BUSINESS PLAN

2015 - 2020
 MISSION STATEMENT

Becoming The Premiere Tyre Manufacturer, Distributor and Service

Provider for East Africa and It’s Bordering Regions

INTRODUCTION
Africa is the most complex continent on earth and defies simple descriptions. It has one
billion of the world’s seven billion people and 20% of the world’s land mass. Behind Asia, it is
both the second largest and second most populous continent. It has 54 countries with
hundreds of ethnic groups speaking more than one thousand languages. One common
theme throughout most of the continent is that the quality of life has and is improving.

THE CASE FOR INVESTING IN AFRICA

THE RIGHT TIME

Africa may be the last great ground-floor international investment opportunity left on earth.
Until just recently, however, the continent has remained beyond the consciousness of all
but the most adventurous of investors. But now Africa is beginning to gain a wider audience
in financial circles. The majority of the continent has notched strong growth for the last
decade and is still in the early stages of a powerful and transforming spurt of economic
progress. There has been a productivity revolution that has resulted in the establishment of
the urban consumer. The continent is as urbanized as China, and more so than the whole of
India. Also, there is as many cities on the continent with more than 1,000,000 in population
(52) then there is in Europe.

The mature economies of the developed world - the U.S., Europe and Japan - must contend
with tepid growth, aging populations and painful fiscal retrenchment for years or even
decades to come. However, Africa is in precisely the opposite position. Having enacted
economic and political reforms and shaken off its post-colonial torpor, Africa is on an
impressive growth trajectory. In 2008, Africa’s GDP was at $1.6 trillion (USD) equaling that
of Russia and Brazil. The increase in oil prices, demand for other mineral and commodities
account for about a third of the GDP growth, remaining two thirds are a result of internal
microeconomic structural changes focused on improving business climates throughout the
region. The continent’s market-based ideals are solidifying, and it is simply a matter of time
before its capital markets and economies become more developed, liquid and integrated
with the global financial system.

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Africa, admittedly, continues to suffer from a serious image problem. While deserved in
certain cases, the outside world’s perception of Africa as a place of poverty, hunger and
incessant warfare has kept many investors away. The media in the developed world does
Africa no favors by focusing intently on its problems and paying minimal attention to its
positive developments. But tough image or not, Africa is moving forward. Vibrant
entrepreneurship and resourcefulness are in full display in much of Africa as people seek to
build better lives for themselves and their families. While this progress may not show up on
your nightly newscast, strong economic growth and a lengthening track record of solid
equity market returns indicate that things are turning for the better.

With that said, the continent’s present image creates an opportunity for today’s investor.
Once the media’s focus shifts to the positive change in Africa, institutional investors seeking
a durable growth opportunity will come calling and investment bargains will become scarce.
Just to note: the cover of The Economist Magazine on December 3, 2011 was entitled
“Africa Rising,” whereas in May 2000 the same magazine dubbed Africa “the hopeless
continent.”

RESOURCES

Africa’s large, inexpensive, and increasingly educated labor force is poised to make a strong
contribution to the global economy. Africa has what the world needs. Many Africans are
very poor, but the continent itself is incredibly rich in natural resources. It has huge
untapped energy resources in the form of oil, natural gas and hydroelectric power. Africa
also holds over half of the world’s gold reserves, 40% of the world’s platinum and 20% of
the world’s uranium as well as vast deposits of diamonds, iron ore, copper, and cobalt. The
true natural wealth of Africa is unknown, since less than half of its land mass has been
surveyed. On top of its mineral and energy wealth, Africa also has a huge swath of
uncultivated arable land. According to the United Nations, only about 10% of Africa’s arable
land is currently being cultivated and this is for a continent that holds more than 60% of the
world’s uncultivated arable land. Over the next few decades, Africa will likely transition from
a net food importer to a net food exporter.

DEMOGRAPHICS

While the populations of the U.S., Japan, Western Europe and China are aging rapidly,
Africa’s one billion people are mostly young. In sub-Saharan Africa, up to 40% of the
population is thought to be under the age of eighteen. The median age in Africa is about 20
versus 30 in Asia and 40 in Europe. Africa is the youngest continent on earth and as this big
bulge of population moves into its most productive years it will create huge demand for a
wide array of products. Even now companies in Africa are racing to fulfill huge unmet needs
across all levels of society.

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As societies become more urbanized, their productivity tends to increase. In Africa now, a
marked trend of urbanization is propelling growth as new inhabitants of African cities begin
to contribute to the economy. Africa’s large, inexpensive, and increasingly educated labor
force is poised to make a strong contribution to the global economy.

