NATL Financial Model

8/10/2019 NATL Financial Model

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Copyright

Nghe An Tate & Lyle Sugar Company (Vietnam)

Harvard Business School Case 9-202-054

Case Software 2-202-734

Copyright 2002 by the President and Fellows of Harvard College

This course software was prepared by Professor Benjamin C. Esty, and Frank J. Lysy, Senior Advisorat the International Finance Corporation and Resesarch Associate Carrie Ferman soley as the basisfor class discussion. Cases are not intended to serve as endorsements, sources of primary data, orillustrations of effective or ineffective management.


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Nghe An Tate and Lyle Sugar ProjectKey Assumptions and Results

(Real US$, $000)

Assumptions Results from Model

Real Discount rate 10.0%Inflation 3.0%

Nominal Discount rate 13.3% Private Return NPV FRRDomestic Sugar Revenue $275,724

Revenue Operating Expenses ($136,390)Cane Crushed (quantity) EBITDA $139,335

Use company projections? TRUE Depreciation ($23,907)

If false, reach full capacity in (year) 2003 EBIT $115,427

Profit Taxes ($14,924)Average Sugar Price per Ton 1999-2005 After 2005 EBIAT $100,503

Use World Bank projections? TRUE plus: Depreciation $23,907

If false, sugar price growth rate 5.0% 2.0% less: Capital Expenditures ($85,897)

less: Increases in Net Working Capital ($4,326)Yield of Sugar per Ton of Cane 10.3% plus: Terminal Value $23,519

Nominal Free Cash Flow $57,707 21.2%

Real Free Cash Flow $57,707 17.7%

ExpensesPrice NATL Pays Farmers for Cane 1999-2005 After 2005

Use company projections? TRUEIf false, cane price growth rate 0.0% 0.0%

Capital Expenditures PUse company projections? TRUE Social Return (Real Terms) NPV ERR o

If false, percent change in total cost 0.0% Private returns $57,707Vietnamese labor employed $9,678

Value of training to labor $470

Tax Rates Cane Growers $39,587

1999-2005 After 2005 Truck haulers $2,746Value Added Tax (VAT) Rate 10.0% 10.0% Profit taxes paid $22,692

Import Tariff Rate on Sugar 30.0% 30.0% VAT paid by firm $29,011VAT paid by domestic suppliers $5,428

2005-2010 After 2010 Reduced VAT on imports ($34,439)Profit Tax Rate 25.0% 25.0% Reduced import tariffs ($71,527)

Total Net Returns $61,352 18.6%

Returns to Deal Participants

Returns to FarmersNet return from alternative cash crops ($/ha) 1


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Nghe An Tate and Lyle Sugar ProjectKey Assumptions and Results

(Real US$, $000)


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Nghe An Tate and Lyle Sugar Project, VietnamAll Assumptions

All fiscal years are October to September 1996 1997 1998 1999 2000 2001 2002

RatesUS GDP deflator (% annual change) 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00%US GDP deflator index (1990=100) 1.061 1.030 1.000 0.971 0.943 0.915 0.888

Exchange rate - - - 15,000 15,000 15,000 15,000LIBOR 5.5%Spread on IFC Loans

IFC A-loan (LIBOR +) 3.250%IFC B-loan (LIBOR +) 2.875%EFIC / other (LIBOR +) 2.500%

Real Discount Rate 10.0%Nominal Discount Rate 13.3%

Depreciation allowance 6%

Terminal Value Discount Rate- Rest of Society 20%

Taxes

1999-2005 After 2005Tariffs 30.0% 30.0%Value Added Tax (VAT) rate 10.0% 10.0%

1999-2000 2001-2005 After 2005Value Added Tax (VAT) rate on Cane Cost 5.0% 2.0% 2.0%

2005-2010 After 2010

Profit Tax 25.0% 25.0%

Revenue Assumptions

Assumed yield of sugar per ton of cane 10.3%Cane crushed (tons):

Min 64,000Max 900,000Company projections 836,000 0 0 0 64,000 400,000 750,000 850,000Delay- Student Input 209,000 0 0 0 64,000 273,000 482,000 691,000

Price per ton Sugar:World Bank Import Price Projections, excl VAT 0 0 0 300 314 331 348Student Input Import Price, excl VAT 0 0 0 300 315 331 347

Implied Tariff 0% 0% 0% 30% 30% 30% 30%


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All fiscal years are October to September 1996 1997 1998 1999 2000 2001 2002

Labor- Vietnamese 0 0 0 466 565 680 785Labor- Expatriate 0 0 0 586 600 450 400Training costs 0 0 0 17 44 57 59Materials and Other Costs 0 0 0 4,643 1,900 1,400 2,000

Cost of Sales

Labor- Vietnamese 0 0 0 503 489 475 545Labor- Expatriate 0 0 0 464 450 436 400Materials and Other Costs (% of Cane Crushed) 0.2%

Aver price paid (incl. for haulage) in dongIFC Projections 0 0 0 200,000 200,000 200,000 200,000Student Input 0 0 0 200,000 200,000 200,000 200,000

Working Capital 150.0 710.0 1,340.0 1,650.0 -- here forth % of revenue

Percent of Revenues (after 1998) 10.0%

Returns to Others

Returns to Suppliers NPV- US$ YR 1 YR 2 YR 3 YR 4 YR 5Tons of Cane Per Hectares 50Costs of growing cane/ha 480 287 287 287 480

Net Return from alternative crop ($/ha)1 Cash Crops (average) (540) (789) (132) (176) (206) 1912 Pineapple 344 (760) 430 663 (760) 430

