CrookedRichard
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 Posted: Thu Aug 30, 2007 9:01 pm
GET RICH QUICK: Investment opportunity! |
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Looks like RJ got his 'Master Mold Maker' mixed up with that previous shipment of Klump?
http://web.archive.org/web/20000118191136/kamado.com/Investment.htm
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A Rare Investment Opportunity!
The Kamado Company’s investment program is limited to Kamado owners and Kamado affinity groups who presently know the function and beauty of our Kamado. We all know that food cooked in a Kamado is different and better and the Kamado is truly "the best barbecue in the world." Now, with our proven formula, manufacturing processes, and beautiful ceramic glazes, we have the "most beautiful barbecue in the world."
Considering this excellent product, its inevitable growth and financial prospects, we believe this venture represents an excellent opportunity to get in on the ground floor of a sound business investment.
NEWS….JULY 1998: "We recently reached our investment goal (establishing the new plant facility) and look forward to further expansion and investment opportunities in the near future"
NEWS……MAY 22, 1999: The Kamado Company is now at a point where we can confidently move forward to further expansion and investment. We invite you to review what we consider a "rare investment opportunity" by initially reading our Executive Summary. This is found on our Home Page…… "Investment Opp," by calling 1-888 KAMADOS, or through e-mail: richard@kamado.com
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Executive Summary
This Executive Summary is extracted from The Kamado Company’s Business Plan and is available in its entirety upon request.
Vision / Mission
In 1996, The Kamado Company was formed to manufacture and distribute the ceramic barbecue trade named "Kamado" and other refractory ceramic products and accessories.
The Kamado Company has a rare opportunity to capture a share of the $3.5 billion dollar barbecue market. There were over 12 million barbecue grills sold last year in the U. S. and only approximately one hundredth of one percent were ceramic Kamados. This is true even though ceramics are the premier material for cooking, not metal. Our vision is to go from our present limited production to 34,000 units (or 3 tenths of one percent) in four years. In terms of sales we estimate them increasing from $700,000 to $17 million in three years and $34 million in five years. To assist this rapid expansion we will raise additional capital through individual investors and a Small Corporation Registration Offering. We will be publicly listed on the Pacific Stock Exchange to meet additional capital growth requirements and to provide a market for the unrestricted sale of our investors stock.
Our unique Kamado presents us with an opportunity to give Americans, who had 2.7 billion outdoor cooking events last year, a beautiful alternative to their deteriorating metal barbecue. There is magic in cooking in a ceramic Kamado. Food cooked in ceramics taste different and better. Historically, as today, ceramics have proved to be the proper material for cooking. Functionally, we can demonstrate that the Kamado is the best barbecue in the world.
Our market share will come from the 84 percent of all families in America who own at least one barbecue. There are over 70 million families who have made a major commitment to their backyards and patios. Aesthetics, to many, is every bit as important as function. In this regard the Kamado’s high gloss ceramic glaze colors and sculptured form make the Kamado a "functional piece of yard art."
Company Overview
In 1960, Richard Johnson, our CEO, designed, patented, and trademarked the original "Kamado" and what is called the "Traditional Japanese Kamado." His design was patterned after a "Mushikamado," a steam rice cooker. The patented design derived from the engineering dictum that "form follows function." His Japanese company manufactured and sold over 1,000 Kamados per month. Since that time, over 100,000 of his original Kamados have found their way to the U.S. Many of these early purchasers are still using their Kamado, and they are dearly loved.
In the latter part of 1970 a U.S. made Kamado was manufactured under patent and other refractory ceramic formula rights of Richard Johnson. This Kamado was made of high-fire ceramics and high gloss ceramic glaze. The U.S. made Kamado corrected the major problem of earlier designs for withstanding heat and weather. However, a major component of the formula could only be found in an African nation. In the early 1970’s the U.S. put an embargo on all imports from this African nation. All efforts to find a substitute for this material failed, and production of this beautiful product was discontinued.
In October of 1996, today’s entirely new ceramic Kamado was introduced by The Kamado Company. The years of research and development of this new product were perfected in California by the original Kamado patent holder, Richard Johnson. He incorporated all the outstanding features of ceramic cooking of his earlier Kamados along with proven ceramic formulas, new engineering, and aesthetic improvements.
