The specific objectives to perform during Phase I were:
1. To prepare a technical feasibility study to optimize the mass production of FELTWOOD and a risk evaluation.
2. To elaborate a commercial feasibility study including a business plan and a Freedom-to-Operate analysis.
3. To carry out a work plan including the economic projections and financing strategy.
Work performed from the folllowing points of view have been:
1. TECHNICAL FEASIBILITY STUDY
- Feltwood has been able to design, develop and implement, from a teoretical point of view, a massive production process, that´s divided into different phases able to convert organic agricultural residues into the new feltwood´s material ( substitute of Wood !!). Feltwood has goaled this technical milestone with the collaboration of a partner called Domen Ingenieriam ,SL (
https://www.dolmeningenieria.com/(se abrirá en una nueva ventana)) and own workers.
- Feltwood has defined a technical risk assessment that lists a forecast of mishaps during the development of our business, as well we have established the probability of these occurred and a contingency plan to mitigate the effects of them.
The results of the risk assessment are included in the feasibility study report, which also describes measures to prevent and mitigate potential negative impacts and contingency plans.
2. COMMERCIAL FEASIBILITY STUDY
- Feltwood has been able to study thorouhhly the market size and growth-rate from a general point of view and in particular, we have focussed initially on France, Germany, Italy and Spain, that are our potential markets when we are to invest.
We have tried to define a list of leading competitors from a general point of view, focussing on our particular market segments in our geographical region. There are no comparable solutions to Feltwood´s solution in Europe and neither the rest of the world. None of the global existing alternatives that Feltwood have better technical. properties
- We have defined a pricing strategy that would be the result of balancing three key commercial objectives and therefore these are the incomes of our business.
- We have defined main customers will be regional manufacturers located in Europe and South America.
- We have developed a SWOT analysis that identifies an feltwood's strengths, weaknesses, opportunities and threats.
- With the aim of understanding the level of competition within our targeted segment of the wood industry, we have developed the Porter’s Five Forces Analysis.
- We have developed a list of barriers which can edinfies if it´s easy to enter in the market, for would-be new players in this market.
- During this period Feltwood has created a stakeholders network such as SAT Hermanos Mené, SL, Primaflor, SL, Grupo RiberEbro, sl.
- Feltwood has designed the main actions to implement our penetration strategy will be: (1) Pilot trial (2) First batch of ecological material for manufacturers (3) Dissemination and communication.
- We have prepared a preliminary Commercial Plan covering the first five years after the launch of the FELTWOOD industrial process-
- The IPR strategy has been defined and the first result has been got, Feltwood has got the patent for the industrial process yet and so it´s freedom to operate all over the world.
- Finally, We have performed an accurate expansion timeline indicating a route-to-market, penetration/marketing strategy, market inception, and full-scale commercialization.
3. ECONOMIC-FINANCIAL FEASIBILITY STUDY
- We have defined a Pricing table talking with our potential clients (Wood panel manufacturers)
- We have defined a costs study for installing our industrial process in potential clients.
- We have developed a five years sales forecast thatt includes an estimation of fixed cost, variable cost, sales, EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) and Return of Investment (ROI) rate. We have considered for this calculation two different scenarios related to the idea of:
1. Feltwood will get the grant from Call phase 2: SME Instrument.
2. Feltwood will NOT get the grant from Call phase 2: SME Instrument.
The result for the realistic scenario are:
SALES
Sales has a very significant increase from the year 2022, the percentage increase from one year to another one is greater than 150%. In both models, the growth is the same because, with or without the grant, the company estimates that it will sell the same.
EQUITY
The company is sufficiently capitalized; its Net Equity is higher than the recommended 50% of the Total Liability in both models.
INDEBTEDNESS
It is a company with a very low debt; its values are below the recommended optimal values. The quality of the debt is good because it has very little current liabilities.
LIQUITY
It is a company without liquidity problems, although it could suffer liquidity tensions due to the "without grant" model has a liquidity ratio very low, it has a scarce of treasury and so not to pay its most immediate commitments. The liquidity that would provide the grant given is a very positive to the immediate availability of cash, which would increase avoiding not being able to pay their short-term debts.
Taking into account the finding and outcomes of the Feasibility Study, we believe that the goals we had set when submitting the SME instrument Phase 1 Proposal have all been met completely. Table 13 (VIEW FEASIBILITY STUDY REPORT) shows a checklist on the completion of those objectives.