3 Coffee (600) (875) (512) (878) 455 4554 Rubber (1,365) (733) (313) (313) (313) (313)5 Combo A - peanuts and maize (897) (133) (133) (133) (133) (133)6 Combo B - peanuts and peanuts 179 27 27 27 27 277 Combo C - peanuts and rice (56) (8) (8) (8) (8) (8)

Returns to Truck Haulers 31%


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All fiscal years are October to September

RatesUS GDP deflator (% annual change)US GDP deflator index (1990=100)

Exchange rateLIBORSpread on IFC Loans

IFC A-loan (LIBOR +)IFC B-loan (LIBOR +)EFIC / other (LIBOR +)

Real Discount RateNominal Discount Rate

Depreciation allowance

Terminal Value Discount Rate- Rest of Society

Taxes

TariffsValue Added Tax (VAT) rate

Value Added Tax (VAT) rate on Cane Cost

Profit Tax

Revenue Assumptions

Assumed yield of sugar per ton of caneCane crushed (tons):

MinMaxCompany projectionsDelay- Student Input

Price per ton Sugar:World Bank Import Price Projections, excl VATStudent Input Import Price, excl VAT

Implied Tariff

2006 2007 2008 2009 2010 2011 2012 2013 2014

3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00%0.789 0.766 0.744 0.722 0.701 0.681 0.661 0.642 0.623

15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000

900,000 900,000 900,000 900,000 900,000 900,000 900,000 900,000 900,000900,000 900,000 900,000 900,000 900,000 900,000 900,000 900,000 900,000

417 426 435 444 454 459 463 468 472410 418 427 435 444 453 462 471 480

30% 30% 30% 30% 30% 30% 30% 30% 30%


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Labor- VietnameseLabor- ExpatriateTraining costsMaterials and Other Costs

Cost of Sales

Labor- VietnameseLabor- ExpatriateMaterials and Other Costs (% of Cane Crushed)

Aver price paid (incl. for haulage) in dongIFC ProjectionsStudent Input

Working Capital

Percent of Revenues (after 1998)

Returns to Others

Returns to SuppliersTons of Cane Per HectaresCosts of growing cane/ha

Net Return from alternative crop ($/ha)1 Cash Crops (average)2 Pineapple

3 Coffee4 Rubber5 Combo A - peanuts and maize6 Combo B - peanuts and peanuts7 Combo C - peanuts and rice

Returns to Truck Haulers

2006 2007 2008 2009 2010 2011 2012 2013 2014

973 1,002 1,032 1,063 1,095 1,127 1,161 1,196 1,232382 394 406 418 430 443 457 470 48466 68 70 72 74 77 79 81 84

2,404 2,476 2,550 2,627 2,706 2,787 2,871 2,957 3,045

634 653 672 693 713 735 757 779 803382 394 406 418 430 443 457 470 484

218,545 225,102 231,855 238,810 245,975 253,354 260,955 268,783 276,847200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000

YR 9 YR 10 YR 11 YR 12 YR 13 YR 14 YR 15 YR 16 YR 17

480 287 287 287 480 287 287 287 480

456 (18) (65) 134 (463) 378 456 (18) 378663 (760) 430 663 (760) 430 663 (760) 430

455 455 (875) (512) (878) 455 455 455 455250 250 250 250 250 250 250 250 250(133) (133) (133) (133) (133) (133) (133) (133) (133)

27 27 27 27 27 27 27 27 27(8) (8) (8) (8) (8) (8) (8) (8) (8)


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Taxes



Profit Tax

Revenue Assumptions




Implied Tariff


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Cost of Sales



Working Capital


Returns to Others


Net Return from alternative crop ($/ha)1 Cash Crops (average)2 Pineapple

3 Coffee4 Rubber5 Combo A - peanuts and maize6 Combo B - peanuts and peanuts7 Combo C - peanuts and rice



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Taxes



Profit Tax

Revenue Assumptions




Implied Tariff


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Cost of Sales



Working Capital


Returns to Others


Net Return from alternative crop ($/ha)1 Cash Crops (average)2 Pineapple3 Coffee4 Rubber5 Combo A - peanuts and maize6 Combo B - peanuts and peanuts7 Combo C - peanuts and rice



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Nghe An Tate and Lyle Sugar Project, Vietnam

All fiscal years are October to September Sum NPV 1996 1997 1998 1999 2000 200

Domestic Sugar Revenue

Assumed yield of sugar per ton of cane 0.0 0.0 0.0 10.3% 10.3% 10.3%Cane crushed (tons) 13,764,000 - 0 0 0 64,000 400,000 750,000

Sugar produced (tons) 1,417,692 - 0 0 0 6,592 41,200 77,250Avg price per ton sugar (domestic), excl VAT - - 0 0 0 390 409 430

Total Domestic Sugar Revenue With VAT 861,923 275,724 0 0 0 2,857 18,701 36,920

Expenses

Admin, Operating, & Selling Expenses

1.LaborVietnamese 16,396 5,520 0 0 0 466 565 680Expatriate 7,502 3,002 0 0 0 586 600 450 Total Labor 23,898 8,522 0 0 0 1,052 1,165 1,130

2.Training costs 1,121 377 0 0 0 17 44 57

3.Materials and Other Costs 44,302 16,962 0 0 0 4,643 1,900 1,400

Total Admin, Operating, & Selling Expenses 69,321 25,860 0 0 0 5,712 3,109 2,587

Cost of Sales

1.LaborVietnamese 11,070 3,910 0 0 0 503 489 475Expatriate 7,216 2,767 0 0 0 464 450 436 Total Labor 18,287 6,677 0 0 0 967 939 911

