses:

Access to capital prevents projects frombeing started and implemented as planned

Lack of facilities blocks the opportunity tostart projects and receive valuable fund flow,such as advance payments and progressivepayments

Lack of labour clearances and non-recruitment of resources has prevented usfrom reaching expected targets


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Opportunities:

Increasing trend of ICV

Oman is experiencing major infrastructure

and developmental growth in the oil & gasfield.

AOTC is able to team-up with experienced

partners


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Threats:

Sister companies are not willing tocollaborate and work on an open book policy

There is an element of cannibalisationattitude of the group, this is becomingknowledgably with customers

Sister companies and employee rivalry isunstable.


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2012 Completed Project

PercentagesContract Value Material Labour Other Direct Costs Total Cost Gross proffit

4,122, 052 1,807,871 44% 518,723 13% 332,723 8% 2,659,317 65% 1,462,735 35%

According to (Charles et-al, 2012) a fabricationbusiness that has a GP of 35% is healthy.

To simplify our 2013 budget, each welder mustproduce 4,750 RO of product per month.

For 2013 budget 93 welders are required, with

their respective crews. A total organisation of380 employees was budgeted: Anything short of this will impact the 2013

budget


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2012 Orders at Hand

AOTC Rusyal secured projects for 2013 with avalue of 3.2 M RO

One project is for 1.5 M RO, which is for theOman MOD (A fueling project) AOTC teamed up

with an American company (Cape Environment)who are experts in working with fuel systemsfor MODs globally.

Another project is for BEC, for the passengerterminal building for the new Oman airport. Thecurrent order stands at 400K RO, which willtriple (Waiting for design drawings).


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Actuals and Forecast of Rusyal


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Actuals and Forecast of Rusyal


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Required Man-Power Plan


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Required Man-Power

AOTC Rusyal has a very good reputation insending qualified workers to execute projects.

However the recruitment and employeeretention is a significant problem especiallywhen we do not have enough workers toproduce enough product to cover the newfacility and financial costs (Overheads).

AOTC Rusyal is unable to meet the Omanisation

requirements; as the skill set is not available atour current salary rate. AOTC Rusyal needs toincrease our out-put - to achieve this we needmore people. Then we can afford to employ

skilled Omani workers (Bit by bit, day by day)


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Reference:

Charles W. L. Hill, Gareth R. Jones 2012: Strategic Management Theory: An Integrated Approach

business plan aotc taipei-pdf.pdf

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