New Envestio project – Wood pellets – trade financing 2
Envestio informed today that a new investment opportunity is available at the portal to all registered participants.
By introducing project “Wood pellets – trade financing 2″, Envestio continues the successful cooperation with the representatives of the environmental-friendly energy industry.
The loan is fully secured by commercial pledge and personal guarantee of the main beneficiary of NDINAMIKA SIA.
You can invest any amount starting from 1 EUR. Minimum deposit to the investment account is EUR 100.
If you invest for the first time at Envestio don’t forget that you can get € 5 and a 0.5% cashback bonus for the investments made in the first nine months (270 days), more details HERE.
Investment opportunity
- High-yielding investment in energy sector, factoring-type financing for a wood pellets trading company.
- Secured debt, 21% planned annual return.
- Investment principal buyback is available at 5% penalty rate.
Project description
The company NDINAMIKA SIA is a company that is successfully acting on the market of sale and delivery of wood pellets/biomass fuel to Latvian households, small agricultural complexes, and other consumers. Taking into consideration increasing prices for traditional fuel, such as natural gas and oil products, the demand for wood pellets is constantly increasing that provides good business opportunities for the market players.
Besides pricing, one more key factor that affects demand is absence of complex and pricey requirements to the heating system of the household. Burning pellets in an ordinary stove can perfectly heat a small and medium size (up to 150 m2) private house; no special gas or oil boiler or generator is necessary in that case. Pellets are easy to transport and store, they do not require a connection to centralized supply system, and have relatively high energetic efficiency.
Installation of a special pellet stove allows using pellets as fuel also for small industrial and agricultural complexes. Specialized pellet stove ensures higher efficiency than ordinary stoves and is comparable to gas boilers.
Pellets are mostly produced from local wood that ensures maximum utilization of this renewable resource. Pellet heating is considered to be one of the most environment-friendly, as it does not create excessive pollution, produces a very small amount of waste (which is traditionally used as a fertilizer by many households) and ensures full utilization of timber, processed by woodworking factories. Pellets are produced by chopping the pieces of wood into powder that is afterwards dried and processed in a granulator mill (pellet-mill) that forms it into pellets.
Established in the year 2013, NDINAMIKA SIA sells and delivers wood pellets to the final customers across the Latvia. Current business scheme assumes purchasing the stock of pellets during the low season (summer) and gradually selling it to the households and business consumers during the high season (autumn and winter).
The need for additional funds is justified by current situation on the Latvian biomass fuel market that is characterized by high seasonality and continuously growing demand for wood pellets, woodchips, and wood briquettes. Summer season is characterized by lower prices at which the fuel is available for purchase from the producers, however, up to 6 months payment delay from the final customer has to be faced in that case.
Covering this gap with the help of Envestio financing will allow purchasing additional stock now and getting extra profits during the winter season, when the price of woodchips reaches its maximum, and repay the investment principal to Envestio participants.
Market
During the last years Latvian market for biomass fuel that includes wood pellets, woodchips, wood briquettes, and similar products was characterized by increasing demand for the qualitative product. The size of Latvian woodworking industry, which is the main internal supplier of the raw materials for further processing, remains relatively stable; at the same time, the number of customers has been increasing almost exponentially.
While cogeneration power plants and producers of wooden pellets are looking to purchase growing amounts of the raw materials, a bigger number of consumers is looking to purchase biomass fuel for their business and private needs. Given the constant supply and increasing number of foreign customers from countries like Estonia, Lithuania, and Poland this logically results in price increase and even product shortage on the market.
Besides the increasing demand the market also faces extreme seasonality. Wood pellets can be purchased at cheaper price during the summer, at the same time, during the winter not all customers can handle the price growth (and still there is an excessive demand). In these conditions, a company that can purchase the wood pellets during the low season, store those in a dry warehouse thus preserving the quality, and sell during the period of higher prices may achieve extra profits.
Sample repayment schedule
Envestio participant’s investment – EUR 1 000.00
Payments:
- 17.10.2018 – EUR 17.26
- 17.11.2018 – EUR 17.84
- 17.12.2018 – EUR 17.26
- 17.01.2019 – EUR 17.84
- 17.02.2019 – EUR 17.84
- 17.03.2019 – EUR 1016.11
Total expected return: EUR 1 104.15