ACTIVITY REPORT – JANUARY 2006

3/378 Bergvlei Road

Unit 1, Acbo Industrial

Wadeville Ext 4.Park 95 Hefer Street

Park, 95 Heefer Street

Tel: (011) 902 3271

Rustenburg 0299

Fax: (011) 902 3907

Tel (014) 596 5356

PO Box 18992, Sunward Park 1470 Fax (014) 596 5356 / 0866101454

www.fbcranes.co.za

info@fbcranes.co.za

COMPANY PROFILE

COMPANY DETAILS

Name Of Company:

FB Crane Builders & Repairs (Pty) Ltd

Company Reg No:

99/024605/07

Date Established:

November 1992

VAT Reg No:

473 013 4998

Physical Address

Head Office (Wadeville):3/378 Bergvlei Road, Wadeville Extension 4, Germiston.

Rustenburg:

Unit 1, Abco Industrial Park 95 Heefer Street, Rustenburg.

Postal Address:

P.O. Box 18992, Sunward Park, 1470.

Telephone Nos:

Wadeville: (011) 902 3271

Rustenburg:(014) 596 5356

Fax Nos:

Wadeville:(011) 902 3907/8462

Rustenburg(014) 596 5356/0866 101 454

E-Mail Address:

info@fbcranes.co.za

NATURE OF BUSINESS

Design, Manufacture, Sales, Repairs, Loadtesting & Maintenance Of Customised Lifting Equipment.

OUR TEAM

Directors

· Frans Best

CEO

· Colleen BestFinance Director

· Mathew BestManaging Director

· Simon NhlapoProcurement Director

· Timothy BestSales & Marketing Director

Management:

· Jacques JonkerRustenburg Branch Manager

· Frans DercksenWorkshop Manager

· Karen MullaneyBusiness Administration Manager

· Tys Mulder

Boilershop Foreman

· Steven JamesQA Consultant

TRADE REFERENCES

· Bolt & Engineering(011) 824 7500

· Burncrete

(011) 613 3851

· Engineering Supplies(011) 493 4355

· Lido Engineering(011) 823 2440

· Liftco

(011) 824 4080

· Powermite Africa(011) 760 1919

· Raytoko Electrical(011) 914 5334

· Rust Busters

(011) 827 0753

· Webbing Products(041) 484 5483

Company Profile

Frans Best established FB Crane Builders & Repairs (Pty) Ltd in 1992. The company,

which had two employees then, now employs in the region of 80 staff members and operates from a 16 000m² factory in Bergvlei Road, Wadeville, on Gauteng’s East Rand, and from a 900m² factory at  the Acbo Industrial Park, in Rustenburg.

FB Crane Builders & Repairs (Pty) Ltd offers a unique combination of products and services for the manufacture and maintenance of overhead and lifting equipment. The company’s new cranes department produced average 70 cranes per year, and the maintenance team members are continuously obtaining Lifting Machinery Inspectors’ certifications.

FB Crane Builders & Repairs is also an ISO 9001:2008 certified company and its consistent focus on product development has seen it develop its own in-house brand: the Amandla/TBM steel wire rope hoists and Amandla electric chain hoists.

Design, Manufacture & Installation:

· Manufacture and installation of electric overhead travelling cranes.

· Design and supply of lifting related and ancillary equipment.

· Manufacture both fabric and metal slings.

Preventive Maintenance

· Provide customers with timely services and inspections of lifting equipment which are carried out by

qualified and safety conscious staff.

· Aim to maximise customers production by avoiding unnecessary and costly breakdowns which usually

are a result of poor maintenance.

· Repairs & Refurbishment

· Upgrade and refurbish lifting equipment in accordance with customer requirements.

· Offer a 24 hour breakdown service to cater for emergencies.

Statutory Load Testing

· FB Crane Builders & Repairs ensures that its customers comply with current legislation for lifting

equipment through conducting statutory inspections and load testing.

We have taken what we truly believe to be revolutionary steps within our industry with regards to people & business development. We are focused on continuous service improvement and aspire to become recognised as one of Southern Africa’s preferred suppliers of lifting equipment. FB Crane Builders & Repairs (Pty) Ltd actively participate and support

the government’s Black Economic Empower (BEE) policies for our nation’s future growth.

PRODUCTS & SERVICES

We provide our customers with a range of products and services including:

· Design, Manufacture & Installation

Specialising in overhead traveling electric cranes and the supply and design related of ancillary equipment. Manufacture of crane slings both fabric and metal.

· Preventive Maintenance

Regular inspections & servicing of lifting equipment by qualified staff to maximise our customers; production by avoiding unnecessary costly breakdowns resulting from problems that could be identified during maintenance calls.

· Repairs & Refurbishment

Upgrading & refurbishment of equipment in accordance with customer requirements, including a 24 hour breakdown service to cater for emergencies. In-House electrical repairs.

· Statutory Load Testing

To ensure our customers are in compliance with current legislation we offer load testing and certification of lifting equipment.

