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HarvestHYDRAULIC CYLINDER REPAIR VIABILITY STUDY

June 07, 20

Prepared By: Marcial Jr. R. Militante

Hydraulic Cylinder Repair Stands

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• This recommends pursuing the transfer of hydraulic cylinder repair to Carmen Copper Mine Site, Cebu. This will be additional service that Monark can offer to its customers at Cebu area given the following indicators.

• ROI• GP % Revenue Jobs , & % Interdepth = annual average

• Continuous demand for the service given the turnaround time as customer requirement in Mining industry.

Executive Summary

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HarvestBackground

• Carmen Copper Corp. and Galeo Equipment and Mining Corp. are the two primary target customers currently pose a huge projected opportunity for Hydraulic Cylinder Repair.

• Decreased in Hydraulic Cylinder Repair service volume may be attributed to:

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HarvestMarket Situation

Service utilization of Hydraulic Cylinder Repair

(Jan-May) SERVICE VOLUME

CAPACITY/YEAR

CAPACITY/MONTH

2011 12 -- --

2012 32 312 26

2013 26 312 26

TOTAL : 56 -- --

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HarvestProjected Opportunity Analysis

Machine PopulationCustomer Name Estd. No. Of CAT

MachinesEstd. No. Of Non-CAT

MachinesTOTAL

GALEO EQUIPMENT

59 24 83

CARMEN COPPER CORP.

15 59 74

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HarvestOpportunity Analysis

EQUIPMENT NO. OF CYLINDERS

Back Hoe Loaders 6Motor Graders 6Wheel Loaders 5Scrappers 5

Excavators 4Track Type Tractors 4Trucks 4

Total Cylinders # Active machine in territory X 4 (Average # of cylinder per machine)

332 Galeo Total Cylinders = 83 X 4 296 Carmen Corp. Total Cylinders = 74 X

4

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GALEO EQUIPMENT

Cylinder per Machine

No. Of CAT Machines

Total CAT Cylinders No. Of Non-CAT Machines

Total Non-CAT Cylinders

Backhoe Loaders 6

Motor Graders

6 4 24

Wheel Loaders

5 3 15

Wheel Dozers 5 1 5

Excavators 4 5 20 7 28

Track Type Tractors

4 12 48

Trucks 4 38 152 13 52

TOTAL : 59 240 24 104

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CARMEN COPPER CORP.

Cylinder per Machine

No. Of CAT Machines

Total CAT Cylinders No. Of Non-CAT Machines

Total Non-CAT Cylinders

Backhoe Loaders 6

Motor Graders

6 2 12 1 6Wheel Loaders

5 1 5 2 10Wheel Dozers 5 3 15

Excavators 4 6 24 7 28Track Type Tractors

4

Trucks 4 3 12 49 147TOTAL : 15 68 59 191

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• Repair Frequency = Hours of use before repair needed

Average hours of use per year

6,000/2,000 = 3 Galeo Total Cylinders 240 = 80 Repair frequency 3

Conclusion: This Monark’s cylinder repair opportunity in Galeo is 80 Cat cylinders per year.

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Repair Frequency = Hours of use before repair needed

Average hours of use per year

6,000/2,000 = 3 Carmen Copper Total Cylinders 68 = 22.66 Repair frequency 3

Conclusion: This Monark’s cylinder repair opportunity in Carmen Copper Corp is approximately 23 Cat cylinders per year.

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Harvest• Total CAT & Non –CAT Opportunity

Total CAT Cylinders + Total Non – CAT Cylinders 308 + 295 = 603

Conclusion: This Monark’s Hydraulic cylinder repair opportunity is approximately 603 cylinders.

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Harvest•Projected Opportunity Year Estd # of units Estd Rev Estd GP(60%)

for hydraulic cylinder repair in Php in Php

2014 103

2015 103

2016 103

2017 103

2018 103

Volume Assumptions: based on capacity of manpower and equipment

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(RECONDITION)

LABOR RATE/HR. KINDS OF CYLINDER QTY. HRS. AMT. Php. 550. 00 STICK CYLINDERS 1 16 HRS.