TECHNOLOGY

Communications and computing technology is acting as an accelerant in Africa; the growth

of mobile phones provides an instructive example. Africa is the fastest-growing mobile
phone market in the world, having increased its subscribership 20% or more in each of the
last five years. African mobile subscribers reached 735 million at the end of 2012—up from
basically zero a decade prior. Africa’s rapidly developing communications infrastructure is a
boom to business, as it facilitates supply-chain management, demand forecasting and
overall operating efficiency.

FINANCIAL

Africa is beginning to integrate with the global financial system. Access for foreign investors,
while still difficult, is improving. Friction costs—spreads, custody, and trading costs—are
higher in Africa than in developed markets, but these costs will decrease over time as
trading volumes build. Financial information about African companies is increasingly
available outside of Africa as many companies offer their financial reports online and firms
such as Bloomberg and Thomson Reuters begin to carry African trading data on their
platforms. Global investors now have online access to corporate and government financial
information that until just recently was very difficult and time-consuming to access.

For the moment, however, limited liquidity for many smaller equity issues has effectively
shut out large global institutions, thus providing smaller investors a clear window of
opportunity. But as more companies come to market with public offerings and liquidity
deepens, institutions will begin to move into Africa. In ten years many global institutions will
be in Africa in some capacity. In twenty years they will all be there.

Foreign direct investment (FDI) is pouring into Africa as more developed countries—notably
China—seek to gain access to Africa’s resources. In 2010 FDI exceeded $55 billion, up 500%
from the level a decade earlier. FDI not only brings extra cash into Africa, but also
infrastructure development. Better ports, roads, rails and telecommunications systems are
sorely needed to support further growth, and FDI is helping. As noted in an article from
Green Resources, direct foreign investment in Africa was at $9 billion USD in 2000, $84
billion USD in 2010 and is expected to reach $150 USD billion by the end of 2015.

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SUB-SAHARAN AFRICA
Today the continent—sub-Saharan Africa in particular—features rapid growth, abundant
natural resources and a large, young and increasingly educated workforce. The greater part
of the continent is poised for a one-time-in-history transformation from an impoverished
agrarian subsistence economy to a modestly prosperous and more urban consumer-based
economy.

Around the year 2000, after two decades of tepid to non-existent growth during the post-
colonial era, Africa began to stir. For the last decade, Africa has been on a steep trajectory.
The International Monetary Fund (IMF) estimates that Africa grew at a rate of 6% per
annum over the last decade—a rate much faster than the developed world and twice as fast
as Africa had been growing for the prior two decades. Africa-wide growth was 6% for 2011
and 7% for 2012 and nine of the top fifteen fastest growing economies in the world are in
sub-Saharan Africa.

To be sure, this GROWTH is off a very low economic base, but this depressed starting point
is an attractive attribute for early investors, as it sets sub-Saharan Africa up for what could
be years or even decades of rapid expansion. That Africa is growing off a low level is a
reason for investors to be encouraged and is in fact a cornerstone of our investment thesis.
Investors who focus not on the absolute level of the starting point but rather on the
direction and rate of change will find that sub-Saharan Africa scores highly on these later
measures.

While the populations of the U.S., Japan, Western Europe and China are aging rapidly,
Africa’s one billion people are mostly young. In sub-Saharan Africa, up to 40% of the
population is thought to be under the age of eighteen. The median age in Africa is about 20
versus 30 in Asia and 40 in Europe. Africa is the youngest continent on earth and as this big
bulge of population moves into its most productive years it will create huge demand for a
wide array of products. Even now companies in Africa are racing to fulfill huge unmet needs
across all levels of society.

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EAST AFRICA
As previously mentioned Sub-Saharan Africa is among the world’s fastest growing economy,
in particular, are the countries of Mozambique, Uganda and Tanzania. Large gas and oil finds
in these three countries’ economies are expected to push the economies above a 10% per
annum growth rate over the next decade. Both Mozambique and Tanzania will spend in
excess of $75 billion USD in developing facilities that we allow for large exports of LNG.

The electrification rate throughout East Africa has been a major issue for both residential
consumers and industry in the past. It was not uncommon for consumers to spend up to
two thirds of their household income on energy purchases (mainly fuelwood). With
concerns over native deforestation there has been a major swing in the use of charcoal
products. However, the use of household charcoal based products presents significant
health and environmental challenges, therefore, there has substantial efforts from local
governments, direct foreign investment, international benefactors and financial
development institutions towards electrification in the region. This includes but not limited
to power generation and transmission equipment. These concerted efforts to supply an
economical and sustainable power source and grid for households as well as industries will
help solidify the expected rapid growth in all the members’ economies for years to come.

