Project Idea

TLMET OÜ (TLMET) is an Estonian steel manufacturer established in July 2018. The company produces steel structures including conveyors, hoppers, chimneys, beams, connections, stairs, fence elements, billboards, and other various structures of black and stainless steel. 

TLMET became fully operational in January 2019 and has since completed a large number of contracts for clients from various industries, including agriculture, woodworking plants, recycling, construction and engineering, etc. Having started working on the Estonian market, over the years TLMET has successfully expanded its geographical presence and the team. In 2020 notwithstanding the COVID pandemic, the company accessed the steel manufacturing market of Finland and Sweden and additionally hired four steel manufacturing engineers. 

TLMET is a young, yet a strong and ambitious player with aspirations to expand into the wider EU market. The company’s employees and board have long and ample experience in the metal business. Among the company’s competitive advantages are modem and sophisticated mechanical equipment, successfully completed worldwide structural steel works, certified production process and quality management (ENI090 and ISO 3834). TLMET has a diversified and cost-efficient supply chain, a wide range of production and is flexible towards its customers’ needs. 

The company has a developed production infrastructure (total area of more than 4000 m2) and modern technical equipment. TLMET is actively expanding its geographical market, including the countries of Sweden, Finland and Norway, with a priority focus on the manufacture of components for the assembly of Scania/Volvo and other special vehicles. Participation in international projects allows the business to expand its geographical reach and attract new customers. Investing in modern equipment and training, as well as personnel development, becomes an important component of TLMET’s successful strategy, enabling employees to master new technologies, improve their skills and provide the market with high-quality welding and metalworking services. The steel manufacturing market is highly competitive and saturated, therefore, to be profitable it is crucial for the market participant to stay competitive by offering top tier quality production. But what also drives TLMET is the ability to contribute to something important on a large scale – to the industry's overall development in accordance with the contemporary technological tendencies and environmental agenda, with the ecological challenges in particular. TLMET is actively expanding its geographical market, including the countries of Sweden, Finland and Norway, with a priority focus on the manufacture of components for the assembly of Scania/Volvo and other special vehicles. 

Participation in international projects allows the business to expand its geographical reach and attract new customers. Investing in modern equipment and training, as well as personnel development, becomes an important component of TLMET’s successful strategy, enabling employees to master new technologies, improve their skills and provide the market with high-quality welding and metalworking services. 

The Idea of the current fundraising round for TLMET is to purchase a welding robot and therefore expand its production. The welding division is a specialized production unit dedicated to customised welding work. The aim of the welding division is to provide high-quality welding and metalworking services for various branches of global industry. Working with a variety of materials using robot welders, the company's welding division will be a key high-tech link in the production process, providing enhanced strength and reliability of welded joints. 

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

Steel manufacturing market description and size

Based on application, the steel market is segmented into non-residential and residential. The latter became the largest application segment in 2021, in terms of value and volumes, with revenue of 46,3%. The non-residential segment is expected to grow significantly due to the increasing demand for high-quality industrial, commercial, office, and institutional building construction materials.
Renovation of European residential structures is anticipated to create numerous opportunities for structural steel vendors. According to the European Parliament report, over 90.0% of the buildings in Europe were built before 1990 and over 40.0% before 1960; thus, many buildings would require renovation and reconstruction. North and West European regions have more old residential buildings than other regions. According to the same report, there is a requirement of EUR 1.12 trillion for renovation activities in Europe.

In contrast to the construction sector, which has been substantially impacted by the economic lockdown (COVID measures), the role of civil engineering as a growth engine for the construction sector has avoided a more profound collapse of the industry. During the economic slowdown in 2019-2020, civil engineering consistently recorded higher growth rates than residential and non-residential construction.

Overall, the global structural steel market was valued at USD 100.3 billion in 2019 and is estimated to register a CAGR of 5.6% from 2020 to 2027. The market for structural steel is driven by increasing construction spending globally since both developed and developing countries aim to enhance public infrastructure, owing to the rapidly growing population.

Executive summary for the fundraising

TLMET is launching the current funding in order to purchase a welding robot worth EUR 983,000 exclusive of a commissioning cost of EUR 30,000. To implement the project, the company needs financing in the amount of EUR 813,000 (in three tranches)

TLMET intends to split the fundraising into several rounds.

All these steps will result in reducing costs and raising efficiency: through modernizing its production facilities, TLMET will enhance the quality of its manufactured steel production, simultaneously making the process more time efficient and eco-friendly. As a result, TLMET will expand its client base and would be able to generate substantially more revenues and profit

Key financials

• The company is seeking a loan with an interest rate of 13,5% with a repayment term of 12 months.
• TLMET demonstrates a year-on-year increase in revenue: in 2022 it recorded EUR 2,000,000 in revenue, up from EUR 1,470,573 in 2021 and EUR 1,216,375 in 2020
• The company similarly exhibits a year-on-year increase in retained profits: in 2022, it recorded EUR 334,775, up from EUR 269,869 in 2021. However, in 2023 the company recorded EUR 376 844 in losses, which is an accumulation of the losses the company incurred since its establishment and that haven’t been accounted for previously, as per the clarification of the company’s accountant.
• In the first quarter of 2024, TLMET recorded a profit of EUR 152,000 per its most recent financial statements
• As of 2022,TLMET’s had EUR 261,423 in total current assets.
• In 2023, TLMET recorded EUR 853 216 in fixed assets
• TLMET projects EUR 480,000 in Brutto Profit by the end of the repayment term
• TLMET projects a cash flow of EUR 1 566 464 by the end of the borrowing term;
• TLMET 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: TLMET would provide the welding robot it intends to purchase, and will offset its existing manufacturing equipment.