UNIVERSITY OF CHILE

FACULTY OF PHYSICAL SCIENCES AND MATHEMATICS

INDUSTRIAL ENGINEERING DEPARTMENT

BUSINESS PLAN FOR THE TREATMENT OF HOSPITAL WASTE

IN MULTIPLE MODALITIES

THESIS TO OPT FOR THE DEGREE OF MASTER IN MANAGEMENT AND

BUSINESS MANAGEMENT

MARTIN ANDRÉS GARRIDO PINTO

PROFESSOR GUIDE:
JORGE ALBERTO LARA BACCIGALUPPI

COMMISSION MEMBERS:
ANTONIO AGUSTÍN HOLGADO SAN MARTÍN
RAFAEL ANDRÉS LOYOLA BERRÍOS

SANTIAGO, CHILE
2016
SUMMARY

The general objective of the thesis project is the generation of a business plan for the
treatment of hospital waste with a value proposition different from environmentally
friendly competition and at a market price. This objective is based on the current offer of
waste treatment services in the Chilean hospital market, where competitors present
offers that are limited in their scope and final added value to the client.

The methodology used to develop this work is directly related to the creation of a
business plan. Therefore, it adheres to the following structure and order: industry and
competition analysis, strategic marketing, operational plan, and financial plan.

Among the results obtained, it should be noted that of the 29 Health Services that make
up the national network, 11 of them concentrate 60% of the waste generation in the
country as a whole. 4 relevant competitors are identified which can generate retaliation
against a new entrant. Their price offers in the last 3 years are also identified, thereby
defining the sales price of this business plan assuming an average value with a discount
of 10% in the metropolitan region and 5% in other regions. On the other hand, a decision
polynomial of the target market is defined, which involves all the variables defined in the
market and competition analysis, resulting in 9 Health Services which concentrate more
than 2 million kilograms of waste per year. From the definition of the organizational
structure of the company, the average cost of processing one kilogram of waste is
defined, the amount of which is equivalent to $390 pesos, which allows the development
of the final flow of the project, which estimates an initial investment of 411 million pesos.

The analysis of final indicators, separated from the flow, provides results that allow us to
conclude that the project is attractive for a private investor, delivering an NPV of 888
million pesos with a return on investment rate of 34%. Although the payback period is
3.1 years, it is projected that after 5 years of the proposed evaluation, only a renewal of
machinery and equipment will be carried out in year 10, therefore future profits will be
higher as the company increase your market share.

Finally, it is possible to affirm that the hospital waste processing market in Chile presents
a limited offer led by a group of 4 companies, which provide a similar service. In this
sense, this project provides the tools to compete and differentiate ourselves from the
competition by delivering added value to potential clients.

TABLE OF CONTENTS

Page

UNIVERSITY OF CHILE.....................................................................................................1
FACULTY OF PHYSICAL SCIENCES AND MATHEMATICS.......................................1
INDUSTRIAL ENGINEERING DEPARTMENT................................................................1
BUSINESS PLAN FOR THE TREATMENT OF HOSPITAL WASTE IN MULTIPLE
MODALITIES....................................................................................................................1
THESIS TO OPT FOR THE DEGREE OF MASTER IN MANAGEMENT AND
BUSINESS MANAGEMENT...........................................................................................1
MARTIN ANDRÉS GARRIDO PINTO...........................................................................1
SUMMARY.......................................................................................................................1
1.4 Introduction.............................................................................................................6
1.2 Business Plan Description and Key Questions........................................................6
1.3 Scope of the Business Plan......................................................................................7
2.1 Goals........................................................................................................................8
2.2 Conceptual framework............................................................................................8
2.3 Methodology............................................................................................................9
3.1 Market Description................................................................................................10
3.2 Projection of Investments and Population Growth by Health Service..................14
3.3 Regulations for the Treatment of Hospital Waste.................................................16
3.4 Competitor analysis...............................................................................................16
3.4.1 Competition Description....................................................................................17
3.4.2 Comparison of Competitor Attributes...............................................................19
3.5 Critical factors of success......................................................................................20
3.6 Analysis of the External Environment..................................................................20
3.6.1 Threats of New Entrants....................................................................................20
3.6.2 Bargaining Power of Buyers..............................................................................21
3.6.3 Threat of Substitute Products.............................................................................22
3.6.4 Bargaining power of suppliers...........................................................................22
3.6.5 Intensity of Rivalry of Competitors...................................................................22
4.1 Mission and vision.................................................................................................23
4.2 Definition of the Target Market............................................................................23
4.3 Company description.............................................................................................27
4.3.1 Equipment for the Treatment of Hospital Waste...............................................29
4.4 SWOT Analysis.....................................................................................................31
4.4.1 Strengths............................................................................................................31
4.4.2 Opportunities.....................................................................................................31
4.4.3 Weaknesses........................................................................................................32
4.4.4 Threats...............................................................................................................32
4.4.5 SWOT matrix.....................................................................................................32
4.5 Value proposal.......................................................................................................34
4.6 Goal Setting...........................................................................................................35
4.7 Strategy Selection..................................................................................................35
4.7.1 Marketing Mix...................................................................................................35
4.7.1.1 Product (Service)...............................................................................................36
4.7.1.2 Price...................................................................................................................38
4.7.1.3 Distribution........................................................................................................39
 4.7.1.4 Promotion...........................................................................................................40
4.7.2 Strategy Selection..............................................................................................42
4.7.3 Control...............................................................................................................43
4.7.4 Sales projection..................................................................................................43
5.1 Supply chain..........................................................................................................44
Mobile Mode:...................................................................................................................45
Client Mode:.....................................................................................................................45
Plant Modality:.................................................................................................................46
5.2 Associated Resources and Equipment...................................................................46
5.3 Human Resources Structure..................................................................................50
5.4 Management indicators.........................................................................................51
6. FINANCIAL PLAN..................................................................................................52
6.1 Investments............................................................................................................52
6.2 Income and Costs per Sale....................................................................................53
6.3 Administrative expenses........................................................................................54
6.4 Discount Rate and Economic Evaluation..............................................................54
6.5 Project awareness..................................................................................................55
Risk Detective Sensitivity Analysis................................................................................................56
7. CONCLUSIONS.......................................................................................................57
Bibliography.....................................................................................................................57
REGULATION ON WASTE MANAGEMENT HEALTH CARE ESTABLISHMENTS
(REAS)........................................................................................................................................73
DISC. NO. 6 OF 2009..........................................................................................................73
Ministry of Health............................................................................................................74
UNDERSECRETARY OF PUBLIC HEALTH...............................................................74
APPROVES REGULATION ON MANAGEMENT OF WASTE WASTE HEALTH
CARE FACILITIES (REAS)...........................................................................................74
Published in the Official Gazette on 04.12.09..................................................................74
No. 6.-...............................................................................................................................74
Santiago, February 23, 2009.-..........................................................................................74
Decree:..............................................................................................................................74
TITLE I General disposition...........................................................................................74
Identification and classification........................................................................................75
TITLE III of the generation.............................................................................................77
Paragraph II......................................................................................................................79
Withdrawal and internal transport....................................................................................79
 Paragraph III.....................................................................................................................80
Waste storage....................................................................................................................80
From elimination..............................................................................................................82
TITLE VI Of transportation............................................................................................84
Of contingency plans........................................................................................................85
Special waste tracking system..........................................................................................86
On inspection and sanctions.............................................................................................87
FINAL TITLE..................................................................................................................87
What I transcribe for your information.- Yours sincerely, Jeanette Vega Morales,
Undersecretary of Public Health......................................................................................87
MAINTENANCE PROTOCOLS............................................................................................90
3 CRITERIA FOR INSPECTION.................................................................................91
1. INTRODUCTION AND DESCRIPTION OF THE BUSINESS

1.4 Introduction

The waste generated today in any human activity can present health risks. Depending on
their nature, they need special treatment in order to be inactivated. Within this group of
waste there is a particular type of waste, which will be referred to from now on as: REAS
(Waste from Health Care Establishments).

Based on the above, the World Health Organization (WHO) indicates the obligation to
carry out differentiated management of REAS according to their nature. It defines
categories that include: radioactive waste, hazardous chemical substances, heavy metals,
infectious waste and waste similar to household waste.

In this sense, the Chilean Ministry of Health has taken the recommendations of the WHO.
Three years ago, it designed the “Regulations on Waste Management from Health Care
Establishments” which began to be required in 2013. This regulation indicates that
hospitals are responsible, from its origin to its final disposal, for the waste they generate.
Therefore, the damage resulting from poor handling.

As a result of the situation raised in the previous paragraphs, this work provides a
Business Plan for the treatment of waste from health institutions, which is developed
under three modalities. The first is Plant, involves the implementation of a fixed waste
treatment center supplied through specialized transportation; the second is Client, where
a treatment plant is implemented at the user's facilities; and finally the third modality,
which is called Mobile, requires carrying out waste treatment at the client's facilities.

The importance of generating these three modalities is highlighted, since currently in the
country only hospital waste treatment is carried out in the plant. Health Facilities are not
allowed to obtain complete traceability of their emissions. The process to treat hospital
waste, proposed in this plan, is sterilization with autoclaves, then crushing and
compacting the waste to be deposited in municipal collection. The treatment methodology
described is accepted by the Chilean Ministry of Health, since it is friendly to the
environment and people.

To achieve what was previously described, the following chapters present the activities
required to achieve success in the application of the Business Plan. A special emphasis is
placed on market and competition analysis.

1.2 Business Plan Description and Key Questions

The main theme of the Business Plan is the development of a service that allows treating
hospital waste generated by the country's public health establishments, taking into
account the regulatory contingency that applies as of 2013.

From the above, it is possible to indicate the motivations for the proposed business plan:

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 • The competition only provides waste treatment in plant mode. Therefore, by
offering mobile and client service it is possible to provide alternatives that can give
a competitive advantage to the business plan.

• In 2013, the REAS regulations are applied more rigorously, which implies extra
pressure on Health Services to implement their waste management plans, with
modalities different from the existing ones.

• The REAS regulations indicate that the Waste Issuer is responsible to the authority
until final disposal. This means that health establishments must have control of the
traceability of waste. This is feasible through the client and mobile mode.

• Currently, waste is treated through incineration, microwaves, chemical disinfection

and sometimes self-nailing. As a result, environmental contaminants and handling
hazards for users are generated. Thus, this plan proposes a clean alternative that
is friendly to the environment and its surroundings.

Based on the previous points, the service provided by the business plan is
comprehensive. The disadvantages of current waste treatments are assumed through
compact equipment positioned in a twenty-foot container, which contains three pieces of
equipment in series: an autoclave to sterilize the waste, a crusher for sharps and a
compactor to reduce waste. the volume.

Finally, the key questions to answer are:

• Are Public Health Services willing to change their current way of waste treatment?

• Is it easy for competitors to copy the service?

• Do the current regulations allow the Mobile service to be carried out?

• What type of technologies do the most advanced countries use in waste

treatment?

• What is the growth potential of the business?

• Is it possible to quantify the benefit to the customer when using the Client and
Mobile service?

• Is it possible to make a strategic alliance with equipment suppliers and end

customers?

1.3 Scope of the Business Plan

The application of this Business Plan covers everything from the generation of waste to its
final disposal. It goes through the separation of waste, classification in the deposits
designated by the regulations, inactivity of the waste and its final destination.

This Plan does not contemplate the management of waste considered toxic, radioactive
and animal, which are 5% of the total REAS. It also does not consider negotiations with

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municipal landfills and public garbage collectors, which is the responsibility of the clients.
These negotiations are mainly:

• Garbage removal charges.

• Number of withdrawals in the month.

• Amount of kilos of garbage that can be removed by contract

2. OBJECTIVES AND METHODOLOGY

2.1 Goals

General objective:

• Generate a Business Plan for the treatment of hospital waste with a value
proposition different from the competition, as well as being environmentally friendly
and at a market price.

Specific objectives:

• Conduct a strategic analysis of the waste treatment industry

hospitable.

• Determine the target market for the waste treatment service

hospitable.

• Determine the marketing plan that meets the business objectives.

• Carry out an economic and financial evaluation of the project to determine the
necessary investment and its profitability.

Determine the operational plan and HR. necessary for the implementation of the
business.

Expected results:

• Generate a waste treatment service with world-class quality standards.

• Apply this business plan supported by private or public investors

2.2 Conceptual framework

The conceptual framework of the Business Plan is supported and inspired by authors
Michael A. Hitt; R. Duane Ireland and Robert E. Hoskisson, specifically for his book
Strategic Management , which is the basis for the MBA Business Policy course.

The conceptual framework begins with an internal and external analysis, to then define
the business vision. Subsequently, the strategy must be formulated, through segment
analysis, rivalry, acquisitions, corporate and international strategy.

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On the other hand, the strategy implementation analysis must be carried out, verifying the
organizational structure, corporate governance and application strategies.

The previous process requires carrying out as many times as necessary as the conditions
of each block change.

Finally, it is necessary to highlight the tools that will support the correct use of the
conceptual framework:

• Model Canvas for creating business models: logically describes how organizations
create, deliver and capture value.

• Porter's five forces model: indicates that there are five forces that determine the
long-term profitability consequences of a market or some segment of it.

• Marketing Plan: management tool that determines the steps to follow, the
methodology and the times to achieve the formulated objectives. This method is
part of the strategic planning of a company.

2.3 Methodology

The methodology used to develop this work is directly related to the creation of a
Business Plan. Therefore, a commonly accepted structure is used, which is:

• Industry and competition analysis : it is the main step that is carried out. The
more relevant market information can be gathered, the greater the effectiveness in
making future decisions. The industry analysis contains relevant information about
its size and potential. Relevant data ranging from your current situation to the
expected changes for economic, social, demographic and technological variables.
Also, the critical success factors that allow obtaining important competitive
advantages must be identified. For example, industry regulations and restrictions
on new entrants. The information collected allows the development of Porter's five
forces analysis, which provides a schematized view of the industry's situation.

On the other hand, the analysis of competitors is addressed. Data on the number
of them, their market shares and important attributes are collected. Finally, they are
compared with the proposed Business Plan, in order to identify competitive
advantages.

• Strategic Marketing : The next step is taken initially with the segmentation of the
industry. Clearly identify the target market to which the business plan is directed
and the positioning that you wish to achieve. These steps deploy a description of
the organization and the SWOT analysis necessary to generate a compelling value
proposition that is difficult for competitors to imitate.

Subsequently, measurable objectives are set based on the mission and vision of
the proposals, which are the basis of the Marketing Mix. This operates the activities
necessary to achieve above-average returns.

• Operational Plan: this step seeks to define the way in which the different tasks

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 that make up the delivery of the waste treatment service are carried out, taking into
account distribution, transportation and sales aspects. It also involves estimating
the human resources necessary to carry out the management and sales objectives
of the service.

• Financial Plan: from the previous stages it is possible to estimate the income,
operational costs, working capital and investments associated with the
implementation of the business plan, which allows an economic evaluation of the
project, obtaining relevant information about its viability. .

3. INDUSTRY ANALYSIS

3.1 Market Description

The waste treatment market is made up of health care entities, which are made up of 184
Institutions. Those are divided into low, medium and high hospital complexity. All of them
belonging to the public health system.

The following graph indicates the proportion of establishments in the country:

Graph 1: Distribution of public hospitals by type of institution

Source Department of Statistics and Health Information, Ministry of Health, www.deis.cl

In order to quantify the amount of waste emitted by Health Establishments, the number of
beds they have is used. This is because according to studies by the World Health
Organization, it is estimated that the average generation of hospital waste in Latin
America is 3 kg/bed/day, varying between 1.0 and 4.5 kg/bed/day depending on to the
Pan American Center for Sanitary Engineering and Environmental Sciences. It is
highlighted that 16% of this waste is considered special and must be treated for the
service offered in this Business Plan.

Based on the above, the total waste available in the country is 27,247 distributed in the
184 Health Establishments 1 , which delivers a total of 4,773,674 Kilo of special waste per
year. In this study, a second presentation of the market is made, based on the number of
waste emitted by Health establishments according to their geographical location. In other

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words, a more detailed view of hospital waste generation at the state level is allowed.

The generation of waste by region and its percentage of the total that is emitted is as
follows:

Table 1: Special waste generation, in kilograms/year by region.

Region kg/year %
XV 40,997 1%
Yo 61,846 1%
1
Source: Department of Statistics and Health Information, Minsal, see distribution by Establishment in
Annex A.

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 II 172,397 4%
III 88,826 2%
IV 150,146 3%
V 555,034 12%
XIII 1,646.705 34%
SAW 206,911 4%
VII 336,559 7%
VIII 680,477 14%
IX 341,640 7%
XIV 162,586 3%
x 216,197 5%
XI 40,646 1%
XII 72,708 2%
Source Department of Statistics and Health Information, Ministry of Health, www.deis.cl

In the graph presented below, it is possible to make a first statement: In the metropolitan
region, V, VI and VII, 57% of the generation of hospital waste is concentrated.

Graph 2: Special waste generation, in kilograms/year by region.

Source Department of Statistics and Health Information, Ministry of Health, www.deis.cl

Based on what was previously stated and described, it is important to highlight the
organizational structure of public health establishments. Institutions that depend directly
on health services. They are the ones who have authority

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 administrative and technical on the decisions of each hospital 2 . Thus, it is necessary to
make an additional presentation of waste emissions by institution in order to have a
different perspective.
Graph 3: Special waste generation, in kilograms/year by Health Service.

Source Department of Statistics and Health Information, Ministry of Health, www.deis.cl

The previously presented graph allows us to make a second statement: In Health

Services 7,9,10,11,12,13,14,15,16,18 and 23, 60% of the generation of hospital waste is
concentrated. In the following table it is possible to see the nomenclature and amount of
waste generated per year by the Health Service:

Table 2: Special waste generation, in kilograms/year by Health Service.