As seen in all developing and industrial countries the movement from rural to urban
habitation has been significant. Along with this movement is the associated increase in
standard of living and discretionary income. Below are the current skylines of Dar es Salaam,
Tanzania, Nairobi, Kenya and Kampala, Uganda

Dar es Salaam, Tanzania (Africa’s Fastest Growing City)

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Nairobi, Kenya

Nairobi, Kenya

Tax revenue collection systems have improved and have led to the financing of
infrastructural improvements including bridges, roads and power grids (such as Uganda’s
new hydro-electric project). These revenues are increasing largely due to export-driven
growth. Mozambique’s growth has come from coal while Tanzania’s is from gold production,
in both cases exports have increased by 20% per year for several years. Uganda will begin to
see increase revenues in the next 3 to 5 years due to a sharp increase in oil and gas
exportation.

Political and macro-economic stability and microeconomic reforms have also supported the
robust East African economies. In June of 2014, a large number of African countries took a
huge step forward in normalizing trade and establishing a common market. This new
Tripartite Trade Area took five years to negotiate but will merge three regional
organizations: the Southern African Development Community (SADC), the East African
Community (EAC) and the Common Market For Easter & Southern Africa (COMESA).

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This new trade zone encompasses almost half the African countries (26) and populations.
Although some fear this new common market approach but for the countries is East Africa,
it will certainly mean more access for their goods and further development and investment
within the region. The following diagram is form Abdelmalek Alaoui’s Forbes article dated June 18th 2015.

TANZANIA
Opportunities in Tanzania span all economic sectors. Because most sectors are in early
stages of development and many attractive investments can be found in basic consumer
goods and services. We expect Tanzanian disposable income to increase rapidly and
therefore seek to invest in industries where that money will be spent. Personal
communications, food and beverage, banks, health care and retail are all industries where
we expect growing demand. As the Tanzanian infrastructure is being built out, there are also
numerous opportunities in the agriculture, construction, telecommunications, and energy,
mining and manufacturing industries. Just recently, Tanzania found 100+ trillion cubic feet
of natural gas in the region just south of the business capital of Dar es Salaam. This is an
unprecedented find and the economic impact will be tremendous.

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As these sectors continue to grow and develop, and with drastic improvements in
infrastructure and roadways, there will be a significant increase in the requirements needed
from the supporting industries. One such industry will be the automotive industry and in
particular the tyre manufacturing, supply and distribution sector of that industry. As the
economies of all of Sub-Saharan and especially the East African Community Countries,
continue to grow at a pace greater than the rest of the world’s economies so are the
populations of these countries. Coupled with improved standard of living and access to
better health care, birth rates and life expectancy increases. (Population projections and vehicle
base data obtained from the World Bank 2014 Environmental publication – 3.13 World Development
indicators: Traffic and Congestion)

Projected Population Growth East African Community Countries

The East African Community has enjoyed some of the strongest GNP growth on the planter
over the last decade, as a result a corresponding the increase in the standard of living. As
many respected economists believe it will be, the world’s largest and most powerful middle
class on the planet. As the middle class increases there also will be a similar increase in the
number of vehicles for both personal and commercial use.

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Projected Vehicle Growth East African Community Countries

As mentioned previously with the growth in the auto industry there will be related increases
in the need for tyres throughout East Africa. Not only will there be a growth in vehicle
population but there will be an increase in kilometers driven as large investments are being
made to improve both bridges and roadways throughout the region. The expected growth
in vehicle population will be across all segments of vehicles as the economies throughout
the region grow. Below is the projected makeup of the vehicle population for Tanzania,
Kenya and Uganda. These three countries have the largest (except for Zimbabwe which has
the largest vehicle population than all three but its’ vehicle make-up is 85% passenger) and
most representative vehicle populations of East Africa.

As indicated in the following graphs for the three countries (Tanzania, Kenya & Uganda) the
composition of the vehicle composition is as follows:

 Passenger group 45% to 50%

 Light truck group 40% to 45%
 Medium truck group 5%
 Agricultural group 3%
 “Off The Road” (OTR) 3%

This ratio is expected to stay constant as the economic dynamics continue to evolve.

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Projected Vehicle Make-up for Tanzania

Projected Vehicle Make-up for Kenya

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Projected Vehicle Make-up for Uganda

Based upon the current vehicle populations of these three countries and the projected
growth, the total tyres in use within each country and vehicle category are determined
based upon a representative average tyre position by category of vehicles. Those average
tyre position by vehicle category are listed below:

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Based upon these average number of tyres per category the total current market volume
and projected volume by year can be calculated. These volumes are seen in the diagrams
below

2020 Market volume (000's of units)

346,995
4,434,38 3,862,57
3 Burundi
9
Kenya
Malawi
Mozambique
Rwanda
Tanzania
Uganda
494,308 Zambia
Zimbabwe
1,008,64 1,044,98
2 9
150,721
1,148,18
3 2,579,096

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EAST AFRICAN TYRE HISTORY
The East African tyre manufacturing industry began in 1969 with approval of plans to build a
facility in Arusha Tanzania with the technical assistance from a global US tyre manufacturing
company from the USA. Arusha was selected since it was the strategic center of the East
Africa Community. The first tyres rolled of the production line in 1971 and the history of
one of Tanzania’s strongest industries began.