2.Materials and Other Costs 37,123 11,799 0 0 0 132 849 1,6393.Cost of Cane

Aver price paid (incl. for haulage) in dong - - 0 0 0 200,000 200,000 200,000Ave price paid (incl. for haulage) in US$ - - 0.0 0.0 0.0 13.33 13.33 13.3Cane crushed (tons) 13,764,000 - 0 0 0 64,000 400,000 750,000 Total Cane Cost 214,933 68,882 0 0 0 853 5,333 10,000

90.0% a. Paid to farmers 193,440 61,994 0 0 0 768 4,800 9,00010.0% b. Paid for haulage 21,493 6,888 0 0 0 85 533 1,000

Total Cost of Sales 270,343 87,358 0 0 0 1,952 7,121 12,550

Value Added Tax% Total revenue 86,192 27,572 0 0 0 286 1,870 3,692% Cost of Sale- Materials and Other Costs 3,712 1,180 0 0 0 13 85 164% Admin- Materials and Other Costs 4,430 1,696 0 0 0 464 190 140% Total Cane Cost 4,484 1,525 0 0 0 43 267 200


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Domestic Sugar Revenue

Assumed yield of sugar per ton of caneCane crushed (tons)

Sugar produced (tons)Avg price per ton sugar (domestic), excl VAT

Total Domestic Sugar Revenue With VAT

Expenses

Admin, Operating, & Selling Expenses

1.LaborVietnameseExpatriate Total Labor

2.Training costs

3.Materials and Other Costs

Total Admin, Operating, & Selling Expenses

Cost of Sales

1.LaborVietnameseExpatriate Total Labor

2.Materials and Other Costs3.Cost of Cane

Aver price paid (incl. for haulage) in dongAve price paid (incl. for haulage) in US$Cane crushed (tons) Total Cane Cost

90.0% a. Paid to farmers10.0% b. Paid for haulage

Total Cost of Sales

Value Added Tax% Total revenue% Cost of Sale- Materials and Other Costs% Admin- Materials and Other Costs% Total Cane Cost

2005 2006 2007 2008 2009 2010 2011 2012 20

10.3% 10.3% 10.3% 10.3% 10.3% 10.3% 10.3% 10.3% 10.900,000 900,000 900,000 900,000 900,000 900,000 900,000 900,000 900,0

92,700 92,700 92,700 92,700 92,700 92,700 92,700 92,700 92,7527 542 554 566 578 590 597 602 6

54,294 55,853 57,043 58,258 59,499 60,765 61,496 62,049 62,6

944 973 1,002 1,032 1,063 1,095 1,127 1,161 1,1371 382 394 406 418 430 443 457 4

1,316 1,355 1,396 1,437 1,481 1,525 1,571 1,618 1,6

64 66 68 70 72 74 77 79

2,334 2,404 2,476 2,550 2,627 2,706 2,787 2,871 2,9

3,714 3,825 3,940 4,058 4,180 4,305 4,434 4,567 4,70

615 634 653 672 693 713 735 757 7371 382 394 406 418 430 443 457 4987 1,016 1,047 1,078 1,110 1,144 1,178 1,213 1,2

2,214 2,280 2,349 2,419 2,492 2,566 2,643 2,723 2,8

212,180 218,545 225,102 231,855 238,810 245,975 253,354 260,955 268,714.15 14.57 15.01 15.46 15.92 16.40 16.89 17.40 17

900,000 900,000 900,000 900,000 900,000 900,000 900,000 900,000 900,012,731 13,113 13,506 13,911 14,329 14,758 15,201 15,657 16,111,458 11,801 12,155 12,520 12,896 13,283 13,681 14,092 14,51,273 1,311 1,351 1,391 1,433 1,476 1,520 1,566 1,6

15,931 16,409 16,901 17,408 17,931 18,469 19,023 19,593 20,18

5,429 5,585 5,704 5,826 5,950 6,077 6,150 6,205 6,2221 228 235 242 249 257 264 272 2233 240 248 255 263 271 279 287 2255 262 270 278 287 295 304 313 3


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Profit Taxes

EBIT 0 0 0 (4,572) 3,835 15,122Interest 0 0 0 2,071 4,730 4,225

Profit before Taxes 0 0 0 (6,643) (895) 10,897

Profit tax rate on project - - 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

Total Profit Taxes 67,170 14,924 0 0 0 0 0 0

EBI A-T 0 0 0 (4,572) 3,835 15,122

Deprecation 0 0 0 0 3,307 3,472

Capital Costs 127,639 85,897 1,548 14,042 38,585 10,376 1,585 3,307of which Local Works and Installation Labor 7,217.7 7,530.0 37 1,595 3,291 2,117 178 0

Net Working CapitalStock of Working Capital 87,557 31,114 150 710 1,340 1,650 1,870 3,692

Increases in Net Working Capital 5,034 4,326 150 560 630 310 220 1,822

Terminal Value 196,485 23,519 0 0 0 0 0 0

Total Private Free Cash Flow FRR/ERR NPV

in Nominal terms 21.2% 57,707 (1,698) (14,602) (39,215) (15,258) 5,337 13,466

Returns to Others Sum NPV

Returns to Labor Employed

Total Vietnamese labor 37 1,595 3,291 3,086 1,232 1,15550% Value above opportunity cost 19 797 1,646 1,543 616 578

Training Value (assume = cost) 0 0 0 17 44 57Value above opportunity cost (total) 27,492 10,148 19 797 1,646 1,560 660 635

Returns to Suppliers

Total paid to cane growers 193,440 61,994 0 0 0 768 4,800 9,000Land devoted to cane (hectares) 275 94 0 0 0 1.280 8.000 15.000