Health Service Cod. Waste Kg/year

Arica Health Service SS1 40,997
Iquique Health Service SS2 61,846
Antofagasta Health Service SS3 172,397
Atacama Health Service SS4 88,826
Coquimbo Health Service SS5 150,146
Valparaíso Health Service - San Antonio SS6 171,871
Viña del Mar Health Service - Quillota SS7 219,701
Aconcagua Health Service SS8 163,462
North Metropolitan Health Service SS9 237,396
Western Metropolitan Health Service SS10 262,800
Central Metropolitan Health Service SS11 242,302
Eastern Metropolitan Health Service SS12 233,191
South Metropolitan Health Service SS13 336,384
South East Metropolitan Health Service SS14 334,632
O`Higgins Health Service SS15 206,911
2
See Annex A distribution of Public Hospitals by Health Service.
Maule Health Service SS16 336,559
Ñuble Health Service SS17 164,863
Concepción Health Service SS18 234,418
Talcahuano Health Service SS19 96,710

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Bío Bío Health Service SS20 132,101
Arauco Health Service SS21 52,385
Araucanía Norte Health Service SS22 98,287
Araucanía Sur Health Service SS23 243,353
Osorno Health Service SS24 81,468
Valdivia Health Service SS25 162,586
Reloncaví Health Service SS26 90,053
Chiloé Health Service SS27 44,676
Aysén Health Service SS28 40,646
Magallanes Health Service SS29 72,708
Source Department of Statistics and Health Information, Ministry of Health, www.deis.cl

3.2 Projection of Investments and Population Growth by Health Service

The Chilean Ministry of Health has begun a process of modernizing the hospital network,
which includes investments in thirty-seven hospitals, of which twenty-five are currently
under construction and twelve will be concessioned. This process begins in late 2010 with
a budgeted completion date of 2018.

The following table details the investments that are in progress and the investments that
will be concessioned:

Table 3: Infrastructure projects in execution

HOSPITALS UNDER CONSTRUCTION: 25

Calama Hospital
Copiapó Hospital
Hanga Roa Hospital
Rancagua Hospital
Talca Hospital
Concepción Traumatological Hospital
Cañete Hospital
Los Angeles Hospital
Corral Hospital
Osorno Hospital
Puerto Montt Hospital
Iquique Hospital Recovery
Salamanca Hospital Normalization
Gustavo Fricke Hospital Normalization
Construction CRS Puente Alto
Los Cedros (Posta Central hospitalization tower)
Replacement of Ezequiel Gonzalez Cortés Hospital
Laja Hospital
Penco Lirquén Hospital
Lautaro Hospital
Carahue Community Hospital
Pitrufquen Hospital

Puerto Aysén Hospital Puerto Natales Hospital Porvenir Hospital

CONCESSIONS PORTFOLIO: 12 HOSPITALS

Antofagasta Hospital
Santiago Oriente Hospital
Salvador Hospital – Geriatric
Puente Alto Hospital

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Sótero del Río Hospital
El Carmen Hospital Dr. Luis Valentín Ferrada
Florida Hospital
Marga Marga Hospital
Quillota Biprovincial Hospital – Villa Alemana
Curico Hospital
Linares Hospital
Chillan Hospital
Source Ministry of Health of Chile, www.minsal.cl

Another point that needs to be expressed refers to the population growth associated with
each health service. The purpose of this is to establish a future scenario for hospital
demand by 2020. In this sense, the population growth projections by region, Health
Service and sex provided by the National Institute of Statistics of Chile are used. 5 .

The population growth projections by Health Service, for the year 2020, are as follows:

Table 4: Population growth by Health Service.

Health Service Population Growth by SS.

Arica Health Service -6,3%
Iquique Health Service 10,0%
Antofagasta Health Service 4,7%
Atacama Health Service 3,2%
Coquimbo Health Service 6,3%
Valparaíso Health Service - San Antonio 2,1%
Viña del Mar Health Service - Quillota 5,5%
Aconcagua Health Service 4,8%
North Metropolitan Health Service 4,8%
Western Metropolitan Health Service 0,2%
Central Metropolitan Health Service 15,2%
Eastern Metropolitan Health Service -1.3%
South Metropolitan Health Service -3,1%
South East Metropolitan Health Service 4,4%
O`Higgins Health Service 4,2%
Maule Health Service 3,4%
Ñuble Health Service 0,8%
Concepción Health Service 5,3%
Talcahuano Health Service -0,8%
Bío Bío Health Service 3,6%
Arauco Health Service 1,7%
Araucanía Norte Health Service -3,1%
Araucanía Sur Health Service 5,2%
Osorno Health Service 0,1%
Valdivia Health Service 0,4%
Reloncaví Health Service 7,5%
Chiloé Health Service 7,5%
Aysén Health Service 3,9%
Magallanes Health Service 1,2%
Source National Institute of Statistics of Chile, www.ine.cl

5 See Annex B: Population Projection by Region, Health Service and Sex 2005 - 2020

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3.3 Regulations for the Treatment of Hospital Waste

The treatment of hospital waste is defined in law by the Regulation on Waste

Management from Health Care Establishments approved by the decree of force of Law
No. 725/67 of the Ministry of Health 4 .

Now, this Regulation regulates and provides the necessary guidelines for the correct
management of hospital waste, highlighting:

• Identification and Classification of Waste

• Management plans and procedures at generation points
• Minimum equipment necessary for waste treatment, including support elements,
labels, capacities, etc.
• Removal procedures, transportation and contingency plans for the management of
hospital waste.

3.4 Competitor analysis

To carry out the analysis of competitors, it was necessary to carry out a study of each of
the tenders published and awarded in the areas related to the treatment of hospital waste.
That in all public hospitals in Chile. In this way, the items that are consulted on the public
market portal are:

Table 5: Application items for waste treatment in the public market.

Category
Description Category
Code
76121500 Industrial cleaning services/Waste disposal and treatment/Waste collection and
disposal
76121600 Industrial cleaning services/Waste disposal and treatment/Non-hazardous
waste disposal
76121700 Industrial cleaning services/Waste disposal and treatment/Liquid waste
treatment
76121800 Industrial cleaning services/Waste disposal and treatment/Liquid waste
treatment
4
See Annex C: Regulations on REAS management.
76121900 Industrial cleaning services/Waste disposal and treatment/Hazardous waste
disposal
76131500 Industrial cleaning services/Cleaning of toxic and hazardous waste or
waste/Treatment of nuclear waste and waste
76131700 Industrial cleaning services/Cleaning up toxic and hazardous waste or
waste/Cleaning up oil spills or spills
Source www.mercadopublico.cl

Based on what has been described, it is possible to obtain information on all the tenders
corresponding to the years 2013, 2014 and 2015 from each of the 184 health institutions.
The information collected corresponds mainly to:

• Competitors by demographic sector and by health institution

• Offered prices and awarded prices

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 • Collection methodology (per kilo of waste or per bag of waste)

• Waste removal and treatment procedures by competitor

It is highlighted that the data provided by the analysis is real and presents minimal
approximation errors, which allows the generation of a more accurate business plan.

3.4.1 Competition Description

Currently, there are four companies that should be considered direct competition to our
business plan. They are those who actively participate in all bidding processes in the field
of hospital waste treatment in the public health sector. These six companies are identified
from the review of all tenders from the last three years in each of the Health Services. The
competitors are the following:

Transportes Anfibio Ltda. Rut: 76.074.214-7

Company with ten years in the market. It carries out its production process through
chemicals, which generates an environmental disadvantage when compared to the
process proposed in this business plan.

The company has its plant in the city of Coquimbo. In the last two years, it has been able
to obtain important accounts in the north of the country by offering lower costs than the
competition. Currently, they are in the evaluation process to change their process from
chemical treatment to autoclaving.

Hospital Clinical Waste Transport Society Ltda. Rut: 76.034.450-8

Company with thirteen years in the market. It carries out its production process through
incineration and autoclaving. That means greater flexibility to meet customer needs.
Today it has a low market share in the segments targeted by this business plan, since its
focus is on universities, laboratories and pharmacies, which is where it directs all its
efforts.

The company has its plant in the commune of San Miguel in the city of Santiago. In recent
years it has not had major variations in its market share.

Sanitary Processes SA Rut: 96.697.710-8

Company with twenty-two years in the market. It carries out its production process
through incineration and autoclaving. Among the competing companies, it is the only
multinational with great prestige worldwide. Currently it is the main service provider in the
segment of public health institutions. However, it has lost some important accounts
because it increases its prices to customers without providing further explanations.
Finally, distrust is generated in users.

Procesos Sanitarios SA can take the greatest retaliation against an entrant, but only at the
price level. Therefore, the new formats offered by this business plan are an important
competitive advantage and difficult for the competitor to copy in the short term. You must
comply with the regulations and procedures of your parent company.

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Waste Transport and Management Society SA Rut: 76.015.564-0

Company with twelve years in the market. It carries out its productive work through
incineration and autoclaving with crushing. Currently, it is the company with the highest
standards of care for the environment. The above is due to the fact that its equipment has
been in use for fewer years, with greater benefits than its direct competitor Procesos
Sanitarios SA. In addition, it is the second provider of treatment services in the segment of
public health institutions. In recent years it has been able to obtain a considerable number
of new accounts.

At the moment, it is the company that is capable of generating the greatest retaliation
against a new entrant. However, its focus is on competing against Procesos Sanitarios SA

From the above, added to the information collected, we can indicate the market share per
kilogram of treated waste, by the number of institutions serving in the entire country. A
weighted market share indicator is also developed for each competitor. This consists of a
percentage of importance for each type of market participation. It is calculated with the
following formula:

PMK X 0.7 + PMI X 0.3 = PMP

Where:

PMK : Market share in kilograms processed

PMI : Market share by awarded institution

PMP: Weighted Market Share

The summary table is as follows:

Table 6: Market shares of the competition by kilograms treated and by institutions that
serve.

Waste
awarded per Market share Awarded Market share Weighted
Business name year (Kg.) (Kg.) institutions (Inst.) market share
Transportes Anfibio Ltda.
254,040 5% 10 5% 0.05

Soc. of Hospital Clinical

Waste Transport Ltda. 205,334 4% 15 8% 0.05

Sanitary Processes SA 3,432,168 72% 106 58% 0.68

Soc. Transport and Waste

Management SA 882,132 19% 53 29% 0.22
Total 4,773,674 100% 184 100% 1
Source www.mercadopublico.cl

Another important data is the variation in sales prices by Health Service, which is

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calculated based on the prices offered in each tender. An average sales per kilogram
treated is obtained, which is expressed in the following graph:

Graph 4: Average market prices per kilogram of waste treated by Health Service.

Average Sales Prices per Kg. of Treated Waste

$ 4,000
$ 3,500
$ 3,000
$ 2,500
$ 2,000
$ 1,500
$ 1,000
$ 500
$0
—~m<LONcOGOAm-LNONCOOOIAm-LNOF0O
U••U•••00NNNN~NNNN
•••••••••••••••••••••••••
000000000000000

Source www.mercadopublico.cl

3.4.2 Comparison of Competitor Attributes

In order to carry out a comparison of the competition, the relevant attributes for correct
treatment of hospital waste are selected. In this sense, each attribute represents a
differentiating characteristic in the decision making of health institutions.

The summary table of attributes is presented below, including the projection of the
proposed Business Plan:

Table 7: Competitor attributes used by buyers for decision making.

Competitors
Transportes Sanitary Waste
Anfibio Ltda. Processes SA Transport and
Hospital Clinical Proposed
Attributes Management
Waste Transport Business Plan
Society SA
Society Ltd.

Time in industry in
10 13 22 12 0
years
Chemical Incineration and Incineration and Incineration Sterilization
Type of treatment
Sterilization Sterilization and
Type of service Plant Plant Plant Plant Plant, Mobile,
Client
National presence
North North Center National South Central Specific Health
Services
Shredding and
compaction of No No No Yeah Yeah
waste

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Source: www.anfibiotgr.cl , www.prevensur.cl , www.stericycle.cl , www.transmedical.cl

3.5 Critical factors of success

The factors that determine the competitive performance of the Business Plan are:

Sales Force: the sales staff is the visible face of health institutions. Therefore, those
responsible transmit to the client the benefits of contracting the waste treatment service
with the company. The sales force must be qualified as trained in all technical, legal and
environmental aspects, placing special emphasis on the comparative advantages of the
service proposed in this business plan.

Competitive prices: the sales price of the waste treatment service must be competitive.
Because healthcare institutions are too price sensitive. In this sense, the price must
communicate to the user that it does not have significant increases in costs, but it does
increase the quality of the service.

Image: the company must project a responsible environmental image. That is, customers
recognize the company as concerned about the environment and people. This factor is
important, since companies that provide waste treatment services are classified as
aggressive towards the environment in which they operate.

Logistics: The business plan proposes treatment of mobile waste and customers. It
presents a higher degree of complexity, in turn a differentiating factor from the
competition. In this sense, logistics at the client is managed rigorously, since it defines
future contracts.

3.6 Analysis of the External Environment

The analysis of the external environment is carried out through Porter's five forces. It is
postulated that there are five forces that define the structure of the industry: Threat of new
entrants, Bargaining power of buyers, Threat of substitute products, Bargaining power of
suppliers, and Intensity of rivalry of competitors.

3.6.1 Threats of New Entrants

There are four relevant competitors in the hospital waste treatment market for the public
health sector. Two of them have a combined market share of 90%. These two suppliers
are Procesos Sanitarios SA, and Sociedad de Transporte y Gestión de Residuos SA.

The analysis of entry of new participants into the market is carried out from these two
suppliers:

Economies of scale: there are economies of scale based on the installed plant capacity,
that is, both competing companies have facilities with processing capacity greater than
the one they currently serve, therefore if demand increases they can reduce their prices in
order to obtain a greater market share or maintain their prices to increase liquidity.

Differentiation of products or services: the waste treatment market does not present major
differentiation of its service, most providers provide assistance in the removal, treatment

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and final disposal of waste.

Capital requirements: the capital that is required to enter the hospital waste treatment
market. This depends on the target segment to which it is directed. However, it is possible
to affirm that the need for investment in equipment, land, infrastructure and HR is an
important limitation for the entry of new competitors.

Switching costs: the waste treatment service currently offered on the market does not
present major differentiation. On the other hand, the client does not make their own
investments, the cost for clients to change to a new supplier is practically zero.

Access to distribution channels: companies that provide the hospital waste treatment
service do not use external distribution channels. That is, they comprehensively manage
their supply chain.

Technology and know-how requirements: technology for treating hospital waste requires
considerable capital investment, but this technology is available on the market. It is also
possible to find specialists and qualified operators in the market to develop the production
process.

Public policies: government restrictions for the provision of hospital waste treatment
services are regulated. Function carried out by the health authorities of each territory and
the provisions of the REAS regulations of the Ministry of Health. They do not imply major
barriers to entry.

Expected retaliation: The two companies that currently own 90% of the market can take
strong or immediate measures to prevent the entry of a new supplier. They have many
interests that invest in the industry. The main measure they could take is to lower prices
or offer a service similar to the one proposed in this plan. In other words, a Mobile and
Plant service in order to reduce the competitive advantage obtained.

From the previous paragraphs it is possible to conclude that the threat of new entrants to
the industry is medium.

3.6.2 Bargaining Power of Buyers

Clients within the industry are public health facilities. They buy services through the
platform www.mercadopublico.cl . There they publish their specific requirements for the
services they require. They indicate obligations and responsibilities of both parties. It is
known that most providers already negotiate the service they offer in advance.

Regarding the above, buyers stipulate in their bidding rules. They can terminate contracts
early if they consider that the service does not satisfy the needs of the institution. They
also have the ability to extend contracts if necessary. In addition, the low cost of changing
from one supplier to another implies that buyers have high bargaining power.

3.6.3 Threat of Substitute Products

The hospital waste treatment service can be (by regulation) carried out mainly through
incineration or autoclaving. Both methods are being used by current providers. In this

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way, there is currently no other way approved by the health authority to treat waste or
deliver the service by providers.

Based on the above, the substitute product may present a threat. That is the acquisition
by health institutions of their own hospital waste treatment plants. It is low probability
since it is not part of their business. In conclusion, the threat of substitute products in the
market is Low.

3.6.4 Bargaining power of suppliers

The critical suppliers for the provision of the waste treatment service are those that market
the equipment necessary to carry out the biological deactivation of waste. In this sense,
there are suppliers from most developed countries in the market. They are in a constant
process of innovation and updating their products. Companies have various alternatives
to choose and negotiate, both in terms of prices and technical support.

On the other hand, equipment suppliers have no interest in integrating forward. For them,
their business is the marketing of products and not the provision of services. In
conclusion, the bargaining power of suppliers is Low.

3.6.5 Intensity of Rivalry of Competitors

At this time, the hospital waste treatment market shows great attraction for new entrants.
Although investment costs are high, there is increasing demand due to new regulations
from the Ministry of Health. A supplier is found that recovers its investment in the medium
term.

Based on the above, the two providers that currently dominate the market compete to
provide a better price and service to their customers. In short, every action carried out by
either company is immediately responded to by the other. This may be by matching prices
or providing additional services.

Furthermore, public health institutions are networked. Supervised by the Ministry of

Health, which implies that good service in an institution can be used as a reference to
obtain new contracts. Finally, the intensity of rivalry among competitors is high.

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Figure 1: Porter's five forces.

Source: self made

4. STRATEGIC MARKETING

4.1 Mission and vision

Vision

Obtain a mobile contract by the end of 2020 for each public hospital with less than two
hundred beds. Likewise, a user mode contract for each public hospital with more than 400
beds in the health services of the target market.

Mission

Generate relationships of trust with our clients by complying, without exception. Carrying
out offers and commitments, through environmentally friendly processes. At the same
time, trained, motivated workers aligned with the company's objectives.

4.2 Definition of the Target Market

The process of selecting the target market to which the Business Plan is directed takes
into consideration the background information collected in chapter 3. After identifying the
184 public health institutions and the amount of annual waste emitted by each of them, it
is possible to develop a first demographic segmentation. The regions where there is a
greater waste emission are indicated.