While the tyre company was originally intended to be the sole tyre manufacturer in East
Africa, the Firestone Tire and Rubber Company negotiated a deal with the Kenyan
Government to begin manufacturing tyres in Nairobi in 1972. Firestone also received a ten-
year import "concession" by the Kenyan government to secure Firestone's investment in a
domestic tire plant. Hence, Firestone became the sole importer and manufacturer for
Kenya. Regardless, tyres from Tanzania were “smuggled” to Kenya and Kenyan’s drove to
Arusha to purchase Tanzania made tyres due to their superior performance.

The 1970’s and 1980’s went on with mostly closed borders and Tanzania’s tyre industry
focused on supplying the local market. Early in the 1990’s the first steps of renewed
cooperation within the East African Community began and the opportunity to export tyres
from Tanzania arose. The rest of the 1990’s became the company’s strongest, especially
with relaxation of exchange control measures, when the company negotiated the financial
modalities of maintaining a foreign bank account with the Tanzania Central Bank for export
proceeds, after which, an aggressive and successful export program was launched.

From 1993 to 2001 Tanzania’s tyre industry exported tyres regularly too many countries, of
which including significant exports to the following countries:

 Kenya
 Uganda
 Malawi
 Zambia
 Zimbabwe

It should be noted the above business was developed during the days of challenging
infrastructure, limited communications, exchange control measures and policies and
taxation rates that were less conducive (than today) to business growth. Still, the business
grew and tyres made in Tanzania were very popular in Sub-Sahara Africa. In addition, tyres
were also exported to Rwanda, Burundi, Ethiopia, Eritrea, Sudan and the former Zaire.

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During the success of the 1990’s the Tanzanian tyre manufacturing industry also focused on
improving services to all stakeholders involved in the business:

Customers – Many product quality updates and the first new product introductions by the
company were introduced in the 1990’s. Also, the company introduced modern tyre service
and service centers throughout the country. In the late 1990’s, giant tyre repair and mobile
service was also introduced simultaneously with the opening of the first large scale mining
operations in Geita, Kahama and Buyanhulu.

Dealers – The Dealer network was expanded and regular tyre Dealer meetings were
introduced to support the distribution network. Also, modern tyre service centre packages
were offered to dealers including financial support which helped many dealers grow their
businesses substantially.

Employees – The Tanzanian company invested heavily in the foundation of the company.
An improved housing scheme, better and more modern healthcare, more nutritional meals,
ongoing training, establishment of a Credit Society, educational support and workers’ pay
packages increased over 400% during the 1990’s.

Community – The Company supported several projects including a new hospital wing in
Arusha, refurbishing of YMCA’s, establishment of an AID’s orphanage, supporting local
sports (football and auto rallies) and many other socio economic programs.

Shareholders – Many long outstanding dividends, royalties and expenses due shareholders
were paid in full in the 1990’s and dividends were declared and paid regularly. Also, the
Company generated billions of TShillings countrywide for the Government coffers by way of
taxes.

The entire economic and social impact of the Tanzanian tyre industry in the past is quite
difficult to value. Certainly there were the jobs (up to ten thousand directly and indirectly at
its peak), the tax revenue generated was used for infrastructure, education and other
priorities, the goodwill created in the local community, throughout the entire nation and
outside the country via exports. The tyre industry in Tanzania was considered a blue chip,
prestigious Company that Tanzania was very proud to use as an exhibition of Tanzania’s
capabilities for high level visitors. In fact, it was no more powerfully demonstrated than by
the issuance of bank notes in the 1990’s with the back of the notes honoring the Arusha
factory and its dedicated workers.

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EAST AFRICAN TYRE OPPORTUNITIES
In 2001 the entire East Africa tyre market was estimated to be at US$400 million. Today the
greater East Africa tyre market is approaching US$1 billion in value and only 5-7% of that is
the approximate market share held by region’s only tyre manufacturer (Kenya’s Yana Tyre).
With East Africa’s unprecedented growth the market value of will exceed US$2 Billion by
2020. Having the World’ fastest growing middle class in history which will have significantly
and more discretionary income, the demand for four wheel drive vehicles (LandCruiser,
Range Rover, Hilux, and similar) will increase the already large market for 4x4 tyres (light
truck), which is a highly profitable segment of the total market.

The Sub-Sahara tyre market is not looked upon as strategically as other more advanced
markets in the world. Historically, and still presently, most tyre business has been initiated
by traders in the region that contact tyre suppliers or manufacturers and become pseudo
agents. However, there is little loyalty to manufacturers, little or no product warranties are
offered and professional service is all but nonexistent by traders as they are primarily
interested in profit margins rather than brand relationships. Therefore, they will import
multiple brands and not hold an allegiance to any manufacturer. Hence, this results in poor
product distribution throughout the region for the majority of tyre manufacturers because
they don’t have well established networks of dealers. Many times the manufacturers will
give an exclusive dealerships or agencies to one company in a country and then watch that
company import competitors’ products.