Total costs of growing cane 98,926 37,537 0 0 614 3,593 5,653 5,260Total Return to cane farmers 94,514 24,457 0 0 (614) (2,825) (853) 3,740

Net Return from alternative crop 4,220 (10,120) 0 0 (1,010) (5,474) (6,636) (3,948

Value above opportunity cost (total) 132,150 39,587 0 0 396 2,649 5,783 7,688


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Profit Taxes

EBITInterest

Profit before Taxes

Profit tax rate on project

Total Profit Taxes

EBI A-T

Deprecation

Capital Costs

of which Local Works and Installation Labor

Net Working CapitalStock of Working Capital

Increases in Net Working Capital

Terminal Value

Total Private Free Cash Flow

in Nominal terms

Returns to Others

Returns to Labor Employed

Total Vietnamese labor50% Value above opportunity cost

Training Value (assume = cost)Value above opportunity cost (total)

Returns to Suppliers

Total paid to cane growersLand devoted to cane (hectares)

Total costs of growing caneTotal Return to cane farmers

Net Return from alternative crop

Value above opportunity cost (total)

2005 2006 2007 2008 2009 2010 2011 2012 20

25,744 26,388 26,676 26,964 27,250 27,535 27,312 26,903 26,42,097 1,258 419 0 0 0 0 0

23,647 25,130 26,257 26,964 27,250 27,535 27,312 26,903 26,4

0.0% 25.0% 25.0% 25.0% 25.0% 25.0% 25.0% 25.0% 25.

0 6,282 6,564 6,741 6,813 6,884 6,828 6,726 6,6

25,744 20,106 20,112 20,223 20,438 20,651 20,484 20,177 19,8

4,185 4,376 4,574 4,777 4,986 5,202 5,424 5,653 5,8

3,722 3,833 3,948 4,067 4,189 4,315 4,444 4,577 4,796 99 102 105 108 111 114 118 1

5,429 5,585 5,704 5,826 5,950 6,077 6,150 6,205 6,2269 156 119 122 124 127 73 55

0 0 0 0 0 0 0 0

25,938 20,492 20,618 20,811 21,111 21,412 21,391 21,198 20,9

1,655 1,705 1,756 1,809 1,863 1,919 1,976 2,036 2,0828 852 878 904 931 959 988 1,018 1,064 66 68 70 72 74 77 79

892 919 946 974 1,004 1,034 1,065 1,097 1,1

11,458 11,801 12,155 12,520 12,896 13,283 13,681 14,092 14,518.000 18.000 18.000 18.000 18.000 18.000 18.000 18.000 18.0

5,547 5,601 6,459 6,513 5,547 5,601 6,459 6,513 5,55,911 6,201 5,696 6,007 7,349 7,682 7,222 7,578 8,9

912 1,149 4,232 3,161 709 272 (1,837) 90 4,8

4,999 5,052 1,465 2,845 6,640 7,410 9,059 7,489 4,0


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Sugar produced (tons) 0 0 0 6,592 41,200 77,250Total 298,159 71,527 0 0 0 593 3,884 7,668

Rest of Society - VAT

Reduced VAT on imports received 143,558 34,439 0 0 0 286 1,870 3,692VAT paid by domestic suppliers 21,207 5,428 0 0 0 520 542 504VAT paid by firm 122,351 29,011 0 0 0 (234) 1,329 3,188


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Sugar produced (tons)Total

Rest of Society - VAT

Reduced VAT on imports receivedVAT paid by domestic suppliersVAT paid by firm

2005 2006 2007 2008 2009 2010 2011 2012 2013

92,700 92,700 92,700 92,700 92,700 92,700 92,700 92,700 92,70011,276 11,600 11,847 12,100 12,357 12,620 12,772 12,887 13,003

5,429 5,585 5,704 5,826 5,950 6,077 6,150 6,205 6,261709 731 753 775 798 822 847 872 8994,720 4,855 4,952 5,051 5,151 5,254 5,303 5,332 5,362


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Nomianl Summary Economic Returns FRR/ERR NPV

1. Private Financiers 21.2% 57,707 (1,698) (14,602) (39,215) (15,258) 5,337 13,466 2. Vietnamese labor employed 9,678 19 797 1,646 1,543 616 578

3. Value of training to labor 470 0 0 0 17 44 57 4. Cane Growers 39,587 0 0 396 2,649 5,783 7,688 5. Truck Haulers 2,746 0 0 0 27 168 315 6. Profit taxes paid 22,692 0 0 0 0 0 0 7. VAT paid by firm 29,011 0 0 0 (234) 1,329 3,188 8. VAT paid by domestic suppliers 5,428 0 0 0 520 542 504 9. Reduced import tariffs (71,527) 0 0 0 (593) (3,884) (7,66810. Reduced VAT on imports (34,439) 0 0 0 (286) (1,870) (3,692

Total Net Returns to Society 22.2% 61,352 (1,680) (13,804) (37,173) (11,616) 8,064 14,435

Real Summary Economic Returns FRR/ERR NPV

1. Private Financiers 17.7% 57,707 (1,802) (15,040) (39,215) (14,814) 5,031 12,323 2. Vietnamese labor employed 9,678 20 821 1,646 1,498 581 528 3. Value of training to labor 470 0 0 0 16 41 52 4. Cane Growers 39,587 0 0 396 2,572 5,451 7,035 5. Truck Haulers 2,746 0 0 0 26 158 288 6. Profit taxes paid 22,692 0 0 0 0 0 0 7. VAT paid by firm 29,011 0 0 0 (228) 1,252 2,918 8. VAT paid by domestic suppliers 5,428 0 0 0 505 510 461 9. Reduced import tariffs (71,527) 0 0 0 (576) (3,661) (7,01710. Reduced VAT on imports (34,439) 0 0 0 (277) (1,763) (3,379