From October 1996 to July 1998, The Kamado Company operated a pilot plant in which to develop all the equipment and master molds necessary to produce a limited amount of Kamados. The goal of this operation was to perfect the formulas, fine tune the manufacturing process, and thoroughly test the product. And most importantly, a primary goal was to introduce the new Kamado on our Internet Web Site, www.kamado.com, to determine customer reaction. The subsequent results have been exceptionally successful. Our limited production and sales have given us the critical information we need to exploit this business opportunity, namely:
Customer Satisfaction. Our sales have resulted in an elated owner and a product exceeding their expectations.
Quality and Aesthetics. Years of cumulative customer use have assured us that we can expect our Kamado to withstand heat, deterioration, and weather along with keeping its aesthetic appearance. We can expect a trouble-free product.
Pricing. The sales price is well positioned to fall within the medium-priced barbecue market.
Manufacturing Cost. Limited production has allowed us to compile detailed cost data for analysis. Our cost of goods is known and allows a wide margin of profit as production increases.
By July 1998, The Kamado Company reached our earlier Investment and Company goals of moving from our pilot plant to our present facilities. We more than doubled our production, further refined our manufacturing processes, introduced our "custom" tile, and improved our website, www.kamado.com.
By August 1998, our website and "word of mouth" from satisfied customers had created a demand for the Kamado that far exceeds the capabilities of the present manufacturing facility.
Present Situation
The Kamado Company is at a point where we can confidently open a new volume manufacturing facility to meet the demand. We will continue our present plant for custom orders, along with sales and service for Kamado owners.
From September 1998 to April 1999, we carefully researched all factors in determining the location for our "volume" manufacturing plant. One of the most important considerations, since our Kamado is very labor intensive, to find a location where there was large pool of skilled workers, and at the lowest labor costs. Our goal is to produce the highest quality while keeping our costs of manufacturing as low as possible. The choice, from a worldwide search is Indonesia where the minimum wage is under $25.00 PER MONTH. We determined that we can increase this minimum wage paid to workers by enacting employee incentives and benefits. We must not disturb or affect the fragile balance of wages paid by local companies and foreign owned companies, who are willing to attract workers by higher pay. The Kamado Company has purchased our Mosaic tile from Indonesia for many years, and the beautiful ceramic glazes have been considered among the world’s best. Within the last months we have expanded our own metal fabrication to our new facility in Indonesia. We are now producing precision bands and grills in stainless steel and are powder coating all black metal parts with excellent results. We have opened a production mold shop in Indonesia that has the capability to produce production molds to meet our present and all future demands. Our plant manager, Bill Nichols, is training Indonesian personnel in our ceramic processes and will open our high fire ceramic plant. A large emphasis will be put on expanding Custom Tile Kamados and other high fire ceramic glazed products. Our first container of completed and crated Kamados will be shipped July 1999.
Objectives
Our objective is to propel The Kamado Company’ products into a prominent market position. Projected sales for fiscal year 1999 with external funding is $704,000. Annual growth is projected to increase to over $34 million within five years (or still less than one percent of the total market of $3.5 billion). We will complete our Small Company Offering Registration (SCOR) stock offering the first year and will have the necessary capital to meet our first year objectives.
Successive years sales objectives are:
Second Year $2.5 Million
Third Year $8.8 Million
Fourth Year $17 Million
Fifth Year $34 Million
We feel that within 3 years The Kamado Company will be in a suitable position to register our stock for trading on the Pacific Stock Exchange.
Capital Requirements
Our foundation is well established. We have completed our Research & Development. We have refined the formulas and manufacturing processes, determined our equipment needs, made master molds in which to mass produce production molds, determined our "cost of goods" and most important……we have product acceptance. We are now preparing to have an equally strong capital foundation to meet all anticipated financial needs.
