RSPG 10KSB report
Item 6. Management's Discussion and Analysis or Plan of Operation.
The following discussion and analysis should be read in conjunction with our Consolidated Financial Statements and notes appearing elsewhere in this report.
Plan of Operation
Private labeling - Bottle water production for other companies who desire to increase their bottled water manufacturing capacity. For these companies, it is more cost effective for them to have RSW provide the water product than to develop and open a new or expand existing water bottling facilities. These customers will provide RSW with the bottles or the molds for the bottles as well as the labels, and RSW will fill the water, label and ship the products to the customer.
Bottled water of its own brand - Besides bottling water for major stores, businesses and bottled water companies, we will be bottling water using our own label "Royal Spring Water". We will be targeting our product (single serve plastic bottles of 500ml, 1liter, 1.5liters, 1gallon) directly to the smaller end user - convenience stores, fast food establishments, gas stations, major clubs and popular restaurants, among others.
Rectifying alcoholic beverages - This product is the mixture of 100% proof alcohol and water to create the final alcohol product. Overseas alcoholic beverage manufactures prefer to rectify alcoholic beverages in the U.S., as it is much cheaper. Once alcohol is rectified/mixed, the finished product contains four times the liquid volume as the unprocessed raw material. As pure alcohol transports in 25,000 gallons per container and glass price is reasonably consistent on a global basis, by using our services, the manufacturer of alcoholic beverages will save on both the cost of shipping the alcohol (1/4 the liquid volume and weight), as well as saving on the cost of shipping the glass bottles. The alcoholic beverage manufacturers will provide the bottles, labels, alcohol and formula and RSW will provide the water for the rectifying, bottling and packing. All transportation will be paid by the alcoholic beverage companies.
In order to obtain high quality products and assure customer satisfaction, we will be using modern manufacturing technologies machinery. For nearly three years now, we have spent much of our time, money and efforts into researching the water industry in the U.S. As a result, we have acquired broad knowledge about procedures, licenses, machinery, and land. During this time we have also built strong relationships with key individuals within the government and private sectors related to the water industry.
Currently, there are seven full time employees. The Company expects to start operations in June 2006 and will therefore be hiring additional staff to run the corporate office as well as for its warehouse facility. It is estimated that an additional eight employees will be required at that time as demand for the products increase. With 15 employees, the plant will be operating at full capacity.
Table of Contents
Index to Financial Statements
Sales and Marketing Plan
We will first start off our business by bottling water for major stores (Ralph's, Albertson's etc.) and major bottled water companies across the country.
We also have contacts in the US Army Ordinance. If we are able to obtain the U.S. government as a customer this would represent a major sector within the market
. When the U.S. Army is on a mission abroad and is no longer on American soil, it strictly uses water (drinking, cooking, bathing, etc.) provided by the United States, for safety reasons.
Besides bottling water for major stores and major bottle water companies, we will be bottling water using our own label, "Royal Spring Water". At first, we will be targeting our product (single serve plastic bottles of 355 ml, 500ml, 1 liter, 1.5 liters and 1 gallon) directly to the end user. Therefore, the first step would be to contact major supermarkets, convenience stores, fast food establishments, gas stations, major clubs and popular restaurants
. A sales team comprised of Company representatives will be put in charge to first work on securing new deals and contracts with stores, restaurants and clubs using various promotional tools such as pamphlets, price lists, and samples of our bottled water. Sponsorship is another great marketing tool that we will utilize in order to acquire exposure and gain recognition. We will be sponsoring concerts, golf tournaments, and dance
clubs, for instance. We believe that by providing free samples of our bottled water to various groups and venues, we will be able to effectively spread our name and popularity and obtain market penetration.
We will also be targeting all major hotel and casino gaming companies in order to provide them with their private labeled bottled water and customized labels (specific hotel-casino names, logos and images)
. We have contacts in some of the major hotel-casinos in Las Vegas who have already expressed an interest in purchasing water from our company when it becomes available. We believe these potential customers are interested in our product for two main reasons - a better price and better quality water
. The hotels and major casinos out-source 100% of their consumable bottled water.
Huge potential market here, not counting contract with Africa.
As of today, RSPG close 1.28 and still going up.