### **Expanded Appendix**
The appendix provides critical documentation and analysis to validate the assumptions, strategies, and risks outlined in Boaz Trading PLC’s business plan. Below is an expanded breakdown of the **import contracts**, **feasibility study**, and **ETB/USD exchange rate analysis**:
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#### **1. Import Contracts**
**Objective**: Secure reliable, cost-effective oil supply from Russian partners.
**Key Components**:
- **Parties Involved**:
- **Supplier**: Rosneft (primary), Lukoil (secondary).
- **Buyer**: Boaz Trading PLC.
- **Terms & Conditions**:
- **Volume Commitment**: 15,000 barrels/month (diesel and gasoline).
- **Pricing Mechanism**: $75/barrel (10% discount to Brent Crude), adjusted quarterly with a 5% cap.
- **Delivery Schedule**: CIF (Cost, Insurance, Freight) to Djibouti Port, with penalties ($500/day) for delays exceeding 72 hours.
- **Compliance & Risk Mitigation**:
- **Sanctions Clause**: Contracts exclude entities on OFAC/SDN lists.
- **Force Majeure**: Covers geopolitical disruptions (e.g., port closures, sanctions).
- **Payment Terms**: 30% advance via UAE intermediary banks (e.g., Mashreq Bank), 70% upon Djibouti delivery.
**Contingency Plans**:
- **Backup Suppliers**: Term sheets with UAE’s ADNOC (20% volume) and India’s Reliance (10% volume).
- **Buffer Stock**: 45-day inventory stored at Djibouti Port.
---
#### **2. Feasibility Study**
**Objective**: Assess the viability of the Russian Oil Deal in Ethiopia’s market.
**Key Findings**:
- **Market Demand**:
- Ethiopia’s fuel consumption grows at **6% annually** (2.8B liters diesel, 1.2B liters gasoline by 2025).
- **Gap**: 95% reliance on imports creates opportunities for agile private distributors.
- **Logistics Analysis**:
- **Cost Breakdown**:
- Maritime shipping: $15/barrel (Russia → Djibouti).
- Rail transport: $0.10/liter (Djibouti → Addis Ababa).
- **Bottlenecks**: Djibouti Port congestion adds 3–5 days to clearance; mitigated via priority berthing rights.
- **Financial Viability**:
- **Revenue Projections**: ETB 33M (Year 1), ETB 55M (Year 2).
- **ROI**: 150% achievable with 10% market share in Addis Ababa.
- **Regulatory & Geopolitical Risks**:
- **Ethiopian Compliance**: Licenses secured via partnerships with DMLF Law Firm.
- **Sanctions Exposure**: Russian suppliers screened; UAE/India backups in place.
**SWOT Summary**:
| **Strengths** | **Weaknesses** | **Opportunities** | **Threats** |
|-----------------------------|-------------------------|----------------------------|---------------------------|
| Russian discounts | High upfront capital | Ethiopia’s energy deficit | ETB/USD volatility |
| Agile logistics | Regulatory complexity | Gov’t tax incentives | Political instability |
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#### **3. ETB/USD Exchange Rate Analysis**
**Objective**: Mitigate currency risk in USD-denominated oil imports.
**Key Data**:
- **Historical Trends**:
- ETB depreciated **18%** against USD in 2022–2023 (ETB 45 → ETB 53/USD).
- **Drivers**: Inflation (34% in 2023), forex shortages, trade deficits.
- **Forecast**:
- **2024–2025**: ETB 58–62/USD (National Bank of Ethiopia projections).
- **Mitigation Strategies**:
- **Hedging**: 70% of import costs locked via 6-month forward contracts.
- **Multi-Currency Accounts**: Hold USD reserves in Ethiopian banks to reduce conversion needs.
**Sensitivity Analysis**:
| **ETB/USD Rate** | **Impact on COGS** | **Net Profit (Year 1)** |
|-------------------|--------------------------|-------------------------|
| 55 | ETB 19.8M | ETB 8.25M |
| 60 | ETB 21.6M (+9%) | ETB 6.45M (-22%) |
| 65 | ETB 23.4M (+18%) | ETB 4.65M (-44%) |
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### **Supporting Documents**
1. **Sample Import Contract**:
- Rosneft agreement for 15,000 barrels/month, CIF Djibouti.
2. **Feasibility Study Report**:
- 50-page analysis by Addis Ababa Consulting Group.
3. **Forex Hedge Agreements**:
- Forward contracts with Commercial Bank of Ethiopia.
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### **Conclusion**
The appendix provides granular evidence of Boaz Trading’s preparedness to execute the Russian Oil Deal. By securing favorable import terms, validating market demand, and hedging currency risks, the company demonstrates operational resilience and strategic foresight. These documents are critical for investor due diligence and regulatory approvals, ensuring transparency and confidence in Boaz’s growth trajectory.