On the other hand, it is also possible to observe that each institution depends on a
defined Health Service. He ultimately indicates the awarded supplier for all institutions. In

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this way, it is possible to carry out an even more specific segmentation than the previous
one, based on each Health Service and the amount of waste emitted by the Institutions in
its charge.

From the previous background, the following procedure is defined for identifying the target
market on which the Business Plan is focused:

1. Identification of the number of annual kilograms of special waste emitted by each

Health Service, indicating a percentage of importance of 40% in the final
evaluation.

2. Identification of the number of Hospitals dependent on each Health Service,

indicating an importance percentage of 10% in the final evaluation.

3. Identification of the number of Hospitals required to implement by law 6 a Hospital

Waste Management Plan for each Health Service, indicating an importance
percentage of 10% in the final evaluation.

4. Identification of the number of new Hospitals projected and in the process of

normalization for each health service, showing a percentage of importance of 10%
in the final evaluation.

5. Identification of population growth until 2020 for each Health Service, revealing an
importance percentage of 10% in the final evaluation.

6. Identification of the number of competitors for each Health Service, indicating an

importance percentage of 5% in the final evaluation.

7. Identification of weighted market share7 of the current service provider for each
health assistance, indicating an importance percentage of 15% in the final
evaluation.

8. The final score of each health service is calculated, defining scores equal to or
greater than 50% as the target market definition parameter.

The final scores for each health service are as follows:

6 The REAS Regulation indicates that all institutions that emit more than one ton of special waste per month
must implement a Hospital Waste Management Plan.
7 See chapter 3 Description of the Competition

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Table 8: Scores for choosing the target segment by health service.

Health Service Total

Arica Health Service 32%
Iquique Health Service 35%
Antofagasta Health Service 48%
Atacama Health Service 30%
Coquimbo Health Service 40%
Valparaíso Health Service - San Antonio 42%
Viña del Mar Health Service - Quillota 54%
Aconcagua Health Service 38%
North Metropolitan Health Service 47%
Western Metropolitan Health Service 52%
Central Metropolitan Health Service 60%
Eastern Metropolitan Health Service 47%
South Metropolitan Health Service 60%
South East Metropolitan Health Service 58%
O`Higgins Health Service 52%
Maule Health Service 72%
Ñuble Health Service 38%
Concepción Health Service 51%
Talcahuano Health Service 27%
Bío Bío Health Service 38%
Arauco Health Service 22%
Araucanía Norte Health Service 25%
Araucanía Sur Health Service 57%
Osorno Health Service 24%
Valdivia Health Service 36%
Reloncaví Health Service 30%
Chiloé Health Service 23%
Aysén Health Service 22%
Magallanes Health Service 27%
Source: self made

In conclusion, the Business Plan is focused on the following Health Services, which
together have a potential for the emission of special hospital waste of 2,348,556 kilograms
per year:

Viña del Mar Health Service – Quillota

It is in charge of eleven Health Institutions with coverage in the communes of Viña del
Mar, Quillota, Quilpué, Peñablanca, Quintero, Limache, La Ligua, La Calera, Cabildo and
Petorca. This Health Service has a potential of 219,701 Kilograms of waste per year.

The direct competition within the segment is Procesos Sanitarios SA y Soc. of Hospital
Clinical Waste Transport Limited.

Western Metropolitan Health Service

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It is in charge of eight Health Institutions with coverage in the communes of: Santiago,
Quinta Normal, Peñaflor, Talagante, Melipilla, Curacaví and Pudahuel. This Service has a
potential of 262,800 kilograms of waste per year.

The direct competition within the segment is Procesos Sanitarios SA, Soc. of Hospital
Clinical Waste Transport Limited and Soc. Transport and Waste Management SA

Central Metropolitan Health Service

It assumes three Health Institutions with coverage in the communes of Santiago and
Maipú. This Health Service has a potential of 242,302 kilograms of waste per year.

The direct competition within the segment is Procesos Sanitarios SA y Soc. of Hospital
Clinical Waste Transport Limited.

South Metropolitan Health Service

It is in charge of seven Health Institutions with coverage in the communes of San Miguel,
Buin, Puente Alto and San Bernardo. It has a potential of 336,384 kilograms of waste per
year.

The direct competition within the segment is Procesos Sanitarios SA y Soc. of Hospital
Clinical Waste Transport Limited.

South East Metropolitan Health Service

With four Health Institutions with coverage in the communities of Puente Alto, San
Ramón, San Jose de Maipú and Providencia. This has a potential of 266,129 Kilograms of
waste per year.

The direct competition within the segment is Procesos Sanitarios SA y Soc. of Hospital
Clinical Waste Transport Limited.

O`Higgins Health Service

It is in charge of fourteen Health Institutions, with coverage in the communes of:

Rancagua, Chimbarongo, San Fernando, Rancagua, Santa Cruz, Pichilemu, Marchigue,
Pichidegua, San Vicente de Tagua Tagua, Peumo, Rengo, Cónico and Graneros. This
Health Service has a potential of 206,911 kilograms of waste per year.

The direct competition within the segment is Procesos Sanitarios SA, Soc. of Hospital
Clinical Waste Transport Limited and Soc. Transport and Waste Management SA

Maule Health Service

Under its jurisdiction there are thirteen Health Institutions with coverage in the communes
of Parral, Cauquenes, Linares, San Javier, Chanco, Talca, Constitución, Molina, Curicó,
Teno, Hualañe, Curepto and Licantén. It has a potential of 336,559 kilograms of waste per
year.

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The direct competition within the segment is Procesos Sanitarios SA y Soc. Transport and
Waste Management SA

Concepción Health Service

It is in charge of 6 Health Institutions with coverage in the communes of Concepción,

Coronel, Lota, Santa Juana and Florida. It has a potential of 234,418 Kilograms of waste
per year.

The direct competition within the segment is Procesos Sanitarios SA y Soc. Transport and
Waste Management SA

Araucania Sur Health Service

It assumes control of fourteen Health Institutions with coverage in the communes of:
Carahue, Cunco, Galvarino, Gorbea, Lautaro, Loncoche, Nueva Imperial, Pitrufquén,
Pucón, Puerto Saavedra, Temuco, Toltén, Vilcún and Villarica. It has a potential of
243,353 kilograms of waste per year.

The direct competition within the segment is Procesos Sanitarios SA y Soc. Transport and
Waste Management SA

4.3 Company description

In order to meet the needs of the target market, which is mainly located in the V, VI, VII,
VIII, IX and Metropolitan regions, the company will be installed on a 4,250 square meter
plot of land. Specifically, on Montevideo street nº 2097 commune of Renca. This site is
strategic due to its accessibility to the three main highways of the Metropolitan Region. It
allows hospital waste removal services to be carried out quickly and in a timely manner.

It is also highlighted that the chosen neighborhood is an emerging industrial area. Place
that has low costs per square meter and with municipal institutions that seek greater
investments in the commune. Therefore it makes it easier to obtain permits and licenses.

Based on the above, the company has, in the first instance, a workstation in plant mode.
A workstation is also added in mobile mode, which allows processing more than 50% of
the waste emitted by the target market. Thus, as demand increases or the company
obtains a greater market share, the acquisition of new plants is projected.

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Figure 2: Company location maps.

Conchali or

Source www.mapcity.cl , googlemaps

On the other hand, the company has a fleet of two trucks equipped for the removal of
hospital waste that needs to be treated in plant mode. Likewise, with trained operators
trained by each of the company's equipment suppliers. Each of the company's resources
are described below.

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4.3.1 Equipment for the Treatment of Hospital Waste

The hospital waste treatment process is carried out through the MWT equipment of the
Italian brand CISA. It is a unique system for the treatment of infectious waste by
sterilization, with special sterilizers (autoclaves), to eliminate all infectious risk.

In a second phase, the equipment crushes and compacts in order to reduce the final
volume of the treated waste. Odors are eliminated through EPA filters. Transport between
the sterilization, crushing and compaction equipment is automatic by means of conveyor
belts.

The main characteristics of the equipment are:

• Sterilizing equipment equipped with special air treatment before air removal to
protect the environment. This is done using two methods. Both with the use of two
special filters on the outputs; These filters are conditioned in a stainless steel
chamber to sterilize in the line, avoiding the accumulation of microorganisms and
dirt in the filter.

• The steam is injected at the beginning of the cycle then condenses upon contact
with the cold load. Condensate can be dangerous if it is released into the sanitary
network immediately without treatment. With the MWT system, all condensate is
heated until it is transformed into sterile steam and is subsequently released.

• The final waste from the process is safe, unrecognizable and can be discarded as
household waste.

In order to obtain flexibility in handling the MWT equipment, all modalities (plant, mobile
and client) are adapted within a twenty-foot container. This allows modalities to be
changed depending on the demand for the service. That is, equipment is used to carry out
the treatment in the user's premises as well as in the company's plant. Below it is possible
to see the layout of the equipment with possible uses.

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Figure 3: Mobile and fixed
application

Source www.cisagroup.it

Figure 4: MWT equipment installation layout

Source www.cisagroup.it

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4.4 SWOT Analysis

4.4.1 Strengths

• The main strength of the business plan is the equipment used to treat hospital
waste. Which allows, thanks to its modular characteristics, to treat waste at the
client's facilities. This treatment is carried out by moving the equipment in a truck
operated directly from the container or by installing a modular treatment plant. In
this sense, the equipment allows us to obtain an important competitive advantage
since the competition only operates an external plant modality.

• The waste treatment process proposed in the business plan guarantees a

minimum impact on the environment. The above since they do not generate liquid
waste into the drains and the vapors generated by the deactivation process are
sent to the environment after a sterilization treatment. In this sense, the
technologies currently used by competitors generate liquid waste, which is
discarded directly into sewage systems.

• The modular business model allows flexibility to change service modality. That is,
a unit of equipment that is managed to provide mobile service. Likewise, it can be
adapted to deliver a service in the plant. The above agrees to meet increases or
decreases in demand for each modality without affecting the initial investment.

• The company providing the equipment has flexible credit; It contemplates paying
for the equipment in thirty-six months with fixed installments payable every six
months at 1% monthly interest, which is an advantage with respect to access to
financing.

4.4.2 Opportunities

• The industry projects investments in public health organizations, in addition to

significant growth in hospital demand8 . Implying an increase in the request for
hospital waste treatment in the medium and long term.

• The REAS regulation indicates the procedures and regulations for the treatment of
hospital waste and establishes that as of 2013, Health institutions are responsible
for their emissions until their final disposal. This forces institutions to maintain
more rigorous control over the treatment of their waste, which is 100% effective if
it is carried out in their own facilities.

• The competition does not present (at the moment) mobile modalities at customer
facilities.

• From the in-depth interviews carried out with those in charge of hospital waste
management in the country's Public Hospitals, it is possible to conclude their
dissatisfaction with the service currently received and the fulfillment of
commitments, both in terms of prices and operation.

• Public Health Institutions are in the process of accreditation by the Chilean

Ministry of Health. There, waste treatment plans are one of the main points to opt
8 See point 3.2 of the Business Plan
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 for being a green hospital.

4.4.3 Weaknesses

• In the start-up process, a large initial investment is necessary, both in land and
equipment. Access to flexible credit or interested investors is necessary. For this,
the equipment supplier is contacted, which can grant direct credit with a letter of
credit in a bank in Brazil.

• Lack of Know How in the hospital waste treatment business. The above is due to
the fact that the knowledge is theoretical and the equipment technology is not
applied in the country. To reduce this weakness, it is necessary to hire a project
manager with experience in the market and travel to Brazil and Italy to empirically
verify the equipment in operation.

4.4.4 Threats

• There is a small number of competitors in the market who, apparently, have public
health facilities distributed by area.9 . In this sense, they can carry out aggressive
actions jointly to prevent the entry of a new competitor.

• Competitors can copy the business model, in the medium term, importing
technology from Europe. Therefore, it is essential to obtain the greatest number of
clients the first year.

• Public hospitals could integrate forward, acquiring similar equipment to

autonomously treat their hospital waste.

4.4.5 SWOT matrix

Based on the analysis of Strengths, Opportunities, Weaknesses and Threats, a SWOT

Matrix is developed, which allows defining specific activities that are necessary to obtain
competitive advantages.

9 See Annex A.
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Based on the above, the SWOT Matrix is as follows:

Figure 5: SWOT Matrix

Source: self made

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4.5 Value proposal

To define the market value proposition (objective set out in chapter 4.2), the SWOT
analysis and Porter's five forces associated with the following factors are taken into
consideration:

Figure 6: Factors to define the value proposition

Source http://advenio.es

• Price: Offer greater value to customers for the same market price.

• New: Provide greater value to customers by satisfying customer needs

market that are not previously identified. The last ones may be waste treatment in
client and mobile mode.

• Quality: Give an increase to the quality of the competition in the delivery of the
service. The above through the use of the latest generation equipment.

• Convenience: Offer a service that allows customers to direct their attention to the
heart of your business. Total responsibility for waste treatment is handed over to
the company.

• Brand/Status: Offer customers differentiation from their peers in the market

through control of their waste in their own facilities.

• Performance: Delivery of superior performance of the service offered than that

provided by the competition.

• Risk reduction. Offer minimal risk to the client when they change their service

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 provider, making contracts associated with the delivery of quality and user
satisfaction.

• Cost reduction: Provide the client with a reduction in their total costs. Well, by
contracting the service you receive indirect benefits, such as: the reduction in
administrative costs of control and variation of future prices.

• Design: Highlight the design of the service focused on mobile and client
modalities.

• Customization: Offer different waste treatment modalities which adapt to the

needs and tastes of each client.

Based on the previous factors, the SWOT analysis and Porter's five forces, it is possible
to conclude that the market is dominated by two companies that can generate
aggressive responses to a new entrant. However, both neglect their clients, since they
do not renew their technologies and their information management processes for their
consumers.

On the other hand, customers are required by the new REAS Regulation to have greater
control of their waste. However, they do not have the budgetary capabilities to modernize
their control and information mechanisms. In this way, the following value proposition is
presented:

Offer an excellent quality service designed exclusively for each client. State-of-the-art
environmentally friendly technology is used at a market price. In other words, users
obtain greater features and benefits than those currently received for the same price.

4.6 Goal Setting

Based on the analyzes carried out in the previous chapters in addition to the defined
target market (mainly focused on the Metropolitan Region and adjoining regions); The
following sales objectives are set, aligned with the vision proposed for 2020:

• Obtain by 2018 the complete concession of 40% of Health Services in the

Metropolitan Region and 60% of Health Services in regions outside the
Metropolitan Region.

• Obtain by 2020 the complete concession of 60% of Health Services in the

Metropolitan Region and 80% of Health Services in regions outside the
Metropolitan Region.

4.7 Strategy Selection

Throughout the next point, the necessary steps are developed to achieve the objectives
set out in the previous point. Next down the line, then, the Marketing Mix, strategy
selection and control mechanisms are discussed.

4.7.1 Marketing Mix

At this point, the four basic variables of the Marketing Mix are analyzed in depth, such

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as: product, price, distribution and promotion. In this way, each variable is valued with
special emphasis on the competitive advantages that the service proposed in the
business plan has in comparison with direct competition.

4.7.1.1 Product (Service)

The product proposed in the Business Plan is the hospital waste treatment service,
which consists of the following activities:

i .- Waste separation: the hospital waste treatment process begins at the point of
generation through the correct segregation of the waste. In this sense, each type of
waste must be stored in colored containers according to its level of contamination and
danger. In general, waste is classified into three types and the percentage of total waste
is as follows:

• Wastedangerous and radioactive (4%):

• Wastespecials (16%)

• Wastecomparable to domiciliary (80%)

ii .- Waste collection: after separating and classifying the waste, it is necessary to collect
each container. This must be frequently carried out in short periods of time to avoid the
spread of infections to neighboring areas. For this, special carts equipped with cooling
systems are used to keep the waste at a low temperature during transport.

iii .- Waste storage: Waste must be stored in specific and delimited areas. They have
specific temperatures and humidity conditions in order to stop the proliferation of
microorganisms.

iv .- Waste treatment: the treatment of hospital waste is carried out through the MWT
equipment of the CISA company, which consists of sterilizing, crushing and compacting
the waste. Finally, it is allowed to obtain unrecognizable waste that can be assimilated to
household waste.

v .- Final Disposal: finally, all waste that has the category of similar to household waste
is discarded as common waste.

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Figure 7: Steps of the hospital waste treatment service

Point of
Generation of
Waste Waste Waste
Source: self made
Separation Collection

It should be noted that all the

steps described are
developed for each treatment
modality (mobile, plant and
client). It is achieved through

Waste Similar
to Household?

T Iata ni io Waste Storage

uto of
Residue

qualified personnel and the supply of all the necessary equipment for the correct
treatment of hospital waste. Thus, only the plant modality requires an additional step,
which is the removal of waste from the storage warehouses to be treated in the
company's warehouses.

From the description of the described service it is possible to indicate the main
competitive advantages:

• The competition only carries out the process of removal, treatment and final
disposal of waste; without supporting the client in separation, collection and
storage. This is one of the main advantages, since the business plan aims to be a
support for the client. It seeks at each stage of the process to provide peace of
mind and constant support to each public hospital, in order to seek differentiation
in the quality of service.

• The competition carries out the waste treatment step through standard
incineration or sterilization, both processes present a higher degree of polluting
emissions to the environment than the equipment described in this plan. The
sterilization technology used in the business plan is called Aqua Zero. It allows
water savings of up to 90% compared to the competition. Furthermore, it does not
emit waste into the sewers. This competitive advantage is important, since Public
Hospitals are increasingly valuing care for the environment, and even give higher
scores in the bidding processes.

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 • The competition provides reports of the process after its plant treatment. It implies
a loss of valuable time for the waste managers of each public hospital. It all lies in
the fact that they are constantly monitored by the health authority. That is, the
service proposed in this business plan generates reports and graphic records in
real time. The above is achieved since the equipment has a printer that has the
capacity to record cycle documentation. Data that includes: the imprint of the date,
time, name of the respective premises, batch number, name of the operator and
result of the process (if valid or invalid).

