Fully describe the business's activities?
Scrap metal merchants. The business collects scrap ferrous and non ferrous metals, separates the scrap on site into different grades, crushes the metal into manageable blocks and packs the different grades into steel containers for transport to customers. 99.9 % Of this business is export
How long has the business been established?
This business has been in existence for about 17 years, having been started by the current owner in June 2001 with 5 employees
How long has the owner had the business?
The seller started this business.
How does the business operate on a daily basis?
Steel bins are placed at sources of scrap metals such as engineering workshops and fabrication plants for later collection. Scrap collectors also deliver ferrous and non ferrous metals to the yard for cash. Metals are sorted and packed into steel containers mainly for export.
How are the clients attracted to the business?
Contracts with larger clients have been developed over the years through good service. Scrap collectors bring their scrap to the premises. The scrap is weighed on a 60 ton weight bridge and the collectors are paid cash. A rep is also in the field services new and current clients
What Advertising/Marketing is carried out?
The company advertises in the local press that they buy scrap for cash.
Does the business have any contract work?
The business has collection contracts with major companies in the area. Steel bins are placed on site and collected regularly
What competition exists?
There is one other major scrap merchant in the area. Other smaller operators exist but struggle to survive, usually selling their scrap to this business.
Is the business VAT Registered?
The business is registered as a Vat vendor.
What VAT documentation is on file?
Vat returns are available to Qualified buyers to verify turnover for the past 12 months.
Are there up-to-date Management Accounts available?
Management accounts are available to qualified buyers for the last 12 Months.
What Balance Sheet and Income Statements are available?
Financial statements are available for perusal by Qualified buyers.
How could the profitability of the business be improved?
This is a well managed business, but a good businessman, looking at it with different views could find ways to increase profits by either gaining market share or cutting costs.
What percentage of of the business is cash/credit?
A large part of the daily purchases from small collectors is cash. Approximately R200 000 cash is paid out on a daily basis. Larger customers are paid by EFT. Debtors pay weekly for delivered scrap.
What is the total staff complement?
The business currently employs 70 people
Do any have management potential?
The general manager has been with the company for 6 years and runs the business on his own.
How involved is the Owner in running the business?
The owner has delegated his responsibilities to his staff and works mainly in a support capacity.
Give a breakdown of staff/functions/length of service?
General manager 12 years service. Runs all aspects of the business. Admin supervisor 9 years service. Health and safety officer, Pay out clerk, Weighbridge and purchasing clerk, 5 operators, 14 drivers, yard supervisor, 3 supervisors and labourers.
When does the current lease end?
The seller owns the property, property will be available for purchase to the buyer as a option or on a first right of refusal basis. However should the premises not be part of the sale the property the rent would be R 57 000 per months. A long lease will be in order.
What is the square meterage of the business?
The premises consist of an admin building, a managers office, a warehouse for sorting non ferrous metals. A change house, and a workshop. The size of the site is 10 000m2 all under concrete. The property is well secured with concrete walls and security fencing.
Are any items not included in the sale?
All items are included in the sale as per assets list.
What is their overall condition?
Excellent working order
Do any require repairing?
Diesel Machine, Hydraulics, Trucks, Plant and equipment, Fully equipped Workshop gets maintained at all times.
Which assets are on lease/HP and with whom?
Some Equipment ,Plant and Vehicles are on HP
Will Seller settle or Buyer to take over?
Depending on the structure of the transaction to be negotiated
Are they presently insured?
Yes full comprehensive insurance in place
How have they been valued. ?
Is a full asset list on file?
A well established business with its own premises that have been developed specifically for this type of business. Loyal customers and relationships with Metal collectors. Purchasers of the scrap metal pay weekly.Well trained staff in place with management. 99.9% of the business is export as the demand runs high for this product globally
Very labour intensive under fairly tough conditions.
As the infrastructure of the area ages, more replacement will be required resulting in a greater generation of scrap metal.
A decline in the price of scrap metals discourages the collectors and makes it difficult to fill customers quotas.
What is the reason for the sale?
The owner has been in the business for a long time now. He is reaching retirement ages and is planning his exit strategy.
Why is this a good business?
There is always a ready supply and demand for scarp metals, however entry to the sector is expensive. Equipment requirements and cash flow make it very difficult for opposition to establish.
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