Total Net Returns to Society 18.6% 61,352 (1,782) (14,218) (37,173) (11,278) 7,601 13,210

Economic Returns as a Share of Overall NPV

1. Private Financiers 94.1% 2. Vietnamese labor employed 15.8% 3. Value of training to labor 0.8% 4. Cane Growers 64.5% 5. Truck Haulers 4.5% 6. Profit taxes paid 37.0% 7. VAT paid by firm 47.3% 8. VAT paid by domestic suppliers 8.8% 9. Reduced import tariffs -116.6%


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Nomianl Summary Economic Returns

1. Private Financiers 2. Vietnamese labor employed

3. Value of training to labor 4. Cane Growers 5. Truck Haulers 6. Profit taxes paid 7. VAT paid by firm 8. VAT paid by domestic suppliers 9. Reduced import tariffs10. Reduced VAT on imports

Total Net Returns to Society

Real Summary Economic Returns

1. Private Financiers 2. Vietnamese labor employed 3. Value of training to labor 4. Cane Growers 5. Truck Haulers 6. Profit taxes paid 7. VAT paid by firm 8. VAT paid by domestic suppliers 9. Reduced import tariffs10. Reduced VAT on imports

Total Net Returns to Society

Economic Returns as a Share of Overall NPV

1. Private Financiers 2. Vietnamese labor employed 3. Value of training to labor 4. Cane Growers 5. Truck Haulers 6. Profit taxes paid 7. VAT paid by firm 8. VAT paid by domestic suppliers 9. Reduced import tariffs

2005 2006 2007 2008 2009 2010 2011 2012 20

25,938 20,492 20,618 20,811 21,111 21,412 21,391 21,198 20,9828 852 878 904 931 959 988 1,018 1,04

64 66 68 70 72 74 77 794,999 5,052 1,465 2,845 6,640 7,410 9,059 7,489 4,0

400 412 425 438 451 464 478 492 50 6,282 6,564 6,741 6,813 6,884 6,828 6,726 6,6

4,720 4,855 4,952 5,051 5,151 5,254 5,303 5,332 5,3709 731 753 775 798 822 847 872 8

(11,276) (11,600) (11,847) (12,100) (12,357) (12,620) (12,772) (12,887) (13,0(5,429) (5,585) (5,704) (5,826) (5,950) (6,077) (6,150) (6,205) (6,2

20,953 21,557 18,171 19,710 23,661 24,584 26,048 24,114 20,2

21,090 16,177 15,802 15,486 15,251 15,018 14,566 14,014 13,4673 673 673 673 673 673 673 673 652 52 52 52 52 52 52 52

4,065 3,988 1,123 2,117 4,797 5,197 6,168 4,951 2,6326 326 326 326 326 326 326 326 3

0 4,959 5,031 5,016 4,922 4,828 4,649 4,446 4,243,838 3,832 3,795 3,758 3,722 3,685 3,611 3,525 3,44

577 577 577 577 577 577 577 577 5(9,169) (9,157) (9,080) (9,003) (8,927) (8,852) (8,697) (8,520) (8,34(4,415) (4,409) (4,372) (4,335) (4,298) (4,262) (4,188) (4,102) (4,0

17,036 17,018 13,926 14,666 17,093 17,242 17,738 15,942 13,02


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All fiscal years are October to September 1996 1997 1998 1999 2000 2001 2002 2003 2004

Interest paida. Stock of Debt 50,000 50,000 47,273 39,596 29,697 1) IFC A-loan 20,000 20,000 20,000 17,778 13,333 2) IFC B-loan 20,000 20,000 18,182 14,545 10,909 3) EFIC / other 10,000 10,000 9,091 7,273 5,455b. Amortization payments 2,727 7,677 9,899 1) IFC A-loan 2,222 4,444 2) IFC B-loan 1,818 3,636 3,636 3) EFIC / other 909 1,818 1,818c. Interest due 0 0 0 2,071 4,730 4,225 4,113 3,678 2,936

1) IFC A-loan (LIBOR +) 1,750 1,750 1,653 1,361 2) IFC B-loan (LIBOR +) 1,675 1,599 1,370 1,066 3) EFIC / other (LIBOR +) 800 764 655 509

Nominal Depreciation Schedule 1996 1997 1998 1999 2000 2001 2002 2003 2004

Total Invest/Yr 1,548 14,042 38,585 10,376 1,585 3,307 3,406 3,508 3,613Cum Invest 1,548 15,590 54,175 64,551 66,136 69,443 72,849 76,357 79,970

Depreciation: Straight line depreciation over 20 yearsYear 1 66,136 3,307 3,307 3,307 3,307 3,307

Year 2 3,307 165 165 165 165Year 3 3,406 170 170 170Year 4 3,508 175 175Year 5 3,613 181Year 6 3,722Year 7 3,833Year 8 3,948Year 9 4,067Year 10 4,189Year 11 4,315Year 12 4,444


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All fiscal years are October to September 1996 1997 1998 1999 2000 2001 2002 2003 2004

Year 13 4,577Year 14 4,715Year 15 4,856Year 16 5,002

Total Depreciation/Yr 0 0 0 0 3,307 3,472 3,642 3,818 3,999Cum Depreciation 0 0 0 0 3,307 6,779 10,421 14,239 18,238