4.7.1.2 Price

Based on the value proposition defined in point 4.5, the service offered seeks to position
itself as a service of excellent quality. He provides additional services that the
competition is not able to provide, but at a market price. In this sense, it is very important
to define a market value, since the project should not be differentiated from its
competition by having low prices but by the quality of service.

From the in-depth interviews with those in charge of waste treatment in each public
hospital, it was possible to conclude that price is not the main decision variable for
awarding a service contract. What's more, a price that is too low can be associated with
poor service.

As can be seen in Annex A, the direct competitors in the target market are Sociedad de
Transporte de Residuos Clínicos Hospitalarios Ltda., Procesos Sanitarios SA; and
Sociedad de Transporte y Gestión de Residuos SA From them, information on prices
offered in the last three years is obtained for each health service belonging to the target
market. With the detailed price information, the following methodology for setting sales
prices per kilogram of processed waste is defined:

• For health services belonging to the Metropolitan Region, a price is set based on
the average values of the competition, but with a decrease of 10% in order to
penetrate the market.

• Regarding the health services of Viña del Mar Quillota, O`Higgins, Maule,
Concepción and Araucanía Sur, a price is set based on the average values of the
competition, but with a decrease of 5% in order to penetrate the market .

Table 9: Competitor prices and sales price setting.

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Source Own elaboration with price information from www.mercadopublico.cl

From the previous table, it is possible to observe personalized sales prices for each
Health Service, where the business plan has an important competitive advantage by
knowing the real sales prices of the competition.

4.7.1.3 Distribution

The hospital waste treatment service is a complex business. Its high need for
specialization of the sales force must be trained to evaluate processes within a public
hospital. It also requests having the ability to present alternatives in accordance with
customer requirements. On the other hand, you must be able to analyze, in addition to
describing the attributes of the service that make it superior to the competition.

At another point, the sales force seeks to have complete knowledge of the current REAS
legislation. Consequently, training in countries that use MWT technology. In this sense,
the distribution channels are coordinated and managed directly by the company. That is,
from the service provider to the final consumer without intermediaries.

The service provision process in mobile, client and plant mode is centralized in the
facilities of the Renca commune. Management is under the operations area that
manages the requirements of the sales force, maintaining the following commercial
distribution:

• The Health Services belonging to the Metropolitan Region and Viña del Mar
Quillota are served by the commercial office located in the facilities of

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 • Renca. In the first instance, it has a salesperson (the Commercial Manager
supports the sale on the ground and generates its own sales).

• The O`Higgins Health Service and the Maule Health Service are served by an
exclusive seller with a commercial office in the city of Talca.

• The Health Service of Concepción and Araucania Sur are served by an exclusive
seller with a commercial office in the city of Concepción.

Figure 8: Distribution of Plant and Commercial Offices

Source: self made

4.7.1.4 Promotion

Before defining promotion strategies, it is important to remember the purchasing process

of the target market. It begins with the conviction of the highest health authorities located
in the departments of environment and industrial equipment of the Ministry of Health.
Subsequently, those responsible for each Health Service go down the decision scale.
Finally, it ends with the end users in each Public Hospital.

As mentioned in previous chapters, the hospital waste treatment service is a complex

process. Therefore it is not aimed at a large mass of customers. What's more, users are
easily identifiable in both their professional and financial profiles. Thus, it is possible to
express the following conclusion: The promotion of the service is directed exclusively to

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decision makers.

It becomes necessary to create a solid strategic alliance with the equipment supplier.
She is the support in Know How to teach the company to the market. Consequently, the
promotional actions will be developed together:

• Publications in specialized journals: publications are made in medical journals.

They are mostly studies on dangers to the environment and people. Existing
waste treatment systems and the use of MWT technology in developed countries
are highlighted. This form of publication aims to position the company as
innovative, concerned about its environment, a position that the competition does
not have.

• Participation in Fairs and Seminars: the company will actively participate in the
Expohospital fair. A main event at the national level of health institutions. Within
the fair, the company will participate by giving seminars on current treatment
technologies. Environmental impact studies will be shown highlighting the
differences in the service offered versus the competition.

• Sales Force: in the promotion process the sales force is key. Since it is
responsible for transmitting the company's environmental philosophy. Also the
advantages of hiring a comprehensive service from the point of waste generation
to its final disposal. Therefore, they carry out direct marketing, One to One
marketing and promotional resources. All three are aimed at providing them with
the necessary tools for merchandising, clothing, travel expenses and trips abroad.
All of the above in order to present MWT technology to its clients in developed
countries.

• Image Development: The company has a Public Relations area. The one that is in
charge of transmitting an ecological image to the market, responsible for the
social business part of the organization. This image is created through
sponsorship of the activities of Public Hospitals, as well as support for charitable
works related to the care of people in the country's Health Services.

In order to value the promotional actions, the following costs are estimated, which are
associated with one year of operation, proposing an increase in this item of 5% each
year.

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Table 10: Valuation of promotional actions
Promotion Action Period Cost Activity Total cost
Publications in specialized
magazines quarterly $ 1,600,000 $ 6,400,000

Advertising material
(Merchandising) annual $ 3,500,000 $ 3,500,000
Hiring Fair space
Expohospital 45 m2 annual $ 10,150,000 $ 10,150,000
Expohospital Stand annual $ 4,500,000 $ 4,500,000
Expohospital Conferences annual $ 540,000 $ 540,000
Participation as an exhibitor in
environmental seminars biannual $ 3,000,000 $ 6,000,000

Foreign trips of sellers and

potential clients biannual $ 5,400,000 $ 10,800,000

Donations and charities annual $ 18,000,000 $ 18,000,000

$ 59,890,000
Source Own elaboration with price information from FISA, Direcmed and Compramed.

4.7.2 Strategy Selection

In order to define the strategy that is applied in this business plan, it is based on the fact
that there are four main types of strategies.10 :

• Strategyof the leader

• Strategyof the challenging

• Strategyof the follower

• Strategyof the specialist

Where the strategy that adapts to the business plan presented and the description of the
company that competes in the market is: the specialist's Strategy proposes accessing
selective market niches, where the competition is not strong. In this sense, the business
plan proposes carrying out activities such as: segregation at the point of waste
generation, waste collection and storage. A strong competitive advantage is provided,
because it is the beginning within a health institution for its access to the award of the
entire service.

The specialist's tactic also raises the importance of not concentrating exclusively on one
niche, accessing more than one with the intention of dispersing the risk.

10 Strategies presented in the book Marketing Plan Step by Step, 2nd edition, author Carlo Cutropía

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4.7.3 Control

To control promotional actions, goals are set that each of the actions must meet, for
which the goals are annual and are redefined at the end of each period in order to
determine their effectiveness.

Table 11: Control of promotion actions

Promotion Action Indicator Goal

Publications in 8 publications
specialized magazines Post Frequency per year
Number of advertising material
delivered to potential clients with
2880
Advertising material identification of name, position and
(Merchandising) telephone number

Hiring Expohospital Fair

space 45 m2 Number of prospects interviewed
200
Expohospital Stand at the fair
Expohospital
Conferences
Participation as an
exhibitor in Number of prospects attending
120
environmental seminars private chats

(Number of Prospects who hire

Foreign trips of sellers
and potential clients
Donations and charities
Source: self made
the service/Number of prospects 60%
who travel)x100
(Number of Prospects who hire
the service/Number of prospects
70%
receive donations)x100

4.7.4 Sales projection

Starting from the objectives set out in point 4.6, adding the pricing strategy described in
the Marketing Mix is to present the sales projection for the next five years.

In order to lay the foundations for sales projection, it is necessary to summarize the
potential of the target market associated with future sales prices. Here it is possible to
see a potential annual income of $2,755,534,212 pesos. This income is divided by the
contribution of $1,252,510,231 pesos in the Health Services of the Metropolitan Region
and $1,503,023,981 pesos from other regions.

Table 12: Potential income by type of region.

Income
Waste Service Sale Annual Potential
Health Service Kg/year Price
Western Metropolitan Health Service 262.800 $ 1.179 $ 309.841.200
Central Metropolitan Health Service 242.302 $ 1.098 $ 266.047.157

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 South Metropolitan Health Service 336.384 $ 1.123 $ 377.759.232
South East Metropolitan Health Service 266.129 $ 1.123 $ 298.862.642
Total Potential Income Metropolitan Region $
Vina del Mar Health Service - Quillota 219.701 $ 1.209 1.252.510.231
$ 265.618.267
O Higgins Health Service 206.911 $ 1.416 $ 292.986.259
Maule Health Service 336.559 $ 1.259 $ 423.728.033
Concepción Health Service 234.418 $ 1.126 $ 263.954.218
Araucanía Sur Health Service 243.353 $ 1.055 $256.737.204
Total Potential Income Other Regions $
2.348.556 1.503.023.981
$
Source: self made 2.755.534.212
On the other hand, the following market share projection is defined:

• The year 2016 does not project sales. It is necessary to carry out the necessary
promotion process to be awarded with projects from the year 2017 (the tenders
are annual therefore it is not possible to immediately obtain income from sales).

• In 2017, the income will be made up of 20% of the Health Services of the
Metropolitan Region and 30% of the Health Services of other regions.

• In 2018, income will be made up of 40% of the Health Services of the Metropolitan
Region and 60% of the Health Services of other regions.

• In 2019, the income will be made up of 50% of the Health Services of the
Metropolitan Region and 70% of the Health Services of other regions.

• In 2020, income will be made up of 60% of the Health Services of the Metropolitan
Region and 80% of the Health Services of other regions.

With the background described above, it is possible to present the sales projection for
the five years of business operation:
Table 13: Annual sales budget by type of region.

2016 2017 2018 2019 2020

Sales by Region Type
Metropolitan region $0 $ 250,502,046 $ 501,004,092 $ 626,255,116 $ 751,506,139
Other Regions $0 $ 450,907,194 $ 901,814,388 $ 1,052,116,787 $ 1,202,419,185
Total Operating Income $0 $ 701,409,240 $ 1,402,818,480 $ 1,678,371,903 $ 1,953,925,324
Source: self made

5. OPERATIONAL PLAN

5.1 Supply chain

To define the flow and activities that must be carried out to provide the hospital waste
treatment service, it is necessary to carry out an analysis for each business modality.
The activities for the mobile system, client and plant are described. It is highlighted that
the service will be delivered during business hours, in order to make the schedule and
joint supervision compatible with the representatives of each health establishment.

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Mobile Mode:

The process begins with the client's approval to accept this type of modality. This is very
different from the other two, since it involves transferring the equipment in a truck to the
consumer's premises and then returning to the plant. The steps are the following:

• The frequency with which waste is treated is determined: this will depend on the
amount of daily emissions from each hospital. It is emphasized that the withdrawal
frequency cannot exceed 72 hours. With this information, the storage warehouses
and collection equipment necessary for the efficient operation of the process are
sized.

• Subsequently, a presentation of the architecture and basic requirements necessary

for the implementation of the service is made. It is emphasized that the hospital does
not incur additional expenses. Well, the construction of storage warehouses and
adaptation of water and electricity supply are the responsibility of the company.

• At the end of the architectural works and the implementation of basic requirements,
waste managers are trained. The personnel who work directly at the Hospital for the
segregation, collection and storage process are introduced and the white march
proceeds.

• When the process is in normal operation, the company's staff collects the classified
waste every day. Then it prepares them in autoclavable bags waiting for the truck
with the mobile equipment. For this, the already classified bags will be stored in the
facilities provided by the company.

• The truck arrives at the hospital, according to the frequency definition. It then
proceeds to treat the stored hospital waste. After that, the biologically deactivated
waste is deposited in the common garbage containers belonging to the facility.

• Finally, the company staff issues a report on the material processed (kilograms, type
of waste, time, operator, etc.). Certify its biological deactivation in real time. This
report must be approved and endorsed by the institution's waste manager.

Client Mode:

The process is initiated with the client's approval to accept this type of modality. Which
involves the installation of a treatment plant on the user's premises. The steps are the
following:

• The size of the plant necessary to treat all of the waste emitted by the hospital is
determined. With this information, the storage warehouses and collection equipment
necessary for the efficient operation of the process are sized.

• Subsequently, a presentation of the architecture and installation requirements of the

plant is made. Both are installed in a twenty-foot container. Like the previous
modality, the establishment does not incur additional expenses. Now, the
construction of storage warehouses and adaptation of the treatment plant will be the
responsibility of the company.

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• At the end of the architectural works and the implementation of basic requirements,
waste managers are trained. Then the personnel who work directly in the institution
for the process of segregation, collection, storage and treatment of hospital waste are
presented. Consequently, we proceed with the white march.

• When the process is in normal operation, the company's personnel will collect the
classified waste on a day-to-day basis. After that, they are prepared in autoclavable
bags to be treated immediately by the plant staff inside the Hospital. They are then
deposited in the establishment's common garbage containers.

• Subsequently, the company staff issues a report on the material processed

(kilograms, type of waste, time, operator, etc.). Certify its biological deactivation in
real time. This report is approved and endorsed by the hospital waste manager.
Plant Modality:

It starts with the client's approval to accept this type of modality. There is an implication
in the removal of waste by the company and the treatment outside the premises of the
site. The steps are the following:

• First, the frequency of waste removal is determined: this depends on the amount of
daily emissions from each hospital. Furthermore, it highlights that the withdrawal
frequency cannot exceed 72 hours. With this information, the storage warehouses
and collection equipment necessary for the efficient operation of the process are
sized.

• Second, a presentation of the architecture and basic requirements necessary for the
implementation of the service is made.

• Third, upon completion of the architectural works and the implementation of basic
requirements, waste managers are trained. The personnel who will work directly on
the premises for the segregation, collection and storage process to proceed with the
white march are presented.

• Fourth, when the process is in normal operation, the company's personnel will collect
the classified waste on a day-to-day basis. That to prepare them in autoclavable bags
waiting for the truck that carries out the removal. For this, the already classified bags
are stored in the facilities provided by the company.

• Fifth, the truck arrives at the Hospital, according to the definition of frequency. It
proceeds to remove the stored hospital waste and transfer it to the company's
facilities in the commune of Renca. There, they are processed and biologically
deactivated and then deposited in the municipal landfills of the commune.

• Finally, sixth; The company staff prepares the report on the material processed
(kilograms, type of waste, time, operator, etc.). Its biological deactivation is certified in
real time. This report must be approved and endorsed by the hospital waste
manager.

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5.2 Associated Resources and Equipment

In order to establish the costs associated with the processing of one kilogram of hospital
waste, the assumption is established of an establishment with an average of 400 beds
which emits approximately 52,800 kilograms of waste per year. The projected resources
do not consider the initial investment in MWT equipment and land and administrative
personnel. For the treatment of this amount of waste, the resources are the following:

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 • Refrigerated collection carts: closed stainless steel cart with refrigeration system
included for the transfer of hospital waste from the point of generation to the
storage areas:

Figure 9: Collection cart

Source : www.cisagroup.it

• Refrigerated storage warehouse: the warehouses to store hospital waste are

manufactured with injected polyurethane panels with a forced cooling system,
which allows maintaining a homogeneous temperature.

Figure 10: Refrigerated warehouse

Source : www.cisagroup.it

• Autoclavable bags - common waste bags: bags made of polypropylene resistant

to 121º C in autoclaves, dimension 30x60 cm.

Figure 11: Autoclavable bag

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Source : www.cisagroup.it

• Electrical energy costs: a use of 8 kW is projected. per waste treatment cycle. In

this sense, in order to satisfy the need of a hospital of 52,800 kilograms per year,
it is necessary to carry out 960 cycles at a cost per kW. of $120 pesos average.

• Water costs: a use of one cubic meter per waste treatment cycle is projected. In
this sense, in order to satisfy the need of a hospital of 52,800 kilograms per year,
it is necessary to carry out 960 cycles at an average cost per cubic meter of $385
pesos.

• Equipment maintenance cost: equipment maintenance plans are in charge of the

company IMAHE SA, representative of the CISA brand in Chile. The first,
maintains the maintenance price indicated by the seal. This value includes the kit
of supplies and spare parts recommended by the manufacturer with a minimum
frequency of four maintenances per year. The annual maintenance cost is
$3,200,000 + VAT11 .

• Segregation, collection and storage operator: for these processes, an operator is

required to work a full shift in the designated Hospital facilities. You must have at
least a technical degree in the areas of health, a gross monthly salary of $350,000
pesos is estimated.

• Waste treatment operator: for the waste treatment process, it is necessary to have
an operator with the skills to operate the MWT equipment. For which he is
considered a higher profile than the segregation operator, since he will have direct
supervision over him, a gross monthly salary of $550,000 pesos is estimated.

From the above, it is possible to estimate the direct cost to process one kilogram of
hospital waste, which has a value of $390 pesos.

11 See Annex E IMAHE SA maintenance protocol

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Table 14: Average cost calculation for the treatment of one kilogram of waste.

Refrigerated collection carts $ 1.700.000

2x3 meter refrigerated storage warehouse $ 2.500.000
Autoclavable bags for 10 kilograms $1.056.000
Common waste bags for 40 kilos $66.000
Electrical energy costs $921.600
Water costs $369.600
Equipment maintenance costs $3.2OO.OOO
Segregation, collection and storage workers $4.200.000
Waste treatment operator $6.6OO.OOO
Total cost per year $ 20.613.200
Amount of waste treated 52.800
Unit cost per treatment per Kilogram $390
Resource Annual costs in $
s
5.3 Human Resources Structure

To carry out the business plan, the following organizational structure is defined. It is
based on a centralized administration in the business units, where each support unit
must contribute and direct its actions in search of maintaining and generating new
business.

Figure 12: Proposed organizational chart

Source : self made
The previous Organization Chart shows that for the commercial area they will be divided
by geographical area. This structure allows each salesperson to focus on a specific
hospital, where they estimate whether there is a need for treatment in mobile, client or
Source : own elaboration and www.cisagroup.it
ward mode.