INDUSTRIES SERVED

· Chemical

· Civil Engineering

· Construction

· Mining

· Power Generation

· Smelting & Foundry

· Steel

· Warehousing

· Water

REFERRALS

· Exxaro;

Neels Potgieter;

083 609 1320

· Placerdome, Western Area Joint Venture; Carl Howell;

083 650 0753

· Rand Water Board;

Vishnu Singh;

011 682 0604

· Rotek Engineering;

Archie Forrester;

011 629 4006

· Minopex;

Manie Nienvert;

014 536 4552

· Holcim Aggregate;

Frikkie Wem;

083 259 0764

· Rustenberg Platinum;

Diff De Villiers;

083 455 3174

· Lonmin Platinum (karee Mine);

Kobus De Beer;

014 571 2123

· Usser Inventions;

Craig Hall;

011 827 5835

· Venture Otto SA (Pty) Ltd;

Deon Vernon ;

083 625 6357

· Transwerk Koedoespoort;

Hans Webber;

082 822 6161

The Marketing Plan:

Economics

· Manufacture of cranes takes up a mass of spacer

· Estimated value of crane sales in South Africa per year 5, 000 units per year @ R 200, 000.00 ea

+/- R1000, 000, 000

· Percentage share of the market held by FB Cranes is estimated at 2%

· Current demand in target market is still valid

· Growth history - since 2003 until now FB Cranes has manufacture around 800 cranes

· Trends in target market — growth trends, trends in consumer preferences, and trends in product development

· Growth potential and opportunity for a business of our size is immense as a larger facility would allow us to

manufacture larger cranes

· Barriers to entry keep potential new competitors from flooding into our South African market?

· High capital costs

· High production costs

· High marketing costs

· Consumer acceptance/brand recognition

· Training/skills

· Unique technology/patents

· Unions

· Shipping costs

· Tariff barriers/quotas

· How could the following affect our company?

· Change in technology

· Government regulations

· Changing economy

· Change in your industry

For business customers, the demographic factors:

· Industry (or portion of an industry)

· Location

· Size of firm

· Quality/technology/price preferences

· Ability to handle larger Projects

Niche

Ability to react fast enough to produce a high quality crane from minimum to maximum capacities in the shortest time period.

Marketing Strategy

Promotion: FB Cranes has an external sales department consisting of sales representatives that travel and call on client throughout South Africa.

Advertising: Trade shows, catalogs, dealer incentives, word of mouth, and network of friends and professionals

Promotional Budget

Estimated R500, 000.00 per annum

Distribution Channels

· Retail

· Direct (mail order, World Wide Web, catalog)

· Wholesale

· our own sales force

· Agents

· Independent reps

Operational Plan

Explanation of our daily operation of the business:

location, equipment, people, processes, and surrounding environment.

Location

· FB Cranes is Based In ERF 3/378 Bergvlei Road Wadeville and as we require more space to produce large

cranes we would look at new facility to manufacture larger cranes.

Inventory

· Steel plates, structural steel

· Average value in stock is estimated at R 5, 000, 000.00

· Rate of turnover and how it compares with our industry averages is only 10% as we do not have enough

space – until 2014

· Lead time for ordering is currently 6-8 weeks with more space this can change to 3-5 weeks

Manufacturing

Production

· Quality control

· Customer service

· Inventory control

Product development

· Present production levels 60-80 cranes per annum

· Present levels of direct production costs and indirect (overhead) costs

· Gross profit margin, overall and for each product line

· Possible production efficiency increases

· Production-capacity limits of existing physical size

· Production capacity of expanded plant could increase by 100%

· Production-capacity limits of existing equipment has been reached

· Production capacity of new equipment could increase 100%

· Prices per product line will become more cost effective

· Purchasing and inventory management procedures will become more stream line

· Anticipated modifications or improvements to existing products

· New products under development can commence

Maintenance Plan

Introduction

Our hoist and crane inspection is an in-depth assessment, available for all brands of overhead cranes and hoists, to help ensure regulatory compliance, assist with safety and reliability, and lower the total cost of crane ownership. FB Cranes certified inspectors analyze hundreds of components and deliver the information in a simple and easy-to-read report.

Hoist & Crane Inspections

Hoist & Crane Inspections Include:

· Findings ranked from most serious such as safety concerns to least such as general maintenance

· Digital photographs of most serious deficiencies

· Clear and concise reports

· Repair proposal includes necessary parts and fully-guaranteed labor Inspection records stored in our

database and available on request, the original available to the client within three to five days.

Certified Inspectors

Our certified inspectors have completed a various rigorous training programs at crane educational facilities, our technicians have extensive crane and hoist service experience, and are equipped with the latest tools and technology needed for crane inspections. The technicians are certified Engineering council of South Africa (LMI) (Lifting Machinery Inspector), and must fulfill a minimum number of hours of experience in order to be qualified.

Safety & Compliance

Our inspections ensure regulatory compliance. To meet the requirements of the OHSA act as well as the usage of the crane, a crane owner must complete routine inspections of all overhead cranes (the routine inspection schedule is dependent upon the service class and environment of crane) and maintain a certification record of inspection reports.

