INVESTMENT OPPORTUNITY IN AL

SALMAN AUTO PARTS MANUFACTURING

PLANT (AAPMP)
Investor Presentation
Prepared for Al Salman Auto Parts
13th March 2023
Table of Contents

Investment Requirement Executive Summary

Financial Projections Business Background and

AGENDA Service Offering

Industry and Key Players Key Clients

Table of Contents

Investment Requirement Executive Summary

Financial Projections Business Background and

AGENDA Service Offering

Industry and Key Players Key Clients

3
Executive Summary
The entrepreneur has established AAPMP in Qatar which is envisaged to manufacture clutch disks for commercial
vehicles; the Technical Partner is now ready for the factory to commence production
Company Overview
▪ Al Salman Auto Parts Manufacturing Plant (AAPMP) was registered in June, 2006 with a vision to establish the first factory
to manufacture clutch disks within the GCC.
▪ The factory’s construction was completed and some of the key machinery was procured and installed in 2016.
▪ The business has the license to manufacture clutch disks and the units associated to it.
▪ The business wishes to target Commercial Vehicle (CV) segment due to better pricing and relatively lesser competition as
compared to other segments (such as passenger vehicles, Two wheelers etc.). The client has already procured some of the
machinery and molds for the CV products.
▪ The business plans to sell its products only in the aftermarket channel since it would be very difficult to get OEM certified
due to stringent quality requirements of OEMs.

Financial Metrics Transaction Overview and Business Valuation

▪ Forecasted revenue for 2024 is QAR 1.84 Mn rising to QAR 26.91 Mn in

▪ The investment required is at QAR 43.17 Mn in exchange for 80% of
2030 which indicates 56% CAGR.
▪ EBITA for 2024 is forecasted at QAR -1.11 Mn having a steady rise to ownership of the AAMP.
QAR 13.50 Mn in 2030.
▪ The Internal Rate of Return (IRR) is at 33.36%.
▪ Gross Profit margin is forecasted to increase from 38% in 2024 to 61% in
2030.
▪ The Net Present Value is at QAR 53.97 Mn.
▪ Net Profit margin is forecasted to increase from (-209%) in 2024 to
(+46%) in 2030.

N.B: All values are in Mn QAR

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Table of Contents

Investment Requirement Executive Summary

Financial Projections Team and Product Offering

AGENDA

Industry and Key Players Key Clients

5
Founder and Technical Partner
AAPMP was envisaged by Mr. Salman Darwish, a Qatari national, more than 12 years ago when he visited regional
industry exhibitions and identified a potential to manufacture clutch disks within the GCC with the Technical Partner.

Mr. Salman Darwish (Founder) Technical Partner

Company Name: Dönmez Debriyaj A.Ş
Academic Background
▪ Bachelor’s Degree in Business Administration and Economics
Founding Year: 1986
from Qatar University in July 1998
Market Positioning: Aftermarket
Experience and Background
▪ Senior Relationship Manager in the Corporate Banking
Product focus: Aftermarket for medium and heavy-duty trucks
division of Qatar National Bank (QNB)
(Clutch size 215 mm to 430mm)
▪ The business is 100% owned by Mr. Salman Darwish. He has
International Reach: Turkey and 60 countries globally through
invested ~QAR 1.7 Mn in the business as equity and has
Hammer brand
limited capability to make further investments (net worth
details not provided).
▪ Aftermarket supplier with a similar offering to AAPMP and a
global distribution network

▪ Provide Clutch kits, clutch cover assemblies and release

bearings

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Technical Partner (Donmez)
Donmez is a family owned company established in 1980 to cover the clutch requirements of light and heavy commercial
vehicles. Hammer Kupplungen is registered brand of Donmez Clutch.