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Nghe An Tate and Lyle Sugar Project,


Interest paida. Stock of Debt 1) IFC A-loan 2) IFC B-loan 3) EFIC / otherb. Amortization payments 1) IFC A-loan 2) IFC B-loan 3) EFIC / otherc. Interest due

1) IFC A-loan (LIBOR +) 2) IFC B-loan (LIBOR +) 3) EFIC / other (LIBOR +)

Nominal Depreciation Schedule

Total Invest/YrCum Invest

Depreciation: Straight line depreciation oveYear 1

Year 2Year 3Year 4Year 5Year 6Year 7Year 8Year 9Year 10Year 11Year 12

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

19,798 9,899 08,889 4,444 07,273 3,636 03,636 1,818 09,899 9,899 9,8994,444 4,444 4,4443,636 3,636 3,6361,818 1,818 1,8182,097 1,258 419 0 0 0 0 0 0 0

972 583 194761 457 152364 218 73

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

3,722 3,833 3,948 4,067 4,189 4,315 4,444 4,577 4,715 4,85683,692 87,526 91,474 95,541 99,730 104,045 108,489 113,066 117,781 122,637

3,307 3,307 3,307 3,307 3,307 3,307 3,307 3,307 3,307 3,307

165 165 165 165 165 165 165 165 165 165170 170 170 170 170 170 170 170 170 170175 175 175 175 175 175 175 175 175 175181 181 181 181 181 181 181 181 181 181186 186 186 186 186 186 186 186 186 186

192 192 192 192 192 192 192 192 192197 197 197 197 197 197 197 197

203 203 203 203 203 203 203209 209 209 209 209 209

216 216 216 216 216222 222 222 222


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Year 13Year 14

Year 15Year 16

Total Depreciation/YrCum Depreciation

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

229 229 229236 236

243

4,185 4,376 4,574 4,777 4,986 5,202 5,424 5,653 5,889 6,13222,422 26,799 31,372 36,149 41,136 46,338 51,763 57,416 63,305 69,437


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Interest paida. Stock of Debt

1) IFC A-loan 2) IFC B-loan

3) EFIC / otherb. Amortization payments 1) IFC A-loan

2) IFC B-loan 3) EFIC / other

c. Interest due 1) IFC A-loan (LIBOR +) 2) IFC B-loan (LIBOR +)

3) EFIC / other (LIBOR +)

Nominal Depreciation Schedule

Total Invest/Yr

Cum Invest

Depreciation: Straight line depreciation ove

Year 1Year 2Year 3

Year 4Year 5

Year 6Year 7

Year 8Year 9Year 10

Year 11Year 12

2015

0

2015

5,002

127,639

165170

175181

186192

197203209

216222


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Year 13

Year 14Year 15Year 16

Total Depreciation/YrCum Depreciation

2015

229

236243250

3,07572,512


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NATL Sugar Project

Crop Economics

Note: All fihures are in thousands of Dong

Exchange Rate (Dong:1$US, 000) 15.0

Discount Rate 13.3%

SUGAR CANE Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10

Costs / haLabor 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000Fertilizer 1,300 1,300 1,300 1,300 1,300 1,300 1,300 1,300 1,300 1,300Seeds 1,700 0 0 0 1,700 0 0 0 1,700 0Land preparation 1,200 0 0 0 1,200 0 0 0 1,200 0

Total Cost 7,200 4,300 4,300 4,300 7,200 4,300 4,300 4,300 7,200 4,300Net Cost US $ /ha 480 287 287 287 480 287 287 287 480 287

PINEAPPLE Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10

Costs / haLabor 900 2,025 2,025 900 2,025 2,025 900 2,025 2,025 900Fertilizer 3,700 3,900 3,900 3,700 3,900 3,900 3,700 3,900 3,900 3,700Seeds 5,500 0 0 5,500 0 0 5,500 0 0 5,500Land preparation 1,300 0 0 1,300 0 0 1,300 0 0 1,300

Total Cost 11,400 5,925 5,925 11,400 5,925 5,925 11,400 5,925 5,925 11,400

Revenues# tons / ha 0.0 22.5 22.5 0.0 22.5 22.5 0.0 22.5 22.5 0.0Price / ton 0 550 550 0 550 550 0 550 550 0Seed Sale 0 0 3,500 0 0 3,500 0 0 3,500 0

Total Revenues 0 12,375 15,875 0 12,375 15,875 0 12,375 15,875 0

Net Return / ha (11,400) 6,450 9,950 (11,400) 6,450 9,950 (11,400) 6,450 9,950 (11,400)Net Return US $ /ha (760) 430 663 (760) 430 663 (760) 430 663 (760)

COFFEE Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10

Costs / haLabor 2,625 6,375 6,375 6,375 6,375 6,375 6,375 6,375 6,375 6,375Fertilizer 7,500 1,300 6,800 4,800 4,800 4,800 4,800 4,800 4,800 4,800Seeds 1,500 0 0 0 0 0 0 0 0 0


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NATL Sugar Project

Crop Economics


Discount Rate 13.3%

RUBBER Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10

Costs / haLabor 3,900 3,750 3,750 3,750 3,750 3,750 3,750 3,750 3,750 3,750Fertilizer 6,000 950 950 950 950 950 950 950 2,500 2,500Seeds 1,100 0 0 0 0 0 0 0 0 0Land preparation 0 0 0 0 0 0 0 0 0 0