On the other hand, the operations department has a different distribution than the
commercial area. He requires a differentiated degree of specialization for each treatment
modality.

Based on the proposed organizational chart, the annual remunerations necessary to

maintain the current structure are defined. In this sense, it is important to emphasize that
all members of the organization have a variable part in their remuneration in order to
motivate and align all employees with sales.

Table 15: Remuneration Costs of the Business Plan.

Fixed Billing Number of Annual Fixed
Post Monthly Commission people Salary
General manager Salary
$ 2,200,000 0.25% 1 $ 26,400,000
Commercial manager $ 1.00% 1 $ 10,800,000
COO 900,000
$ 1,350,000 0.10% 1 $ 16,200,000
Finance manager $ 1,350,000 0.05% 1 $ 16,200,000

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 Risk prevention $ 0.01% 1 $ 6,000,000
Accounting 500,000
$ 0.01% 1 $ 5,400,000
Treasury and Collection 450,000
$ 0.01% 1 $ 4,200,000
RM Sales Team 350,000
$ 2.00% 1 $ 5,400,000
South and North Zone Sales Team 450,000
$ 2.00% 2 $ 10,800,000
Head of Mobile and Client Operations 450,000
$ 0.02% 1 $ 8,400,000
Acquisitions 700,000
$ 0.01% 1 $ 5,400,000
Plant Operators 450,000
$ 0.01% 3 $ 12,600,000
Mobile Operators and Client 350,000
$ 0.01% 3 $ 12,600,000
Total Fixed Salaries 350,000 18 $ 140,400,000
Source : self made

5.4 Management indicators

Before defining the KPIs that are used to control and measure the application and
development of the Business Plan, it is important to indicate that any provision of hospital
waste treatment services implies the signing of a contract. That is standardized by the
Ministry of Health. This contract defines the Service Level Agreements (SLA) that
suppliers must comply with, such as: waste removal schedule, profile of removal
operators, emergency response time, available documentation, etc. In this sense, the
provider only adapts to the demands of the institution, where each one varies the values
of each indicator according to its own reality.

The KPIs are the following:

Description Formula
Customers
Number of new clients per year # New clients

# Real customers 100

# Clients contacted and iú:^aed
% of potential to actual clients

# Customer calls for complaints 100

# Total customer calls
% of customer complaints
Operations
Production Capacity (Kg/month) Kg. Total equipment production capacity per month
Kq. totals processed month
——----------—---------------------x 100
Utilization rate in % of productive capacity
# Cpaat:iadd production
# of cyclofd day rooesooa aOrraddos — x
100
# dc total cycles performed
% of process errors
Finance

Total revenue per month — Production costs Total revenue

per month
% commercial gross margin
Value of fixed costs Value of monthly fixed costs in $
Source : self made

6. FINANCIAL PLAN

In this chapter, the waste treatment service project in multiple modalities is evaluated
economically and financially. For this, a horizon of five years is estimated.

5
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6.1 Investments

In chapter 4.3 it is possible to see that the most relevant investments are the land, the
civil works to adapt the plant and the MWT equipment for waste treatment.

Regarding what has already been said, it was decided to lease the land and carry out
only the civil works to adapt the plant. This land is 4,250 square meters and is located in
the commune of Renca. It is only necessary to carry out minimal civil works to adapt the
company, since it has offices and warehouses to carry out the treatment process. An
investment in civil works of the facilities is estimated at 80 million pesos.

The main civil works are the construction of concrete slabs to support the MWT
equipment and the construction of refrigerated storage warehouses.

On the other hand, the investment in equipment for waste treatment has two modalities:
one in plant equipment and another mobile, allowing the waste projected for the first two
years of operation to be processed. The equipment costs are as follows:

• Plant Modality: Includes complete equipment installed in a twenty-foot container,

its costs are $153,391,205 pesos.

• Mobile Modality: Includes equipment installed in a twenty-foot container, plus a

truck adapted to transport the equipment to the clients' facilities, its cost is
$177,691,205 pesos

Investments in collection carts, bags and supplies are not considered in the investment,
because in point 5.2 they are included in the cost of treating one kilogram of waste.

In summary, the investment is as follows:

Table 16: Business Plan Investments

Investments Investment
Civil works $ 80.000.000
Plant modality team $ 153.391.205
Mobile mode team $ 177.691.205
$
Source : self made 111.082.410

6.2 Income and Costs per Sale

The sales income of the project is described in chapter 4.7.4, based on the sales
projection. The direct cost for providing the service is calculated from the unit cost for the
treatment in one kilogram of waste calculated in table 14.

Table 17: Exploitation Margin

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Source : self made
11
See Annex D quote for MWT equipment, exchange rate $710 is used

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6.3 Administrative expenses

At this point, the expenses from remunerations described in Table 15 are defined,
projecting an increase of 2% annually, the administrative expenses for plant
maintenance (which was estimated at 5% of total operating costs) and the plan
expenses. marketing which have an increase of 5% annually. Below is the table with the
results.

Table 18: Administrative Expenses

Administrative expenses 2016 2017 2018 2019 2020

Remunerations $ 140,400,000 $ 143,208,000 $ 146,072,160 $ 148,993,603 $ 151,973,475
Plant maintenance expenses $0 $ 3,496,227 $ 15,064,897 $ 18,561,125 $ 23,137,340
Marketing plan $ 59,890,000 $ 62,884,500 $ 66,028,725 $ 69,330,161 $ 72,796,669
Land Lease $ 36,907,200 $ 38,531,117 $ 40,226,486 $ 41,996,451 $ 43,844,295
Total Administrative Expenses $ 237,197,200 $ 248,119,844 $ 267,392,268 $ 278,881,340 $ 291,751,779
Source : self made

6.4 Discount Rate and Economic Evaluation

A risk-free rate of 4.4% is estimated, which is the annual average of the 5-year BCP
rates, using Bloomberg as a source, and a market risk premium of 5.5%, which is the
one used by the Santander GBM research team in the valuation of companies, leaving
the discount rate at 9.9%.

Table 19: Project Flow

2016 2017 2018 2019 2020
Sales by Region Type
Metropolitan region - $ 250.502.046 $ 501.004.092 $ 626 255.116 $ 751 506 139
Other Regions - $ 450 907 194 $ 901.814.388 $ 1.052.116.787 $ 1.202.419.185
Total Operating Income - $ 701 409 240 $ 1.402.818.480 $ 1.678.371.903 $ 1.953.925.324
Costs by Region Type
Metropolitan region - $ 86 399.114 $ 172.798.228 $ 216 997 785 $ 259 197 342
Other Regions - $ 144.974.283 $ 289.948.567 $ 338.273.328 $ 386.598.089
Total Operating Costs - $ 231.373.397 $462.746.795 $ 554 271 113 $ 645.795 431
Exploitation Margin - $ 470.035.843 $ 940.071.685 $ 1.124.100.790 $ 1.308.129.893
Administrative expenses
Remunerations $ 140.400.000 $ 143.208.000 $ 146.072.160 $ 148.993.603 $ 151.973.475
Plant maintenance expenses - $ 3.496.227 $ 15.064.897 $ 18.561.124 $ 23.137 340
Marketing plan $ 59 890 000 $ 62.884.500 $ 66.028.725 $ 69.330.161 $ 72.796 669
Land Lease $ 36.907.200 $ 38.531.117 $ 40.226.486 $41.996.451 $43.844.295
Total Administrative Expenses $ 237.197.200 $ 248.119.844 $ 267.392.268 $ 278.881.339 $ 291.751.779
Depreciation $ 41.385.301 $41.385.301 $41.385.301 $41.385.301 $ 41.385.301
Amortization $ 157.069.903 $ 157.069.903 $ 157.069.903 $ 157.069.903
Profit Before Tax $ 278.582.501 $ 23.460.795 $474.224.213 $ 646.764.247 $ 817.922.910
First Category tax (24%) - $ 5.630.591 $ 113.813.811 $ 155 223 419 $ 196 301 498
Profit After Tax $ 278.582.501 $ 17.830.204 $ 360.410.402 $ 491.540.828 $ 621.621.412
Depreciation $ 41 385 301 $41.385.301 $41.385.301 $41.385.301 $ 41.385 301
Amortization $ 157.069.903 $ 157.069.903 $ 157.069.903 $ 157.069.903
Recovery of working capital $ 237.197.200
Investments
Civil works $ 60 000 000
Plant modality team $ 153 391 205
Mobile mode team $ 177.691.205
Working Capital $237.197.200
Total Investments $ 628.279.610
FINAL FLOW $ 628.279.610 $ 237.197.200 $ 216.285.408 $ 558.865.606 $ 689.996.032 $ 1.057.273.816
Source : self made

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When applying the 9.9% discount rate, the indicators are the following:

Table 20: Project Indicators

Indicator Worth
GO $ 888,465,538
IRR 34%
Payback Period 3.1 years
Working Capital (due to accumulated deficit) $ 237,197,200
Break even $ 371,232,744
Source : self made

6.5 Project awareness

Based on the flow of the project, it is necessary to raise awareness regarding: the sales
price, demand and cost per kilo of waste treatment. For this, the RISK DETECTIVE
software is used.

The value variation assumptions are:

Table 21: Variation of variables

Description Units Yam In Use Index Low Base High

Globals
First Year firstYear 2014
Base Year baseYear 2014 5
Time Horizon timeHorizon

Financial Parameters

Market Inputs
Metropolitan Region Demand Kilos dda_met 221,487 2 177189.6 221487 243635.7
Demand Other Regions Kilos dda_otr 371,729 2 297383.2 371729 408901.9

Demand 3 year RM pesos dda_rm3 442974 2 354379 442974 487271

Demand 4 year RM pesos dda_rm4 553718 2 442974 553718 609090
Demand 5 year RM pesos dda_rm5 664462 2 531570 664462 730908
Demand 3 year OTR pesos dda_or3 743458 2 594766 743458 817804
Demand 4 year OTR pesos dda_or4 867368 2 693894 867368 954105
Demand 5 year OTR pesos dda_or5 991277 2 793022 991277 1090405

Pr Sale Price Metropolitan Region pesos pre_rm 1131 2 1018 1131 1244
Pr Sale Price Other Regions pesos pre_or 1213 2 1092 1213 1334

Co Cost of capital % cos_cap 9.9% 2 8.5% 9.9% 12%

Co Cost per Kilo Treated pesos cos_kil 390 2 468 390 292.5

Ca Working Capital pesos cap_tra 237,197,200 2 284636640 237197200 189757760

Source : self made

5
5
The previous data provides the following awareness information, where we can observe
that our return has a greater variation when there are changes in demand and projected
growth.

Table 22: Project awareness

Risk Detective Sensitivity Analysis
Created:07-Feb-16 11:02:06
Model: Sensitization. xls!Calc
Output:Project NPV (w/o TV)
Base Value: 888551521

Base Low High Output Explained

Description Row Input Input Output Input Output swing Variation
Demand 5 year RM 16 664462 531570 841870162 730908 911892200 70022037 30%
Demand 4 year RM 15 553718 442974 845799202 609090 909927680 64128477 55%
Demand Other Regions 12 371729 297383,2 850050301 408901,9 907802130 57751829 75%
Demand 3 year RM 14 442974 354379 850963716 487271 907345423 56381706 94%
Metropolitan Region Demand 11 221487 177189,6 867897022 243635,7 898878770 30981748 100%
Source : self made

Graph 5: Influence of variables on NPV

Source : self made

5
6
7. CONCLUSIONS

In the present work it is possible to conclude that there is a market with growing demand.
It is possible to verify the increase in the population, in new investment projects and
finally in new technological needs to treat waste. All this driven by the new regulations in
force as of 2013.

It is also possible to observe a highly specialized competition with few participants per
Health Service, which implies that a couple of companies are receiving the benefits of
offering in this market. In this sense, an aggressive response is expected when a new
participant enters. However, this business plan is prepared to compete. The above since
it does not provide a service equal to its competitors, but rather specializes in its clients'
processes, which will generate bonds of trust and lasting relationships.

The methodology for identifying the target market is emphasized, although it is based on
a matrix that attempts to combine as much information as possible for decision-making.
Consequently, the results are satisfactory, since intuition and experience in the market
indicate a good choice of Target.

On the other hand, it was possible to operationalize the business plan through the
Marketing mix. Logical activities are obtained that are in line with market needs, in
addition to the need to obtain lasting competitive advantages. It is important to highlight
that the proposed business plan must be reviewed every year, both in its price variable
and in its competitive strategy, since the proposed treatment modalities can be copied by
the competition in the medium term. This requires generating immediate relationships of
trust with the first clients in order to position the company as a pioneer and specialist in
this type of treatment modality.

Finally, we should highlight the important returns that are possible to obtain when this
business plan is applied efficiently. Although they are associated with a large investment,
they generate great profits in the long term. Likewise, thanks to the final awareness of
the project it is possible to indicate that the success of the business plan is directly
related to the ability of its sales force to delight and convince customers.

In conclusion, there is an opportunity in the market for a new entrant. There is a

guaranteed demand since it is not a service that can be rejected and it is possible to be
competitive by implementing this business plan in order to obtain the necessary
competitive advantage positioning.

Bibliography

1. Strategic Management “Competitiveness and globalization concepts and cases,

7th edition, Authors Hitt, Ireland, Hoskisson, Seventh Edition.

2. Business Model Generation, 5th edition, Author Alexander Osterwalder & Yves
Pigneur.

3. Waste Management from Health Care Establishments, Government of Chile

Ministry of Health, First Edition.

5
7
4. Step by Step Marketing Plan, 2nd edition, Author Carlo Cutropía

5
8
 ANNEX A: Distribution of Public Hospitals by Health Service.

PUBLIC HOSPITALS DATABASE

Customer Beds Waste

Kg/year
Arica Health Service
Dr. Juan Noe Crevani Hospital 234
40,997
Iquique Health Service
353
Iquique Regional Hospital Dr.Ernesto Torres Galdames 61,846
Antofagasta Health Service
Regional Hospital Dr. Leonardo Guzmán 755
132,276
Carlos Cisternas Hospital 149
26,105
Mejillones Hospital 13
2,278
Hospital 21 de Mayo de Taltal 40
7,008
Carlos Macuada Tocopilla Hospital 27
4,730
Atacama Health Service
Dr. Jeronimo Mendes Arancibia Hospital 38
6,658
San Jose del Carmen Hospital in Copiapo 291
50,983
Florencio Vargas Diaz Hospital 31
5,431
Manuel Maghalaes Medling Hospital 14
2,453
Dr. Nicolaz Naranjo Hospital 133
23,302
Coquimbo Health Service
Dr. José Araño de Andacollo Hospital 15
2,628
San Juan de Dios Hospital of Combarbalá 20
3,504
San Pablo Clinical Hospital of Coquimbo 270
47,304
192
Ovalle Provincial Hospital Dr. Antonio Tirado Lanas
33,638
Salamanca Hospital 26
4,555
San Juan de Dios Hospital in La Serena 271

5
9
 47,479
San Pedro de Los Vilos Hospital 33
5,782
Hospital San Juan de Dios de Vicuña 30
5,256
Valparaiso Health Service - San Antonio
Carlos Van Buren Hospital 490
85,848
Claudio Vicuña Hospital 164
28,733
Dr. Eduardo Pereira Hospital 240
42,048
Salvador Psychiatric Hospital 87
15,242
Viña del Mar Health Service - Quillota
Dr. Gustavo Fricke Hospital 436
76,387
San Martin de Quillota Hospital 203
35,566
Quilpue Hospital 160
28,032
Juana Ross Edwards Hospital 108
18,922
Adriana Cousiño de Quintero Hospital 31
5,431
Santo Tomas de Limache Hospital 72
12,614
San Agustin de la Ligua Hospital 66
11,563
Dr. Mario Sanchez de la Calera Hospital 56
9,811
Dr. Victor Moll Hospital of Cabildo 23
4,030
Petorca Hospital 34
5,957
Afternoon Peace Geriatric Hospital 65
11,388
Aconcagua Health Service
San Juan de Dios Hospital 214
37,493
San Francisco Hospital 45
7,884
San Camilo Hospital 232
40,646
Saint Anthony of Padua Hospital 27
4,730

6
0
Psychiatric Hopsital Dr. Philippe Pinel 415
72,708
North Metropolitan Health Service
San Jose Hospital Complex 556
97,411
Roberto del Rio Hospital 244
42,749
Psychiatric Institute 447
78,314
National Cancer Institute 98
17,170
Til Til Community Hospital 10
1,752
Western Metropolitan Health Service

San Juan de Dios Hospital 541

94,783
Dr. Felix Bulnes Cerda Clinical Hospital 522
91,454
Penaflor Hospital 48
8,410
Talagante Hospital 95
16,644
San Jose de Melipilla Hospital 169
29,609
Curacavi Hospital Dr. Mauricio Heyermann 17
2,978
Dr. Teodoro Gebauger Weisser Traumatological 108
Institute 18,922
C.R.S. Dr. Salvador Allende Gossens
-
Central Metropolitan Health Service

San Borja Arriaran Hospital 721

126,319
El Carmen Hospital Dr. Luis Valentín Ferrada 375
65,700
Public Assistance Emergency Hospital 287
50,282
Eastern Metropolitan Health Service
Savior Hospital 425
74,460
Dr. Luis Calvo Mackenna Hospital 262
45,902
Santiago Oriente Hospital Dr. Luis Tisne 340

6
1
 59,568
Hanga Roa Hospital 15
2,628
National Thorax Institute 181
31,711
Neurosurgery Institute 108
18,922
South Metropolitan Health Service
Barros Luco Care Complex 697
122,114
San Luis de Buin Hospital 100
17,520
Exequiel Gonzalez Cortes Hospital 144
25,229
El Peral Psychiatric Hospital 398
69,730
Lucio Cordova Hospital 120
21,024
Saint Bernard Parish Hospital 197
34,514
El Pino Hospital 264
46,253
South East Metropolitan Health Service
Dr. Sotero del Rio Hospital 731
128,071
Father Hurtado Hospital 381
66,751
San Jose de Maipo Hospital Complex 241
42,223
Metropolitan Hospital 166
29,083
Florida Clinical Hospital 391
68,503
O`Higgins Health Service