Almost incredibly, most of the world’s tyre manufacturers are asleep with regard to what is
happening in Africa and they have no plans to make any significant investments into the
market places in an effort to capture additional market share. For some reason Africa
remains a “free for all” when it comes to the tyre market. Even the South African tyre
manufacturers have all but looked away from “north of South Africa.

Tanzania is in a unique position and has a lot to offer with regard to the tyre manufacturing
industry. Conservatively the industry could generate revenues of more than USD$150
million annually, directly and indirectly impact the lives of thousands of Tanzanians,
generate significant amounts of tax revenue for the Government and save Tanzania and
other countries valuable foreign exchange by manufacturing locally and generating Intra-
Africa trade.

The time is now to cease the opportunity and take advantage of Tanzania’s history in tyre
manufacturing, the central location of the country to the East and Southern Africa markets
and the future growth of the region. The economic and social contributions to Tanzania by
a modern, strong and dominating tyre manufacturing and distribution company would be
substantial.

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TANZANIAN BUSINESS PLAN

GOODWILL

Arusha, Tanzania has a very well-known reputation in East Africa and other Sub-Sahara
Countries for producing high quality tyres. A recent quote from a Kenyan in Nairobi (March
2014) “Those Tanzanian’s know how to make high quality tyres. I and many other
Kenyans often drove to Arusha to change our tyres there instead of buying Kenyan or
imported tyres.” Such statements are not uncommon. Also, remember the reference to the
20 schilling note.

ARUSHA

Things have changed and are changing fast. Logistically Arusha still remains a great central
location but even more so today due to the improvement of the roads and the planned
rehabilitation of the railways. Therefore, shuttling raw materials to the factory and shipping
tyres throughout the East Africa region will be much easier in the years to come. Also, there
remains a knowledge base for tyre manufacturing and sales and marketing related to
Tanzania. All of these characteristics are very valuable and can be utilized to build a
dominant market position and presence throughout East and Southern Africa.

MARKET

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Based upon the projections of the total tyre volume in the market a conservative approach
was taking in calculating the replacement market for the East Africa market.

Below is the yearly replacement percentage by vehicle category in the market.

The resulting current and projected tyre market volume in each category shows substantial
opportunities for Tanzania, Kenya and Uganda, as well as all of East Africa.

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MANUFACTURING

The business plan for tyre manufacturing in Tanzania, or anywhere else in the world today,
will be much different than a tyre manufacturing business plan in 1969. The Sub-Sahara
Africa market has changed dramatically as has the tyre manufacturing industry. The tyre
manufacturing industry that was created in 1969 was designed to produce almost every size
and type of tyre the market demanded from small passenger car tyres to large truck tyres.
Today the market demand is so large (more than ten times what it was in 1969) it would be
extremely inefficient to try to produce the majority of tyre types and sizes the market
demands in Tanzania let alone all of East and Southern Africa.

Therefore, the best case scenario would be to design a manufacturing model to produce the
tyres sizes that will be in the highest demand (in East and Southern Africa) and generate the
highest profit margins for the next several years to come. That said, it is very well known
the strongest market today and in the future will be 4x4, light truck (Hilux type) and small
bus tyres. That market is massive and is enough to keep a quality and competitive factory in
Tanzania producing tonnage that would be at least double the previous production outputs
from the Arusha facility during the 1990’s.

Furthermore, it makes no sense to be a supplier of only a few ranges and sizes of tyres in the
region. The tyre manufacturing company in Tanzania should be able to supply the
marketplace with ANY and ALL types and sizes of tyres. From small forklift tyres for
factories throughout Tanzania and East Africa to giant mining tyres for the massive Off-The-
Road tyre market in Tanzania today (and in the future) and throughout Sub-Sahara Africa.

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Therefore, we take advantage and leverage the 4x4 market in Tanzania, Kenya and Uganda
to begin with. We will use these regional market locations and partner with a global tyre
manufacturing company to invest in Tanzanian tyre production and supply tyre technology
(4x4 tyres only).

The actual manufacturing would be done in the revitalized General Tyre East Africa facility in
Arusha, Tanzania. All existing equipment will be removed and scrapped, the building and
utilities will be upgraded and new mixers, extruder, stock prep, building machines and
curing presses purchased and installed. Initially, two light truck building machines will be
installed to produce the major light truck sizes in the market.