Total Cost 11,000 4,700 4,700 4,700 4,700 4,700 4,700 4,700 6,250 6,250

Revenues# tons / ha 0 0 0 0 0 0 0 0 10,000 10,000Price / ton 0 0 0 0 0 0 0 0 1 1

Total Revenues 0 0 0 0 0 0 0 0 10,000 10,000

Net Return / ha (11,000) (4,700) (4,700) (4,700) (4,700) (4,700) (4,700) (4,700) 3,750 3,750Net Return US $ /ha (733) (313) (313) (313) (313) (313) (313) (313) 250 250

MIXED RICE PEANUTS MAIZE

Costs / haLabor 3,450 3,000 3,000

Fertilizer 550 600 550Seeds 400 500 150Land preparation 300 500 500

Total Cost 4,700 4,600 4,200

Revenues# tons / ha 1.8 1.2 2.0Price / ton 2,500 4,000 1,000

Total Revenues 4,375 4,800 2,000

Net Return / ha (325) 200 (2,200)

Net Return US $ /ha (22) 13 (147)


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NATL Sugar Project

Crop Economics


Discount Rate 13.3%

Cost of cane

1996 1997 1998 1999 2000 2001 2002 200

Incremental Hectares

1996 0 0 0 0 0 0 0 0

1997 0 0 0 0 0 0 0

1998 1 614 367 367 367 614 367

1999 7 3,226 1,926 1,926 1,926 3,226

2000 7 3,360 2,007 2,007 2,007

2001 2 960 573 573

2002 1 480 287

2003 0 0

2004 0

2005 0

2006 0

2007 0

2008 0

2009 0

2010 0

2011 0

2012 0

2013 0

2014 0

2015 0

Total Cane Cost per Year 0 0 614 3,593 5,653 5,260 5,601 6,459


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NATL Sugar Project

Crop Economics


Discount Rate 13.3%

Alternative Crop

Crop: Cash Crop (average) Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8

Net Return/ha (789) (132) (176) (206) 191 268 (206) 19

Incremental Hectares 1996 1997 1998 1999 2000 2001 2002 20

1996 0 0 0 0 0 0 0 0

1997 0 0 0 0 0 0 0

1998 1.28 (1,010) (169) (225) (264) 244 34

1999 6.72 (5,305) (885) (1,183) (1,385) 1,28

2000 7 (5,526) (922) (1,233) (1,44

2001 2 (1,579) (263) (35

2002 1 (789) (13

2003 0

2004 0

2005 0

2006 0

2007 02008 0

2009 0

2010 0

2011 0

2012 0

2013 0

2014 0

2015 0

Net Alt. Crop per Year 0 0 (1,010) (5,474) (6,636) (3,948) (3,427) (30


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NATL Sugar Project

Crop Economics

Note: All fihures are in thousands

Exchange Rate (Dong:1$US, 00

Discount Rate

SUGAR CANE

Costs / haLaborFertilizerSeedsLand preparation

Total CostNet Cost US $ /ha

PINEAPPLE


Total Cost

Revenues# tons / haPrice / tonSeed Sale

Total Revenues

Net Return / haNet Return US $ /ha

COFFEE

Costs / haLaborFertilizerSeeds

Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20 Year 21 Year 22 Year 23 Yea

3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 31,300 1,300 1,300 1,300 1,300 1,300 1,300 1,300 1,300 1,300 1

0 0 0 1,700 0 0 0 1,700 0 00 0 0 1,200 0 0 0 1,200 0 0

4,300 4,300 4,300 7,200 4,300 4,300 4,300 7,200 4,300 4,300 4287 287 287 480 287 287 287 480 287 287


2,025 2,025 900 2,025 2,025 900 2,025 2,025 900 2,025 23,900 3,900 3,700 3,900 3,900 3,700 3,900 3,900 3,700 3,900 3

0 0 5,500 0 0 5,500 0 0 5,500 00 0 1,300 0 0 1,300 0 0 1,300 0

5,925 5,925 11,400 5,925 5,925 11,400 5,925 5,925 11,400 5,925 5

22.5 22.5 0.0 22.5 22.5 0.0 22.5 22.5 0.0 22.5550 550 0 550 550 0 550 550 0 550

0 3,500 0 0 3,500 0 0 3,500 0 0 312,375 15,875 0 12,375 15,875 0 12,375 15,875 0 12,375 15

6,450 9,950 (11,400) 6,450 9,950 (11,400) 6,450 9,950 (11,400) 6,450 9430 663 (760) 430 663 (760) 430 663 (760) 430


6,375 6,375 6,375 6,375 6,375 6,375 6,375 2,625 6,375 6,375 64,800 4,800 4,800 4,800 4,800 4,800 4,800 7,500 1,300 6,800 4

0 0 0 0 0 0 0 1,500 0 0


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NATL Sugar Project

Crop Economics


Discount Rate

RUBBER


Total Cost

Revenues# tons / haPrice / ton

Total Revenues


MIXED

Costs / haLabor

FertilizerSeedsLand preparation

Total Cost


Total Revenues

Net Return / ha

Net Return US $ /ha


3,750 3,750 3,750 3,750 3,750 3,750 3,750 3,750 3,750 3,750 32,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2

0 0 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0 0 0

6,250 6,250 6,250 6,250 6,250 6,250 6,250 6,250 6,250 6,250 6

10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 101 1 1 1 1 1 1 1 1 1

10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10

3,750 3,750 3,750 3,750 3,750 3,750 3,750 3,750 3,750 3,750 3250 250 250 250 250 250 250 250 250 250