According to the opportunities and requirements for The Kamado Company described in this business plan, and based on what we feel are sound business assumptions, our initial capital requirements are $250,000.00 to be raised from individual investors by September 1999. These funds are earmarked for accounting, legal and filing fees associated with our SCOR offering, legal & governmental fees for our wholly owned Indonesian subsidiary, Indonesian plant set up, and training and limited production. We will raise $5,000,000.00 from our SCOR offering by January 2000, to greatly expand the production capacity of the present products and introduce our new gas Kamado. (See Business Plan "Use of Funds" and Appendix for more information SCOR offerings.)
We anticipate additional capital requirements in subsequent years to allow us to increase production capacities to meet market demand. These capital requirements will be met through earnings from operations and additional stock issuance under SCOR.
Management Team
Our management team is led by Richard Johnson who has over 35 years of engineering, design, and testing experience with high-temperature refractory ceramic formulas and products. Richard, while not a ceramic engineer, has been very much involved in "space age ceramics" from the outset, including learning the formulas and adhesives used on the space shuttle. He designed and holds the original patent on the Kamado, including its name. Mr. Johnson is a "Master Mold Maker," and all models, patterns, and master molds are created by or under his tutelage. He has opened and managed manufacturing plants in Japan, U.S. and Mexico. In addition, he is responsible for the sales and distribution of over 100,000 Kamados sold in Japan and America.
The present team members are serving multiple management tasks. They include Deborah Johnson, president, over 15 years in sales, accounting and advertising. In production, she is responsible for all glazing, kiln setting and tiling. Bill Nichols is the plant manager with 20 years experience in production, quality control and product services with a Fortune 500 company. He will reside in Indonesia during initial operations. Brad Olson, Vice President, Director of Operations, is an engineer and quality control expert who will oversee sales and administration. Mr. Olson will assist in quality control in all Indonesian operations.
Kamado Company’s wholly owned Indonesian subsidiary, due to the distressed Asian financial situation, has the opportunity to choose from the best ceramic engineers, mechanical engineers, mold makers, designers, craftsmen, and production supervisors. Mr. Harry Ananda is our Indonesian director of operations. Mr. Ananda has a track record of 35 years of major Indonesian Company directorship. (See Business Plan…"Company Management")
In the immediate future, we will continue to select among management’s finest experienced executives to lead and guide the Company in meeting our goals.
Outside management support will be provided by nationally recognized accounting, law, public relations and advertising firms.
Additionally, our outside management advisors provide tremendous support for management decisions and creativity.
Product Strategy
Current Product
The Kamado Company’s principal product is the Kamado ceramic barbecue. Our designs include the Large #5 Kamado (18 inch grill) and the Extra Large #7 Kamado (22 ? inch grill.) Each have optional carts for moving. All have similar shapes since "form follows function," that is, proper combustion and heat circulation dictate our Kamado’s form. The exteriors come in Texture, Mosaic Tile, and Kamado Company’s own, larger Custom Tile. There are many glazed colors to choose from. The research and development has been completed on our exciting Gas Kamado. We are completing final testing, patent filing and expect to introduce this Gas Kamado by September 1999.
Our product technology consists of the development of a proven refractory ceramic formula. This formulation, combined with the efficient design of the Kamado, can withstand the potential thermal shock experienced at 1000? F. The Kamado can be fueled by either hard wood, charcoal, or gas. In addition, this ceramic formula has the ability to be formed and fired, and to retain its unique shape and size without warping or distorting. Lastly, the Kamado has the ability to have beautiful ceramic glazes to match or "fit" our extraordinary refractory ceramic body.
Research and Development
There is a market opportunity to manufacture and sell accessories and follow-on products. New products will be specially designed and formulated using our new technology and years of research and development in the field of high fired refractory ceramics. (See Appendix for our Meridian Stoves and Fireplace Inserts.) Our budget sets aside 10% of revenues and investments to continue current and new product research and development. We must remain at the forefront of refractory ceramic products. In addition, we have and are developing new ceramic formulas, glazes, and processes. We are in no way limited to our current refractory formulas and processes. There will be minor and some major improvements in our ceramic refractory.
Production and Delivery
The key factor in our ability to expand production is our capability to make additional production molds, availability of a huge manufacturing facility, and an unlimited supply of Indonesian skilled labor. Larger kilns will be required and can be quickly constructed to meet delivery requirements. Our biggest advantage is technical knowledge and simplified manufacturing processes.