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Required initial capital investment is as follows:

Category MM USD

Mixing $25.0
Extruding $12.0
Calendaring $12.5
Stock Prep $15.0
Beads $7.0
Tire Building $15.0
Curing $25.0
Molds $4.5
Building & Land $40.0
Warehouse $5.0
Vehicles (Transport) $2.0
QA Equipm ent $1.0
Service Trucks $0.4
Warehousing $3.0
Contingency $8.1

Total $175.4

The anticipated share structure and participation by shareholders will resulting in-kind
contributions of $100.0 MM (land building and equipment). The importation and build out
will be begin once financing has been approved and will take approximately nine months to
complete and begin testing/production of the 4X4 tyres.

The production buildup itself will take an additional three months to utilize building
capacity. The production process will be designed to be able expand to include additional
tyre building machines if the market dictates. Year by year light truck production will be as
follows:

 Year 1 477 K
 Year 2 576 K
 Year 3 576 K
 Year 4 576 K
 Year 5 576 K

MANUFACTURING AND TECHNICAL PARTNER

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The global tyre manufacturer and technical partner will also supply branded product to
round out the remaining 4x4 sizes not produced in Arusha and all of the passenger, medium
truck, agricultural and OTR sizes used in the East African market. Thus, giving the technology
and manufacturing partner access to one of the world’s fastest growing markets for their
products produced offshore via the Tanzanian based manufacturing facility and its
distribution network. Not only will the partner have to be a world class provider of
technology and world class manufacturer they will also have to demonstrate a current “full
product line” to meet the demands of Sub-Sahara Africa. Too many manufacturers today
only exploit the Sub-Sahara market by dumping products they are overstocked with (not
providing a warranty of service / support) and need to move quickly. This is not good for
the marketplace.

However, we must understand that no one tyre company in the world makes every single
tyre size in demand. However, there are tyre manufacturers that will be able to provide 80-
90% of the tyre sizes in demand in Sub-Sahara Africa and it is important that the necessary
detailed review of each company be done to ensure the best possible partner is chosen for
such a project.

Anticipated importation of product can begin immediately after approved financing and
during the construction phase. This time period will be used to develop market and
distribution network upon which preceding years importation will be based upon. Below is
the projected the market share anticipation for Year “0” through Year “5”. As can be seen an
aggressive marketing campaign in Tanzania and Kenya will be performed in Year “0” with
the imported product and then supplemented with manufactured product (light truck) in
Year “1”. During this period the dealer networks and inventory centers (bonded
warehouses) will be established based upon expected growth and manufacturing
capabilities.

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 COMPETITIVE FOCUS

BUSINESS VALUE
Extend Exportation
Of Tyres Beyond
Tanzania, Kenya &

Commence
Manufacturing Of
4X4 Tyres

Begin Importation of
Tyres & Development
Of Distribution

BUSINESS FOCUS

CHALLENGERS LEADERS

l MAJOR TYRE
MANUFACTURERS

l TYRE DEALERSHIPS
ABILITY TO EXECUTE

l SECOND TIER TYRE MANUFACTURERS

l LARGE IMPORTERS

l TYRES4AFRICA
l TRANSPORTERS
TYRES4AFRICA WILL NOT ONLY BE
VISIONARY IN THE MARKET PLACE
l AUTOMOBILE DEALERSHIPS BUT WITH EXPEREINCED LEADERSHIP
AND SUFFICIENT CAPITAL INVESTMENT
l PERTOL STATIONS WILL BE ABLE TO ENTER THE
"LEADERSHIP QUADRANT"
l SMALL INDIVIDUAL COMPANIES

l SMALL IMPORTERS

NICHE PLAYERS VISIONARIES

COMPLETENESS OF VISION

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As mentioned above, the ability to supply not only manufactured tyres (highest demand
category) but a full complement of lines and sizes will be paramount in re-establishing a
market presents and dedicated dealer base. The technical backing of a major or major
players in the global tyre manufacturing arena will provide additional creditability to the
Tyres4Africa brand and the abilities to firmly secure the brand throughout East Africa.
As additional incentive for the technical partner or partners, there would a technical
assistance fee (TAC) paid upon the sale of each manufactured & imported tyre. These
payment would be made to the partner 30 days after the end of each quarter. The fee
structure would be as follows:
TAC – Manufactured Tyres

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 Assistance Fee Payment Range

3.00% $0 To $25,000,000
2.50% $25,000,001 To $50,000,000
2.00% $50,000,001 To $75,000,000
1.50% $75,000,001 To $100,000,000
1.00% $100,000,001 To

TAC – Imported Tyres

Assistance Fee Payment Range

1.25% $0 To $25,000,000
1.00% $25,000,001 To $50,000,000
0.75% $50,000,001 To $75,000,000
0.50% $75,000,001 To $100,000,000
0.25% $100,000,001 To

BRANDING

The big and important factor here is BRAND. This name would not only be the name of the
company it will be on the side of each and every tyre manufactured in Tanzania. Also, we
would require the technology and manufacturing facility partner to use the same brand
name on any imported product that they produce in their other factories overseas.

