preview

Dixon Corporation: the Collinsville Plant

Better Essays
Open Document

Harvard Business School 9-298-165
Rev. June 8, 1999
This case was prepared as the basis for class discussion rather than to illustrate either effective or ineffective handling of an administrative situation. It is a rewritten version of an earlier case entitled, “American Chemical Corporation,” HBS no.
280-102.
Copyright © 1998 by the President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1-800-545-7685 or write Harvard Business School Publishing, Boston, MA 02163. No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means—electronic, mechanical, photocopying, recording, or otherwise—without the …show more content…

Other uses of sodium chlorate also were expected to grow at about 8% to 10% per year.
Capacity additions had not kept pace with sales growth during the 1970s (Exhibit 3). Though sales had increased by over 95% between 1970 and 1979, capacity had increased by less than 70% during this period. The resulting tight markets in 1973-1974 and 1977-1978 caused a substantial improvement in profit margins between 1970 and 1979, even though production costs also increased greatly during this period. These tight markets and cost increases had caused prices for sodium chlorate to increase rapidly beginning in 1973 (Exhibit 3).
In late 1979, there were a dozen domestic producers of sodium chlorate (Exhibits 4 and 5).
The market was dominated by large, diversified chemical companies (Hooker, Pennwalt, American and Kerr-McGee). However, a number of paper and pulp companies (Georgia Pacific and Universal) had integrated backward into the production of sodium chlorate. In addition, two firms (Brunswick and Southern) specialized in producing sodium chlorate. The three largest producers accounted for over 55% of domestic capacity.
The majority of sodium chlorate plants were located in the Southeastern United States
(Exhibit 4) where

Get Access
Related
Get Access