Experience You Can Trust

The benefits of our inspections are:

· Reliability—minor problems can be corrected before they lead to a major breakdown

· Fast turnaround—complete report and repair proposal available in one week or less

· Work can be scheduled at a time that will not interrupt production

· Comprehensive parts inventory

· Parts and labor are fully-guaranteed

· Lower your total cost of crane ownership

Hoist & Crane Repairs

FB Crane’s technicians are trained to repair all makes and models of cranes and hoists. Our hoist & crane repair services can help to minimize the costs of downtime while increasing the uptime and safety of your operations. On-call technicians are able to provide consultation regarding planned replacement and repair of your equipment. FB Cranes maintains an extensive network of cliental throughout South Africa, offering close proximity to our customers and ensuring rapid response time.

On-Call Hoist & Crane Repair Service

· Available 24 hours a day, 365 days a year

· Factory-trained personnel

· Factory-engineered solutions

· Quick response time

· Comprehensive parts inventory

Hoist & Crane Maintenance

The purchase of a crane is a long-term investment which requires periodical expert service to extend the life and improve performance. A planned preventive maintenance program ensures that equipment is inspected and serviced by trained, certified technicians. FB Crane’s sets the industry standard for maintaining cranes. Our engineering, manufacturing, and field expertise in performing equipment overhauls, modernizations, and upgrades is the advantage you need to keep your crane in peak performance.

We offer scheduled maintenance contracts, load testing, crane and runway modifications, motor rewinds, extensive retrofits, and maintenance services for all brands of cranes and hoists.

Our comprehensive maintenance service includes:

· customized maintenance schedules determined by the class and duty requirements of the crane

· complete documentation of maintenance history to satisfy reporting requirements

From minor adjustments to complete rebuilds, FB Crane’s technicians can provide maximum efficiency and correct issues before problems that interrupt production flow and result in costly downtime occur

Hoist & Crane Modernization

FB Crane’s offers hoist & crane modernization services to enhance existing equipment. Our technicians can provide a complete overhaul of your current equipment to increase efficiency, safety, and productivity. When cranes fail to meet the requirements of your facility—productivity suffers. Modernizing your crane can be an economic way to restore your fatigued equipment to peak performance.

Before any modernization is performed, FB Crane’s cross-references your current needs with forecasted lifting needs. In addition, our engineers will complete a comprehensive evaluation of your operating processes and offer detailed suggestions of alternative processes to increase overall production flow.

Our engineers follow a four-step hoist & crane modernization process:

· Analyze the requirements for modification of your current application

· Determine the feasibility of the modernization

· Detail the necessary materials

· Service and renew your equipment

Hoist & Crane Rebuilds & Overhauls

Our expertise stems from hands-on experience with customer processes. When it comes to mission-critical equipment in key processes, we have the technical engineering services required to maintain and improve these processes.

Engineering Services

Our knowledgeable, well-trained staff provides valuable assistance in the following areas:

· Planned engineered lifts

· Crane and runway capacity upgrades

· Studies to reduce maintenance costs

· Duty-cycle studies

· Automation feasibility studies

· Diagnosis and solutions for tracking problems, abnormal rail/wheel wear, and fatigue cracks

· Precise measurements and alignment of crane structures and wheels

· Extensions of existing runways and design of new systems

· Accident and failure investigations

· Safety inspections and evaluations for compliance with industrial safety codes and current engineering standards

Hoist & Crane Rebuilds & Overhauls

Even with regular maintenance, inspection, and best practices, the crane’s long-service hours and variable workloads can lower performance. FB Crane’s keeps your equipment running smoothly, efficiently, and cost-effectively. Refurbishing a tired crane is often the most cost-efficient way to boost production. With our in-house machining and rebuilding capabilities, we can provide the components your crane requires—even if we have to fabricate it.

Rebuilding and overhauling restores the ability of a crane to:

· Lift heavy loads

· Accelerate and travel faster

· Position loads quickly and precisely

· Save operator time with floor-level, push-button, or radio controls

· Simplify load handling

Component Replacements

FB Crane’s knows the importance of maintenance to your overhead cranes and hoists. We keep your crane’s electrical components, switches, controls, relays, and other components in excellent working condition

Our Johannesburg branch, specializes in built-to-order components. Our extensive inventory and knowledge allows our skilled craftsmen to address needs for rare and older components. If we are unable to locate a component—we can build it.

Overview of inspections

Daily Inspection Check points

· The Power Supply

· The Controls

· The Hoist

· The Trolley

· The Bridge

· The Electrification

· The Support Structure

· Lubrication Check Points

· Functionality testing

Monthly Inspection Check Points

· Electrical Motor brake linings

· Gearbox oil levels

· Gear wear

· Wheel wear

· Electrification tests The Power Supply

· The Controls

· The Hoist

· The Trolley

· The Bridge

· The Electrification

· The Support Structure

· Lubrication Check Points

· Functionality testing

Workshop packed to capacity

Service Department with room of expansion

Existing layout

Proposed Layout

FB Crane Builders & Repairs (Pty) Ltd

Reg No: 1999/024605/07 Vat No: 4730134998

Directors: CF Best (CEO); C Best (Finance); VS Nhlapo (Procurement); M Best (Managing)