BOOM CYLINDER (each) 12 HRS.

BUCKET CYLINDER 1 12 HRS.

CENTERSHIFT CYLINDER 12 HRS.

ARTICULATION (each) 2 12 HRS.

SWING CYLINDER (each) 10 HRS.

Ripper LIFT CYLINDER 2 12 HRS.

WHEEL LEAN CYLINDER 1 10 HRS.

STEERING CYLINDER 1 10 HRS.

LIFT CYLINDER 2 12 HRS.

SCALIFIER CYLINDER 1 12 HRS.

HOIST CYLINDER 18 HRS.

HYDRAULIC CYLINDER RECONDITIONING FLATRATE

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QTY TYPES OF CYLINDER FOREMAN ACTUAL HRS. AMT.

Php. 550/HR. 1 STICK CYLINDER each(320D) 10 HRS.

1 BOOM CYLINDER (320D) 8 HRS.

1 BUCKET CYLINDER (320D) 8HRS.

1 CENTERSHIFT CYLINDER (Motor Grader eg.14G/130G/12G/) 8 RHS.

1 ARTICULATION CYLINDER each 8HRS.

1 SWING CYLINDER each (428/416/) 8HRS.

1 RIPPER LIFT CYLINDER each (Motor Grader eg.14G/130G/12G/) 8HRS.

1 WHEEL LEAN CYLINDER (Motor Grader) 8HRS.

1 STEERING Cylinder (Motor Grader) 6 HRS.

1 LIFT CYLINDER (Motor Grader) 2HRS.

1 SCALIFIER CYLINDER 8 HRS.

HYDRAULIC CYLINDER REPAIR RECONDITIONING FLATRATE

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Harvest• MONTHLY SERVICE REVENUE

COST OF SALES

ITEM FLAT RATE CHARGE

ESTD. NO. OF

CYLINDERSREVENUE LABOR PARTS MISC TOTAL COST GROSS

MARGIN %

STICK CYLINDERS BOOM CYLINDER

BUCKET CYLINDER CENTERSHIFT

CYLINDER

ARTICULATION

CYLINDER

SWING CYLINDER

RIPPER LIFT CYLINDER WHEEL LIFT CYLINDER STEERING CYLINDER

LIFT CYLINDER SCALIFIER CYLINDER

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Harvest• PRE OPERATING COSTS

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HarvestTarget Market Analysis

• PTC = PRIMARY TARGET CUSTOMERS

• CARMEN COPPER CORP.• GALEO EQUIPMENT & MINING CORP.

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HarvestBasic Customer Service

• Provide fast turnaround on cylinder reseals – Offer reseal with light honing

• Provide high quality cylinder reseals • Perform pressure tests on cylinders - 100%

Note: Honing and Chroming are being done thru sub – contractors.

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HarvestTooling

• Hydraulic Cylinder Repair Stands (HCS 40)• Pressure tester • Dynajet Cylinder washer • Cylinder storage racks

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HarvestTarget Market Analysis

• Customer Requirements• The key requirement for customers in mining is

turnaround time. Customer needs are simple. They need their machine back in the dirt, as quickly as possible.

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HarvestCustomer Needs – Value Matrix

High Production Average Production Low Production New Machine ( 0-3 Years) Turnaround Quality Quality Availability Turnaround Price Convenience Convenience Turnaround Quality Availability Availability Price Price Convenience Middle Aged (3-7 Years) Turnaround Quality Price Availability Price Turnaround

Convenience Turnaround AvailabilityQuality Availability Price

Price Convenience Convenience Older Machine Turnaround Low Price Low Price Availability Availability Availability Price Turnaround Turnaround Convenience Quality Quality Quality Convenience Convenience

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Cylinder Storage Racks

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Cat Hydraulic Cylinder Tester

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Cat Hydraulic Cylinder Washer

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