That way we are promoting the same brand throughout Sub-Sahara Africa and become
known as a manufacturer and supplier of all types and lines of tyres. In addition, the
company would be subsidizing the cost of the manufactured tyres with the higher margins
generated via the imported tyres. This would be a win-win situation for all those involved.
Below is the brand logo as it will appear on the manufactured and imported tyres:

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DISTRIBUTION

This is an important component as a revised Tanzania tyre industry would enjoy its goodwill
of the past by way of its former dealer distribution network in the East Africa region and
beyond. An important fact is that the factory in Arusha stopped manufacturing and
distributing tyres to those dealers . . . the dealers did not stop requesting to buy those
tyres produced in Arusha. The majority if not all of those dealers would give the company
their full support and having a complete line of tyres from one source that would make their
business much easier to operate. They are now buying tyres from many different sources
because no trader carries a full line of tyres or is willing to inventory any sustainable amount
of tyres on an ongoing basis.

The selected manufacturing/technical partner must be willing to supply consignment

inventories and favorable payment terms. Bonded warehouses will be setup and controlled
by Tyres4Africa to service the major dealers in each region. The major dealerships then will
be responsible to service the smaller dealers in their region. This methodology will ensure a
constant supply of category, lines and sizes of tyres to meet existing and expected needs in
the market place. In addition, by doing so, the majority of the tyre traders will be eliminated
and a true brand loyalty created.

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SERVICE

In addition to the manufacturing and distribution components of the business Tyres4Africa

will also provide a leasing program for tyre service vehicles. Service vehicles will be designed
to provide servicing of passenger to OTR tyres depending upon need and or region.

 Vehicles to service passenger, light truck and medium truck tyres

 Vehicles to service agricultural & OTR tyres

Tyres4Africa will also purchase and maintain a fleet of

transport vehicles which will be used to supplement raw
material movement s from port and delivery of
manufactured light truck product to designated
inventory centers or dealerships.

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A technical training programs as part of the tyre knowledge network will also be created
linking-up with our technical partner and local learning institutions to further drive brand
loyalty within the dealer base.

MANAGEMENT

The management group has over three decades of experience in the global tyre
manufacturing arena and have held various positions including Chief Executive Officer,
Managing Director, Chief Financial Officer and Director of Manufacturing Director with
responsibilities for finance, manufacturing and sales & marketing (including import and
export). The management group’s global experiences includes executive positions in the
USA, Canada, Mexico, Germany, China, India and Tanzania.

The management group also has global tyre industry relationships with many of the world’s
largest tyre manufacturers and working experience with a vast network of tyre
manufacturing equipment suppliers and raw material suppliers. Additionally, the group has
maintained relationships with former GTEA managers and technical staff, East Africa tyre
dealers and the entire East and Central Africa business network.

The group’s tenure in East Africa were the strongest years for the then General Tyre East
Africa. The company regularly exported tyres to Kenya, Ethiopia, Sudan, Uganda, Kenya,
Rwanda, Burundi, DRC, Zambia, Malawi and northern Zimbabwe, while previously had only
limited export activity to Kenya.

The management group is fully committed to oversee all aspects of market and
manufacturing research, technology provider search, due-diligence and engagement,
project funding, project management (factory refurbishment), market development and is
obligated to lead the company for the first ten years.

GOVERNEMNT & BUSINESS RELATIONSHIPS

The management group has had and continues to have a strong relationships between all
levels of the Tanzanian Government, these relationships have been built upon full
transparency and trust over numerous years. As an example, the relationship with the
current President of Tanzania, The Honorable Jakaya Mrisho Kikwete, was built many years
ago when he was then the Minister of Finance.

As mentioned above earlier, group has maintained relationships within both the East and
Central Africa business network. These relationships will become invaluable in developing
and building the deal network throughout the region.

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FINANCIAL
The anticipated growth in regions’ economy, coupled with the increase in vehicles, miles
driven and consumer spending lends to a robust tyre market. With the estimated growth
and share of the Tanzanian, Kenyan and Uganda markets (as shown above) expected
revenues will reach $300 MM USD by Year “5” and Net Income of $53 MM USD or 18% of
revenues.

