Project Idea

JS Production OÜ (JS Production) is an Estonian metal powder coating company registered in Tallinn in May 2022. The business is rather commercially successful: its customers are satisfied with the quality of metal coating services and are asking for higher volumes and new services like metal blasting and wet painting. In 2023 its monthly revenue has grown by 60% compared to 2022 against the backdrop of increased orders inflow from both its existing and incoming suppliers. Currently, the company’s growth is limited by the production capacity, workshop size and lack of sufficient equipment. The advantages of JS Production OÜ are qualified workforce and flexibility in both the work process and deadlines. During 2022-2023 the pricing policy enabled JS Production to create a very profitable business with a high profit margin of 30% and a growing number of customers.

Metal structures corrode quickly under the influence of external factors like temperature changes, humidity and exhaust gasses and need special protection like powder coating, which is suitable for both machinery and everyday items. It holds well to extreme weather and physical impact and is resistant to scratches, abrasions, and chips. Painting of metal structures is a relevant and profitable business, and metal structure producers complain that it is difficult to find a high-quality partner in the field of metal coating, as the demand for services has increased and the queues for service provision are long.

To increase production volumes and satisfy customer requirements, there is a need to enlarge the existing enameling workshop and purchase additional equipment. Specifically, JS Production currently seeks a loan of EUR 840,000 which is required to build an annex 625m2 to the existing workshop and to purchase an automatic washing line, a metal blasting camera and a bridge crane. Building a workshop in the same location in addition to the current building would help provide minimal in-house logistics and thus achieve high efficiency and minimal losses. Automatic washing line provides efficiency and productivity increase up to 2 times for large batches of standardized products (starting from 10 pcs).

The Idea of the current round (round I) of the given project is to implement up-to-date equipment along with the relevant working space, which will allow the company to serve more customers in a much more time and cost effective as well as ecologically sustainable way.

A more detailed project description is available in the ‘Executive Summary’ section.  

Executive summary (Business plan and financial model)

JS Production is launching the current funding in order to modernize its workshop, enable the development of the company and purchase additional equipment. Specifically, JS Production currently seeks a loan of EUR 800,000 for the following purposes:

• build an annex 625m2 to the existing workshop
• purchase an automatic washing line worth EUR 200,000, a metal blasting camera worth EUR 120,000 and a bridge crane worth EUR 20,000.

JS Production intends to split the fundraising into several rounds: as part of the first round it seeks to raise EUR 100,000 for workshop building and renovation.

All these steps will result in reducing costs and raising efficiency: through modernizing its production facilities, JS Production will enhance the quality and production capacity, and would be able to generate substantially more revenues and profit.

Key financials

• The company is seeking a loan with an interest rate of 11.9% with a repayment term of 12 months;
• In 2023, JS Production recorded EUR 17,353 in retained profit, down from EUR 16,113 in 2022;
• As of 2023, JS Production has EUR 192,752 in fixed assets;
• JS Production projects a revenue of EUR 500,000 in 2024;
• The company expects a cash flow of EUR 661,077 by the end of 2023;
• JS Production exhibits a healty working capital ratio of 1.0 calculated based on its most recent annual financial statements for 2021;
• JS Production has a healthy credit history ranking according to Creditinfo, an independent aggregator of credit history information;

Collateral and guarantees

The loan is backed by a collateral that would cover the entire sum of the desired loan. As part of the collateral, JS Production provides existing production equipment, also would provide the equipment it intends to purchase, the commercial lien on the company’s share capital, and the commercial lien on the land appraised by an independent third party, when the land will be purchased by JS Production for further production site expansion using the Loan facility organized.