Delivery by ship in containers will allow Kamado shipment from Indonesia to ports throughout the world at a cost that is often 2/3 less than present shipping costs. Container shipping rates from Indonesia are little more to the East Coast than rates to the West Coast. We will ship by container directly to our distributors or to one of our strategic port distribution centers. From our distribution centers we can drop ship directly to nearby dealers and internet customers. Our crating has proven to be a safe shipping container. With Indonesian hardwood along with additional labor and crate design improvements, we can expect little or no damage in shipping and delivery.
Market Analysis
Millions of people take an enormous interest in the taste and preparation of food, as witnessed by the voluminous output of cookbooks, cooking articles, magazines, and the exploding Internet. Our product will make the preparation of food easier and will make it taste better. We also conclude that there are, conceivably, more people who appreciate the aesthetics and beauty of our product. Therefore, our market analysis corroborates our conclusion that we have a huge market potential with a rare opportunity to take advantage of our unique position.
Eighty-four percent of all American families own at least one barbecue grill, up from sixty eight percent in 1987. The Barbecue Institute estimates there will be over 15 million sold in 1999 with sales over $3.5 billion. There were 2.7 billion barbecues (cookouts) in the United States last year. Living outdoors has become a major activity today, with gardening, building decks, buying more outdoor furniture - a Kamado is the next logical addition! People have made a major commitment to their backyard, and now they want to cook in it year round.
Five years ago, most barbecues sold for about $130 to $300, but now the average price runs between $300 and $700 and the demand for higher-priced grills - some running up to $4,500 - is on the rise. This comes as many barbecuers look for more than just an iron grate with a flame below. It’s not just about cooking, but how the cooking unit looks on their splendid patio. Style is almost as important as function.
By our fourth year, it is estimated that our Kamado sales will reach 34,000 units per year. The market potential for Kamados in these quantities – with a current average price of $500 per unit – is $17 million. This translates to The Kamado Company’s market share of still under one half of one percent of the overall market potential. Fifth year sales are projected to be $34 million with a market share less than one percent of total U.S. sales.
Note. Our projections do not include our new Gas Kamado. Our preliminary market analysis indicates that our Gas Kamado will be a huge additional source of revenue. It might be reasonable to anticipate doubling our sales with the introduction of our unique combination Gas Kamado. (I.e. the ability to burn charcoal only, gas only or a combination of both.)
Competition
There are many companies that compete in the barbecue market with the Kamado. However, our chief competition is metal charcoal grills, such as the Weber or the endless list of gas grills.. All companies charge competitive prices in the range of $80 to $700 and up for charcoal grills and $300 to $1,200 and up for gas grills. Educating the consumer on the benefits of ceramics is our top priority
By mass producing in Indonesia, utilizing our unique formula and manufacturing processes, we can make, ship, and distribute our products at such a low cost competition will find it very hard to compete in price or quality. In addition, we will utilize, patent pending, trade marks, trade name, copyright, trade secrets and other protection the United States and other countries afford. We will actively pursue all our legal rights to protect our trade secrets and non competitive agreements.
There is no competition in the area of aesthetics in barbecues, either in design, form, or exterior beauty. The elegance of ceramic glazes is unequaled. Key factors in our strategy for eventually dominating the competition is our unique combination of function and beauty.
We will continue to expend 10% of our gross sales in research and development to be the forefront of ceramic designs and formulas to assure us of a competitive edge.
Marketing Plan
To date, our marketing plan has consisted primarily of selling over the Internet. Our website, www.kamado.com has been a huge success and has provided us with far more orders than we can fill. With our new Indonesian manufacturing facility we can fill our present orders and expand our marketing efforts to the 95% of potential customers who are not yet utilizing on-line purchasing.
Response from customers indicate that our Kamado is enjoying an excellent reputation in functional use and aesthetically. We will support our marketing plans by capitalizing on this reputation by devoting a substantial percentage of gross sales to marketing efforts.
Sales Strategy
Because of the Kamado's special market characteristics, our sales strategy includes a major program to present the product visually, thereby enabling the prospective distributor or customer to see its beauty, form, and color. These strategies include, our website www.kamado.com, other E-commerce sites or "stores," national magazine advertisements, displays, home & garden shows, videos, color display advertisements, and press releases.