Products Certifications
▪ Ø 215 mm – 430 mm clutch application ▪ IATF 16949: Quality Management System for
o Compatible with leading truck manufacturers: Automotive
Mercedes Benz, MAN, Scania, DAF, Iveco, Volvo and ▪ ISO:9001- Quality Management System for All
Renault Truck etc ▪ ISO 4001:2004- Environmental Management System
▪ Flywheel ▪ OHSAS 18001:2007- Health and Safety Management
▪ Turbo charger System
▪ LCV and HCV segment wide range products ▪ EAC- Certificate of Conformity for Russia
▪ TSI- Certificate of Conformity to Turkish Standards
▪ ISO 16949- DONMEZ is Original Equipment Supplier

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Product Offering (1/2)
The business has license to produce both CV clutch disks, clutch pressure plate, clutch bearing, and flywheels

▪ Product Description: A clutch is a mechanical device which engages and disengages

power transmission, especially from driving shaft to driven shaft in a vehicle in the
Clutch Disks

simplest application, clutches connect and disconnect two rotating shafts (drive shafts or
line shafts). In these devices, one shaft is typically attached to an engine while the other
shaft provides output power for propelling vehicle.
▪ Target Vehicle Segment for the Business: Commercial Vehicles, including trucks,
trailers and buses
▪ Target OEM Models: MAN, Mercedes, DAF, Iveco, Renault, Scania and Volvo

▪ Product Description: Component in a manual transmission system in a vehicle. It is

Clutch Pressure

responsible for applying pressure to the clutch disc in order to engage and disengage
the engine from the transmission. When the driver presses the clutch pedal, the
Plate

pressure plate releases the pressure on the clutch disc, allowing the gears to be shifted.
▪ Target Vehicle Segment for the Business: Commercial Vehicles, Light trucks and
SUVs, Off-road vehicles etc.
▪ Target OEM Models: MAN, Mercedes, DAF, Iveco, Renault, Scania and Volvo

Clutch disks require constant replacement (~every 70,000 kms to 100,000 kms).
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Product Offering (2/2)
The business has license to produce both CV clutch disks, clutch pressure plate, clutch bearing, and flywheels

▪ Product Description: Type of bearing that is used in a manual transmission system in a

vehicle. It is designed to support the transmission input shaft and help transmit power
Clutch Bearing

from the engine to the wheels. Clutch bearings are typically made of high-quality
materials that can withstand high loads and heavy usage. They are designed to work in
conjunction with the clutch pressure plate and the clutch disc to engage and disengage
the engine from the transmission.
▪ Target Vehicle Segment for the Business: Commercial Vehicles, including trucks,
trailers and buses
▪ Target OEM Models: MAN, Mercedes, DAF, Iveco, Renault, Scania and Volvo

▪ Product Description: Mechanical component in a vehicle that is used to store energy

and maintain engine momentum. It is typically located between the engine and the
transmission, and is connected to the crankshaft of the engine. The flywheel acts as a
Flywheel

spinning mass, which helps to smooth out fluctuations in engine speed and provide
consistent power delivery to the transmission.
▪ Target Vehicle Segment for the Business: Commercial Vehicles, Light trucks and
SUVs, Off-road vehicles etc.
▪ Target OEM Models: MAN, Mercedes, DAF, Iveco, Renault, Scania and Volvo

Flywheels usually last around 100,000 KM

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Operating Model
The proposed business is advised to focus on clutch manufacturing initially and on attaining sufficient
favourable cash position

Sales and
Process Target Market
Marketing

Mix of locally Assembly of the Direct Qatar Aftermarket

sourced parts as per the marketing to
components guideline from Product testing channel
AAMP

and parts the Technical and packaging partners with

GCC Aftermarket
coming from the Partner in as per local guaranteed
technical Turkey and norms sales from
partner in adopted to local Technical
Partner Middle East
Turkey norms
Aftermarket Region

▪ Based on the output of the financial and technical assessment phase, the business is advised to focus on manufacturing clutch disks
only.
▪ The proposed business is expected to generate revenues through its direct sales team, by direct lead generation and client acquisition
▪ Since the local Qatari market is small for achieving a sustainable scale of operation, the business will have to target the export market
from the first year of operation. The proposed business should look at three distinct markets for its products
❑ Qatar aftermarket for CV clutch disks
❑ GCC aftermarket for CV clutch disks (Oman and Kuwait only – considering the current blockade situation)
❑ Middle East aftermarket region
▪ The company will have to invest its resources to develop its own design for clutch disks and also complete stringent lab testing & vehicle
testing for its products

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Table of Contents

Investment Requirement Executive Summary

Financial Projections Business Background and

AGENDA Service Offering

Industry and Key Players Key Clients

11
Potential Clients
AAPMP will target its end customers through independent distributors. The independent distributors
generally cater to demand from independent multi brand service centres and small garages.