Lolol Hospital 16
2,803
Mercedes Hospital 38
6,658
San Juan de Dios San Fernando Hospital 184
32,237
Nancagua Hospital 10
1,752
Holy Cross Hospital 82
14,366
Pichilemu Hospital 26

6
2
 4,555
Marchigue Hospital 13
2,278
Pichidegua Hospital 17
2,978
San Vicente de Tagua Tagua Hospital 65
11,388
Salvador Peumo Hospital 55
9,636
Dr. Ricardo Valenzuela Saez Hospital 102
17,870
Coinco Hospital 22
3,854
Rancagua Regional Hospital 518
90,754
Santa Filomena Hospital 33
5,782
Maule Health Service

San Jose de Parral Hospital 122

21,374
Hospital Juan de Dios Cauquenes 144
25,229
Linares Hospital 338
59,218
St. Xavier's Hospital 65
11,388
Chanco Hospital 44
7,709
Talca Regional Hospital 540
94,608
Constitution Hospital 91
15,943
Molina Hospital 72
12,614
Hospital San Juan de Dios de Curico 386
67,627
Teno Hospital 40
7,008
Hualañe Hospital 27
4,730
Curepto Hospital 12
2,102
Licanten Hospital 40
7,008

6
3
Ñuble Health Service
Pedro Morales Campos Hospital 58
10,162
El Carmen Hospital 29
5,081
Bulnes Hospital 74
12,965
Dr. Eduardo Contreras Trabbuco Hospital 60
10,512
Herminda Martin Clinical Hospital 506
88,651
Saint Charles Hospital 150
26,280
Quirihue Hospital 64
11,213
Concepción Health Service

Dr. Guillermo Grant Benavente Clinical Hospital 940

164,688
Concepción Traumatological Hospital 70
12,264
San jose hospital 149
26,105
Lota Hospital 100
17,520
Clorinda Avello Hospital 45
7,884
San Agustin Hospital 34
5,957
Talcahuano Health Service
Las Higueras Hospital 392
68,678
Tome Hospital 119
20,849
Hospital Penco Lirquen 41
7,183
Bio Bio Health Service
Mulchen Hospital 97
16,994
Santa Barbara Hospital 39
6,833
Huepil Hospital 26
4,555
Dr. Victor Rios Ruiz Hospital 430
75,336
Birth Hospital 57

6
4
 9,986
Laja Hospital 52
9,110
Yumbel Hospital 53
9,286
Arauco Health Service

Ricardo Figueroa González de Cañete Hospital 61

10,687
Contelmu Hospital 16
2,803
Curanilague Hospital 93
16,294
Arauco Hospital 63
11,038
Lebu Hospital 66
11,563
Araucania Norte Health Service
Angol Hospital 195
34,164
Collipulli Hospital 39
6,833
Dr. Oscar Hernández Escobar Hospital 32
5,606
Lonquimay Hospital 24
4,205
Puren Hospital 25
4,380
Traiguén Hospital 115
20,148
San José Victoria Hospital 131
22,951
Araucania Sur Health Service
Carahue Family Hospital 50
8,760
Dr. Eduardo González Galeno Hospital 24
4,205
Galvarino Family Hospital 29
5,081
Gorbea Family Hospital 43
7,534
Dr. Abraham Godoy Peña Hospital 60
10,512

6
5
Loncoche Family Hospital 45
7,884
Intercultural Hospital of Nueva Imperial 148
25,930
Pitrufquen Family Hospital 33
5,782
San Francisco Hospital 101
17,695
Dr. Arturo Hillerns Larrañaga Hospital 23
4,030
Dr. Hernan Henriquez Aravena Hospital 729
127,721
Tolten Hospital 26
4,555
Vilcun Family Hospital 32
5,606
Villarica Hospital 46
8,059
Osorno Health Service
Osorno Base Hospital 357
62,546
Puerto Octay Hospital 28
4,906
Dr. Juan Hepp Purranque Hospital 42
7,358
Rio Negro Hospital 38
6,658
Valdivia Health Service
Lanco Hospital 40
7,008
Los Lagos Hospital 42
7,358
Paillaco Hospital 44
7,709
Panguipulli Hospital 127
22,250
Rio Bueno Hospital 76
13,315
Santa Elisa Hospital 75
13,140
Regional Clinical Hospital of Valdivia 524
91,805
Reloncaví Health Service

6
6
Fresia Hospital 37
6,482
Llanquihue Hospital 15
2,628
Maullín Hospital 36
6,307
Palena Hospital 8
1,402
Puerto Montt Hospital 418
73,234
Chiloé Health Service
Achao Hospital 26
4,555
Ancud Hospital 72
12,614
Castro Hospital Dr. Augusto Riffart 113
19,798
Queilén Community Hospital 10
1,752
Quellon Hospital 34
5,957
Aysén Health Service
Dr. Leopoldo Ortega Rodríguez Hospital 18
3,154
Lord Cochrane Hospital 15
2,628
Coyhaique Regional Hospital 135
23,652
Puerto Aysén Hospital 56
9,811
Dr. Jorge Ibar Bruce Hospital 8
1,402
Magallanes Health Service
17
Porvenir Community Hospital Dr. Marcos Chamorro 2,978
Dr. Augusto Essmann Burgos Hospital 34
5,957
Dr. Lautaro Navarro Hospital 364
63,773

27,247 4,773,674

6
7
ANNEX B: Population Projection by Region, Health Service and Sex 2005 – 2020.

Population projection by Region, Health Service, and sex. 2005-2020

Region and Sex Year
Health
Service 2015 2016 2017 2018 2019 2020

Total Country Total 17,865,1 18,001,9 18,138,7

18,275,5 18,412,3 18,549,0
85 64 49 30 16 95
Men 8,839,23 8,905,40 9,037,75 9,103,92
2 5 8,971,58 0 2 8 9,170,10 0
Women 9,167,16 9,237,77 9,308,38 9,378,99
9,025,95 3 9,096,55 9 9 8 8 5
From Arica Total 176,067 173,843 171,618 169,367 167,150 164,933
and
Men 83,671 82,218 80,758 79,296 77,852 76,382
Women 92,396 91,625 90,860 90,071 89,298 88,551
Arica Total 176,067 173,843 171,618 169,367 167,150 164,933
Men 83,671 82,218 80,758 79,296 77,852 76,382
Women 92,396 91,625 90,860 90,071 89,298 88,551
Of Total 350,502 357,493 364,480 371,499 378,474 385,457
Tarapaca
Men 182,610 186,355 190,101 193,864 197,593 201,354
Women 167,892 171,138 174,379 177,635 180,881 184,103
Iquique Total 350,502 357,493 364,480 371,499 378,474 385,457
Men 182,610 186,355 190,101 193,864 197,593 201,354
Women 167,892 171,138 174,379 177,635 180,881 184,103
Of Total 607,410 613,093 618,772 624,449 630,126 635,800
Antofagasta
Men 316,035 318,938 321,835 324,734 327,631 330,530
Women 291,375 294,155 296,937 299,715 302,495 305,270
Antofagasta Total 607,410 613,093 618,772 624,449 630,126 635,800
Men 316,035 318,938 321,835 324,734 327,631 330,530
Women 291,375 294,155 296,937 299,715 302,495 305,270
From Total 290,710 292,554 294,408 296,253 298,110 299,954
Atacama Men 148,463 149,411 150,361 151,310 152,261 153,205
Women 142,247 143,143 144,047 144,943 145,849 146,749
Atacama Total 290,710 292,554 294,408 296,253 298,110 299,954
Men 148,463 149,411 150,361 151,310 152,261 153,205
Women 142,247 143,143 144,047 144,943 145,849 146,749
Of Total 769,816 779,448 789,080 798,719 808,353 817,990
Coquimbo
Men 381,161 385,871 390,582 395,294 400,003 404,717

6
8
 Women 388,655 393,577 398,498 403,425 408,350 413,273
Coquimbo Total 769,816 779,448 789,080 798,719 808,353 817,990
Men 381,161 385,871 390,582 395,294 400,003 404,717
Women 388,655 393,577 398,498 403,425 408,350 413,273
Of Total 1,845,10 1,861,80 0 1,878,49 1,895,20 1,911,90 1,928,59
Valparaiso 2 3 6 1 2
Men 908,567 916,621 924,677 932,745 940,798 948,851
Women 936,535 945,179 953,816 962,461 971,103 979,741
Total 484,456 486,505 488,466 490,536 492,538 494,593
Valparaiso
San Antonio
Men 241,739 242,773 243,777 244,854 245,857 246,930
Women 242,717 243,732 244,689 245,682 246,681 247,663
Total 1,083,06 1,095,05 1,107,09 1,119,05 1,131,07 1,143,02
Vina del Mar 3 2 7 2 5 4
Quillota
Men 528,508 534,277 540,053 545,777 551,553 557,271
Women 554,555 560,775 567,044 573,275 579,522 585,753
Aconcagua Total 277,583 280,243 282,930 285,618 288,288 290,975
Men 138,320 139,571 140,847 142,114 143,388 144,650
Women 139,263 140,672 142,083 143,504 144,900 146,325
Total 7,199,29 7,252,84 1 7,306,38 0 7,359,89 7,413,45 7,467,01 1
Metropolitan 3 8 4
of Santiago
Men 3,513,12 3,539,16 3,565,20 3,643,34
4 5 9 3,591,23 0 3,617,29 1 2
Women 3,686,16 3,713,67 3,768,66 3,796,16 3,823,66
9 6 3,741,17 1 8 3 9
Non-North Total 808,510 816,336 824,115 831,974 839,856 847,679
Metropolitan
Men 401,377 405,278 409,186 413,105 416,995 420,898
Women 407,133 411,058 414,929 418,869 422,861 426,781
Metropolitan Total 1,165,60 1,166,02 1,166,85 1,167,15 1,167,08 1,167,56
not 4 5 1 1 8 1
West
Men 573,325 573,235 573,156 573,111 573,019 572,951
Women 592,279 592,790 593,695 594,040 594,069 594,610
Non-Central Total 1,328,65 1,407,73 1,448,31 1,490,04 1,530,06
Metropolitan 7 1,368,88 0 5 3 1 7
Men 655,421 675,315 695,084 714,776 734,628 754,390
Women 673,236 693,565 712,651 733,537 755,413 775,677
Metropolitan Total 1,199,12 1,196,10 1,193,60 1,190,34 1,186,66 1,183,66
of the East 4 8 3 5 2 6
Men 554,558 553,168 551,759 550,381 549,005 547,612
Women 644,566 642,940 641,844 639,964 637,657 636,054

6
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Non-Southern Total 1,041,60 1,035,06 1,029,08 1,022,40 1,015,27 1,008,83
Metropolitan 2 2 1 3 4 5
Men 511,119 507,790 504,550 501,303 498,018 494,766
Women 530,483 527,272 524,531 521,100 517,256 514,069
Metropolitan Total 1,655,79 1,670,43 0 1,684,99 1,699,71 1,714,53 1,729,20
of the South 6 5 2 3 3
East
Men 817,324 824,379 831,474 838,554 845,626 852,725
Women 838,472 846,051 853,521 861,158 868,907 876,478
Total 925,353 933,144 940,939 948,737 956,538 964,325
From the
Liberator B.
O'Higgins
Men 466,470 470,306 474,150 477,990 481,830 485,666
Women 458,883 462,838 466,789 470,747 474,708 478,659
Total 925,353 933,144 940,939 948,737 956,538 964,325
Liberator B.
O'Higgins
Men 466,470 470,306 474,150 477,990 481,830 485,666
Women 458,883 462,838 466,789 470,747 474,708 478,659
Del Maule Total 1,047,47 1,054,63 1,061,79 1,068,95 1,076,10 1,083,27
6 9 9 6 9 5
Men 520,494 523,751 527,014 530,270 533,527 536,792
Women 526,982 530,888 534,785 538,686 542,582 546,483
Maule Total 1,047,47 1,054,63 1,061,79 1,068,95 1,076,10 1,083,27
6 9 9 6 9 5
Men 520,494 523,751 527,014 530,270 533,527 536,792
Women 526,982 530,888 534,785 538,686 542,582 546,483
From Bíobío Total 2,110,17 2,121,16 2,132,16 2,143,15 2,154,14
2,099,18 1
3 8 7 4 8
Men 1,033,33 1,038,41 1,043,49 1,048,57 1,053,63 1,058,71
9 4 1 1 8 1
Women 1,065,84 1,071,75 1,077,67 1,083,59 1,089,51 1,095,43
2 9 7 6 6 7
Ñuble Total 468,078 468,826 469,594 470,340 471,122 471,899
Men 231,786 232,137 232,504 232,853 233,237 233,595
Women 236,292 236,689 237,090 237,487 237,885 238,304
Conception Total 683,033 690,310 697,604 704,902 712,110 719,416
Men 329,229 332,508 335,817 339,123 342,364 345,672
Women 353,804 357,802 361,787 365,779 369,746 373,744
Arauco Total 172,488 173,058 173,648 174,225 174,849 175,388
Men 86,504 86,779 87,048 87,331 87,631 87,890
Women 85,984 86,279 86,600 86,894 87,218 87,498
Talcahuano Total 366,556 365,992 365,411 364,844 364,285 363,712

7
0
 Men 180,064 179,666 179,261 178,858 178,452 178,057
Women 186,492 186,326 186,150 185,986 185,833 185,655
Biobío Total 409,026 411,987 414,911 417,856 420,788 423,733
Men 205,756 207,324 208,861 210,406 211,954 213,497
Women 203,270 204,663 206,050 207,450 208,834 210,236
Of the Total 1,010,34 1,017,62 1,024,91 1,032,20 1,039,49
Araucanía 4 6 7 3 1 1,046,77 0
Men 499,931 503,329 506,731 510,133 513,534 516,932
Women 510,413 514,297 518,186 522,070 525,957 529,838
North Total 191,988 190,804 189,565 188,371 187,151 185,963
Araucanía
Men 93,917 93,223 92,482 91,788 91,063 90,342
Women 98,071 97,581 97,083 96,583 96,088 95,621
South Total 818,356 826,822 835,352 843,832 852,340 860,807
Araucanía
Men 406,014 410,106 414,249 418,345 422,471 426,590
Women 412,342 416,716 421,103 425,487 429,869 434,217
From the Total 384,715 385,066 385,359 385,687 386,016 386,302
rivers Men 191,145 191,128 191,058 191,046 191,007 190,964
Women 193,570 193,938 194,301 194,641 195,009 195,338
Valdivia Total 384,715 385,066 385,359 385,687 386,016 386,302
Men 191,145 191,128 191,058 191,046 191,007 190,964
Women 193,570 193,938 194,301 194,641 195,009 195,338
Total 888,069 897,869 907,719 917,535 927,357 937,216
Of the Lakes
Men 451,775 456,837 461,944 466,990 472,078 477,158
Women 436,294 441,032 445,775 450,545 455,279 460,058
Osorno Total 237,099 237,132 237,184 237,228 237,249 237,319
Men 117,757 117,696 117,653 117,603 117,547 117,509
Women 119,342 119,436 119,531 119,625 119,702 119,810
Of the Total 448,521 455,264 462,044 468,792 475,584 482,352
Reloncavi
Men 228,849 232,255 235,671 239,056 242,489 245,884
Women 219,672 223,009 226,373 229,736 233,095 236,468
Chiloe Total 202,449 205,473 208,491 211,515 214,524 217,545
Men 105,169 106,886 108,620 110,331 112,042 113,765
Women 97,280 98,587 99,871 101,184 102,482 103,780
From Aisén Total 109,970 110,816 111,680 112,536 113,392 114,252
del Gral. c.
Ibanez del
Campo
Men 57,734 58,157 58,581 59,007 59,432 59,856
Women 52,236 52,659 53,099 53,529 53,960 54,396
Aisen Total 109,970 110,816 111,680 112,536 113,392 114,252

7
1
 Men 57,734 58,157 58,581 59,007 59,432 59,856
Women 52,236 52,659 53,099 53,529 53,960 54,396
Total 161,177 161,559 161,937 162,318 162,691 163,070
Of Magellan
and Chilean
Antarctica

Men 84,713 84,904 85,088 85,272 85,453 85,640

Women 76,464 76,655 76,849 77,046 77,238 77,430
Magellan Total 161,177 161,559 161,937 162,318 162,691 163,070
Men 84,713 84,904 85,088 85,272 85,453 85,640
Women 76,464 76,655 76,849 77,046 77,238 77,430

7
2
ANNEX C: Regulations on REAS management.

THE REPUBLIC OF CHILE

MINISTRY OF HEALTH DEPARTMENT. LEGAL ADVICE

REGULATION ON WASTE MANAGEMENT

HEALTH CARE ESTABLISHMENTS (REAS)

DISC. NO. 6 OF 2009

Published in the Official Gazette on 04.12.09

Modifications :
❖ Discount No. 64/10, Minsal, published in the Official Gazette on 07/17/10

7
3
 Ministry of Health
UNDERSECRETARY OF PUBLIC HEALTH

APPROVES REGULATION ON MANAGEMENT OF WASTE WASTE

HEALTH CARE FACILITIES (REAS)

Published in the Official Gazette on 04.12.09

No. 6.-

Santiago, February 23, 2009.-

Seen : The provisions of articles 67, 78, 80, 81 and 82 of the

Health Code, approved by decree with the force of law No. 725 of 1967, of the Ministry of Health;
in articles 4, 7 and 12 of DFL No. 1 of 2005, of the Ministry of Health and taking into account the
powers conferred on me by article 32 No. 6 of the Political Constitution of the State, and

Considering: The need to prevent and control the risks coming from the waste generated in health
care establishments with respect to their users, those who work there, those who directly
participate in their management and the population. in general,

Decree:

Approve the following Regulation on Waste Management from Health Care

Establishments:

TITLE I
General disposition

Article 1.- This regulation establishes the basic health and safety conditions to which the
management of waste generated in health care establishments must be subject.