As production capability allows, we will show our Kamado and accessories at all major trade shows. These will include, but not be limited to the National Hardware Show, National Houseware Show and over 20 other Trade Shows attended by all national and international buyers and distributors.
In addition, The Kamado Company’s strategy for presenting the special and unique functions of cooking in the Kamado, like its unequaled flavor and moisture, is best obtained by demonstrations. A live demonstration provides undisputed proof that "food cooked in ceramic tastes different and better." This effort will greatly accelerate the "word of mouth" sales. We will assist and encourage dealers and distributors in demonstration programs.
Distribution Channels
The Kamado Company's distribution strategy incorporates plans to sell our products through several channels. Initially, marketing has been by direct sales from our factory in Sacramento, over our website www.kamado.com This has allowed a large margin for internal growth from operations. Presently, we will select distributors in key locations in the U.S. Once our production capacity is sufficient and there is wide product recognition, we will market our products to selected retailers nationwide through our dealers, distributors, and representatives. We will continue to take advantage of the explosion of the Internet by expanding our Website and link to Website listings. However, we will refer inquiries to our dealers for both our benefits. Last, we will work through our distributors to sell specially designed ceramic products to mass merchandisers.
Advertising and Promotion
Ninety-eight percent of the U.S. barbecuing population know almost nothing about ceramic barbecues or our product. Fortunately, there is the Internet that is reaching over 5 percent of the U.S. population and a large percent worldwide. We have received over 40,000 "hits" on our website www.kamado.com after a year of putting our Kamado on the Internet. Additionally there are 100,000 Kamado owners, and others who have eaten food cooked on these units, who know the exceptional qualities of cooking in ceramics. This is helping us by creating their own momentum. We realize, however, our rapid growth potential will only be reached by extensive advertising and promotion.
This Business Plan has centered on the allocation of up to 10% of gross sales for national product recognition. The first year budget of approximately $71,000.00, increases to $1.3 million the fourth year and is $2.5 million the fifth year. We anticipate that the Kamado will have 50% national product recognition. The Kamado Company’s philosophy is that our advertising and promotion strategy are an investment and not an expense.
Public Relations
During 1999, The Kamado Company will focus on the following publicity strategies:
Continue to expand the use of our Internet site www.kamado.com by listing our site will all search engines, similar sites, and internet publications.
We will capitalize on the newsworthy aspects of our new and unique product. There is a huge number of excellent publications with editors devoted to the subject of cooking who are looking forward to providing their readers with interesting stories on the history and magic of cooking in ceramics.
We expect our Public Relations Team to have our beautiful Kamado included in many backyard scenes, such as in major magazines, movies and TV productions. In addition, we expect to benefit from endorsements received by celebrities who are the proud owners of a Kamado.
Financial Plan
Exit / Payback
The exit strategy for our investors is through an Initial Public Offering. Our successful SCOR stock offering and profitable operations will position The Kamado Company to be listed on the Pacific Stock Exchange. Barbecues are a $3.5 billion business. This is an attractive number for potential growth and secondary trading. A moderate "times revenue" ratio will allow the investor to receive approximately 8 times their original investment.
In addition, The Kamado Company will be a prime candidate for acquisition. This large growth potential, margin of profit, and national advertisements will not go unnoticed by the "Fortune 1000" companies. This opportunity will be available and can be considered at any time.
Conclusion
The Kamado Company enjoys the position where all the engineering, research & development and improvement of a historically successful product have been completed. It has an established track-record of excellent functional use. Our pilot plant has produced our new Kamados in sufficient numbers to allow us to perfect our manufacturing process, determine our manufacturing costs, defects, determine our sales price, margin of profit and, above all, receive our customers' expressions of satisfaction and encouragement.
Now is the time to capitalize on a unique, beautiful and functional product. Based upon this excellent product, its inevitable growth and the attached financial projections, we believe that this venture represents a rare opportunity to get in on the ground floor of a sound business investment.
Please e-mail us for more information or any questions you might have. richard@kamado.com or call 1-888-KAMADOS
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