Bus Fleet Owners Logistics Companies F&B Companies

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Table of Contents

Investment Requirement Executive Summary

Financial Projections Business Background and

AGENDA Service Offering

Industry and Competition

Key Clients

13
Overall Auto Parts Industry and Key Players
The global auto parts manufacturing market reached a value of about USD 2265.9 billion in 2024. The industry is further expected
to grow at a CAGR of 3.2% in the forecast period of 2024-2030 to reach a value of around USD 2737.28 billion by 2030.

Overall Auto Parts Industry Clutch Parts Industry

Global Market Size Qatar Market Size

QAR 186.2
$ 2737.3 Bn
QAR 75.2 Mn
$ 2265.9 Bn
Mn

2024 2030 2024 2030

Clutch Parts Industry Key brands for Clutch Disks, Clutch Pressure Plates, Clutch
GCC Market Size Bearing, and Flywheels

QAR 476.9
QAR 170.2 Mn
Mn

2024 2030
Source: 1-

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SWOT Analysis
SWOT analysis indicates that AAPMP can leverage on several business strengths and opportunities to
overcome weakness and threats perceived by the business

Strengths Weakness
◼ First locally manufactured product in Qatar: AAPMP would be the only ◼ High dependency on Technical Partner:
manufacturer in Qatar for clutch disks and would have an early mover The transfer of technology from Turkey to
advantage compared to new manufacturers planning to enter the market. AAPMP is of very high dependence.
◼ Logistical and delivery advantages in Qatar and GCC: Being located within Opportunities
GCC, AAPMP would be able to compete with imported products through lower ◼ Growing local market in the GCC
logistic costs and slower delivery time. Imported products pay ~8% to 12% of region: The GCC market for AAPMP
the price as logistics cost. The technical partnership with Dönmez allows products is expected to grow by ~2.2%
massive synergy with the expertise they bring to the table. over the next 5 to 7 years.
◼ Exemption from customs duty: The products would be exempted from ◼ Proximity to major markets of Iran,
customs duty as compared to imported products that need to pay ~5% Turkey, Iraq, and other Middle-Eastern
customs duty. countries: The business can further
◼ Proximity to customer base: The business will be located near its customer increase sales by establishing a market
base and would be better equipped to understand customer needs and presence in nearby economies of Iran,
suitably adapt its products. Turkey, and Iraq which have high CV
vehicle populations.
Threats
◼ Growing support of GCC countries for automobile industries may bring ◼ Alternate product lines for automotive
in new market entrants: Support programs and incentives announced by aftermarket: The business can further
KSA and the UAE can bring in new entrants to the market. increase sales by establishing alternate
product lines that would have synergies
◼ Electric Commercial Vehicle entry into the market: Electric vehicles are with the planned factory set-up and
being highly produced by major brands such as Tesla, BMW & Mercedes over include components for electric vehicles.
the years and this could hinder the clutch auto part market.

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Table of Contents

Investment Requirement Executive Summary

Financial Projections Business Background and

AGENDA Service Offering

Industry and Key Players Key Clients

16
Financial Projections
AAMP’s revenue is expected to grow at the CAGR of 56% from 2024 to 2030 with major revenue contributions from

Revenue Forecast for AAMP (2024-30) Key Industry Drivers

▪ Growing automotive market: The GCC region has a growing automotive market due to
26.91 increasing demand for vehicles, which drives demand for automotive parts.
24.47
22.24
20.22
18.40
▪ Government support: Governments in the GCC region are supporting the development of
11.00 the automotive sector through investment in infrastructure and offering tax incentives.

1.84 ▪ Increasing local production: The GCC region is increasing its focus on local production of
vehicles and parts, which is creating new opportunities for automotive parts suppliers.
2024 2025 2026 2027 2028 2029 2030
▪ Strategic location: The GCC region is strategically located between Europe and Asia,
N.B: All values are in Mn QAR making it a key hub for the import and export of automotive parts.