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NATL Sugar Project

Crop Economics


Discount Rate

Cost of cane


1996 0

1997 0

1998 1

1999 7

2000 7

2001 2

2002 1

2003 0

2004 0

2005 0

2006 0

2007 0

2008 0

2009 0

2010 0

2011 0

2012 0

2013 0

2014 0

2015 0

Total Cane Cost per Year

2009 2010 2011 2012 2013 2014 2015

0 0 0 0 0 0 0

0 0 0 0 0 0 0

367 614 367 367 367 614 367

1,926 1,926 3,226 1,926 1,926 1,926 3,226

2,007 2,007 2,007 3,360 2,007 2,007 2,007

960 573 573 573 960 573 573

287 480 287 287 287 480 287

0 0 0 0 0 0 0

0 0 0 0 0 0 0

0 0 0 0 0 0 0

0 0 0 0 0 0 0

0 0 0 0 0 0 0

0 0 0 0 0 0 0

0 0 0 0 0 0 0

0 0 0 0 0 0

0 0 0 0 0

0 0 0 0

0 0 0

0 0

0

5,547 5,601 6,459 6,513 5,547 5,601 6,459


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NATL Sugar Project

Crop Economics


Discount Rate

Alternative Crop

Crop: Cash Crop (average)

Net Return/ha


1996 0

1997 0

1998 1.28

1999 6.72

2000 7

2001 2

2002 1

2003 0

2004 0

2005 0

2006 0

2007 0

2008 0

2009 0

2010 0

2011 0

2012 0

2013 0

2014 0

2015 0

Net Alt. Crop per Year

Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20

378 456 (18) 378 456 0 0

2009 2010 2011 2012 2013 2014 2015

0 0 0 0 0 0 0

0 0 0 0 0 0 0

171 (592) 484 584 (23) 484 584

(437) 900 (3,110) 2,542 3,065 (123) 2,542

(128) (455) 937 (3,239) 2,648 3,193 (128)

912 (37) (130) 268 (926) 757 912

191 456 (18) (65) 134 (463) 378

0 0 0 0 0 0 0

0 0 0 0 0 0 0

0 0 0 0 0 0 0

0 0 0 0 0 0 0

0 0 0 0 0 0 0

0 0 0 0 0 0 0

0 0 0 0 0 0 0

0 0 0 0 0 0

0 0 0 0 0

0 0 0 0

0 0 0

0 0

0

709 272 (1,837) 90 4,898 3,848 4,288


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NATL Sugar Project

Crop Economics

Note: All fihures are in thousands


Discount Rate

SUGAR CANE


Total CostNet Cost US $ /ha

PINEAPPLE


Total Cost

Revenues# tons / haPrice / tonSeed Sale

Total Revenues


COFFEE

Costs / haLaborFertilizerSeeds

Year 28 Year 29 Year 30

3,000 3,000 3,0001,300 1,300 1,300

0 1,700 00 1,200 0

4,300 7,200 4,300287 480 287


900 2,025 2,0253,700 3,900 3,9005,500 0 01,300 0 0

11,400 5,925 5,925

0.0 22.5 22.50 550 5500 0 3,5000 12,375 15,875

(11,400) 6,450 9,950(760) 430 663


6,375 6,375 6,3754,800 4,800 4,800

0 0 0


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NATL Sugar Project

Crop Economics


Discount Rate

RUBBER


Total Cost


Total Revenues


MIXED

Costs / haLabor

FertilizerSeedsLand preparation

Total Cost


Total Revenues

Net Return / ha

Net Return US $ /ha


3,750 3,900 3,7502,500 6,000 2,500

0 1,100 00 0 0

6,250 11,000 6,250

10,000 0 01 0 0

10,000 0 0

3,750 (11,000) (6,250)250 (733) (417)


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NATL Sugar Project

Crop Economics


Discount Rate

Cost of cane


1996 0

1997 0

1998 1

1999 7

2000 7

2001 2

2002 1

2003 0

2004 0

2005 0

2006 0

2007 0

2008 0

2009 0

2010 0

2011 0

2012 0

2013 0

2014 0

2015 0

Total Cane Cost per Year


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NATL Sugar Project

Crop Economics


Discount Rate

Alternative Crop

Crop: Cash Crop (average)

Net Return/ha


1996 0

1997 0

1998 1.28

1999 6.72

2000 7

2001 2

2002 1

2003 0

2004 0

2005 0

2006 0

2007 0

2008 0

2009 02010 0

2011 0

2012 0

2013 0

2014 0

2015 0

Net Alt. Crop per Year


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NATL Sugar Project

Trucking Economics

Assumptions Profit per Season

Exchange Rate (Dong:US$1.00) VND 15,000 Dong US Dollar Revenue VND 66,642,788 $4,443

Revenue

Mean travel distance (km,round trip) 20 Costs

Cost to deliver (VND/per ton) VND 23,080 Gas (19,687,500) -1,313Tons per load (payload) 5.5 Wages (4,500,000) -300

Average trips per day 3.5 Maintenance (10,000,000) -667

Number of days 150 Total Costs (34,187,500) -2,279 Revenue per Season VND 66,642,788

Net revenue 32,455,288 2,164

Fuel Costs Interest (4,931,507) -164

Lorry: KM/Gallon 12 Depreciation (6,562,500) -438

Price/Gallon ($US) $1.50 Profit/Loss VND 20,961,281 $1,562

Price/Gallon (Dong) VND 22,500

Total per Day VND 131,250 Profit Margin 31%

Gas per Season VND 19,687,500

Labor Costs

Average Wage per day VND 30,000

Labor per Season VND 4,500,000

Maintenance per Season VND 10,000,000

Lorry Costs

Average cost for lorry VND 100,000,000

Average km for life of lorry VND 160,000Yearly Interest 12.0%

Depreciation per km VND 625 Deperciation per Season VND 6,562,500

NATL Financial Model

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