Article 2.- For the purposes of this regulation, the expressions indicated here will have the
meaning indicated:

Storage: Conservation of waste in a location and for a specific period;

Container: Portable container or container, in which waste is stored or transported prior to disposal;

Radioactive waste: Any radioactive substance or material contaminated by said substance that,
having been used for medical purposes, is discarded;

Disposal: Set of operations through which waste is treated or finally disposed of through definitive
deposit, including these operations those intended for reuse or recycling;

Health Care Facilities: Care facilities in which people are diagnosed, treated or rehabilitated;

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Generator: Health care establishment that generates waste
corresponding to the categories of special waste referred to in this regulation;

Waste management: Set of operations to which waste from health care facilities is subjected after
its generation, including its storage, transportation and disposal;

Minimization: Actions to avoid, reduce or reduce at its origin, the quantity or danger of waste
generated from health care establishments. Considers measures such as generation reduction,
concentration and recycling;

REAS: Waste generated in health care facilities;

Waste or waste: Substance, element or object that the generator eliminates, proposes to eliminate
or is obliged to eliminate;

Radioactive substance: Any substance that has specific activity greater than two thousandths of a
microcurie per gram or 74 becquerels per gram; and

Treatment: Any process intended to change the physical, chemical or biological characteristics of
waste, with the aim of neutralizing it, recovering energy or materials or eliminating or reducing its
danger.

TITLE II
Identification and classification

Article 3.- Waste generated in health care establishments is classified into the following categories
according to its risk:

Category 1: Hazardous Waste;

Category 2: Low Intensity Radioactive Waste;

Category 3: Special Waste; and

Category 4: Solid Waste Similar to Household.

Article 4.- Hazardous waste is that which presents one or more dangerous characteristics defined
in Supreme Decree No. 148, of 2003, of the Ministry of Health, which approves the Health
Regulations on the Management of Hazardous Waste. The hazardous waste that occurs most
frequently in health care facilities are:12

1 Waste consistent with or contaminated by cytotoxic drugs, such as:

chlorambucil, cyclosporine, cyclosfamide, melphalan, semustine, tamoxifen, thiotepa and
treosulfan;

2 Waste consisting of or contaminated by halogenated organic solvents,

such as methylene chloride, chloroform and trichloroethylene;
12 Subsection modified, as it appears in the text, by No. 1, of the Department. 64/10, from the Ministry of Health, published in the
Official Gazette on 07/17/10

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3 Waste consisting of or contaminated by non-halogenated organic solvents, such as xylene,
methanol, acetone, isapropanol, toluene, ethyl acetate and acetonitrile;

4 Waste consisting of or contaminated by dangerous organic substances, such as

such as: formaldehyde, perchlorethylene and phenol-based disinfectant and cleaning
solutions;

5 Waste consisting of, containing or contaminated by heavy metals, such as equipment

containing mercury and batteries containing cadmium or lead.

6 Waste consisting of or contaminated by inorganic chemical substances

dangerous such as: sulfuric, hydrochloric, nitric and chromic acid; alkaline solutions of
sodium hydroxide and ammonia; oxidizing substances such as potassium permanganate
and potassium dichromate and, in addition, reducing agents such as sodium bisulfate.

Article 5.- Low intensity radioactive waste is that which contains or is contaminated by radioactive
substances whose specific activity, after storage, has reached a level lower than 74 becquerels per
gram or two thousandths of a microcurie per gram. The segregation, storage, transportation and
treatment of this waste must be carried out in accordance with current regulations and these
regulations.

Waste with greater intensity than indicated constitutes radioactive waste and must be managed in
accordance with the regulations that govern it.

Article 6.- Special waste is waste from health care establishments suspected of containing
pathogenic agents in sufficient concentration or quantities to cause illness in a susceptible host.
This category includes the following:

1 Cultures and stored samples: Waste from the production of biological material; live virus
vaccines, culture dishes and mechanisms for transferring, inoculating or mixing cultures; crop
residues; stored samples of infectious agents and associated biological products, including
cultures from medical and pathological laboratories; and laboratory cultures and strains of
infectious agents.

2 Pathological waste: Biological remains, including tissues, organs, body parts that have been
removed from human beings or remains, including those body fluids that present a health risk.

3 Blood and derived products including plasma, serum and other blood components and
elements such as gauze and cotton, saturated with these. Excluded from this category are
blood, derived products and materials from blood banks that, after being analyzed, have
demonstrated the absence of health risks. In addition, contaminated material that has been
subjected to disinfection is excluded.

4 Sharps: Waste resulting from diagnosis, treatment, research or production, capable of causing
cuts or punctures. This category includes waste such as needles, Pasteur pipettes, scalpels,
culture plates and other glassware, among others.

5 Animal waste: Cadavers or parts of animals, as well as their bedding, that were exposed to
infectious agents during a research process, production of biological material or in the
evaluation of drugs.

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Article 7.- Solid waste comparable to household waste is all waste generated in health care
establishments that, due to its physical, chemical or microbiological characteristics, can be
delivered to municipal collection and disposed of in a landfill, such as preparation waste. and food
service, hallway cleaning materials, sick rooms and units, papers and office materials and other
similar materials and absorbent materials, such as gauze and cotton wool not saturated with blood
and their derivatives. This category includes special waste that has been subjected to prior
treatment in accordance with the specific provisions established for this purpose in this regulation.

TITLE III
of the generation

Article 8.- At the time of its generation, waste must be segregated and stored in containers
according to the categories indicated in article 3. Said segregation must be maintained during all
stages of waste management until its elimination or treatment.

If there is a mixture of household waste with waste from other categories of the health
establishment, these must be managed in accordance with what is prescribed for the highest risk
waste. For its part, the management of waste mixtures that include 2 or more of the following
categories: Hazardous waste, low-intensity radioactive waste or special waste, must be carried out
considering the risks of all the waste present in them.

Article 9.- Each waste generation service or area must have an adequate number of containers,
according to the categories and volumes of these that are generated there and their respective
collection frequencies.

In each service or generation zone, the containers must be located in a previously determined and
duly identified location.

Article 10.- Every health care establishment that generates more than one ton of special waste per
month must submit, to the respective health authority, a Health Care Establishment Waste
Management Plan within a period of six months from its creation. start of activities, since they
reach said amount or from the entry into force of this regulation. These establishments must
designate someone responsible for the execution of the plan and the performance of the personnel
in charge of waste management.

The Plan must include all the technical and administrative procedures necessary to comply with
the provisions of this regulation and ensure that the internal management and disposal of waste is
done with the least possible risk. Said plan must consider at least the following aspects:

1 .- Estimation of the daily amount of REAS generated in each service or area of the
establishment, disaggregated according to the categories indicated in article 3.

2 .- Simplified plans of the establishment indicating the location of:

a. the designated sites for placing containers in the generation areas;

b. storage room;

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 c. collection tours; and
d. removal facility, yes corresponds.

3 .- The internal management procedures of the REAS, including segregation,

internal transportation and storage for each of the categories of REAS that are generated in the
establishment. In addition, the procedures must be established, according to said categories, for
their delivery to authorized third parties for their transport or disposal and the processing
procedures, according to the categories of REAS to be processed, if there is a disposal facility in
the country. place.

4 .- Registration system for containers with waste that enter the storage site, which includes the
following information for each of them:

• service or generation area;

• waste category;
• stored quantity;
• date of entry to the storage room; and
• shipping date and quantity sent for disposal.

5 .- Definition of the profile and obligations of the person in charge and other personnel in charge
of implementing the plan.

6 .- Training program for the personnel in charge of managing REAS.

7 .- Health surveillance program for personnel in charge of managing REAS.

8 .- Contingency plan.

Article 11.- Waste generators from health care establishments that must be subject to a Waste
Management Plan must comply with the provisions of Title IX, Special Waste Monitoring System.

TITLE IV
From internal management
Paragraph I
From the containers

Article 12.- Containers used for storage or any other stage of management of Waste from Health
Establishments must:

• Have tight closing lid.

• Have blunt edges and smooth surfaces.

• Have handles that facilitate handling.

• Be made of material that is resistant to manipulation and contained and watertight waste.

• Have a capacity of no more than 110 liters, without prejudice to the provisions for this purpose

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in Title V of Book II of the Labor Code “On the Protection of Workers in Loading and Unloading
Manual Handling”.

• Comply with the color and labeling standards indicated herein

Regulation.

Containers for waste classified as Sharps must be rigid and resistant to cuts and punctures.

Reusable containers must be made of washable and corrosion-resistant material and must be
replaced when they show deterioration or problems in their containment and handling capacity.

Article 13.- Special waste must be stored in a yellow container and solid waste similar to
household waste must be stored in a gray or black container, without prejudice to the possibility of
maintaining specific containers intended for the recycling of solid waste items. comparable to
domiciliary.

Every container in use must carry a perfectly legible, visible and wash-resistant label that identifies
it with the agency that uses it.

Containers intended for the storage of hazardous waste must comply with the provisions of
Supreme Decree No. 148 of 2003, of the Ministry of Health, which approves the Health
Regulations on the Management of Hazardous Waste, or the one that replaces it, and other
applicable health regulations. .

Article 14.- Inside each reusable container, a plastic bag of dimensions and thickness appropriate
to the container must be placed, made of waterproof, opaque material that is resistant to the waste
it contains and handling, the upper end of which must be kept folded towards the container. the
outside of the container during use to facilitate removal.

Paragraph II
Withdrawal and internal transport

Article 15.- The REAS must be transferred from the generation area or service to the storage
room in accordance with the requirements established in this title.

The collection and transfer of all waste must be carried out through a safe work procedure. During
removal and internal transportation, waste deposited in containers and bags may not be handled
differently than established in this paragraph.

Article 16.- Containers for household waste and special waste must be removed from the
generation area at least once a day or when 3/4 of their capacity has been completed. In the case

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of reusable containers, prior to removing them, you must tie or close the respective bags.

The sharp material must be removed when the respective container is 3/4 full, at which time it must
be closed and sealed.

Hazardous and Radioactive Waste must be removed from services or generation areas in
accordance with the specific regulations that govern them.

Article 17.- The removal of the REAS, from the services or areas in which they are generated,
must be carried out at times and under conditions that minimize inconvenience and risks and that
do not affect the proper functioning of the establishment, especially taking into account feeding
schedules. from the patients.

Article 18.- At the time of waste removal, the used containers must be replaced with new or clean
containers, provided with their respective new bags if applicable.

Article 19.- The collection of the REAS must be carried out in a cart that ensures the stability of
the containers, that minimizes noise, made of material that allows easy washing and whose design
does not hinder the loading and unloading operations of the containers.

The transfer may be carried out directly in the waste containers if they are equipped with wheels
and meet the conditions indicated in the previous section.

Article 20.- The use of gravity pipelines for the discharge of waste will only be used for the
discharge of solid waste comparable to household waste.
Paragraph III
Waste storage

Article 21.- Every establishment that generates REAS must have at least one storage area or
room for waste, which must be located and operated in such a way that inconvenience and risks
are minimized. Said room or area must have authorization issued by the competent health
authority, to which a copy of the respective operation plan must also be delivered.

Article 22.- The storage area or room must comply with the following conditions:

1 .- Sufficient capacity to store different categories of waste

generated in the establishment, considering the number and type of containers and the
frequencies of collection and shipment for disposal.

2 .- Have:

2.1 A design that allows safe work, facilitating access for personnel, and, when appropriate,
the maneuvering of internal collection carts.

2.2 Separate and signposted sectors for the different categories of REAS generated in the
establishment.

2.3 Doors with tight closure and provided with a lock that allow access and removal of waste.

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 2.4 Artificial lighting and adequate ventilation for stored waste.

2.5 Ventilation ducts, windows, pipe runs and other openings

similar, protected from the entry of vectors of health interest.

2.6 Floor and walls internally covered with smooth, resistant, washable, waterproof and light-
colored material. The floor with a slope of at least 2% facing a drain connected to the sewage
system.

2.7 Container washing and disinfection area equipped with the elements
necessary to carry out that activity.

2.8 Sufficient sinks to allow the cleaning of the staff there.

performs.

Article 23.- The operation of the waste storage area or room must comply with the following
minimum requirements:

1 .- Entry will be allowed only to people in charge of waste management.

2 .- Permanent availability of items to maintain the cleanliness of the room.

3 .- It must be washed daily and disinfected weekly with a 0.5% chlorine solution or a disinfectant
solution of equivalent effectiveness.

4 .- Have at least one person in charge of its operation and maintenance.

5 .- Have the necessary number of containers to replace those that are removed during internal
collection.

6 .- The container emptying maneuver, when appropriate, must be carried out through
procedures that respect the safe work parameters established in Title V of Book II of the Labor
Code. During storage, waste deposited in containers and bags must be handled according to the
respective management plan for each type of waste.

7 .- The reusable containers used must be subjected to a cleaning and disinfection process in the
washing area, using water and detergent, finally applying a 0.5% chlorine solution or a disinfectant
solution of equivalent effectiveness, in a quantity greater than the 10% of the container volume.

8 .- Special waste must be kept in closed bags and cannot be stored for periods longer than 72
hours, unless it is stored refrigerated at temperatures below 4°C, in which case it can be kept
stored for up to a week.

9 .- A record must be kept on the entry and exit of waste in which

Record the date on which the shipment was carried out for treatment or final disposal, in weight or
volume and by type of waste.

TITLE V

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 From elimination

Article 24.- All Waste from Health Establishments must be eliminated in facilities that have health
authorization.

Notwithstanding the above, low-intensity radioactive waste may be disposed of through sewage
systems or municipal collection, depending on its nature, as long as it has been previously stored
adequately for a period such that the radioactive activity has ceased. decreased to 74 becquerels
per gram or two thousandths of a microcurie per gram.

Special waste consisting of blood and its derivatives from blood banks that, after being analyzed,
have been shown to not present health risks, may be eliminated through the sewage system.

Solid waste comparable to household waste, including special waste subjected to a treatment
process in accordance with what is indicated in this regulation, may be delivered to the municipal
collection system for final disposal or recycling, if applicable.

Article 25.- The final disposal of special waste, both that carried out by the generators themselves
and that carried out by third parties that provide elimination services, can only be carried out if
there is a health authorization for it, which will be granted, prior approval by the Regional
Ministerial Secretariat of Health responsible for the respective engineering project that must
consider, at least, the following aspects:

1 .- Technical description of the project.

2 .- Facility plan.
3 .- Waste treatment capacity.

4 - Description of operations.
5 .- Storage of waste, if applicable.
6 .- Operation and maintenance plans.
7 - Contingency plan.

Article 26.- The handling of special waste in disposal facilities must be carried out without direct
manipulation of these by operators or workers. During handling, breakage of containers or spillage
of waste outside the treatment system must be avoided.

Article 27.- The special waste disposal system must comply with the following requirements:

1 .- Keep a record of origin, category, date of receipt, date of disposal and quantity by weight or
volume of the waste received.

2 .- Keep a record of the relevant parameters of the operation of the disposal equipment.

3 .- The storage of special waste should not exceed 24 hours, unless refrigeration equipment is
available.

4 .- The equipment must be maintained in adequate operating conditions.

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5 .- Have trained personnel for the correct operation of the installation.

6 .- Keep the records mentioned in this article at the disposal of the health authority for a period of
at least 2 years.

7 .- Deliver a quarterly report to the Regional Health Authority indicating the establishment of
origin and the amount of special waste eliminated.

Article 28.- Facilities that carry out autoclave treatment of special waste must:

1 .- For pre-vacuum autoclave equipment, perform a steam penetration test (Bowie Dick test)
monthly in at least one cycle. For gravitational autoclaves, the test will be carried out monthly, with
the chamber empty, under the time, temperature and pressure conditions authorized for the
equipment. In addition, said test must be performed after any repair or maintenance of the
equipment.

2 .- Conduct an annual trial that demonstrates a 4 log10 reduction in

Bacillus stearothermophilus in the authorized operating conditions of the equipment.

3 .- Keep a continuous record of the temperature, pressure and duration of the treatment cycles
or autoclave operation.

In the autoclaving cycle for special waste, temperatures equal to or greater than 121°C and a
vapor pressure of not less than 1.1 Kpa must be simultaneously maintained for a period of at least
60 minutes.

The health authority may authorize the use of other combinations of time, temperature and
pressure, provided that it is demonstrated through tests that these conditions are equivalent to the
one indicated above, as far as the elimination of microorganisms is concerned.

Article 29.- Facilities that provide incineration treatment of special waste, without prejudice to
observing current environmental regulations, must comply, at least, with the following
requirements:

1 .- Have a double combustion chamber.

2 .- Have auxiliary fuel burners.

3 .- Ensure that minimum temperatures of

operation at 850°C and that the gas retention times in the secondary chamber are not less than 1
second.
Article 30.- Untreated special waste may be disposed of in landfills specially authorized for this
purpose, for which they must comply with Decree No. 189 of 2005, of the Ministry of Health, on
landfills and the following special requirements:

1 .- There must be a separate cell or ditch where only special waste is disposed; in no case will it
be disposed of on the work front where household waste is unloaded.

2 .- The covering of special waste must be immediately upon discharge.

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3 .- Special waste should not be subjected to compaction prior to disposal.
covering.

Article 31.- Special waste may also be eliminated by means of other treatment systems with
respect to which the effectiveness of destroying pathogens in waste of equal or greater
effectiveness than that of the previously mentioned treatment systems has been demonstrated.

Article 32.- With prior authorization from the competent health authority, establishments that, for
justified reasons accredited to it, cannot access waste disposal facilities of health establishments,
may eliminate the special waste indicated in article 6 of this regulation in digester pits. Under the
same conditions, they may eliminate special waste consisting of pathological waste or blood and
derived products, in the local cemetery in common graves or crematoriums.

Article 33.- Sharp elements must be disposed of in rigid containers resistant to breakage due to
the action of the material contained.