Income Statement (Millions USD)

(000's USD) FY 0 FY 1 FY 2 FY 3 FY 4 FY 5
Revenues $7,872 $79,141 $171,402 $211,582 $242,302 $298,824
Direct Expenses $6,180 $62,261 $130,938 $152,195 $174,791 $220,099
Gross Profit $1,692 $16,880 $40,464 $59,388 $67,511 $78,725
Gross Profit (%) 21% 21% 24% 28% 28% 26%
Other Expenses $795 $4,542 $6,270 $9,382 $10,072 $10,666
EBITDA $896 $12,338 $34,194 $50,005 $57,440 $68,059
Depreciation $525 $1,428 $9,171 $11,561 $11,561 $11,561
Preliminary Exp Written off $200 $200 $200 $200 $200
Interest Expense $1,044 $3,602 $3,341 $2,923
Income Tax Expense
Net Income $371 $10,710 $23,779 $34,643 $42,338 $53,375
Net Income (%) 5% 14% 14% 16% 17% 18%

As can be seen, the free cash flow generated by Year “5” is in excess of $132 MM USD. The
cash flow includes 5 years of debt repayments (10 years total), no dividend payments,
income tax (34% on Imported Tyre Profits Only) and no re-investment capital during this
period.

Cash Flow Statement (Millions USD)

FY 0 FY 1 FY 2 FY 3 FY 4 FY 5

CASH FLOW FROM OPERATIONS

Net Income (Loss) $83 $7,068 $15,694 $29,112 $36,092 $44,083
Change in Working Capital ($1,874) ($3,725) ($5,855) ($5,224) ($599) ($3,683)
Plus Depreciation $525 $1,428 $9,171 $11,561 $11,561 $11,561
Plus Preliminary exp w ritten off $200 $200 $200 $200 $200
Net Cash Flow from Operations ($1,266) $4,972 $19,210 $35,649 $47,255 $52,161

CASH FLOW FROM INVESTM ENTS

Fixed Assets ($75,923)
Net Cash Flow from Investm ents ($75,923)

CASH FLOW FROM FINANCING

Cash from Equity $5,000
Net Income (Loss) $68,333 ($7,590) ($7,590) ($7,590)
Net Cash Flow from Financing $5,000 $68,333 ($7,590) ($7,590) ($7,590)

Net Cash Flow $3,734 $4,972 $11,621 $28,059 $39,665 $44,571

Cash at Beginning of Period $3,734 $8,706 $20,326 $48,385 $88,050
Cash at End of Period $3,734 $8,706 $20,326 $48,385 $88,050 $132,621

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As for the balance sheet the debt to equity ratio starts at 2.66 in Year “0” but moves to .42
in Year “5”. Again, the assumption is that there is no dividend payments or re-investment
capital through Year “5”.

Balance Sheet (Millions USD)

(000's USD) FY 0 FY 1 FY 2 FY 3 FY 4 FY 5

ASSETS
Cash $1,734 $6,706 $18,326 $48,385 $88,050 $132,621
Other Current Assets $5,248 $15,168 $28,850 $38,280 $40,384 $49,804
Total Current Assets $6,982 $21,873 $47,176 $86,666 $128,434 $182,425

Fixed Assets $26,500 $30,500 $185,423 $185,423 $185,423 $185,423

Accum Depreciation $525 $1,953 $11,124 $22,685 $34,246 $45,807
Net fixed assets $25,975 $28,547 $174,298 $162,737 $151,177 $139,616

Prelim inary Exp $2,000 $1,800 $1,600 $1,400 $1,200 $1,000

TOTAL ASSETS $34,957 $52,220 $223,075 $250,803 $280,810 $323,041

Current Liabilities $3,374 $9,569 $17,397 $21,603 $23,108 $28,846

Debt outstanding $68,333 $60,743 $53,153 $45,563
Total Liabilities $3,374 $9,569 $85,729 $82,346 $76,261 $74,409

Share Capital $31,500 $35,500 $114,500 $114,500 $114,500 $114,500

Retained earnings $83 $7,151 $22,845 $51,957 $88,050 $132,132
Total Equity $31,583 $42,651 $137,345 $166,457 $202,550 $246,632

TOTAL LIABILITIES & EQUITY $34,957 $52,220 $223,075 $248,803 $278,810 $321,041

EXIT STRATEGY
Given the management group leadership and expertise, they will put in place reporting
systems and practices with a view towards an eventual public listing or IPO. Strategic
acquisitions generally result in higher exit values for investors than an initial public
offering, however, one cannot plan for such an eventuality and know in advance whether
it would meet stakeholder interests. Tyes4Africa model front loads all investment for
future capital gains through brand development by manufacturing key products and loyal
distribution network while partnering with a highly recognized leader in the global tyre
market. As a result the management group believe that the stakeholders would be well
served with executing an IPO after the initial five years of operation.

The company’s growth over the first 5 years will be of the prerequisite for being able to
offer other higher value of products and services with greater revenue margins in the
developing and emerging fast growing market of East Africa. In addition, the ability of

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Tyres4Africa to develop and promote a strong dealer base and building upon their
financial growth targets will help in determining its valuation after the first 5 years.

Relevant valuation drivers look at transferability, sustainability and scalability of revenue

to help arrive at an appropriate multiple. The Company’s management group will focus
upon monetizing all potential opportunities within the tyre and vehicle markets to arrive
at a future terminal valuation by year-end of the 5th year or later

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