EBITDA Forecast for AAMP (2024-30) ▪ Technological advancements: The automotive industry in the GCC is constantly evolving
with new technologies being developed, and this creates new opportunities for the auto
13.50 parts industry.
12.12
10.90
8.79
9.80 ▪ Growing aftermarket: The growing aftermarket in the GCC is also driving demand for
automotive parts, as more vehicles are being sold and need to be maintained over time.
4.37
▪ Rising consumer awareness: Consumer awareness about the importance of vehicle
maintenance and repair is rising in the GCC region, which is driving demand for
-1.11 automotive parts.
2024 2025 2026 2027 2028 2029 2030

N.B: All values are in Mn QAR

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 Profit & Loss Statement (1/2)

P&L Statement 2024 2025 2026 2027 2028 2029 2030

Revenues
Sales/ Revenue 1,838,200 11,029,200 18,382,000 20,220,200 22,242,220 24,466,442 26,913,086
Other Operating Income - - - - - - -
Total Operating Income 1,838,200 11,029,200 18,382,000 20,220,200 22,242,220 24,466,442 26,913,086
Other Income: Non Operating - - - - - - -

Total Income 1,838,200 11,029,200 18,382,000 20,220,200 22,242,220 24,466,442 26,913,086

Direct Costs:
Material Consumed 564,200 3,452,904 5,869,937 6,586,069 7,389,570 8,291,097 9,302,611
Stores and Spares Consumed 27,573 165,438 275,730 303,303 333,633 366,997 403,696
Employee Cost (Direct) 534,000 550,020 566,521 583,516 601,022 619,052 637,624
Fuel, Power and Utilities cost 15,115 18,398 22,627 26,640 31,015 32,827 34,745
Repairs to Machinery 6,434 40,532 70,932 85,827 103,851 125,660 152,048
Total Direct Cost 1,147,322 4,227,292 6,805,746 7,585,355 8,459,090 9,435,632 10,530,724
Gross Profit 690,878 6,801,908 11,576,254 12,634,845 13,783,130 15,030,810 16,382,362
Gross Profit Margin 38% 62% 63% 62% 62% 61% 61%

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 Profit & Loss Statement (2/2)

P&L Statement 2024 2025 2026 2027 2028 2029 2030

Indirect Costs:
General & Administration
104,000 106,080 108,202 110,366 112,573 114,824 117,121
Expenses
Management Salaries 1,284,000 1,322,520 1,362,196 1,403,061 1,445,153 1,488,508 1,533,163
Selling and marketing 129,674 662,752 920,100 910,909 890,689 857,325 808,393
Miscellaneous expenses 34,382 124,372 199,564 219,917 242,354 267,010 294,047
Rent 15,000 15,750 16,538 17,364 18,233 19,144 20,101
Total Indirect Cost 1,803,491 2,433,686 2,794,569 2,836,771 2,872,620 2,903,130 2,919,491
EBITA (1,112,614) 4,368,222 8,781,685 9,798,074 10,910,509 12,127,680 13,462,871
EBITDA Margin -61% 40% 48% 48% 49% 50% 50%
Depreciation 2,038,171 1,806,354 1,603,318 1,425,067 1,268,224 1,164,167 1,038,575
Interest - - - - - - -
Amortization 685,647 - - - - - -
Total Expenses 5,674,632 8,467,332 11,203,634 11,847,193 12,599,934 13,502,929 14,488,791
Net Profit (3,836,432) 2,561,868 7,178,366 8,373,007 9,642,286 10,963,513 12,424,295
Net Profit Margin -209% 23.2% 39% 41% 43% 45% 46%

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Table of Contents

Investment Requirement Executive Summary

Financial Projections Business Background and

AGENDA Service Offering

Industry and Key Players Key Clients

20
Investment Requirement
The majority of the funds required for business setup will be used for the CAPEX, Working Capital, and the Technology
Transfer. Total investment needed would be ~QAR 43.17 Mn in total.

Investment Details Estimated cost (QAR)

Company Value 53,965,674

Total Capex Investment

Machinery and Fixtures 7,730,873

Building (Already Constructed)* 3,300,000

Working Capital Investment 31,972,230

Premium for Owners Equity 14,500,310

Total Investment Required 43,172,539

▪ The Owner is willing to offer 80% of the company in exchange for QAR 43.17 Mn of investment.
▪ Valuation of the company is estimated to be QAR 53.97 Mn.
*The building has been already constructed, therefore it is not part of the investment requirement.

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THANK YOU!