Article 34.- Waste consisting of recognizable anatomical parts may not be delivered to municipal
collection.

TITLE VI
Of transportation

Article 35.- Special waste transportation companies, as well as any generator that itself transports
more than 1 ton of such waste per month, must have health authorization and comply with the
provisions of Title IX Waste Monitoring System. Specials.

Article 36.- For the purposes of the provisions of the previous article, the respective authorization
request must contain the identification and characteristics of the vehicles used for this purpose, as
well as the location and characteristics of the transportation system facilities and of cleaning and
decontamination equipment. Additionally, you must consider a contingency plan to address
possible accidents that occur during the transportation process.

Article 37.- The vehicles used in the transportation service of special waste must be used
exclusively for this purpose and comply with the following:
1 .- The cargo box must be completely closed and watertight to prevent the spillage of solids
and/or liquids. Its interior must be smooth, easily washable and made of waterproof and
corrosion-resistant material.

2 .- Have equipment to control spills, which must consist, at least, of absorbent material,
disinfectant, bags or containers and personal protective equipment.

3 .- In the case of using containers in the transport of this waste, compliance with the provisions of
article 12 of this regulation must be complied with.

Article 38.- The cargo box of the vehicles must be washed after each transfer of waste and
disinfected weekly with a 0.5% chlorine solution or a disinfectant solution of equivalent
effectiveness.

Article 39.- The transportation of hazardous waste must be carried out in accordance with
supreme decree No. 298 of 1994, of the Ministry of Transportation and Telecommunications, or the

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one that replaces it, and as specified in the Health Regulations on the Management of Hazardous
Waste.

Article 40.- The transportation of solid waste comparable to household waste may be carried out
through the municipal solid waste collection system.

Of contingency plans

Article 41.- Establishments that must present a management plan, as well as transport
companies and REAS disposal facilities, must have a contingency plan, which will describe all the
measures to be developed in the event of possible emergencies. This plan must contemplate at
least the following:

1 .- Control or mitigation measures.

2 .- Training of personnel who handle waste.

3 .- Identification of staff responsibilities.

4 .- Communications system, fixed or portable, to alert the competent authorities.

5 .- Identification, location and availability of personnel and equipment necessary to respond to

emergencies.

6 .- Updated list of public organizations and people who must be given immediate notice in the
event of an emergency. Consider, at least, communication with the health authority,
Carabineros, Firefighters and the Regional Emergency Office when the emergency is of such
magnitude that it may affect the health and/or safety of people or the environment.

Article 42.- Emergencies associated with spills of special waste that occur during transportation
must be controlled through a procedure that, at least, considers the following:

1 .- The driver must immediately notify the authorities indicated in point No. 6 of the previous
article of the contingency that has occurred.

2 .- Personal protective equipment must be used according to the waste transported (for example
use of gloves and plastic shirt).

3 .- The spill area must be delimited.

4 .- Liquids must be collected with absorbent material.

5 .- Spilled waste must be recovered in special bags or containers.

6 .- All material used and recovered waste must be managed as special waste.
TITLE VIII
From the staff

Article 43.- Every worker who carries out activities of collection, selection, transportation or
elimination of waste generated in health care establishments must be trained in relation to the risks

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to which they are exposed and the prevention measures that must be adopted.

The person responsible for the application of a Waste Management Plan must be trained in both
waste management and contingency resolution.

Article 44.- All personnel who handle waste generated in health care establishments must have
personal protection elements according to the risk associated with the type of waste they handle.

The personnel who carry out the functions of removing special waste must have, at least, the
following personal protection elements, which must be used in accordance with what is indicated in
the respective Waste Management Plan:

1 .- Work clothes and shoes

2 .- Gloves resistant to wear and puncture.

3 .- Waterproof bib or apron and half-cut rubber boots, worn under the sleeve of pants, for
personnel who wash containers or containers.

Article 45.- Every worker referred to in article 43 must undergo a medical evaluation at the
beginning of employment and be included in the biological and ergonomic risk prevention
programs.

All workers referred to in this article must be vaccinated against hepatitis B.

It will be the obligation of the person responsible for the REAS management system to maintain a
copy of the documents that prove compliance with the provisions of this article.

Article 46.- Any worker who has had an accident with exposure to high biological risk body fluids
must undergo a medical evaluation and post-exposure prophylaxis, if applicable, according to
Technical Standard No. 48, “Management Standard Post-occupational exposure to Blood in the
Context of the Prevention of HIV Infection of the Ministry of Health, approved by exempt resolution
No. 561 of 2000 of the Ministry of Health.

Article 47.- It will be the obligation of the personnel referred to in article 43 to report any accident
associated with the management of solid waste to the person in charge of the system, who, if
necessary, must inform the management of the establishment to that the corresponding corrective
actions be taken.

Special waste tracking system

Article 48.- Health care establishments that send special waste for disposal in quantities greater
than one ton per month, as well as the transporters and recipients of these, are subject to the
provisions of this Title.

Article 49.- A record must be kept of the shipment of special waste for disposal outside the
establishment, stating the date on which it was carried out, quantity sent in weight or volume, type
of waste, place to which it is sent, carrier. and vehicle used.

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A document with this information will be delivered to the carrier, with two copies, one of which he
will leave in the place of elimination, the original it will return to
generating establishment with bell of receiving the entity eliminator,
keeping the second copy for himself.

The consolidation of these records, in both cases, will be sent quarterly, signed by the person
responsible for the waste system of the corresponding institution, to the competent health authority
of the place where the respective health establishment is located.

Article 50.- The Ministry of Health will establish an electronic waste tracking system, which may be
used by health care establishments subject to said system to make their declarations on these
matters.

TITLE
On inspection and sanctions

Article 51.- It is the responsibility of the Regional Ministerial Secretariats of Health, in their capacity
as Health Authority, to grant the entities located in their territories under their jurisdiction the
authorizations referred to in this regulation, supervise compliance with its provisions and sanction
infractions to the Regulation. same, in accordance with the rules established in Book Ten of the
Health Code.

FINAL TITLE

Article 52.- This regulation will come into force within a period of two years from its publication in
the Official Gazette, date on which all regulatory provisions and standards or resolutions of the
Health Authority that are contrary or incompatible with this regulation.

Within six months following the entry into force of this regulation, natural and legal persons that
provide transportation or disposal services for special waste from health care establishments must
submit to the

Competent Health Authority a program to adapt its activity to the standards of this regulation.

Within the same period indicated in the previous section, those responsible for presenting a REAS
management plan must send said document to the respective Health Authority.

The adaptation measures and actions consulted in the adaptation program and/or the
Management Plan must have been made and completed six months after the entry into force of
this regulation. The Health Authority, through a reasoned resolution, may, in special qualified
cases, grant an additional period of no more than 1 year to complete said measures and actions. 13

Give yourself, take right and published. MICHELLE BACHELET JERIA,

President of the Republic.- Álvaro Erazo Latorre, Minister of Health.

13 Article modified, as it appears in the text, by Nos. 2 and 3 of the Dto. 64/10, from the Ministry of Health, published in the
Official Gazette on 07/17/10

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 What I transcribe for your information.- Yours sincerely, Jeanette Vega
Morales, Undersecretary of Public Health.

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ANNEX D: MWT equipment quote.

Feel the innovation

Custom IMAHE COMMERCIAL PROPOSAL Contact Mr. Martin Garrido

ME180613-
er :
City : Santiago Cou Chili
ntry
Date : 18.06.13
We allow ourselves to present for your consideration the following quotation:

MWT 60 - 80 Kg/Hour
Price with
Price USD Discount
Code Description Unit Ctde discount USD

ITEM #1
FFF1986 MWT6412/2P MQ 1 240.000,0 35% 156.000,00
FFF2142 EXTERNAL TROLLEY 6412 PC 2 2.873,0 25% 4.309,50
FFF2141 INTERNAL TROLLEY MOD. 6412 PC 1 2.900,0 25% 2.175,00
FFF2461 ELETRISC AIR COMPRESSOR 30LT/MIN OPC 1 4.130,0 25% 3.097,50
CONVEYOR STEP OPC 1 5.850,0 25% 4.387,50
445393 Reverse Osmosis - 20 liters OPC 1 3.116,0 40% 1.869,60
446638 50 liter tank OPC 1 562,0 40% 337,20
TM/51366 Wall Support OPC 1 344,0 40% 206,40
FFF9040 DISCHARCHAR VAPORIZER TANK OPC 1 5.915,0 25% 4.436,25
FFF9042 MWT Container 20 Box PC 1 52.300,0 25% 39.225,00

USD$ 216.043,95

Total Value of the Proposal: $

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 COMMERCIAL TERMS

SHIPMENT : EX-Works
WAY TO PAY: 30 With the purchase order
40 30 Days after equipment availability
30 60 Days after equipment availability
DELIVERY : Immediat Days after confirmation of the Letter of Credit
VALIDITY OF OFFER: e Days
WARRANTY : 7 12 months warranty after installation or 15 months

after dispatch or whichever comes first.

Ricardo Farah
Southern Cone Commercial Manager
rfarah@cisabrasile.com.br - Skape: rfarah.cisabrasile

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ANNEX E: IMAHE SA maintenance protocol

MAINTENANCE PROTOCOLS

With the purpose of unifying the concepts and technical criteria on the different activities carried out for the
implementation of maintenance programs and especially so that the personnel who intervene in one way or another
in the system, handle the same vocabulary, it is pertinent define the terms most commonly used in hospital
maintenance activities.

1 TYPES OF MAINTENANCE
Preventive Maintenance
It is defined as the technical administrative action that is carried out for the systematic care and inspection of an
equipment or element. In order to keep them in good working order, avoid and detect minor failures before they
become major defects.
The application of preventive maintenance allows equipment to operate at full technical capacity and eliminates the
possible risks of being out of service, causing long shutdowns due to serious breakdowns, which results in high
costs.
The preventive maintenance program is based on daily inspections or weekly routines and in some cases immediate
actions when a part fails due to wear or poor lubrication which were not scheduled.

Corrective maintenance
Corrective maintenance is the administrative technical action that is used when equipment and installation has
stopped working or works defectively and must be repaired. This causes uncontrollable workloads that cause large
activities, equipment out of use for long periods of time, which causes additional costs for paying for extra work,
purchasing materials and spare parts immediately. In summary, they are the logical consequences when an
unexpected accident occurs.

Predictive Maintenance
It is more of a philosophy than a working method. It is fundamentally based on detecting a failure before it
happens, to give time to correct it without harm to the service; Diagnostic instruments and non-destructive tests are
used for this. For example, it allows you to estimate the remaining life of equipment, insulation, bearings,
containers, motors, etc.

2 MAINTENANCE ACTIVITIES
Calibration
Calibration consists of carrying out corrective operation and putting the equipment in the initial operating conditions,
through the analysis of its parts or components, an activity that is carried out through equipment, instruments,
patterns or standards.

Inspection
It consists of carrying out a thorough examination visually and using measuring elements of each of the parts and
components of the equipment, in order to verify that the operating state is optimal given and that it is in
accordance with the characteristics and conditions of construction and operation given by the equipment
manufacturers. Inspection can be classified into three types:

Assessment
Each piece of equipment must be evaluated in its physical and functional condition by the maintenance service,
before being subjected to any maintenance action.

Appearance

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Equipment with minor scratches, indentations, discoloration, or any other defect that does not affect operation
cannot be considered unusable. However, such defects must be scheduled for proper correction, depending on its
availability.

Integrity
It is considered a complete device when it has all the electrical, mechanical elements and other original accessories
assembled in the factory and that are essential for its perfect functioning.
The equipment identification plate is a special component of the equipment and must remain attached to it. All
equipment contains accessories that are essential for its operation, which must be related as part of the equipment.

Acceptance Test
Acceptance tests consist of carrying out visual and operational inspections, following standards and procedures
issued by Institutes, Organizations or associations dedicated to the regulation of the construction and quality of
medical equipment in order to verify its efficiency and safety. The quality and performance standards are given by
the manufacturers themselves or by organizations dedicated to providing guidelines on the quality, use and safety
of medical equipment, especially on the electrical safety of the patient and the equipment itself.

Cleaning
It consists of the removal of foreign or harmful elements to the structure of the equipment.

Lubrication
It is the action by which a viscous element is applied between rigid and mobile bodies, in order to reduce friction
and wear of the parts.

Funcionality test
These are tests that are carried out on each piece of equipment to determine whether its operation is in accordance
with the performance and safety characteristics established in its design and manufacturing. Equipment that does
not meet these requirements is considered unsuitable for providing the service. The tests must be carried out by
trained technical personnel on each of the different pieces of equipment.

3 CRITERIA FOR INSPECTION

In order to determine the physical and functional state of hospital equipment, inspection criteria have been
established, taking into account the use and nature of these places where they are located for the provision of the
service, similarity of elements or parts that compose them. , inspection and maintenance routines.
The inspection criteria have been grouped into six groups, each with special characteristics, which allow the
evaluation of each piece of equipment within the group. Evaluation inspections must be carried out by qualified
technical personnel with experience in medical equipment maintenance activities.

Group A

The criteria specified in this group will be applied to all equipment, in order to determine its condition and
appearance.
• The overall appearance and finish of the equipment and its parts shall be in accordance with manufacturing
standards.
• The interior and exterior of the equipment or element must be free of oxidation, corrosion, solutions, dirt, lint and
deposits.
• Doors, drawers, panels, sections, locks, pins, hinges, locks, handles, pulls, casters, must be adjusted so that they
operate without tripping.
• Handles, clips and containers must be properly adjusted.

• Control buttons, mechanical locks and levers must be attached and properly identified.
• Nuts, bolts, screws and other articles of this kind must be properly tightened and in good condition.
• The operator's manual, whenever possible, should be within reach of whoever is operating the equipment.

B Group

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The criteria specified for this group will serve as a guide to determine the condition of equipment or elements that
use chains, gears, belts, levers, supports, springs or hydraulic systems. - Gears must be free of excessive backlash.
• Chains, gears, brackets and supporting surfaces must not be worn and properly adjusted.
• The axles and drive shaft must not be excessively worn and have no longitudinal play.
• Belts, pulleys and levers should be free of wear, adjusted and properly aligned.
• Hydraulic systems with tripping, tripping or closing mechanisms must not be worn and properly adjusted.
• Liquid levels must be at the appropriate level and the system free of leaks or leaks.
Group C

The criteria described here will be applied to determine the conditions of the equipment that require negative or
positive pressures for operation or the use of one or more inhalation gases such as oxygen or nitrous oxide.
• Parts and components made of rubber and rubber must remain in their original shape and elasticity. They should
not have cracks, perforations or defects in the adjustments. The conductivity must be continually verified and
verified that it is in accordance with the standards established for these cases.
• The high pressure pipe must comply with what is specified in the previous section and not present leaks or losses
due to frayed linings. All adjustments and connections must be in good condition and well adhered to the terminals.
• Controls, regulators, flow indicators, spray valves must be properly adjusted to regulate gas flow. All temperature
indicators will be verified to ensure accuracy.
• The glass or plastic covers of meters, inspection doors and containers must be free of cracks and chips and
remain clean and properly positioned to prevent leaks.
• The safety and release valves must be in good working condition, with no rust or corrosion on their parts.
• Air removal systems must be sufficiently capable of maintaining bacon as specified in the design.
• Conduction systems will be of the appropriate type and correctly installed.

Group D

The criteria specified in this group will be applied to determine the operating conditions of equipment that heats,
cools, regulates, mixes, pumps or circulates water and/or produces steam.
• Water heating or steam producing tanks must not contain excessive oxidation, corrosion, or solid deposits.
• All closure packaging made of rubber, rubber, cork or any of these compositions must not have breaks or wear
that does not guarantee a perfect seal.
• Closing mechanisms for doors and lids must operate freely and be adjusted to ensure a perfect seal.
• There should be no steam or water leaks in the pipes, valves, valve gaskets, regular boilers, tanks or pumps.
• All valves, regulators, controls, steam traps, etc., must function properly.
• Heating systems (electric, fuel or steam) will provide the appropriate temperature and/or pressure in the
prescribed time under normal operation.
• The water and boiling point switches will work in perfect condition.
Group E

The criteria specified for this group will be applied to determine the conditions of equipment that uses electrical or
electronic components.
• Equipment connections (receptacles or plugs) shall be of a type approved by the International Electrical Code
and shall be free of breaks or cracks and shall be properly bonded.
• The cables or wires will be of the appropriate gauge for the electrical conduction capacity and of adequate
length; they must not have defective splices or joints that are frayed or in poor condition.

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• Cables, contact clips, connection pins and terminals must be free of rust, corrosion or dirt deposits.
• Manual or automatic switches, relays, selectors must not be dirty, corroded, or excessively worn.
• The electrical conduction systems will be of the type specified by the international electrical code and the
installation will be adequately installed.
• All electrical components (relays, transformers, capacitors, conduction tubes or resistors) must operate without
overheating.
• Equipment used for heating must produce and maintain the temperature selected for the required operation.
• Electrical meters will monitor and indicate the appropriate results.
• Electrical components such as plugs or switches of explosion-proof equipment must comply with the standards
established for this class of equipment.
• Batteries must remain charged and not have breaks, cracks or leaks. The liquid electrolyte must remain at the
proper level.

Group F

The criteria of this group will be applied to evaluate equipment that uses electric motors.
• The electric motor must operate without excessive variation, fluctuation or noise.
• The electric motor must operate without excessive temperature increase, for which the appropriate cycle and
mechanical load must be taken into account.
• The mechanical coupling between the motor and the load (belts, chains, gears, pulleys and shafts) must be
adjusted so that it has proper play and does not cause wear.
• Oil seals and grease retainers on rotating or reciprocating members must be properly positioned and have no
evidence of leaking.
• The brushes and commutators must remain clean and not worn. Brushes should be properly adjusted and not
produce excessive arcing.
• The motor and mechanical load supports must be clean, free of wear and adequately lubricated.
Once the equipment has been evaluated meeting the described criteria, each of these will be in a position to
develop a preventive maintenance program.

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